Landmark Legal Flashcards
Discuss Whiten v. Pilot Insurance Co (2002)
Award for punitive damages
- Whiten family’s house burns down
- Insurer pays few mths rent + temporary living expenses
- Insurer cuts off payments w/o notice, alleging family set the fire deliberately (No evidence)
Judgments:
• Jury awards punitive damages of 1M
• Court of Appeal reduces punitive damage : 100K
• Supreme Court restores the 1M
• Denial of claim was exceptionally reprehensible as it was designed to force insured to make unfair settlement
• Punitive damages required an actionable wrong (failure to deal in good faith) in addition to breach sued upon (obligation to pay the claim)
Discuss Award for punitive damages
- Retribution: Punish the wrongdoer
- Deterrence: Deter defendant from similar misconduct
- Denunciation: Public condemnation
- Criminal law and regulatory offenses are primary mechanisms for punishment
- Punitive damages should occur only in special cases
- No cap or ratio adopted to set punitive damages
What are the considerations for proportionality in punitive damage awards?
- Blameworthiness of the defendant’s conduct
- Degree of vulnerability of the plaintiff
- Harm or potential harm directed at the plaintiff
- Need for deterrence
- Other penalties imposed: Both civil and criminal
- Advantage wrongfully gained by the defendant
Discuss Somersall vs Friedman/Scottish (2002)
Subrogation rights of the SEF 44 Family Protection Endorsement
- S were injured in an accident allegedly caused by F
- S sued F, seeking compensation exceeding his policy limit. Both parties entered in a Limit Agreement.
- S claimed payment from S&Y for the exceeding amount
- S&Y use his subrogation right to recover from F
- F defend with the LA
- S&Y denied payment because of the LA, there were no damages which the plaintiff “is legally entitled to recover”
- Judge agreed with S&Y, Court of Appeal reversed
Judgment:
• LA did not affect:
- Amount: S were legally entitle to recover from tortfeasor that existed at time of accident
- Insurer’s right of subrogation: which legally arise after the insured has been fully indemnified
• S&Y could not use the LA as a reason not to pay S
Discuss Sansalone vs Wawanesa Mutual Ins Co (1998)
Duty to defend
- Bus driver sexual acts on a minor
- Wawanesa+Lloyd (Re) denied coverage and defense
- Court of Appeal decided that the insurer had no duty to defend in a split decision
Minority:
• Policy said “Injury caused intentionally” instead of “injury caused by intentional acts”
Majority:
• 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
• For duty to defend, policy coverage must be possible
Discuss Nichols vs America Home Insurance (1990)
Duty to defend
- Insured is unsuccessfully sued for fraud
- Insured claim the settlement cost of the trial
- Insurer argue there was no duty to defend since fraud is not covered in insurance contract
Judgment:
• Court of Appeal rules that the duty to defend is separate from the duty to indemnify
• Supreme reverses concluding that the duty to defend does not apply to allegations clearly beyond the scope of coverage
Discuss Amos vs Ins Corporation of BC (1995)
Class of victims who can claim auto accident insurance benefits extended
- Amos was shot by a gang who surrounded his car
- Connection between the use, operation or ownership of a vehicle and his injuries is entitled to coverage
- Supreme reverses: Injuries arise out of the use of a vehicle
Judgment:
(1) Purpose test: Did the accident result from the ordinary activities to which automobiles are put? Yes
(2) Causation test: Is there a causal relationship between vehicle use and the injuries? Yes
• Because the words “arising out” instead of “caused by” are used, the policy has a wider coverage. Ontario uses “caused by”, so judgement do not apply there
Discuss KP Pacific Holdings Ltd vs Guardian Ins Co. of Canada (2003)
(Multi-peril property insurance - Fire insurance - Defences - Limitation period)
- Claim for loss caused by fire under all-risks policy
- Insured argued: Claim fell under Part 2 BC Ins Act which has a 1 year limit from filing the proof of loss
- Insurer insisted: Under Fire Part: 1 year limit from fire
Judgment:
• Supreme: Appeal allowed. Multi-risk policy does not fall under Fire Part therefore they fall under Part 2. Insured could not agree to harsher terms than Part 2
• Unique to BC ins act: Chief Justice advises modification to BC Ins Act to clarify multirisk policies
Discuss Alie vs Bertrand and Frere Construction Cie Ltd (2002)
(Duty to defend)
• Damages to foundation of homes because of defective concrete supplied by defendant between 1986-1992
Judgment:
• Primary and excess insurers of the cie have duties to defend and indemnify
• Excess insurers, w/o specific wording excluding duty to defend, were responsible for payment of defence costs
What is the Tobacco Damages and Health Care Costs Recovery Act?
• Authorizes an action by the gov of BC against a manufacturer of tobacco products for the recovery of health care expenditures incurred by the gov
• 2 requirements for recovery
o Manufacturer’s breach of duty
o Gov expenditures in treating the disease
What were the issues of BC vs Imperial Tobacco Canada Ltd? What was the verdict?
BC Supreme dismissed the gov’s actions, concluding that the Act was unconstitutional because it failed to respect territorial limits on prov legislative jurisdiction
Supreme of Canada: Act is constitutionally valid
• Not extra-territoriality: Only applicable to cost of BC gov for tobacco damages to residents of BC
• Not violate indep of the judiciary
• Does not implicate the rule of law
Discuss Resurface Corp v. Ralph Robert Hanke and Leclair Equipment Ltd. v. Ralph Robert Hanke (2007)
(Negligence action)
• Zamboni guy that mistook gas tank for hot water tank
• Negligence for making gasoline and water tank similar
• Liability for negligence requires the following:
(1) Breach of duty of care
(2) Arising from reasonably foreseeable risk of harm
(3) Created by the act or omission of another
Judgment:
• Trial judge finds that not reasonably foreseeable that tanks would be mistaken
• Court of Appeal reverses decision
• Supreme concludes that Court of Appeal erred. The “but for” test used by trial judge was adequate
Discuss “but for” test and “material contribution” test in negligence actions
Basic test for determining causation is the “but for” test
• Recognizes that compensation for negligent conduct should only be made where a substantial connection between the injury and the defendant’s conduct is present
In special circumstances “material contribution” test is used instead of “but for” test
• Impossible for the plaintiff (outside his control) to prove that the defendant’s negligence caused the plaintiff’s injury using the “but for” test
• Must be clear that the defendant breached a duty of care owed to the plaintiff, thereby exposing the plaintiff to an unreasonable risk of injury, and the plaintiff must have suffered that form of injury
Discuss Morrow vs Zhang (2009)
Minor Injury Regulation (MIR) cap
- MIR imposed 4K cap on non-pecuniary damages for MI
- Trial judge found that the cap was discriminatory against those suffering from MI: categorized as less worthy of punitive damages
• Appeal judged reversed trial judge with two reasons:
1 - While legislation makes a distinction based on disability it is not discriminatory
2 - When the legislative scheme is viewed in its entirety it does not infringe on the Charter
• Trial judge erred in failing to analyze the insurance reforms as a complete package
Discuss PIPEDA Report of Findings (2013)
Credit information
- ON couple with property insurance had their premiums go up considerably because of use of credit info
- They stated credit info was used w/o their consent
- Application warned that it could use credit info
Judgment:
• Use of credit info is appropriate for assessing UW risk
• Consent was not a meaningful consent as required by principle 4.3.2. of PIPEDA and thus inadequate
• Notice used “may” should include separate consent clause
• Consent clause for credit info should be separate from the general consent clause
