Lima Delta Company v. Global Aerospace, Inc.
338 Ga. App. 40
| Ga. Ct. App. | 2016Background
- Global Aerospace issued a broad hull and liability policy (June 22, 2011–June 22, 2012) covering a Gulfstream G‑IV owned in trust by Lima Delta for beneficial owner Socikat; Trident procured the policy through Wells Fargo as broker.
- The aircraft crashed during landing in the Democratic Republic of the Congo on February 12, 2012; Global sued the insureds seeking rescission (alleged misrepresentations about basing/ownership/use) and a declaratory judgment that coverage did not apply because pilots failed to meet Policy pilot‑training requirements.
- The Policy included an "open pilot warranty" in the Declarations requiring both PIC and SIC to have completed the manufacturer’s ground and flight training school for the make/model within the prior 12 months; no endorsement or written waiver of that requirement was produced.
- The trial court granted Global’s summary judgment in part, holding (1) Global had grounds to rescind and (2) the Policy did not cover the accident due to noncompliance with the open pilot warranty; it also struck insureds’ amended counterclaim for bad faith/fees; insureds’ motion to apply Delaware law was denied.
- On appeal the Court of Appeals affirmed: the pilot‑training provision was unambiguous and enforceable despite its placement in the Declarations; one pilot did not meet the 12‑month training requirement; insureds failed to timely plead a separate bailment/conversion claim; Georgia law governs.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the pilot‑training warranty in the Declarations is enforceable or ambiguous because it is not in an Exclusions section | Placement in Declarations creates ambiguity; ambiguous terms construe against insurer | Clause is plain and unambiguous; placement does not render it ineffective; prior Georgia authority upholds pilot clauses in Declarations | Enforceable; no ambiguity; summary judgment for insurer because a pilot failed the 12‑month training requirement |
| Whether the Policy applies to the accident given the open pilot warranty breach | Insureds argued possible in‑flight training or waiver via broker communications | Global: no endorsement or written waiver; policy requires documentary endorsement to amend/waive | Policy did not apply; insureds produced no evidence of a valid waiver or compliant training |
| Whether insureds’ amended counterclaim for bad faith/fees should remain after insurer rescinded/denied coverage | Insureds sought bad faith penalties and fees | Global: rescission/denial justified; counterclaim insufficient if no coverage; trial court struck amended counterclaim | Affirmed: counterclaim struck because Policy did not apply and rescission/denial were supported |
| Whether Georgia or Delaware law controls (choice of law) | Insureds: Delaware law should apply | Global: Georgia law applies because Policy was delivered/accepted in Georgia (broker in Atlanta) and lex loci contractus governs | Georgia law governs; law‑of‑the‑case and record support finding Wells Fargo acted as insureds’ agent and policy was delivered in Georgia |
Key Cases Cited
- Burkett v. Liberty Mut. Fire Ins. Co., 278 Ga. App. 681 (legal standard for de novo review of summary judgment)
- State Farm Fire & Cas. Co. v. Goodman, 259 Ga. App. 62 (insurer/insured contract construction and treatment of unambiguous policy language)
- Howell v. U. S. Fire Ins. Co., 185 Ga. App. 154 (upholding pilot‑training clause located in policy Declarations)
- Ranger Ins. Co. v. Columbus‑Muscogee Aviation, Inc., 130 Ga. App. 742 (pilot clause in Declarations valid; noncompliance defeated coverage)
- Grigsby v. Houston Fire & Cas. Ins. Co., 113 Ga. App. 572 (coverage defeated where pilot failed policy‑required qualifications)
- Gen. Telephone Co. of the Southeast v. Trimm, 252 Ga. 95 (lex loci contractus principles for choice‑of‑law in contract cases)
- Gen. Elec. Credit Corp. v. Home Indem. Co., 168 Ga. App. 344 (insurance contract is constructively made where delivered)
- R. W. Holdco, Inc. v. Johnson, 267 Ga. App. 859 (new claims cannot be raised for first time in summary judgment without proper pleading)
- Brown v. Piggly‑Wiggly Southern, Inc., 228 Ga. App. 629 (law‑of‑the‑case exception when evidentiary posture changes)