Avemco Corp., a Frederick, Md., holding company for aviation insurance and finance firms, said yesterday it is seeking at least $20 million in a suit against a former employe who now heads the insurance arm of the Aircraft Owners and Pilots Association.

Avemco alleged that James G. Leach, the former chairman and president of its National Aviation Underwriters Inc. subsidiary, "secretly negotiated an agreement" to become president of AOPA Service Corp. (ASCO), "claiming that he could obtain insurance services for AOPA on terms more favorable than currently furnished, or to be furnished, by Avemco."

Avemco Insurance Co., an Avemco subsidiary, has been AOPA's official insurer for 23 years, and the policies written for its members accounted for 40 percent of the firm's 1984 revenue.

The suit, filed in Frederick Circuit Court, charges Leach with breach of fiduciary duty, interference with contract, fraud and conversion, and seeks actual and punitive damages of at least $10 million for each.

Leach, who became acting president of ASCO Monday, would not comment. But AOPA issued a statement saying "the allegations contained in the suit are not supported by the facts."

Leach, who is awaiting formal trustees' confirmation as president, joined ASCO "to manage and administer our members' insurance programs, including our existing arrangements with Avemco, which . . . continue in force," AOPA said.

Attempts to reach an Avemco spokesman were unsuccessful.

Avemco and AOPA share a close relationship. They are housed in adjacent office buildings, on a site purchased together, and Avemco helped AOPA construct its building by guaranteeing 50 percent of its $4.8 million loan. The guarantee prevents AOPA from canceling its business arrangement with Avemco.

Avemco Corp. is the parent company of Avemco Group, which provides insurance, financial, marketing and loss-management services. The corporation reported net income of $5.3 million ($1.74 a share) on revenues of $42.8 million for the first nine months of this year, a 29 percent increase over last year.