Insurance Coverage

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7^th Circuit Court of Appeals

Case Name: Jadair International, Inc. v. American National Property & Casualty Company

Case No.: 22-3053

Officials: Easterbrook, Rovner, and Lee, Circuit Judges.

Focus: Insurance Coverage

Schmutzler, a seasoned pilot and the owner-president of Jadair, possessed extensive decades-long flying experience. In 2019, Schmutzler submitted an application to American National Property & Casualty Company seeking an insurance policy for their Cessna aircraft. The application distinctly listed Schmutzler as the sole authorized pilot for the Cessna. He affirmed his status as a licensed pilot equipped with an FAA medical certificate. Within the application, there were stipulated “Minimum Pilot Requirements,” explicitly stating that “coverage in flight is not applicable unless the aircraft is operated by the designated pilot(s) specified in this document, possessing the required certificates, ratings, and pilot experience, and who are suitably qualified for the particular flight.” Schmutzler acknowledged this provision by initialing it.

Tragically, in May 2020, the Cessna crashed, killing Schmutzler who was piloting the plane. The crash was attributed to a mechanical malfunction.

American National denied coverage, asserting that Schmutzler lacked a valid and current FAA medical certificate at the time of the accident, as his prior certificate had already expired. Subsequently, the district court ruled in favor of American National by granting them summary judgment and declaratory judgment. The Seventh Circuit opined that the insurance policy explicitly excludes coverage for any incident involving the Cessna if the pilot does not possess an up-to-date FAA medical certificate. This stipulation operates as an exclusion from coverage rather than an unfulfilled condition of coverage.

Affirmed

Decided 08/09/23

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