SAN DIEGO – The U.S. District Court for the Southern District of California recently granted an insurance company's motion for summary judgment in a lawsuit regarding the denial of an insurance claim for a Gulfstream jet that went missing in Mexico.
In a Nov. 27 court order, U.S. District Judge Larry Alan Burns granted Old Republic Insurance Company (ORIC) motion in a lawsuit filed by R Consulting & Sales claiming breach of contract and bad faith after ORIC denied its claim regarding the jet. In the ruling, the court agreed with ORIC's claims that cited possible misrepresentations in the policy application as well as breaches of the policy’s warranties.
Court filings said the jet, which allegedly went missing in Mexico in 2014
In its motion, ORIC claimed inconsistencies in R Consulting’s application for coverage, and that R Consulting had infringed on several warranties and had yet to prove that the physical damage coverage was warranted.
The court agreed that the inconsistencies voided the coverage.
ORIC alleged that R Consulting had misrepresented the home base of the aircraft as being Minden-Tahoe Airport in Nevada, court filings said, but ORIC claimed that it was in fact based in Mexico following a lease agreement. ORIC said it does not offer coverage for operations based in Mexico, though it covers incidental trips abroad.
ORIC also claimed that R Consulting had not informed it of a felony conviction for falsifying air logs by one of its pilots, Lance Ricotta, over which ORIC said it would have denied coverage.
The court noted that the insurer has requested such specific details in its application.
The court also noted R Consulting's alleged bid to sell the aircraft, which the consulting firm purportedly concealed, an action that would have breached the insurance policy.
According to court filings, R Consulting entered into an agreement to sell the jet in Mexico, and the prospective buyer assumed possession and control over the jet in December 2014. However, funds for the purchase of the jet failed to be transferred to the consulting firm, and R Consulting filed suit in Mexico in June 2015 regarding the dispute.
Court filings said that in September 2015, R Consulting "learned from the Mexican Directorate General of Civil Aeronautics that the aircraft had crashed sometime before Jan. 12, 2015. ... (and) later learned from the U.S. Department of Homeland Security that the plane was likely destroyed in Venezuela on or about Dec. 23, 2014"
ORIC was informed in September 2015 of the possible loss of the jet, court filings said.
In its motion, ORIC also argued that loss of the jet did not equate to physical damage – for which the plane was insured – and there was no proof that the aircraft had actually been damaged or what had happened to it.