                     NOTICE: NOT FOR OFFICIAL PUBLICATION.
        UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT
           PRECEDENTIAL AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.




                                     IN THE
             ARIZONA COURT OF APPEALS
                                  DIVISION ONE


                DANIEL L. KIRKLAND, Plaintiff/Appellant,

                                        v.

       OLD UNITED CASUALTY COMPANY, Defendant/Appellee.

                             No. 1 CA-CV 14-0427
                               FILED 10-22-2015


           Appeal from the Superior Court in Maricopa County
                          No. CV2012-011997
            The Honorable Douglas L. Rayes, Judge (Retired)

                                   AFFIRMED


                                   COUNSEL

Stone Law Firm, PLC, Tempe
By C. Randall Stone
Counsel for Plaintiff/Appellant

Clark Hill, PLC, Scottsdale
By Darrell E. Davis, Mark S. Sifferman
Counsel for Defendant/Appellee
                      KIRKLAND v. OLD UNITED
                         Decision of the Court



                      MEMORANDUM DECISION

Presiding Judge Margaret H. Downie delivered the decision of the Court,
in which Judge Patricia A. Orozco and Judge Maurice Portley joined.


D O W N I E, Judge:

¶1           Daniel L. Kirkland appeals the superior court’s grant of
summary judgment to Old United Casualty Company. For the following
reasons, we affirm.

           FACTUAL AND PROCEDURAL BACKGROUND

¶2             On March 30, 2012, Kirkland was involved in an accident
while piloting a Focke-Wulf FW-190 airplane.1 During the landing, the
airplane veered off the runway and sustained damage. According to a
report prepared by the National Transportation Safety Board, Kirkland
failed to maintain “directional control of the airplane during the landing
roll.” The flight was Kirkland’s first time piloting the FW-190.

¶3            Kirkland — the plane’s owner — had purchased ground and
flight insurance from Old United. Old United denied coverage for
damages arising from the accident, taking the position Kirkland was not
an approved pilot under the policy. Kirkland sued Old United in superior
court, alleging breach of contract and bad faith.

¶4            Old United filed a motion for summary judgment, which the
superior court granted. The court awarded Old United its costs and
attorneys’ fees, and this appeal followed. We have jurisdiction pursuant
to Arizona Revised Statutes (“A.R.S.”) section 12-2101(A)(1).




1       The plane at issue is a reproduction of the Focke-Wulf FW-190,
which was a German single-seat, single-engine fighter aircraft used
during World War II. The FAA categorizes the plane as an “experimental
category aircraft.”




                                    2
                        KIRKLAND v. OLD UNITED
                           Decision of the Court

                               DISCUSSION

¶5            As identified by Kirkland, the issue before us is whether the
superior court “erred in finding that [he] was not an approved pilot under
the contract of insurance during his flight.” The interpretation of an
insurance contract presents a question of law that we review de novo.
Sparks v. Republic Nat’l Life Ins. Co., 132 Ariz. 529, 534 (1982). We review
the facts and the record in the light most favorable to Kirkland, the party
against whom summary judgment was entered. Gulf Ins. Co. v. Grisham,
126 Ariz. 123, 124 (1980).

¶6              “It is well established that parties to an insurance agreement
may contract for any lawful coverage, and that an insurance company has
the right to limit its liability by imposing conditions and restrictions on its
contractual obligations.” Sec. Ins. Co. of Hartford v. Andersen, 158 Ariz. 426,
430 (1988); see also Pac. Indem. Co. v. Kohlhase, 9 Ariz. App. 595, 597 (1969)
(insurer “may lawfully exclude certain risks from the coverage of its
policy”). In Andersen, our supreme court upheld summary judgment in
favor of the insurer because the pilot did not hold a valid and current
medical certificate at the time of the crash, which was a condition of the
policy. 158 Ariz. at 427-28, 431. Interpreting the insurance contract, the
court observed that “[t]he language of exclusion, based on a FAA
regulation that is obviously related to safety, is clear and unambiguous.”
Id. at 430. More recently, this Court applied this same standard in a case
involving a pilot who failed to log the minimum number of flight hours
required for coverage under an insurance policy. Potter v. U.S. Specialty
Ins. Co., 209 Ariz. 122, 125, ¶ 11 (App. 2004). In affirming summary
judgment for the insurer, we acknowledged the company’s right to “limit
its liability for losses associated with inexperienced pilots.” Id. at 124, ¶ 9.

¶7          The insurance policy at issue limits coverage to flights flown
by “approved pilots” and imposes conditions that must be satisfied before
coverage applies:

       ITEM 7. APPROVED PILOTS – During each “Approved
       Use” as defined in Item 6, the aircraft must be operated
       in-flight only by the “Approved Pilots” shown below who
       must have a current and proper (1) medical certificate and
       (2) pilot certificate with necessary ratings as required by the
       FAA for each flight. There is no coverage under the policy if
       the pilot does not meet these requirements.

       Lee Lauderback and Stewart Dawson and Bill Muzala



                                       3
                        KIRKLAND v. OLD UNITED
                           Decision of the Court

       Dan Kirkland is required to receive a check ride and sign off
       by Lee Lauderback in the same make and model aircraft
       insured herein and 25 hours solo in the same make and
       model aircraft insured herein prior to . . . completing a check
       ride with Stewart Dawson.

Absent compliance with the approved pilot conditions established in Item
7, the insurance policy made clear that no coverage existed.2

¶8           The record establishes that Kirkland failed to satisfy the
conditions required to be an “approved pilot” under the terms of the
policy. He never completed a check ride with either Lee Lauderback or
Stewart Dawson in a FW-190.3 Indeed, Kirkland admitted in the superior
court that he had not completed a check ride, arguing it would be
“impossible in a single seat aircraft” such as the FW-190.               FAA
regulations, however, state that a practical test can be conducted in a
single seat airplane “if the [e]xaminer is in a position to observe the
applicant during the practical test . . . .”4 14 C.F.R. §§ 61.63(g), 61.45(e).
During such a test, “the inspector observes the applicant from the ground
or from another aircraft.”       FAA Order 8900.1, Flight Standards
Information Management System, Vol. 5, Ch. 1, section 4, § 5-84(e).


2     Under the section entitled “General Provisions and Conditions,” the
policy states: “When the aircraft is in-flight, you must make certain that
the pilots are ‘approved pilots’ in Item 7 of the PSP [policy summary
page]. There is no coverage if this requirement is not met.”
3     Kirkland flew with Lauderback in a TF-51 Mustang in January 2012,
after which Lauderback gave Kirkland a sign off indicating he was ready
to proceed with a FW-190 check ride.

4     The regulations provide:

       An applicant for a type rating . . . in a single engine airplane
       with a single-pilot station must perform the practical test in
       the multi-seat version of that single engine airplane, or the
       practical test may be performed in the single-seat version of
       that airplane if the Examiner is in a position to observe the
       applicant during the practical test and there is no multi-seat
       version of that single engine airplane.

14 C.F.R. § 61.63(g).



                                      4
                       KIRKLAND v. OLD UNITED
                          Decision of the Court

¶9            Additionally, Kirkland failed to complete the twenty-five
hours of solo flight in a FW-190 that was expressly required by policy Item
7. Kirkland concedes he had only “begun to fly up to 25 hours when the
accident occurred.”

¶10           As a final and independent basis for denying coverage, the
record established that at the time of the accident, Kirkland was piloting
the Focke-Wulf FW-190 without proper FAA authorization.               The
insurance policy required each approved pilot to have a “pilot certificate
with necessary ratings as required by the FAA for each flight.” Old
United asserts, without contradiction, that on the day of the accident,
“Kirkland was piloting the aircraft on an expired FAA Letter of
Authorization.” Kirkland contends, however, that the policy did not
require him to obtain a letter of authorization or any other FAA
authorizations.

¶11            The FAA can issue letters of authorization in lieu of a type
rating and will do so in the case of experimental aircraft for which a type
rating has not been established. See 14 C.F.R. § 61.31(b); FAA Order
8900.1, Flight Standards Information Management System, Vol. 5, Ch. 9,
section 2, § 1578(A)(1) and (2). “Issuance of this [letter of] authorization
parallels the issuance of a type rating under Title 14 of the Code of Federal
Regulations (14 CFR) part 61.” FAA Order 8900.1, § 1578(B)(3).

¶12          The Focke-Wulf FW-190 is an experimental aircraft, and the
FAA issued Kirkland a “temporary letter of authorization,” authorizing
him to receive “pilot training and practice” on the aircraft. The temporary
authorization expired on March 24, 2012 — six days before the accident.
Accordingly, at the time of the accident, Kirkland was piloting the FW-190
without FAA authorization.

¶13           Kirkland failed to meet several conditions necessary to
become an “approved pilot” under the policy, justifying Old United’s
denial of coverage. See Kohlhase, 9 Ariz. App. at 597 (“[W]here damage
occurs during the operation of a plane under circumstances as to which
the policy excludes coverage, there is no coverage.”). Accordingly, we
affirm the grant of summary judgment in favor of Old United.

                              CONCLUSION

¶14          We affirm the judgment of the superior court. Old United
seeks an award of attorneys’ fees incurred on appeal pursuant to A.R.S. §
12–341.01. In the exercise of our discretion, we grant that request and will
award Old United its reasonable attorneys’ fees and taxable costs upon


                                     5
                  KIRKLAND v. OLD UNITED
                     Decision of the Court

compliance with ARCAP 21. See State Farm Mut. Auto. Ins. Co. v.
Arrington, 192 Ariz. 255, 261, ¶ 27 (App. 1998).




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