Puckett v. U.S. Fire Insurance Co. , 28 Tex. Sup. Ct. J. 55 ( 1984 )

SPEARS, Justice.

This is a declaratory judgment action. The question presented is whether an insured’s failure to have his plane inspected need be the cause of an accident in order for the insurance company to avoid liability under an aviation policy for damages resulting from that accident. The trial court held that causation was not required and rendered summary judgment for respondent, U.S. Fire Insurance Company. The court of appeals, in an unpublished opinion, affirmed. Tex.R.Civ.P. 452. We reverse the judgments of both courts and remand the cause for trial.

On July 18, 1981, a Cessna 337 aircraft jointly owned by Robert Holt and M. Hunter Puckett, and flown by Puckett, crashed near Pampa. Puckett and two passengers were killed, and a third passenger was seriously injured. U.S. Fire sued Holt and the administrators of Puckett’s estate, seeking a determination that it was not obligated to pay any damages or defend any claim arising out of the crash. The insurer relied on a clause in the policy suspending coverage “if the aircraft ... airworthiness certificate is not in full force and effect.” Under federal law in effect at the time of the accident, the certificate was effective only so long as all maintenance requirements had been met. 14 C.F.R. § 21.181(a)(1) (1981). Those requirements included an annual inspection. 14 C.F.R. §§ 91.165, 91.-169 (1981).¹ The parties stipulated that no such inspection had been performed. Therefore, by virtue of federal regulation, the certificate had lapsed. The parties also stipulated, however, that the failure to have the plane inspected in no way caused the accident.

Most courts addressing the question have held that causation is not required for an insurance company to avoid liability on the basis of a breach of condition in an aviation policy. See National Insurance Underwriters Inc. v. Bequette, 280 F.Supp. 842 (D. Alaska 1968), aff'd 429 F.2d 896 (9th Cir.1970); Middlesex Mutual Insurance Co. v. Bright, 106 Cal.App.3d 282, 165 Cal.Rptr. 45 (1980); O'Conner v. Proprietors Insurance Co., 661 P.2d 1181 (Colo.App.1982), cert. granted; Grigsby v. Houston Fire and Casualty Insurance Co., 113 Ga.App. 572, 148 S.E.2d 925 (1966); Arnold v. Globe Indemnity Co., 416 F.2d 119 (6th Cir.1969) (applying Kentucky law); Kilburn v. Union Marine & General Insurance Co., 326 Mich. 115, 40 N.W.2d 90 (1949); Macalco, Inc. v. Gulf Insurance Co., 550 S.W.2d 883 (Mo.App.1977); Omaha Sky Divers Parachute Club, Inc. v. Ranger Insurance Co., 189 Neb. 610, 204 N.W.2d 162 (1973); Security Mutual Casualty Co. v. O’Brien, 99 N.M. 638, 662 P.2d 639 (1983); Baker v. Insurance Co. of North America, 10 N.C. App. 605, 179 S.E.2d 892 (1971); Ochs v. Avemco Insurance Co., 54 Or.App. 768, 636 P.2d 421 (1981); Di Santo v. Enstrom Helicopter Corp., 489 F.Supp. 1352 (E.D.Pa.1980).

The rule is by no means unanimous, however. Several courts have held that causation is required. See Ranger Insurance Co. v. Phillips, 25 Ariz.App. 426, 544 P.2d 250 (1976); Avemco Insurance Co. v. Chung, 388 F.Supp. 142 (D.Hawaii 1975); American States Insurance Co. v. Byerly Aviation, Inc., 456 F.Supp. 967 (S.D.Ill.1978); Migues v. Universal Airways, Inc., 18 Av.Cas. (CCH) 17,250 (S.D.Miss.1982); Bayers v. Omni Aviation Managers, 510 F.Supp. 1204 (D.Mont.1981); South Carolina Insurance Co. v. Collins, 269 S.C. 282, 237 S.E.2d 358 (1977). One commentator has referred to a causation requirement as the “modern trend.” J. Appleman, 6A Insurance Law and Practice § 4146 (1972). Whether this is the modern trend is debatable, as evidenced by the authority cited above. We do believe, however, that it is the better rule to require causation. See South Carolina Insurance Co. v. Collins, 237 S.E.2d at 362; A. Windt, Insurance Claims and Disputes § 6.07 (1982). Therefore, we hold that under the facts presented here, an insurer cannot avoid liability under an aviation liability policy unless the failure to inspect is either the sole or one of several causes of the accident.

It is well established that insurance policies are strictly construed in favor of the insured in order to avoid exclusion of coverage. Ramsay v. Maryland American General Insurance Co., 533 S.W.2d 344 (Tex.1976). That rule does not apply, however, when the term in question is susceptible of only one reasonable construction. Ranger Insurance Co. v. Bowie, 574 S.W.2d 540 (Tex.1978). Such is the case here. The insurance policy says in plain language that “there is no coverage under the policy if the aircraft ... airworthiness certificate is not in full force and effect.” When there is no ambiguity, it is the court’s duty to give the words used their plain meaning. Transport Insurance Co. v. Standard Oil Co. of Texas, 161 Tex. 93, 337 S.W.2d 284 (1960). This policy did not require a causal connection between the breach of the policy and the accident.

The question remains, however, whether the clause as interpreted violates the public policy of this state. Puckett contends that allowing an insurance company to avoid liability when the breach of contract in no way contributes to the loss is unconscionable and ought not be permitted. We agree. Here, the accident was caused by something — pilot error — unquestionably covered by the policy. It would be against public policy to allow the insurance company in that situation to avoid liability by way of a breach that amounts to nothing more than a technicality. If we held otherwise:

it would actually be to the insurer’s advantage that the insured failed to renew the airworthiness certificate. In such event, the insurer would collect a premium but would have no exposure to risk because the policy would no longer be effective.

Pickett v. Woods, 404 So.2d 1152 (Fla.Dist.Ct.App.1981), petition for review denied, Foremost Ins. Co. v. Pickett, 412 So.2d 465 (Fla.1982). Moreover, under federal law, there are hundreds of requirements that the inspection must meet in order for an airworthiness certificate to be effective. See Maintenance, Preventive Maintenance, Rebuilding, & Alteration Requirements, 14 C.F.R. Part 43; General Operation & Flight Rules, 14 C.F.R. Part 91. Some of these are substantial, some technical. It would be virtually impossible for an insured to know whether his certificate was valid. The legislature has passed an “anti-technicality” statute covering fire insurance policies. Tex.Ins.Code Ann. art. 6.14. We believe the legislature’s action indicates the public policy of the state, and decline to hold to the contrary in this analogous situation.

U.S. Fire urges a number of cases that it claims have decided this question in its favor. See United States Fire Insurance Co. v. Marr’s Short Stop, — S.W.2d — (Tex.1984); Stewart v. Vanguard Insurance Co., 603 S.W.2d 761 (Tex.1980); Ranger Insurance Co. v. Bowie, 574 S.W.2d 540 (Tex.1978); Glover v. National Insurance Underwriters, 545 S.W.2d 755 (Tex.1977). In none of those cases, however, was the issue of causation raised. One case, Schepps Grocer Supply, Inc. v. Ranger Insurance Co., 545 S.W.2d 13 (Tex.Civ.App.—Dallas 1976, writ ref’d n.r.e.), does directly support U.S. Fire’s position, and we now disapprove of its holding.

On the other hand, Robinson v. Reliable Insurance Co., 569 S.W.2d 28 (Tex.1978), is clearly distinguishable. In Robinson, we held that if an insured in an application for life insurance misrepresents the state of his health, the insurer need not show that the condition about which the insured made the misrepresentation contributed to the insured’s death. The reasoning in Robinson was that if the insured had not misrepresented his health, the company would never have issued the policy. Thus, the policy was void from inception. Here, the policy was valid from the beginning; the only question is whether the breach alleged can be used to suspend coverage. We hold that under the facts of this case it cannot.

The judgments of the trial court and the court of appeals are reversed, and the cause is remanded for trial.

WALLACE, J., concurs. POPE, C.J., joined by McGEE, J., dissent.

1 . 14 C.F.R. section 21.181(a)(1) provided that:

Standard airworthiness certificates ... are effective as long as the maintenance, preventive maintenance, and alterations are performed in accordance with parts 43 and 91 of this chapter ....

Under the heading "Maintenance required,” 14 C.F.R. section 91.165 provided that:

Bach owner or operator of an aircraft shall have that aircraft inspected as prescribed in Subpart D or § 91.169 of this part_

Section 91.169 provided that:

[N]o person may operate an aircraft unless, within the previous twelve calendar months, it has had—

(1) An annual inspection in accordance with part 43 of this chapter ....