Landmark Cases Flashcards
1
Q
Whiten v Pilot Ins Co - Facts
A
- family house burns down
- insurer pays for temporary shelter, then suddenly ceases payments
- insurer claims that they are not liable due to arson, but don’t provide any evidence to support arson
2
Q
Whiten v Pilot Ins Co - Issues
A
Did Pilot use the power imbalance to force the insured into a smaller settlement?
3
Q
Whiten v Pilot Ins Co - Rulings (1,2,3)
A
1) Jury awards $1m in punitive damages
2) on appeals, damages reduced to $100k in the ON appeals court
3) the Supreme Court reinstates original $1m in damages
4
Q
Whiten v Pilot Ins Co - Details (general)
A
Awards of this type should consider PROPORTIONALITY along several other DIMENSIONS.
5
Q
Whiten v Pilot Ins Co - Details (dimensions) (6)
A
- blameworthiness of insurer
- vulnerability of the victim
- harm to the victim
- deterrence to the insurer
- consider other penalties to insurer that may have already occurred
- punitive award should not be seen by the insurer as a license (no financial gain for the insurer)
6
Q
Somersall v Scottish & York - Facts
A
- the victim is severely injured by UNDER-insured driver
- the injured party and the tortfeasor sign a limits agreement up to the tortfeasor’s limits
- the injured then claimed against their OWN insurer for the excess beyond the limits agreement
- the injured party’s own insurer denies the claim
7
Q
Somersall v Scottish & York - Definition of Limits Agreement
A
An agreement between the injured party and the tortfeasor that the tortfeasor will admit liability in exchange for the agreement that the injured party won’t sue for more than the tortfeasor’s insurance limit.
8
Q
Somersall v Scottish & York - Definition of SEF 44
A
It is an endorsement that provides coverage to an insured WHEN the tortfeasor is UNDER-insured.
9
Q
Somersall v Scottish & York - Issue
A
Regarding the insurer: does a limits agreement imply that the plaintiff is not legally entitled to further recovery from the tortfeasor, AND THUS the insurer would lose their rights to subrogation?
10
Q
Somersall v Scottish & York - Rulings (1,2,3)
A
1) ruling in favour of the insurer: claim denial is upheld
2) ON court of appeals reverses in favour of the plaintiff
3) Supreme Court dismisses the insurer’s appeal, the plaintiff is allowed to recover under SEF44.
11
Q
Somersall v Scottish & York - Reasoning of Supreme Court’s dismissal
A
At the time of the accident, the SEF 44 coverage was in effect, therefore, the subsequent limits agreement did not preclude coverage under SEF 44.
12
Q
Sansalone v Wawanesa - Facts
A
- BC transit bus driver sexually abused a teenager
- Wawanesa DENIED defence and coverage: policy terms exclude bodily injury caused intentionally
13
Q
Sansalone v Wawanesa - Issues
A
How does the ‘duty to defend’ relate to the ‘duty to indemnify’
- does the insurer have a duty to defend where the indemnification is beyond the scope of policy?
14
Q
Sansalone v Wawanesa - Ruling at initial trial
A
There is a duty to defend because the bus driver may have mistakenly or negligently believed that consent had been given.
- the insurer appeals this decision
15
Q
Sansalone v Wawanesa - Ruling on appeal
A
The appeals court rules there is no duty to defend. It was a split decision (2 to 1).
16
Q
Sansalone v Wawanesa - Ruling on appeal (majority reasoning)
A
IF an act is intentional AND an injury is a natural or probable result of that act, THEN there is the intention to cause injury, and therefore this is excluded by the policy.
17
Q
Sansalone v Wawanesa - Ruling on appeal (minority reasoning)
A
The act WAS intentional, BUT there was no intention to injure.
- the defendant had the invalid belief that there was consent
- there IS a duty to defend, but not a duty to indemnify
18
Q
Nichols v American Home Insurance - Facts
A
- a solicitor was accused of fraud but found innocent
- the solicitor sought defence costs from a professional liability insurer
- the insured’s claim was denied
19
Q
Nichols v American Home Insurance - Issues
A
How does the ‘duty to defend’ relate to the ‘duty to indemnify’
- does the insurer have a duty to defend where indemnification is beyond the scope of the policy?
20
Q
Nichols v American Home Insurance - Ruling at initial trial
A
The ruling was that the insurer must defend.
21
Q
Nichols v American Home Insurance - Ruling on appeal
A
ON court of appeals dismissed the appeal:
- the duty to indemnify vs the duty to defend is different
- must pay for the defence since the defendant was found innocent
22
Q
Nichols v American Home Insurance - Ruling at the Supreme Court
A
The Supreme Court allowed the appeal:
- the duty to defend is triggered by the duty to indemnify
- since fraud is beyond the scope of the coverage, there is no duty to indemnify, and therefore there is no duty to defend
23
Q
Alie v Bertrand Frere Construction - Facts
A
There was defective concrete that required the replacement of the basements of 137 houses that were built between 1986 and 1992.
24
Q
Alie v Bertrand Frere Construction - Issues
A
INDEMNITY COST ALLOCATION:
- different years were covered by different insurers
- which policies are triggered?
DEFENCE COSTS ALLOCATION:
- how are the defence costs ALLOCATED between primary & excess insurers
25
Alie v Bertrand Frere Construction - Ruling at initial trial (Indemnity Issue)
INDEMNITY TRIGGER: Main trigger theory was Injury-in-Fact:
- is based on the circumstances when loss occurred (eg: CGL - damage is suffered within the policy period)
But since the exact timing within many various policy periods was impossible to determine, losses were proportioned on a continuous/progressive basis
- therefore, it was combination of Injury-in-Fact and Triple Trigger Theory
26
Alie v Bertrand Frere Construction - Ruling at initial trial (Defence Issue)
DEFENCE TRIGGER:
- excess/umbrella policies have duty to defend provided...
- ... they follow the form of the underlying policy AND do not specifically exclude the duty to defend
27
Precision Plating v Axa Pacific Insurance - Facts
- the insured had a fire on their premises causing the release and contamination of pollutants on neighbouring properties
28
Precision Plating v Axa Pacific Insurance - Issues
Does the insurer have a duty to defend
- pollution/contamination is EXCLUDED by the policy
- but the insured argued that the cause of the loss was fire & therefore should be covered
29
Precision Plating v Axa Pacific Insurance - Ruling at initial trial
The chambers judge held for the insured (that the insurer must defend):
- policy terms are ambiguous
- should not exclude contamination caused by fire
30
Precision Plating v Axa Pacific Insurance - Ruling at appeal
Insurer's appeal is allowed (no duty to defend):
| - third party claims were for CONTAMINATION not for fire (thus excluded from coverage)
31
Precision Plating v Axa Pacific Insurance - Compare this case to the other duty to defend cases
Other Cases where there is no duty to defend and no duty to indemnify:
- Sansalone v Wawanesa (sexual abuse)
- Nichols v American Home Insurance (fraud)
Precision Plating is different however:
- pollution/contamination was clearly excluded
- the insured argued that the cause of loss was fire not pollution (unsuccessful on appeal)
32
Amos v ICBC - Facts
- the insured, Amos, was shot by a gang in California (while driving)
- claims no-fault benefits against his BC auto policy
33
Amos v ICBC - Issues
PURPOSE TEST: did the accident result from ordinary activity that the vehicle is meant for? YES
CAUSALITY TEST: is there a causal relationship between the use of the vehicle and the injury? YES, because the shooting wasn't random
34
Amos v ICBC - Rulings (1,2,3)
1) the BC Supreme court dismissed the driver's claim
2) the court of appeals upheld the judgement of the BC Supreme Court
3) i) the Supreme Court of Canada held that appeal should be allowed
ii) the answer is YES to both the purpose and causality tests
iii) the plaintiff received no-fault benefits because damage was 'ARISING OUT OF' use of the vehicle
35
Amos v ICBC - Applicability in Ontario
- not strictly applicable in Ontario
| - in Ontario, the policy wording is 'caused by' rather than 'arising out of'
36
KP Pacific v Guardian - Facts
- there was a hotel fire
- the proof of loss was submitted (to the insured) within 1 year of the fire
- the claim was submitted (to the insurer) under the 'all-risk' category
i) within 1 year of the proof of loss
ii) but MORE than 1 year after the fire
- the insurer rejects the claim under Part 5 of the BC Insurance Act
37
KP Pacific v Guardian - Issues
- does Part 5 apply (fire provisions) or Part 2 (general provisions)?
- important because Part 2 allowed the claims submitted within 1 year of the proof of loss (even if it is 1 year after the fire)
38
KP Pacific v Guardian - Rulings (1,2,3)
1) the ruling was held for the insurer at the original trial
2) ruling was upheld on appeal
3) the ruling was overturned (unanimously) at the Supreme Court - modern multi-peril policies don't fit into the fire act (plaintiff wins)
39
KP Pacific v Guardian - Implications
Multi-peril policies are governed by general provisions of insurance legislation, NOT specific provisions that apply to fire insurance.
40
Resurfice Corp v Hanke - Facts
- Hanke was badly burned in a Zamboni accident: so he sued the manufacturer
- Hanke claimed: the gas and water tanks looked similar & were easily confused
41
Resurfice Corp v Hanke - Issues
ISSUE: What was the cause of the injury?
STANDARD CAUSATION TEST: the 'but for' rule
ALTERNATE CAUSATION TEST: 'material contribution' (use only when the 'but for' rule can't establish causation
42
Resurfice Corp v Hanke - What is the 'but for' causation test?
'but for' causation test: Would the result have occurred BUT FOR the act or omission of the defendant
if YES: defendant is not liable
if NO: defendant is liable
43
Resurfice Corp v Hanke - What is the 'material causation' test?
- requires that a negligent action had MATERIALLY CONTRIBUTED to the risk of harm
- less rigorous than the 'but for' test
44
Resurfice Corp v Hanke - Ruling at initial trial
TRIAL: defendant wins
REASONING: apply the 'but for' test
- would the explosion still have occurred BUT FOR making the gas and water tanks similar?
- YES, so the defendant is NOT liable
45
Resurfice Corp v Hanke - Ruling at appeal
APPEAL: plaintiff (Hanke) wins
REASONING: apply 'material contribution' test
- appeals judge stated that the trial judge failed in a Foreseeability & Causation analysis
- appeals judge then applied the 'material contribution' test
46
Resurfice Corp v Hanke - Ruling at the Supreme Court
Supreme Court: defendant wins
| REASONING: apply the 'but for' test, NOT the 'material contribution' test since accident WAS NOT reasonably foreseeable
47
Resurfice Corp v Hanke - 2 requirements before 'material contribution' test can be applied
1) the 'but for' test CAN'T establish causation
| 2) the accident MUST be reasonably foreseeable
48
Morrow v Zhang (AB 2004) - Facts
- Alberta introduced legislation to address (availability and affordability)
- trial challenged the constitutionality of a $4K cap on non-pecuniary damages for minor injuries
49
Morrow v Zhang (AB 2004) - Issues
1) the cap stigmatizes minor injuries because it treats victims as malingerers
2) cap is discriminatory because it treats minor injuries differently regarding non-pecuniary damages
50
Morrow v Zhang (AB 2004) - Rulings (1,2)
1) cap is discriminatory & is struck down at initial trial
2) appeal reverses the original ruling - cap is designed to lower premiums for EVERYONE, not discriminate against minor injuries (cannot be appealed further)
51
PIPEDA Report of Findings - Facts
- PIPEDA is Personal Information Protection & Electronic Documents Act
- an ON couple complained of an increase in property insurance rates because the insurer used their credit score
52
PIPEDA Report of Findings - Ruling
PRIVACY COMMISSIONER: the use of credit score is acceptable
53
PIPEDA Report of Findings - Ruling note
- commissioner notes that the standard insurance form is deficient and misleading
- consent must be meaningful (website said credit score MAY be used, but it was ALWAYS used)
- the insurer should be explicit regarding its intent
54
Aviva v Pastore - Facts
- victims sustained severe complications from a motor vehicle accident
- sought for catastrophic impairment designation for their injuries
- Aviva rejected the CAT impairment designation
55
Aviva v Pastore - Define 'class 4 CAT impairment'
It is the marked impairment significantly impeding useful functioning in at least 1 of (DSCW):
- Daily living
- Social interaction
- Concentration
- Work activities
56
Aviva v Pastore - Issues
- for Class 4 designation, is it enough to show marked impairment in just 1 of the functional categories?
- for Pastore, this was Daily living
57
Aviva v Pastore - Pre-ruling (DAC, Arbitration)
```
DAC: marked impairment in daily living constitutes as a Class 4 CAT impairment
Arbitration: delegate affirmed the DAC (class 4 impairment is upheld)
```
58
Aviva v Pastore - Ruling at the divisional court
Divisional Court:
- judicial review requested by Aviva reversed prior decision
- judge stated that the delegate exceeded their jurisdiction
- thus, there was not CAT impairment
59
Aviva v Pastore - Ruling at the court of appeals
- divisional court applied the standard of review of correctness instead of reasonableness
- therefore, the class 4 CAT impairment was reinstated
60
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 and a CAT impairment
61
Kusnierz v Economical - Facts
The insured is injured in an accident and claims enhanced benefits under SABS (Statutory Accident Benefits Schedule) for 'catastrophic impairment'.
62
Kusnierz v Economical - Issues
Can the physical impairment of 50% be combined with the mental impairment of 55% to reach the 55% threshold for SABS (Statutory Accident Benefits Schedule) CAT impairment?
63
Kusnierz v Economical - Ruling at initial trial
TRIAL: NO CAT impairment
- SABS (Statutory Accident Benefits Schedule) does not explicitly state that physical & mental impairment can be combined
64
Kusnierz v Economical - Ruling at appeal + 2 items
APPEAL: allowed CAT impairment
- combining physical and mental % seemed a more reasonable and modern interpretation
- few would qualify
- thus, NO material impact on AA (Availability & Affordability)
65
Belanger v Sudbury - Facts
A 20-year old woman is catastrophically injured in a head-on collision with an oncoming school bus due to an icy road in Sudbury.
66
Belanger v Sudbury - Issue
- Was the city LIABLE for failing to maintain the roadway in good repair during the winter storm?
- Damages of $12m had already been agreed upon
67
Belanger v Sudbury - Ruling at inital trial
- the city was liable for the plaintiff's injuries
| - salting & plowing occurred but were not sufficient given the storm conditions
68
Belanger v Sudbury - Ruling on appeal
The ruling was UPHELD: the court of appeal rejected the defendant's 'statutory defence' and upheld the trial judge's decision
- the city is expected to ADAPT to conditions, NOT just blindly follow procedures
69
Belanger v Sudbury - Defence: describe the city's defence strategy
- the city attempted a 'statutory defence'. it claimed no liability because:
i) it could not be reasonably expected to know about the reformed ice
ii) took reasonable steps to maintain the roadway
70
Belanger v Sudbury - Comment: Standard of care
- this case was essentially about 'standard of care'
- appeal judge implied that the standard of care was breached
- a qualified city worker should reasonably have foreseen the icy road conditions and taken steps to mitigate them
71
Saadati v Moorhead - Facts
- Mr Saadati (plaintiff) sustained injuries in an auto accident when his vehicle was hit by Mr. Moorhead's (defendant) vehicle
- accident occurred on July 5, 2005
72
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)
73
Saadati v Moorhead - Ruling at Initial Trial
Physical injury claim: Rejected by trial judge
Mental injury claim:
- evidence from plaintiff's expert psychologist was not enough to establish psychological injury
- but testimony of Mr. Saadati's family and friends was sufficient proof of psychological injury
thus,
- Judge awards $100k in non-pecuniary damages
74
Saadati v Moorhead - Ruling at Appeal
- trial judge's decision overturned by BC Court of Appeal
| - Mr. Saadati had not demonstrated a medically recognized psychiatric or psychological injury
75
Saadati v Moorhead - Ruling at Supreme Court
- Supreme Court of Canada: unanimously reversed the BC Court of Appeal (June 2017)
Reason: recovery from mental illness depends on 5 criteria:
1) duty of care (defendant had a 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 and prolonged, and rises above ordinary anxieties and fears
- > all criteria were met (note: plaintiff does not have to prove a specific recognized mental illness)
76
Saadati v Moorhead - Concluding Comments
- the law of negligence must afford equal protections to victims of mental and physical injuries
- this case will have significant impact on future cases dealing with compensation for mental injuries
77
What are the purpose of punitive damages? (hint: DDR)
- Deterrence
- Denounce
- Retribution
78
Which Landmark Legal cases went to the Supreme Court? (6)
```
Resurfice Corp v Hanke
Somersall v Scottish & York
Whiten v Pilot
Amos v ICBC
Nichols v American Home Insurance
KP Pacific v Guardian
Saadati v Moorhead
```
79
Which Landmark Legal Cases deal with the 'duty to defend'? (3+1)
Primary insurer:
- Sansalone v Wawanesa
- Nichols v American Home Insurance
- Precision Plating v Axa Pacific
Excess insurer:
Alie v Bertrand Frere construction
80
Which 'duty to defend' Landmark Legal cases went to the Supreme Court?
Nichols v American Home Insurance
81
Which Landmark Legal cases have catastrophic injury as the main issue? (2)
Aviva v Pastore
| Kusnierz v Economical
82
Does the insurer have the duty to defend when an act is beyond the scope of the policy? List the Landmark Cases to support your answer. (3)
NO, as per:
- Sansalone v Wawanesa
- Nichols v American Home Insurance
- Precision Plating v Axa Pacific
