                          UNPUBLISHED

UNITED STATES COURT OF APPEALS
                FOR THE FOURTH CIRCUIT


U.S. SPECIALTY INSURANCE COMPANY,       
                  Plaintiff-Appellee,
                 v.
SKYMASTER OF VIRGINIA,
INCORPORATED; GARY HOWARD                         No. 01-1071
JOHNSON POULIN; JANE ANN POULIN;
GINGER MARIE POULIN; ERIC ANDREW
POULIN; RUTH HODGES,
             Defendants-Appellants.
                                        
           Appeal from the United States District Court
          for the Eastern District of Virginia, at Norfolk.
                Tommy E. Miller, Magistrate Judge.
                           (CA-00-39-2)

                      Argued: September 26, 2001

                      Decided: December 17, 2001

   Before MOTZ, TRAXLER, and GREGORY, Circuit Judges.



Affirmed by unpublished opinion. Judge Gregory wrote the majority
opinion, in which Judge Motz joined. Judge Traxler wrote a dissent-
ing opinion.


                             COUNSEL

ARGUED: Joseph Anthony Gawrys, Virginia Beach, Virginia; Carl
Randall Stone, Richmond, Virginia, for Appellants. Robert Barnes
2        U.S. SPECIALTY INSURANCE v. SKYMASTER OF VIRGINIA
Delano, Jr., SANDS, ANDERSON, MARKS & MILLER, Richmond,
Virginia, for Appellee. ON BRIEF: Albert M. Orgain, IV, SANDS,
ANDERSON, MARKS & MILLER, Richmond, Virginia, for Appel-
lee.



Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).


                             OPINION

GREGORY, Circuit Judge:

   Skymaster of Virginia, Inc., Gary Poulin, Jane Ann Poulin, Ginger
Marie Poulin, Eric Andrew Poulin, and Ruth Hodges appeal the dis-
trict court’s grant of summary judgment to U.S. Specialty Insurance
Company ("U.S. Specialty"). This action was filed after Gary Poulin
("Poulin"), a Skymaster officer and shareholder, piloted a U.S.
Specialty-insured plane that crashed, injuring Poulin and four others.
U.S. Specialty sought to avoid coverage because Poulin purportedly
did not have a valid medical certificate when he flew the plane, as
required by U.S. Specialty’s insurance policy ("the Policy"). In
response to cross-motions for summary judgment, the district court
held that Va. Code § 38.2-2227 did not preclude U.S. Specialty from
avoiding coverage, that U.S. Specialty could avoid coverage even if
the crash was not caused by Poulin’s medical condition and purported
lack of a valid medical certificate, and that Va. Code § 38.2-2226 did
not waive U.S. Specialty’s right to avoid coverage. The district court
did not address U.S. Specialty’s alternative summary judgment
motion based on Poulin’s failure to cooperate with U.S. Specialty and
unclean hands. We affirm the district court, but on the alternative
ground that Poulin’s failure to cooperate with U.S. Specialty allowed
U.S. Specialty to avoid coverage.

                                  I.

  Poulin was diagnosed with diabetes in 1987, but never reported his
condition to the Federal Aviation Administration ("FAA") or U.S.
         U.S. SPECIALTY INSURANCE v. SKYMASTER OF VIRGINIA             3
Specialty. On August 9, 1998, Poulin’s plane crashed, injuring Poulin
and his four passengers: Jane Ann Poulin, Ginger Marie Poulin, Eric
Andrew Poulin and Ruth Hodges. It is undisputed that the crash was
not related to Poulin’s diabetes, but apparently was caused by a
mechanic’s failure to properly fuel the plane.

   While investigating the crash scene, the FAA found insulin and
hypodermic needles. The FAA eventually revoked Poulin’s medical
certificate on the basis of his diabetes. The FAA also refused to award
Poulin a medical waiver, which would have allowed him to pilot a
plane despite his diabetes.

   U.S. Specialty refused to honor the Policy after it learned of the
FAA’s decision, arguing that Poulin lacked a valid medical certifi-
cate, as required by the Policy. It is undisputed that the Policy
excludes coverage if the pilot of an insured plane does not have a cur-
rent and proper medical certificate. Specifically, the Policy provides:

    The aircraft must be operated in flight only by a person
    shown below, who must have a current and proper (1) medi-
    cal certificate and (2) pilot certificate with necessary ratings
    required by the FAA for each flight. There is no coverage
    under the policy of the pilot if he does not meet these
    requirements.

"Coverage Identification Page", Item 9.

    You must make certain that the pilot operating the aircraft
    in flight meets the requirements shown in Item 9 of the Cov-
    erage Identification Page. There is no coverage under the
    policy if the pilot does not meet these requirements.

Part One of the Policy entitled "General Provisions and Conditions,"
paragraph 3.

    We will not pay for physical loss of or damage to your air-
    craft . . . unless the requirements of the Coverage Identifica-
    tion Page regarding Pilots (Item 9) . . . are met . . . .
4        U.S. SPECIALTY INSURANCE v. SKYMASTER OF VIRGINIA
Part Two of the Policy entitled "Aircraft Physical Damage", para-
graph 4(a).

    We do not cover any . . . bodily injury or property damage
    unless the requirements of the Coverage Identification Page
    regarding Pilots (Item 9) . . . are met . . . .

Part Three of the Policy entitled "Liability to Others", paragraph 4(a).

  Moreover, as part of its post-crash investigation, U.S. Specialty
asked Poulin to submit to an examination under oath ("EUO"). Para-
graph 6 of the Policy’s "General Provisions and Conditions" required
Poulin to cooperate in U.S. Specialty’s investigation. It states as fol-
lows:

    6. If You Have An Accident or Occurrence

    In the event of an accident or occurrence, you and anyone
    we protect must: . . .

         b. Cooperate with us in the investigation, settle-
         ment or defense of any claims or suit;

         c. Answer under oath, questions asked by us or
         anyone we designate . . . .

Poulin appeared for his EUO on July 21, 1999, but refused to answer
any questions relating to his FAA medical certificate. Instead, Poulin
invoked the Fifth Amendment right against self incrimination. In fact,
Poulin refused to answer any questions about his medical certificate
until his discovery deposition more than one year later, on August 1,
2000, which was scheduled as a result of the instant litigation.

   U.S. Specialty brought this declaratory judgment action for a deter-
mination that it could exclude coverage. On cross-motions for sum-
mary judgment, Poulin argued that (1) Va. Code § 38.2-2227
precluded U.S. Specialty from avoiding coverage based on Poulin’s
purported failure to have a valid medical certificate; (2) U.S. Spe-
cialty could not avoid coverage based on his purported failure to have
         U.S. SPECIALTY INSURANCE v. SKYMASTER OF VIRGINIA             5
a valid medical certificate because that failure was not causally
related to the crash; and (3) Va. Code § 38.2-2226 waived U.S. Spe-
cialty’s right to rely on a policy exclusion. The district court denied
Poulin’s summary judgment motion on all grounds and entered judg-
ment for U.S. Specialty on its motion for summary judgment, which
was based on the medical certificate policy exclusion. U.S. Specialty
Ins. Co. v. Skymaster of Virginia, Inc., 123 F. Supp.2d 995 (E.D. Va.
2000). The district court did not rule on U.S. Specialty’s alternate
summary judgment motions based on Poulin’s failure to cooperate
with U.S. Specialty and unclean hands.

                                   II.

                                   A.

   This Court reviews a grant of summary judgment de novo. Higgins
v. E. I. DuPont de Nemours & Co., 863 F.2d 1162, 1167 (4th Cir.
1988). Summary judgment is appropriate only when there are no
material facts in dispute and the moving party is entitled to judgment
as a matter of law. Fed. R. Civ. P. 56(c); Celotex Corp. v. Catrett, 477
U.S. 317, 322 (1986). A material fact is in dispute when its existence
or non-existence could lead a jury to different outcomes. Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A genuine issue exists
when there is sufficient evidence on which a reasonable jury could
return a verdict in favor of the non-moving party. Id. Mere specula-
tion by the non-moving party cannot create a genuine issue of mate-
rial fact. Beale v. Hardy, 769 F.2d 213, 214 (4th Cir. 1985). The
Court must view the evidence in the light most favorable to the non-
moving party. Smith v. Virginia Commonwealth Univ., 84 F.3d 672,
675 (4th Cir. 1996) (en banc).

                                   B.

   U.S. Specialty moved for summary judgment based on Poulin’s
failure to cooperate by refusing to answer questions at his EUO.
Poulin responded by arguing that questions relating to his medical
certificate were not material and that he had a right to invoke the Fifth
Amendment. The district court did not rule on this issue, but it poses
a question of law that this Court may address.
6         U.S. SPECIALTY INSURANCE v. SKYMASTER OF VIRGINIA
   We easily dispose of Poulin’s Fifth Amendment claim. In Powell
v. USF&G Co., 88 F.3d 271 (4th Cir. 1996), this Court considered a
similar EUO provision and the insureds’ failure to answer certain
questions based on the Fifth Amendment. We rejected the insureds’
reliance on the Fifth Amendment:

     Any argument of the [insureds], that giving the [EUO] pro-
     vision such a broad scope would effectively abrogate their
     right against self-incrimination, is unavailing; they may
     avoid incriminating themselves by refusing to submit to rel-
     evant requests made by [the insurer] under the policy provi-
     sion, although to do so may ultimately cost them insurance
     coverage under the terms of the contract for which they and
     [the insurer] bargained.

Id. at 274. See also USF&G v. Wigginton, 964 F.2d 487, 491 (5th Cir.
1992) ("the compulsion secured against by the constitution is a com-
pulsion exercised by the state in its sovereign capacity . . . . Constitu-
tional immunity has no application to a private examination arising
out of a contractual relationship"). Thus, Poulin may not rely on the
Fifth Amendment to avoid a contractual obligation to cooperate by
submitting to an EUO.

   Powell also is instructive with respect to Poulin’s immateriality
claim. In Powell, fire destroyed the insureds’ home. Id. at 272. They
immediately came under suspicion by the police and the insurer. Id.
Their insurer scheduled an EUO, seeking information relating to the
fire’s cause. Id. The insureds refused to answer such questions, claim-
ing, in part, that they were immaterial. Id. This Court disagreed, stat-
ing that an EUO clause "encompasses investigation into possible
motives for suspected fraud." Id. at 273. The Court also relied on 5A
J. Appleman & J. Appleman, Insurance Law and Practice § 3552, p.
561 (1970), in which the authors state that an EUO "is not restricted
to amount of loss, but the insurer has the right to examine the insured
and his witnesses as to any matter material to the insurer’s liability
and the extent thereof." Id.

  Thus, Powell teaches that an EUO may reach "any matter material
to the insurer’s liability and the extent thereof." U.S. Specialty
believed that it could exclude coverage based on Poulin’s purported
         U.S. SPECIALTY INSURANCE v. SKYMASTER OF VIRGINIA             7
failure to obtain a valid medical certificate. The potential existence of
an exclusion negating liability for an insurer is a material matter.
   Poulin claims that questions relating to the medical certificate were
immaterial because Va. Code § 38.2-2227 precludes U.S. Specialty
from excluding coverage based on Poulin’s purported failure to obtain
a valid medical certificate. Va. Code § 38.2-2227 states that

    [n]o insurance policy issued or delivered in this Common-
    wealth covering loss, expense, or liability arising out of the
    loss, maintenance, or use of an aircraft shall act to exclude
    or deny coverage because the aircraft is operated in viola-
    tion of federal or civil regulations or any state or local ordi-
    nance. This section does not prohibit the use of specific
    exclusions or conditions in any policy that relates to any of
    the following:

         1. Certification of an aircraft in a stated category
         by the Federal Aviation Administration;

         2. Certification of a pilot in a stated category by
         the Federal Aviation Administration;

         3. Establishing requirements for pilot experience;
         or

         4. Restricting the use of the aircraft to the purposes
         stated in the policy.
   We need not decide whether § 38.2-2227 precludes U.S. Specialty
from relying on its Policy exclusion because, even if it does, it does
not render questions about Poulin’s medical certificate immaterial.
Rather, the questions remain material (1) to determine whether a Pol-
icy exclusion applies and (2) to determine whether a state statute
could apply to preclude U.S. Specialty from relying upon that Policy
exclusion. Thus, the questions were, indeed, material and Poulin
failed to cooperate by refusing to answer them.
8        U.S. SPECIALTY INSURANCE v. SKYMASTER OF VIRGINIA
                                  III.
   For the foregoing reasons, the judgment of the district court is
affirmed.*
                                                           AFFIRMED

TRAXLER, Circuit Judge, dissenting:

   I recognize that Poulin was not completely forthcoming in respond-
ing to questions from U.S. Specialty about his diabetes, but I feel that
his disclosure to U.S. Specialty within two months of the crash that
he had had diabetes since 1987 and that he had been using insulin
since 1994 was sufficient information given within sufficient time for
U.S. Specialty to oppose coverage. Under these circumstances, I can-
not conclude that Poulin’s later refusal to answer some questions was
a material and substantial breach of his duty to cooperate.

   I would reach the merits of the coverage question and hold that Va.
Code Ann. § 38.2-2227 precludes U.S. Specialty from utilizing misin-
formation to the FAA about Poulin’s diabetes to deny coverage for
claims arising from a crash caused by the airplane’s running out of
gas. Accordingly, I respectfully dissent.

  *Because the issue of Poulin’s lack of cooperation is dispositive, we
need not address the parties’ remaining arguments.
