Land.Cases Flashcards
Whiten v Pilot Insurance Co : Facts
Insured’s house was destroyed in a fire. After some time, the insurer cuts off the rent without notice alleging arson (“that insured deliberately set the house on fire”) but has no evidence
Whiten v Pilot Insurance Co : Issues
Did Pilot Ins use the power imbalance to force insured into a smaller settlement?
Whiten v Pilot Insurance Co : Rulings 1,2,3 (intiial, appeal, Supreme Court)
Ruling 1: jury awards 1M in punitive damages to insured
Ruling 2: ON Court of Appeals reduces punitive damages to 100K
Ruling 3: Supreme Court of Canada restores the 1M in damages. Although award was very high the award was within the rational limit as the act was highly reprehensible as an effort to force an unfair settlement.
Whiten v Pilot Insurance Co : Details - General
Awards of this type should consider proportionality along several dimensions
Whiten v Pilot Insurance Co : Details - Dimensions / Considerations Supreme Court used to determine the quantum of punitive damages
- Degree of vulnerability of the plaintiff. Punitive damages would be higher if defendant abused their position of power.
- Degree of harm or potential harm directed at plaintiff. The more harm is done the higher the quantum.
- Other advantage wrongfully gained - so that the defendant don’t see the award simply as a fee
- Consider the need for deterrence
- Consider all other civil and criminal punishments to defendant
Somersall v Scottish & York : Facts
- Victim is severly injured by UNDER-insured driver
- Injured party & tortfeaser sign limits agreement
- Injured party also claims against OWN insurer for excess beyond limits agreement
- Insurer denies claim
Somersall v Scottish & York : Definition of limits agreement
Agreement between injured party & tortfeasor where:
- Tortfeasor admits liability
- Injured party won’t sue for more than tortfeasor’s limits
Somersall v Scottish & York : Definition - SEF No. 44
Endorsement providing coverage to insured when tortfeasor is UNDER-insured
Somersall v Scottish & York : Issues
Regarding insurer:
- Does limits agreement imply plaintiff not legally entitled to further recovery from tortfeasor?
- (Insurer then effectively loses subrogation rights)
Somersall v Scottish & York : Rulings 1,2,3 (initial, appeal, Supreme Court)
Ruling 1: motions judge rules for insurer
Ruling 2: ON appeals court reversed original ruling (plaintiff recovers under SEF 44)
Ruling 3: Supreme Court dismissed insurer’s appeal (plaintiff recovers under SEF 44)
Somersall v Scottish & York : Ruling - Supreme Court Reasoning
At time of accident, SEF 44 was in effect, therefore:
- Subsequent limits agreement did not preclude coverage under SEF 44.
Sansalone v Wawanesa : Facts
- BC Transit bus drivers sexually abused a teenager
- Wawanesa DENIED defense & coverage: policy terms exclude bodily injury caused intentionally
Sansalone v Wawanesa : Issues
How does (duty to defend) relate to (duty to indemnify)?
- Does insurer have a duty to defend where indemnification is beyond the scope of the policy
Sansalone v Wawanesa : Ruling 1 (initial Trial)
RULING 1: there IS duty to defend because bus drivers may have (mistakenly, negligently) believed consent had been given (insurer appeals)
Sansalone v Wawanesa : Ruling 2 (appeal)
RULING 2: appeals court rules there is no duty to defend (2-1 split decision)
Sansalone v Wawanesa : majority reasoning
When the risk of injury is inherent in the insured’s deliberate act so that the injury is the natural and probable consequence of the act, the intention to commit the act is the intention to cause the injury.
In this case, Sansalone had the intention to commit the act and therefore the intention to cause the injury. The insurer has no duty to defend
Sansalone v Wawanesa : minority reasoning
Sansalone committed an intentional tort without intending to cause injury.
Sansalone committed the alleged sexual acts in the negligently‐held belief that the victim consented. The duty to defend is separate from the duty to indemnify against damages, and therefore, the insurer has a duty to defend.
Nichols v American Home Assurance : Facts
A solicitor was accused of fraud but found innocent
- Sought defence costs from professional liability insurer
- Insurer denied claim
Nichols v American Home Assurance : Issues
How does (duty to defend) related to (duty to indemnify)
- Does insurer have a duty to defend where indemnification is beyond scope of the policy?
Nichols v American Home Assurance : Ruling 1 (Initial Trial)
Insurer must defend
Nichols v American Home Assurance : Ruling 2 (appeal)
ON appeals court dismissed appeal:
- (Duty to indemnify) vs (duty to defend) is different
- Must pay defense since defendant was found innocent
Nichols v American Home Assurance : Ruling 3 (Supreme Court)
Supreme Court allowed appeal:
- (Duty to defend) is triggered by (duty to indemnify)
- Since fraud was beyond the scope of coverage, there was no duty to indemnify, and therefore no duty to defend
Alie v Bertrand Frere Construction : Facts
Defective concrete requires replacement of basement of 140 houses in Ottawa (built between 1986 and 1988)
Alie v Bertrand Frere Construction : Issues
INDEMNITY COST ALLOCATION:
- Different years were covered by different insurers
- Which policies were triggered?
DEFENSE COST ALLOCATION:
- How are defense costs ALLOCATED between primary & excess insurer?
Alie v Bertrand Frere Construction : Ruling 1a
INDEMNITY TRIGGER: injury-in-fact
- consider each 1-yr period from construction to realization of defect in 1992
- assume that damages are evenly spread over all years
Alie v Bertrand Frere Construction : Ruling 1b
DEFENSE TRIGGER:
- excess/umbrella policies have duty to defend provided…
- …they follow the form of the underlying policy AND do not specifically exclude duty to defend
Precision Plating v Axa Pacific Insurance : Facts
Insured has a fire on premises causing chemicals to overflow and contaminate neighboring property
Precision Plating v Axa Pacific Insurance : Issue
Does insurer have a duty to defend?
- Pollution/contamination is EXCLUDED from policy
- But insured argued that cause of loss was fire & therefore covered
Precision Plating v Axa Pacific Insurance : Ruling 1
Chambers judge held for insured (insurer must defend)
- policy terms were ambiguous
- should not exclude contamination caused by fire
Precision Plating v Axa Pacific Insurance : Ruling 2
Insurer’s appeal allowed (no duty to defend)
- Third party claims were for CONTAMINATION not for fire (thus excluded from coverage)
Precision Plating v Axa Pacific Insurance : compare to other duty-to-defend cases
Compare to: (no duty to defend because no duty to indemnify)
- Sansalone v Wawanesa (sexual abuse)
- Nichols v American Home (fraud)
Precision Plating was different however:
- pollution/contimation was clearly excluded
- Insured argued cause of loss was fire not pollution (unsuccessful on appeal)
Explain the significance of the court case Precision Plating v Axa Pacific Insurance as it applies to exclusions in CGL coverage
What is critical is not the cause of loss, but the cause of liability. The claim arose from pollution damages, but pollution was excluded so the insurer had no obligation to payout. So even though fire was a concurrent cause of loss, the claim was for pollution damages, an excluded item.
Amos v ICBC : Facts
The insured, Amos, was shot by a gang in California (while driving rental car)
- claims no-fault accident benefits against his BC auto policy
Amos v ICBC : Issues
PURPOSE TEST: Did the accident result from ordinary and well known activities to which automobiles are put? (essentially, was the car being used in a normal way?)
CAUSALITY TEST: Is there some causal relationship between the injuries and the user or operation of the vehicle? (essentially, was there a link (possibly indirect) between use of car and shooting?)
Amos v ICBC : Rulings 1,2,3 (initial, appeal, Supreme Court of Canada)
Ruling 1:
- BC Supreme Court dismissed driver’s claim
Ruling 2:
- Appeals court upheld the judgment of the BC Surpreme Court
Ruling 3:
- Supreme Court of Canada held that appeal SHOULD be allowed (driver is compensated)
- Answer is YES to both purpose & causality tests
- Plaintiff received no-fault benefit (Accident Benefits) because damage was “arising out of” use of car
Amos v ICBC : Applicability to Ontario
Not strictly applicable in Ontario
- In Ontario, the policy wording is damage “caused by” use of car (vs “arising out of” use of car)
Belanger v Sudbury : Facts
20-yr old woman catastrophically injured in head-on collision due to icy road in Sudbury Ontario
Belanger v Sudbury : Issue
Was the city LIABLE for failing to maintain roadway in good repair during winter storm?
Damages of 12M had already been agreed upon
Belanger v Sudbury : Ruling 1
City was liable for plaintiff injuries
- Salting & plowing occurred but were not sufficient given the storm conditions
Belanger v Sudbury : Ruling 2
UPHELD: court of appeals rejected defendant’s “statutory defense” and upheld trial judges decision
- City is expected to ADAPT to conditions, NOT just blindly follow procedures
Belanger v Sudbury : Defense - describe the city’s defense strategy
The city attempted a “statutory defense”: claimed no liability because:
- could not reasonably be expected to know about the reformed ice
OR
- took reasonable steps to maintain roadway
Belanger v Sudbury : Comment - Standard of Care
The case was essentially about “standard of care”
- Appeal judge implied that standard of care was breached
- A qualified city worker should reasonably have foreseen the icy conditions and taken steps to mitigate them
Saadati v Moorhead : Facts
Mr Saadati sustained injuries in an auto accident when his vehicle was hit by Mr Moorhead’s vehicle
- Accident occurred on July 5, 2005
(Mr Saadati is the paintiff, Mr Moorhead is the defendant)
Saadati v Moorhead : Issue
Is Mr Saadati eligible for non-pecuniary damages for physical and/or mental injury
(see also: Trilogy case involving cap on non-pecuniary damages)
Saadati v Moorhead : Ruling 1
Physical Injury Claim:
- Rejected by trial judge
Mental injury claim:
- Evidence from plaintiff’s expert psychologist not enough to establish psychological injury
- BUT testimony of Mr Saadati’s family and friends was sufficient proof of psychological injury
- Judge awards 100K in non-pecuniary damages
Saadati v Moorhead : Ruling 2
- Trial judge’s decision overturned by BC court of appeals
- Mr Saadati has not demonstrated a medically recognized psychiatric or psychological injury
Saadati v Moorhead : Ruling 3
Supreme Court of Canada: unanimously reversed the BC Court of Appeal (June 2017)
Reason: recovery for mental illness depends on 5 criteria:
1. Duty of care (defendant had duty to drive safely)
2. Breach of duty of care
3. Legal causal relationship
4. Factual causal relationship
5. Establishment that the mental injury is serious & prolonged, and rises above ordinary anxieties & fears
All criteria were met (plaintiff does not have to prove a specific recognized mental illness), would not be fair for mental injuries to have a specific classification whereas for physical injuries there is no need for this.
Saadati v Moorhead : Concluding Comments
- The law of negligence must afford equal protections to victims of mental and physical injuries
- This case will have a significant impact on future cases dealing with compensation for mental injuries
Resurfice Corp v Hanke : Facts
Hanke badly burned, sued manufacturer of ice-surfacing machine for negligence in making the gasoline and water tanks so similar leading to his mistake
Resurfice Corp v Hanke : Issues
ISSUE: what was the cause of injury?
- STANDARD CAUSATION TEST: “but for” rule
- ALTERNATE CAUSATION TEST: “material contribution” (use only when the “but for” rule can’t establish causation)
Resurfice Corp v Hanke : what is the “but for” causation test
“But for” CAUSATION TEST: would result have occurred BUT FOR act/omission of defendant?
if YES: defendant NOT liable
if NO: defendant liable
Resurfice Corp v Hanke : what is the “material contribution” causation test
Requires that the negligent action MATERIALLY CONTRIBUTED to the risk of harm
- less rigorous than the “but for” test
Resurfice Corp v Hanke : Ruling 1 (initial trial)
TRIAL: defendant wins
The trial judge found that Hanke did not prove negligence of manufacturer as was Hanke’s error and not manufacturer design error’s. Notably due to Hanke’s own admission and application of but for rule test.
Reasoning of the “but for test”
- would explosion still have occurred BUT FOR making gas/water tanks similar?
- YES, so defendant not liable
Resurfice Corp v Hanke : Ruling 2 (appeal)
APPEAL: plaintiff (Hanke) wins
Reasoning: apply “material contribution test”
- Appeals judge stated trial judge failed in FC analysis (Foreseeability & Causation)
- Appeals judge then applies “material contribution test”
Resurfice Corp v Hanke : Ruling 3 (Supreme Court)
Supreme Court: defendant wins
Reasoning: Supreme Court conclude that manufacturer is not liable for Hanke’s injury and assessment of comparative blameworthiness is not necessary since Hanke’s error was not a design error and the but for rule test is the basic test and material contribution test not justified and necessary in this case
Resurfice Corp v Hanke : 2 requirements before “material contribution” causation test can be applied
Requirement 1: Plaintiff cannot prove negligence of defendant using the “but for” test because of factors outside plaintiff’s control
Requirement 2: The defendant may have exposed claimant to unreasonable risk with his conduct/negligence and the plaintiff suffered a loss
Morrow v Zhang (AB 2004) : Facts
Alberta introduced legislation to address: rising costs, increase in un/under-insured motorists
- Trial challenged constitutionality of $4K cap on non-pecuniary damages for ‘minor injuries’
Morrow v Zhang (AB 2004) : Issues
Issue 1 (article 7): insured stated that his right to freedom was not respected since he was “forced” to follow certain medical practices in order to be compensated.
Issue 2 (article 15): Injured states that the law is discriminatory for minor injured victims. Indeed, they can’t “fully” be compensated for non-pecuniary damages while major injureds can. Moreover, this stigmatizes the minor injured.
Morrow v Zhang (AB 2004) : Rulings 1,2
RULING 1: cap is discriminatory & shut down
- Cap does discriminate vs MI victims
- Cap promotes stereotype as malingeres
- Cap is unconstitutional - makes MI victims bear unfair share of cost cutting that came from need to reduce prems
RULING 2: appeal reverses original ruling (cap is upheld)
- Cap is designed to lower premiums to everyone
- Cap does not discriminate against minor injuries (cannot be appealed further)
PIPEDA Report of Findings : Facts
PIPEDA is Personal Information Protection & Electronic Documents Act
- an ON couple complained of increase in property insurance rates because insurer used their credit score
PIPEDA Report of Findings : Ruling
PRIVACY COMMISSIONER: use of credit score is acceptable
PIPEDA Report of Findings : Ruling - note
- Commissioner notes that the standard insurance form is deficient & misleading
- Consent must be meaningful (website said credit MAY be used, but it was ALWAYS used)
- Insurer should be explicit regarding its intent
Aviva v Pastore : Facts
- Victim sustained severe complications from ankle injury in 2002 auto accident
- Victim broke her leg and sought catastophic impairement designation. After a certain time, the other leg was not working properly
- Insured impacted by one of the 4 catastrophic impairement condition (was classified as class 4 in only one of 4 areas)
- Aviva rejected cat imparment designation
Aviva v Pastore : define “class 4 cat impairement”
Marked impairment significantly impeding useful functioning in at least 1 of: (DSCW)
- Daily Living
- Social Interaction
- Concentration
- Work activities
Aviva v Pastore : Issues
For class 4 designation, is it enough to show marked impairment in just 1 functional category?
- For Pastore, this was daily living
2nd issue is whether physical and mental/psychiatric injuries can be combined to determine whether the CAT injury criteria are satisfied
Aviva v Pastore : pre-Ruling (DAC, Arbitration)
DAC:
- concluded there was marked impairment in daily living
- An assessment of class 4 cat impairment was appropriate
Arbitration:
- DAC’s conclusion affirmed by arbitration delegate (class 4 impairment upheld)
Note:
- DAC = Designated Assessment Centers
- DACs were used by ON auto insurers & claimants
- DACs provided neutral 3rd party opinions about a claimant’s injuries and benefits
- DACs were in effect from 1994-2006
Aviva v Pastore : Director Delegate’s decisions on these issues
1st issue: Director delegate required only one criteria (DSCW) of these to be satisfied to declare a catastrophic impairment
2nd issue: this is allowed as it is hard to separate out the individual mental & physical injury. A comprehensive approach is needed to determine if CAT injury criteria are satisfied
Aviva v Pastore : Ruling 1 (Divisional Court)
Judicial review requested by Aviva reversed prior to decision
-Judge stated that delegate exceeded jurisdiction
NO cat impairment
Aviva v Pastore : Ruling 2 (ON Court of Appeals)
Divisional Court erred in “standard of review”
- Standard should be “reasonableness” (which delegate applied)
Class 4 cat impairement reinstated, so reinstated Director Delegate’s decision
Aviva v Pastore : Final words
There is currently a big gap in compensation between (non-cat & cat) impairment
- There should be a provision for something between minor injury & cat impairment
Kusnierz v Economical : Facts
- Plaintiff had leg amputated following auto accident (as passenger)
- Sought classification as catastrophically impaired
Kusnierz v Economical : Issue
Can physical impairment of 50% be combined with mental impairment % to reach 55% threshold for SABS cat impairment
Kusnierz v Economical : Ruling 1
TRIAL: NO cat impairment
- SABS does not explicitly state that physical & mental impairment can be summed
- SABS = Statutory Accident Benefits Schedule
Kusnierz v Economical : Ruling 2 (+2 items)
APPEAL: allowed cat impairment
- combining physical & mental %s seemed a more reasonable & modern interpretation (is not explicitly allowed but also not forbidden)
- The combination is consistent with the guidelines
More would qualify for cat impairment but still rare
NO material impact on AA (Availability/Affordability) of insurance
Tomec v Economical : Facts
Initial Injury:
- The insured (Tomec) was hit by a vehicle as a pedestrian on Sept 12, 2008
- Her injuries were serious but not catastrophic
- She was therefore granted 104 weeks of ACB (Attendant Care Benefits) and HK (House Keeping)
- Economical stopped benefits on Sept 12, 2010
Deteriorating Condition:
- Economical reclassified her as CAT (catastrophically impaired) in May 2015
- CAT impairment removes the time limit for ACB and HK
- but Economical denied benefits because the 2-yr statutory time limit for making a claim had expired
- Economical argued the clock started on Sept 12, 2010 (original date of stoppage of benefits)
Tomec v Economical : “Discoverability principle”
Discoverability principle:
- A statutory limitation period can be extended in certain cases
- Specifically, where a plaintiff did not have knowledge of and cannot have resonably discovered an event
For Tomec:
- she didn’t “discover” her CAT impairment until May 2015 (Economical’s official acknowledgment date)
- Wasn’t possible for her to apply for extended benefits within 2 years of original stoppage on Sept 12, 2010
Tomec v Economical : Issues
Does the discoverability principle apply so that the statutory time limit can be extended?
- Is Tomec still entitled to extended benefits based on subsequent CAT classification?
Tomec v Economical : Ruling 1
The LAT (License Appeal Tribunal) and the Ontario Divisional Court concluded discoverability does not apply
- Tomec did not apply for extended benefits by Sept 12, 2012
- Therefore Tomec cannot apply for (or receive) extended benefits
Tomec v Economical : Ruling 2
Ruling:
- ON Court of Appeal ruled that discoverability did apply to the limitation period
- The orders of LAT and Divisional Court were set aside
Reasoning:
- It would be absurd to expect Tomec to apply for extended benefits by Sept 12, 2012 because…
- … Economical didn’t even classify her as eligible for extended benefits until May 2015
Tomec v Economical : Concluding Comments
The Court of Appeals further supported their decision because:
- if she had NOT claimed the original benefits then the statutory time limit would have started May 2015 and…
-… she would NOT have been denied extended benefits
- but the catastrophic impairment would be the same in each case so the outcome should be the same
Purpose of punitive damages (3)
- Deterrence
- Retribution
- Denunciation
Which landmark legal cases went to the supreme court (6)
Resurface Corp v Hanke
Somersall v York
Whiten v Pilot
Amos v ICBC
Nichols v American Home
Saadati v Moorhead
Which landmark legal cases deal with duty to defend (3+1)
Primary Insurer:
- Sansalone v Wawanesa
- Nichols v American Home
- Precision Plating v Axa Pacific Insurance
Excess Insurer:
- Alie v Bertrand Frere construction
Which “duty-to-defend” Landmark legal case went to the Surpreme Court
Nichols v American Home
Which landmark legal cases have catastophic injury as the main issue (2)
Aviva v Pastore
Kusnierz v Economical
Does insurer have a duty-to-defend when act is beyond scope of policy?
NO: see
- Sansalone v Wawanesa
- Nichols v American Home
- Precision Plating v Axa Pacific Insurance
