Two insurers failed to cover repairs and other costs stemming from a corporate jet crash that totaled more than $1.3 million, the jet's owner alleged in a lawsuit removed by the insurers to Texas federal court Thursday, saying the carriers further concealed and misrepresented coverage terms.

In its third-party petition filed in April against United States Aircraft Insurance Group and QBE Insurance Corp., the jet owner Falcon Crest Holdings LLC told a Texas state court that the insurers further sought to improperly obtain a release from coverage liability in "proof of loss" paperwork.

"In other words, had Falcon Crest trusted the insurers and signed the paperwork the insurers requested in expectation of a partial claim payment, the insurers would have obtained a release from Falcon Crest and had no liability beyond the very first and minor partial claim payment," Falcon Crest said.

It added that it did receive partial coverage payment of $300,000, although through two "sluggish installments" that still left an aviation company performing airframe repairs with $200,000 in outstanding invoices.

Falcon Crest further named insurance adjuster Shaen Phillips as a defendant, alleging in part that he "exerted pressure to settle the claim on terms that would have been abusively favorable to the insurers."

According to court filings, the coverage dispute stems from a March 2024 incident in which a corporate jet owned by Falcon Crest and operated by RVR Aviation LLC crashed on takeoff. RVR then sued Falcon Crest in June 2024, alleging that Falcon Crest breached its charter aircraft management contract with RVR, asserting claims with respect to the crashed jet and two separate jets.

Falcon Crest then brought the insurers into the dispute via its third-party complaint filed this past April. That in turn prompted the defendants to sever the coverage dispute over the jet crash from the other claims from RVR, which the state court granted last month.

Falcon Crest said it promptly notified its insurers about the jet crash, and that the insurers' delay in covering repair invoices prevented it from returning the jet to service.

"For context, Falcon Crest's jet at issue was capable of generating more than $200,000 of revenue in a single month when fully chartered," the company alleged.

But before receiving any coverage payments, Falcon Crest said that its insurers initially "refused to provide Falcon Crest a copy of the policy," saying they first sent a heavily redacted copy before Falcon Crest finally received a full copy around October 2024.

It "became clear" why the insurers didn't want to send a full copy, Falcon Crest said, arguing that the policy "actually afforded valuable replacement aircraft and engine coverage while the repairs were pending."

"This benefit would have been worth up to $1.5 million in rental and engine coverage had Falcon Crest been aware of it," Falcon Crest said. "The insurers concealed it, and thereby misrepresented through omission of material fact, the policy's coverage terms."

The insurers also misrepresented the policy's terms by maintaining that they were only obligated to reimburse expenses that Falcon Crest actually paid, Falcon Crest said.

Under such a reading, Falcon Crest would have to "advance nearly $1 million of covered costs to contractors while the insurers could continue to hold the insurance funds, generate interest on those funds, and gain even more disparate bargaining power over Falcon Crest," the company further argued.

The company specifically asserted claims under the Texas Insurance Code, along with claims for breach of contract and negligence.

In their notice of removal Thursday, the defendants argued that the now-severed coverage litigation is more appropriate for Texas federal court since "no defendant is a citizen of Texas and thus there is complete diversity."

Representatives of the parties did not immediately respond to a request for comment.

Falcon Crest is represented by Justin N. Bryan, Asher K. Miller and Brenna N. Wiebe of McCathern PLLC.

USAIG, QBE and Phillips are represented by Andrew B. Ryan and Sarah E. Long of Ryan Law Partners LLP.

The case is Falcon Crest LLC v. United States Aircraft Insurance Group et al., case number 3:25-cv-02683, in the U.S. District Court for the Northern District of Texas.