Appeal from the United States District Court for the Central District of California R. Gary Klausner, District Judge, Presiding D.C. No. 2:07-cv-06204-RGK-FMO
The opinion of the court was delivered by: Rawlinson, Circuit Judge
Argued and Submitted June 11, 2010-Pasadena, California
Before: Alfred T. Goodwin, Johnnie B. Rawlinson, Circuit Judges, and Mark W. Bennett, District Judge.*fn1
Appellants Trishan Air, Inc. and Kerry Acquisitions, LLC (collectively Trishan) purchased an aviation insurance policy from Appellee Federal Insurance Co. (Federal). After an accident involving one of Trishan's corporate jets, Trishan filed a claim with Federal. Federal denied coverage because the co-pilot had not undergone the training mandated by the policy's pilot warranty. We affirm the district court's summary judgment in favor of Federal due to Trishan's failure to raise a material issue of fact regarding strict compliance with the pilot warranty, breach of the implied covenant of good faith and fair dealing, or bad faith. In addition, Trishan's claim for coverage under Coverage 29 of the policy was not properly raised in the district court.
Trishan retained David Wittwer (Wittwer) and the Buckner Company to procure the renewal of Trishan's aviation insurance policy covering a Dassault Falcon 900 B aircraft. Trishan's chief pilot informed Wittwer that Trishan sought a renewal policy that provided for second-in-command pilots' compliance only with the training requirements of 14 C.F.R. § 61.55.*fn2
Arlington/Roe & Company (A/R) acted as the insurance broker for Trishan. Accordingly, Wittwer contacted Connie French (French) of A/R "to obtain a quote for the replacement policy from Starr Aviation."*fn3 Sam Seybert (Seybert), Starr Aviation's underwriter, determined that he could not provide a pilot warranty limited to the basic requirements listed in 14 C.F.R. § 61.55. As a result, Seybert transmitted a quotation to French that included a pilot warranty requiring pilots to complete ground and flight courses, including simulator training, for the make and model of the covered aircraft. In a subsequent email to French, Seybert clarified that the pilot warranty covered second-in-command pilots (SICs).*fn4 French forwarded this information to Wittwer, who understood that, "under the Starr Aviation proposal, the schooling requirements and simulator requirements would apply to back-up SICs."
Wittwer subsequently requested a binder for the policy. The binder included a pilot warranty endorsement that provided:
It is required that the aircraft is operated by a two pilot crew at all times that has been approved by the named insureds [sic] chief pilot.
It is further required that such pilot(s) must have successfully completed a ground and flight recur-rent/initial training course for the make and model operated within the past 18 months. Any such course must incorporate the use of a motion-based simulator specifically designed for the insured make and model/make and model series.
The policy contained a nearly identical pilot warranty and Exclusion F, which excluded coverage consistent with the pilot warranty provisions.*fn5
Scott Michael (Michael), Trishan's chief pilot, was in command of the covered aircraft during the accident. Michael was unaware at the time of the accident that the Federal policy contained "commercial flight school and simulator training requirements" for second-in-command pilots. According to Michael, he would "have never, and would never, permit any pilot to operate any aircraft if that pilot did not meet both the applicable minimum requirements under federal regulations and any further training requirements set forth in the insurance policy covering the aircraft."
Dennis Piermarini (Piermarini) served as the second-in-command for the aircraft during the accident. Piermarini had "45 years and 15,000 hours of flight experience with 13,000 hours in jet aircraft." He also "flew as co-pilot in the Falcon 900 as second-in-command for approximately five round-trip flights and a total of approximately nine hours of flight time." Piermarini maintained that, if he had performed the simulator training, he "would have learned no new information or training that would have either alerted [him] to any condition or contributed to any of the actions that [he] took . . ."
According to Michael's expert witness report, Piermarini received "approximately 8-10 hours of static cockpit simulation of procedures, emergency procedures, placement of placards, markings, instrumentation and other operations of the aircraft." Michael stated that this training was "very similar to simulator training, and in some cases better . . ." After conducting "[a] check ride flight," Michael believed that Pier-marini "was well versed and procedurally accurate in all particulars of the Falcons systems." Piermarini also "flew in the jump seat as an observer on several flight legs . . ." Michael opined that Piermarini's failure to undergo simulator training would not have affected Piermarini's qualifications to operate the aircraft.
In his declaration, Charles Tatum (Tatum), Trishan's expert, stated that the accident would not have been prevented if the pilots had undergone simulator or ground training. In his expert report, Tatum opined that Piermarini's "8-10 hours of static cockpit training [was] very similar to simulator training and in some cases better . . ." Tatum concluded that "a full ...