Old Republic Insurance v. Griffin ( 2005 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
OLD REPUBLIC INSURANCE COMPANY,  No. 03-16671
Plaintiff-Appellee, D.C. No.
v. CV-02-00252-LRH
ROBERT GRIFFIN,
Defendant-Appellant,  ORDER
CERTIFYING A
and QUESTION TO
THE SUPREME
LOIS JENSEN, COURT OF

Defendant. NEVADA
Filed March 16, 2005
Before: Dorothy W. Nelson, William A. Fletcher and
Raymond C. Fisher, Circuit Judges.
ORDER
We respectfully certify to the Nevada Supreme Court the
question of law set forth in Section III of this order, pursuant
to Nevada Rule of Appellate Procedure 5. The question of law
will be determinative of the matter pending before this court,
and there is no clearly controlling precedent in the decisions
of the Nevada Supreme Court.
All further proceedings in this case are stayed pending
receipt of the answer to the certified question. This appeal is
withdrawn from submission and will be submitted after
receipt of the Nevada Supreme Court’s opinion on the ques-
tion certified. This panel retains jurisdiction over further pro-
ceedings in this court. The parties will notify the Clerk of this
court within one week after the Nevada Supreme Court
3307
3308 OLD REPUBLIC INSURANCE v. GRIFFIN
accepts or rejects the certification and again within one week
after that court renders its opinion.
I. Background
In September 2001, Kevin Jensen was piloting a plane and
approaching the runway of the Carson City Airport when his
plane crashed in the backyard of appellant Robert Griffin, pin-
ning Griffin down and causing him to sustain severe injuries.
His medical expenses topped $200,000. Jensen had purchased
the plane only a few months earlier and had bought insurance
through Old Republic Insurance Company.
In April 2002, Griffin filed suit in state court against Jensen
and his wife, seeking recovery for damages from the crash.
Shortly thereafter, Old Republic filed an action for a declara-
tory judgment that it had no obligation to pay any damages to
Griffin or Jensen because the accident was excluded from
coverage. Specifically, the company alleged that because Jen-
sen failed to have an annual inspection performed on the air-
craft as required by the airworthiness provisions of the policy,
the accident was excluded from coverage. Griffin argued, in
turn, that the airworthiness exclusion was unreasonable and
could not be interpreted to require an annual inspection. He
also contended that Nevada law supported adopting a causal
connection requirement, thus permitting coverage exclusion
only if the failure to comply with the policy led to the acci-
dent.
Old Republic’s policy does not cover the aircraft when “the
Airworthiness Certificate of the aircraft is not in full force and
effect” or “the aircraft has not been subjected to appropriate
airworthiness inspection(s) as required under current applica-
ble Federal Air Regulations for the operations involved.” Jen-
sen had initialed a clause in the application stating that there
would be no coverage “unless a standard airworthiness certifi-
cate is in full force and effect.”
OLD REPUBLIC INSURANCE v. GRIFFIN 3309
Further, the aircraft purchase agreement also required the
buyer to acknowledge “that he or his authorized mechanics/
agents, have fully inspected the described aircraft, related air-
worthy paperwork, log books, etc. and have determined that
this aircraft is in airworthy condition.” Jensen signed a deliv-
ery and acceptance agreement indicating that he had complied
with the requirements described above.
The certificate remains in full force and effect as long as
the plane complies with FAA maintenance regulations. See 14
CFR § 21.181 (stating that “[s]tandard airworthiness certifi-
cates issued for restricted or limited category aircraft are
effective as long as the maintenance, preventive maintenance,
and alterations are performed in accordance with Parts 43 and
91 of this chapter and the aircraft are registered in the United
States”). Specifically, “no person may operate an aircraft
unless, within the preceding 12 calendar months, it has had
. . . an annual inspection in accordance with . . . this chapter.”
See 14 CFR § 91.409. Under FAA regulations, another annual
inspection was required by July 31, 2001. It is undisputed that
at the time of the crash, the plane had not been inspected for
more than 12 months. The plane’s logbook revealed that the
last inspection had been conducted on July 13, 2000. Thus,
Jensen was in violation of the insurance policy at the time of
the crash.
It is unclear whether the annual inspection might have pre-
vented the crash. Jensen speculated that the accident was
caused by sediment that clogged the fuel lines and prevented
fuel from feeding the engine. The National Transportation
Safety Board, in its accident report, determined that the prob-
able cause of the crash was “[t]he pilot’s incorrect setting of
the fuel selector valve during the prelanding checklist to a
position between usable tanks, resulting in fuel starvation.”1
1
Should a causal connection be required, resolution of relevant disputed
facts would be the province of the finder of fact in the district court.
3310 OLD REPUBLIC INSURANCE v. GRIFFIN
Old Republic moved for summary judgment, which the dis-
trict court granted. The court concluded that the policy exclu-
sion was unambiguous and that a “lay person would
reasonably expect after reading the exclusion (both in the
application and policy) that coverage would be denied if the
airworthiness certificate was not in effect, regardless of
whether the insured had knowledge that it was not in effect.”
On the issue of causality, the court ruled as a matter of first
impression that Nevada law did not call for such a require-
ment. It noted the strong public policy considerations of
enforcing an airworthiness provision, whether or not it was
causally related to the crash. The court concluded that the
“clear purpose behind these exclusions . . . is to encourage the
safe operation of aircraft. . . . Enforcement of such a provision
serves to encourage compliance with the Federal Aviation
Regulations, which serve an important safety function.”
On appeal to this court, Griffin challenged the interpreta-
tion of the airworthiness exclusion provision and argued that
Nevada law compelled a causal connection requirement
between the policy exclusion and the reason for the accident.
We affirm the district court’s conclusion that the policy exclu-
sion at issue here is unambiguous and is properly interpreted
to include an annual inspection. Therefore, the question of
causation will be determinative of the appeal.2
II. Discussion
Appellant argues that Old Republic is trying to use an
inconsequential violation — failure to meet the airworthiness
standard by not conducting an annual inspection — to avoid
its obligations under the policy. The question of whether cau-
sality is a required element to deny coverage is a matter of
2
Should a causal connection be required, we would then remand the
case to the district court for a trial to determine causation. See n.1, supra.
If no causal connection is required, we would affirm the judgment of the
district court in full.
OLD REPUBLIC INSURANCE v. GRIFFIN 3311
first impression in Nevada, as recognized by the district court.
The court reasoned that the Nevada Supreme Court would
reject such a requirement, based on the state’s public policy
interests and the practice of other jurisdictions.
As a starting matter, Nevada statutory and case law do not
clearly indicate whether the state Supreme Court would
impose such a requirement on insurers. Appellant claims that
Nevada law supports a causal connection requirement, relying
in part on Nevada’s insurance code, which contains an anti-
technicality provision. N.R.S. 687B.110. Under the provision:
All statements and descriptions in any application
for an insurance policy or annuity contract, by or in
behalf of the insured or annuitant, shall be deemed
to be representations and not warranties. Misrepre-
sentations, omissions, concealment of facts and
incorrect statements shall not prevent a recovery
under the policy or contract unless either (1)
[f]raudulent; or (2) [m]aterial either to the accep-
tance of the risk, or to the hazard assumed by the
insurer; or (3) [t]he insurer in good faith would
either not have issued the policy or contract, or
would not have issued a policy or contract in as large
an amount, or would not have provided coverage
with respect to the hazard resulting in the loss, if the
true facts had been made known to the insurer as
required either by the application for the policy or
contract or otherwise.
Id. Appellant reasons that this provision demonstrates
Nevada’s support for a causal connection requirement to pre-
vent insurers from evading their obligations based on techni-
cal violations of a policy.
However, we find the provision to be inconclusive on the
causal connection issue for several reasons. First, the statute
on its face does not speak to the relationship between exclu-
3312 OLD REPUBLIC INSURANCE v. GRIFFIN
sion provisions of a policy and the cause of an accident. This
is in contrast to other state laws, which address the issue of
causality more directly and therefore provide greater support
for imposing a causal connection requirement. For example,
in Pickett v. Woods, a Florida court rejected the insurer’s
attempt to deny coverage based on an airworthiness exclusion
where the accident was attributed to pilot error. 404 So. 2d
1152, 1153 (Fla. Dist. Ct. App. 1981). The court reached its
decision relying on a state statute, under which:
A breach or violation by the insured of any warranty,
condition, or provision of any wet marine or trans-
portation insurance policy, contract of insurance,
endorsement, or application therefore shall not ren-
der void the policy or contract, or constitute a
defense to a loss thereon, unless such breach or vio-
lation increased the hazard by any means within the
control of the insured.
Id. at 1152-53) (quoting Fla. Stat. ch. 627.409 (1979)); see
also Puckett v. U.S. Fire Ins. Co., 678 S.W.2d 936, 938 (Tex.
1984) (adopting a causal connection requirement based on an
anti-technicality provision covering fire insurance which
stated that any violation of a policy would not “void the pol-
icy or contract, or constitute a defense to a suit for loss
thereon, unless such breach or violation contributed to bring
about the destruction of the property”) (quoting Tex. Ins.
Code Ann. § 6.14 (2002) (repealed 2003)). Nevada’s anti-
technicality statute, in contrast, does not directly support a
causal connection requirement.
Nevada case law also does not clearly suggest that the anti-
technicality provision should have such a broad reach or that
causation is required to exclude coverage. In Randono v.
CUNA Mutual Ins. Group, the Nevada Supreme Court held
that an insurer could deny insurance proceeds because of the
insured’s omission of his hypertension on his application
form, even though this condition was not related to his cause
OLD REPUBLIC INSURANCE v. GRIFFIN 3313
of death. 793 P.2d 1324 (Nev. 1990). In discussing the appli-
cation of N.R.S. 687B.110, the court noted that the introduc-
tory language of the statute “offers hope to consumers that
insurance contracts will not be made voidable by inaccuracies
and omissions in their applications, but the exceptions . . .
largely consume the rule. The exceptions would appear to
deny, in most situations, the protection and relief that the stat-
ute may have been attempting to grant.” Id. at 1327. Thus, it
is hard to read the limited anti-technicality statute as support-
ing a broad causal connection requirement.
Additionally, another case suggests that the state court has
taken a more permissive view on the issue of causation in the
insurance context. In McDaniel v. Sierra Health and Life Ins.
Co., the Nevada court construed causation loosely in a policy
that excluded coverage based on the insured’s commission of
a felonious act. 53 P.3d 904, 908 (Nev. 2002). The court held
that the insurer had no financial obligation where the insured
was driving drunk and failed to make a proper turn. The car
flipped over, killing the insured and injuring the passenger-
claimant. Id. The court rejected the beneficiary’s argument
that because the statute treated drunk driving as felonious
based on the harm caused to another, the death of the insured
was not sufficiently related to the felonious conduct to trigger
the exclusion. Id. at 907. Instead, the court adopted the more
expansive majority approach of interpreting felony exclusions
to apply “when the loss is remotely connected to any aspect
of the insured’s felonious conduct.” Id.
In sum, Nevada statutory and case law do not provide a
definitive answer to the question of whether a causal connec-
tion between the policy violation and the accident must exist
to exclude coverage. We look now to the practice of other
states, some of which have imposed a causal connection
requirement to limit the instances in which an insurer may
avoid coverage under a policy.3 In Puckett v. U.S. Fire Ins.
3
We decline to adopt the characterizations of the parties as to the “ma-
jority” practice or the “modern trend” among jurisdictions.
3314 OLD REPUBLIC INSURANCE v. GRIFFIN
Co., the Texas Supreme Court concluded that “an insurer can-
not avoid liability under an aviation liability policy unless the
failure to inspect is either the sole or one of several causes of
the accident.” 678 S.W.2d at 938. It held that allowing the
insurance company to avoid liability for an accident caused
by pilot error based on the lack of an airworthiness certificate
violated public policy.
An Illinois district court, in a matter of first impression,
concluded that Illinois state law called for a causal connection
between the accident and the reason for the exclusion. Am.
State Ins. Co. v. Byerly Aviation, Inc., 456 F. Supp. 967 (S.D.
Ill. 1978). The court reached the result based on Illinois law
requiring insurance policies to be construed liberally in favor
of the insured and a state appellate court decision calling for
a causal connection between the accident and a provision of
a motor vehicle insurance policy. Id. at 969-70; see also
Bayers v. Omni Aviation Managers, Inc., 510 F. Supp. 1204,
1207 (D. Mont. 1981) (holding that a policy claiming to limit
coverage where a pilot did not have a proper medical certifi-
cate did not meet the causal connection requirement because
the pilot’s medical condition did not cause the crash).
The Colorado Supreme Court adopted a slightly different
approach in O’Connor v. Proprietors Ins. Co., 696 P.2d 282
(Colo. 1985). The court concluded that if the regulation is
clearly safety related — as in the case of an airworthiness
requirement — then the exclusion should apply unless the
insured can show the violation was not the cause of the acci-
dent. Id. at 286. In that case, the insured party had not met its
burden to demonstrate that his violation of an airworthiness
provision did not cause the accident and therefore should not
exclude coverage. Id. at 285-86 (noting that “the FAA regula-
tion violated relates so directly to the safe operation of the
plane that the violation could have contributed to or prevented
discovery of an unsafe condition that may have caused the
accident”).
OLD REPUBLIC INSURANCE v. GRIFFIN 3315
However, many states have rejected a causal connection
requirement, especially where the insurance policy exclusions
are unambiguous and clearly delineate the conduct that will
trigger a violation. See, e.g., Security Ins. Co. of Hartford v.
Andersen, 763 P.2d 246, 249 (Ariz. 1988) (finding no causal
connection required but limiting its holding to cases “where
the exclusion was narrow and specifically delineated what
was and what was not covered, where the relevant clause was
an exclusion of coverage (as opposed to some kind of condi-
tion subsequent), and where the exclusion was completely
unambiguous”); National Union Fire Ins. Co. v. Miller, 192
Cal. App. 3d 866, 872-73 (1987) (finding no need for a causal
relationship between an exclusion and the accident in a case
in which the policy did not cover claims if the pilot’s medical
certificate was not current); Hollywood Flying Serv., Inc. v.
Compass Ins. Co., 597 F.2d 507, 508 (5th Cir. 1979) (treating
insurance policy as suspended when not in compliance with
government regulations per the terms of the exclusion).
We conclude that the case law on this issue is sufficiently
divergent to leave open the question of whether Nevada
would or would not adopt such a requirement based on its
own public policy goals. We further note that the appellant in
this case is a third party, who was injured when a plane fell
on him in his own backyard. As such, the state may weigh dif-
ferently the public policy considerations of precluding cover-
age in this type of case, where the party seeking coverage had
no way of ensuring compliance with the policy or preventing
the crash. Thus, because this question represents an issue of
first impression and has significant implications for Nevada’s
insurance coverage law, and we cannot be certain how the
Nevada Supreme Court would resolve the matter, we believe
certification on this question of law to be appropriate.
III. Question of Law
The question of law we hereby certify is:
3316 OLD REPUBLIC INSURANCE v. GRIFFIN
Under Nevada law, may an insurer deny coverage under an
aviation insurance policy for failure to comply with an unam-
biguous requirement of the policy or is a causal connection
between the insured’s noncompliance and the accident
required?4
IV. Conclusion
Griffin’s appeal presents an issue of Nevada state law
which will be determinative of an issue essential to the par-
ties’ dispute and as to which there is no clearly controlling
precedent from the Nevada Supreme Court. For this reason,
we request that the Nevada Supreme Court accept and decide
the question herein certified. We agree to abide by the Nevada
Supreme Court’s decision as specified by Rule 5 of the
Nevada Rules of Appellate Procedure, which states that “[t]he
written opinion of the Supreme Court stating the law govern-
ing the questions certified . . . shall be res judicata as to the
parties.”
Party Names
The names of the appellant and appellee are as follows:
Appellant: Robert Griffin
Appellee: Old Republic Insurance Co.
Counsel for the Parties
The names and addresses of the parties’ counsel are as fol-
lows:
4
If a causal connection is required, which party bears the burden of
showing causation? Also what degree of causation must be shown, i.e.
must the failure to comply be the sole cause of the accident or just a pre-
ventable cause of the accident?
OLD REPUBLIC INSURANCE v. GRIFFIN 3317
Counsel for appellant: Day R. Williams
Attorney at Law
204 N. Minnesota St.
Carson City, NV
89703-4151
Counsel for appellee: Stephen S. Kent
Woodburn & Wedge
6100 Neil Road, Suite 500
Reno, NV 89511
The clerk of this court is hereby directed to file in the
Nevada Supreme Court, under official seal of the Ninth Cir-
cuit Court of Appeals, copies of all relevant briefs and an
original and ten copies of this request with a certificate of ser-
vice on the parties. IT IS SO ORDERED.
Respectfully submitted, Dorothy W. Nelson, Senior Circuit
Judge, William A. Fletcher and Raymond C. Fisher, Circuit
Judges.
____________________________
The Honorable Raymond C. Fisher
United States Circuit Judge
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