A - Law Cases - LANDMARK LEGAL and BAER RENDALL (miss Belanger and Precision)

Question 1

LANDMARK LEGAL - WHITEN v. PILOT

Facts of the case
Trial - Appeal - Supreme Court Decisions

Answer 1

-(Arson-Punitive Damage-Good Faith-Duty to pay-Pilot)
-House burns. Insurer paid a few months, then stops payments without notice, alleging of ARSON
-Allegation completely discredited at trial since no evidence.
TRIAL DECISION : Jury gave 1M$ in punitive damages
COURT OF APPEAL : Reduce punitive damage to 100K
SUPREME COURT : restores the 1M$, amount considered to be within reasonable limits based on proportionality standard and highly reprehensible
-Insurer breached its duty to pay and its duty of good faith.

Question 2

LANDMARK LEGAL - WHITEN v. PILOT

What (5) should punitive damage awards be proportionate to?

Answer 2

Proportionate to

• degree of GUILT of defendant
• degree of VULNERABILITY of plaintiff
• degree of HARM caused to plaintiff
• The NEED TO DETER
• ADVANTAGE WRONGFULLY GAINED from defendant.

Question 3

LANDMARK LEGAL - WHITEN v. PILOT

3 purposes of punitive damages.

Answer 3

To retribute
To deter
To denounce
(To punish)

Question 4

LANDMARK LEGAL - WHITEN v. PILOT

When should punitive damages be used?

Answer 4

• for actionable wrong in addition to a breach
• (mainly intentional tort, breach of duty to pay, but also negligence).
• Only in exceptional cases

Question 5

LANDMARK LEGAL - SOMERSALL v. SCOTTISH

Facts of the case
Trial - Appeal - Supreme Court Decisions
Outcome

Answer 5

• insureds had serious injuries in a collision with an underinsured motorist.
• Without notice to insurer, Injured driver enters a LIMITS AGREEMENT with tortfeasor so that he admits liability, and will not to sue him in excess of his policy limit.
• Injured driver want to claim the balance on his Underinsured coverage.
• Insurer says that the LIMITS AGREEMENT prevent insured to bring a claim to insurer.
• It limits insurer’s right to subrogate against the tortfeasor.
• TRIAL : InsureR is right
• APPEAL : InsureD is right
• SUPREME COURT : agreed with insured.

Determination of legal entitlement is determined AT DATE OF ACCIDENT, not at date of the claim.
Insurer is required to pay the amount in excess of what the insured has received from the other driver.
-Amendment to Underinsured Coverage SEF44 to remove ambiguity is recommended.

Question 6

LANDMARK LEGAL - SANSALONE v. WAWANESA

Facts of the case
Majority Decision
Minority Decision

Answer 6

TRUC : fille dans un autobus, elle se sent ALONE

• Girl sued Sansalone, Scalera and 3 other bus drivers for ALLEGED DAMAGES FROM SEXUAL ACTS on a minor.
• Wawanesa, Sansalone’s insurer, denied coverage based on exclusion for “BI caused intentionally”.
• Lloyd’s Scalera’s insurer, denied coverage based on exclusion for “BI caused by Intentional or criminal act”.
• Issue : Does both insurers have a duty to defend?
• Decision : neither have a duty to defend in a split 2-1 decision.
• MAJORITY : if the injury is the natural and probable consequence of the act, the intention to commit the act is the intention to cause the injury.
• NO DUTY TO DEFEND by the intentional act exclusion.

-MINORITY : Sansalone committed intentional tort without intending to cause injury. Sansalone did ALLEGED SEXUAL ACTS with negligent belief that the victim consented. Insurers has DUTY TO DEFEND for intentional acts causing injury, but not injury caused intentionally

Question 7

LANDMARK LEGAL - NICHOLS v AMERICAN HOME

Facts of the case
Trial - Appeal - Supreme Court Decisions
Outcome

Answer 7

• Insured is sued for allegation of fraud, but case is dropped.
• Insured claims defense costs to insurer
• Insurer says no duty to defend because fraud is excluded under contract. Case go to court
• COURT : No proof of fraud, so insurer HAS duty to defend
• APPEAL: insurer HAS duty to defend.
• SUPREME COURT : Insurer has NO duty to defend.
• Duty to defend is triggered when there is duty to indemnify.
• Fraud is excluded, so no duty to indemnify
• Hence, no duty to defend
• Insurer wins

Question 8

LANDMARK LEGAL - AMOS v ICBC

2 questions the Supreme Court considered

Court Decision and Rationale

Could this judgement by applied in Ontario?

Answer 8

TRUC : Amos, c’est ghetto, ça tire du gun!
-Insured is shot in California and seriously injured by a gang surrounding his car

-coverage is triggered for injury “ARISING OUT” of the ownership, use or operation of vehicle”

Supreme court consideration

(1) PURPOSE TEST : does the accident result from ordinary activity to which auto are put?
(2) CAUSALITY TEST : is there SOME CAUSAL RELATIONSHIP (not necessarily direct) between injury and ownership, use or operation?

SUPREME COURT : gave reason to insured
-Anyone who can establish connection between use of vehicle and his injuries is entitled to coverage.

Could not be applied in Ontario, since policy refers to injury “CAUSED BY” and not “ARISING OUT”

Question 9

LANDMARK LEGAL - PACIFIC HOLDING v GUARDIAN

Answer 9

TRUC : Qui est pacific enough to hold a claim for 1 year?
-Insured had a multi-risk policy
-He made a fire claim more than one year after loss occurred
The claim was made within one year of filing proof of loss.
-Insured sues insurance company for denying coverage.

• Insurer position : Part 5 (Fire Part) of BC Insurance says it should be within 1 year of loss occurrence
• Insured position : Part 2 says within one year of proof of loss
• TRIAL and APPEAL : gave reason to insurer
• SUPREME : gave reason to INSURED.
• Multi-peril policies are subject to Part 2, even though loss caused by fire.
• Insured wins and insurer needs to pay
• Recommendation to amend insurance act to remove ambiguity

Question 10

LANDMARK LEGAL - ALIE v BERTRAND ET FRERE

Answer 10

• TRUC : Alie s’allie avec d’autres homeowners contre suppliers Bertrand et Lafarge
• Alie and hundreds of homeowners sued Bertrand for use of defective concrete provided by Lafarge
• TRIAL : Bertrand and Lafarge liable.
• Primary and excess insurers have duty to indemnify and duty to defend.
• COURT OF APPEAL : confirm trial decision
• Excess insurer has duty to defend, unless excluded in wording.

Question 11

LANDMARK LEGAL

3 cases involving Duty to Defend - and their judgment

Answer 11

SANSALONE v WAWANESA
-no duty to defend in case involving intentional sexual acts as coverage is excluded
NICHOLS v AMERICAN HOME
-No duty to defend in cases involving fraud act or omissions if they are out of the scope of the policy.
ALIE v BERTRAND
-Excess insurer has duty to defend, unless excluded in wording

Question 12

LANDMARK LEGAL - RESURFICE CORP v HANKE

Facts of the case
Outcome of trial and rationale
Outcome of Supreme Court and rationale

2 requirements for the application of “material contribution” test in determining causation

Answer 12

Hanke badly burned sues manufacturer of ice-surfacing machine for negligence in making gasoline and water tanks so similar, leading to his mistake

TRIAL : Hanke did not prove negligence of manufacturer. It was Hanke’s error, not manufacturer’s error.
Decision due to Hanke’s own admission and due to “but for rule” test.

APPEAL : keep same judgment, but finds that Trial Judge erred in foreseeability and causality analyses (should have used the “MATERIAL CONTRIBUTION” test

SUPREME : manufacturer not liable for injury.
assessment of comparative guilt is not necessary since it is Hanke’s error and not a design error. Also “but for rule” test is the basic test, so Material Contribution Test not justified in this case.

–Plaintiff cannot prove negligence of defendant using the “but for rule” test because of factors outside of plaintiff’s control

–The defendant must have exposed claimant to unreasonable risk with his negligence and the plaintiff must have suffered a loss.

Question 13

LANDMARK LEGAL - MORROW v ZHANG

facts of the case
TRIAL outcome and rationale
APPEAL outcome and rationale

Answer 13

injured suffers soft tissue injury. Says the $4000 cap on non-pecuniary damage for minor injury (from Minor Injury Regulation MIR) is not constitutional

TRIAL
injured says cap is discriminatory against MI victims because they cannot be “fully compensated for non-pecuniary damage as major injureds.
-Stigmatize MI victims

-judge says CAP is discriminatory and is removed.

APPEAL
-judgment is reversed. CapisNOT DISCRIMINATORY.
When looking at law in its totality, no stigmatization of MI victims.
-Appeal says capis LEGAL

Question 14

LANDMARK LEGAL - PIPEDA

Answer 14

finds it is appropriate to collect and use credit score to assess property insurance UW risk.

score is less intrusive than accessing entire credit report

consent form was deficient and misleading

need to clearly explain the information collected and the purpose it is used for

review consent form so that it explicitly says that credit info could be used in rating

Question 15

LANDMARK LEGAL - AVIVA v PASTORE

fact of the case

2 Main issues

Arbitrator and Director’s Delegate decision
Ontario Divisional Court Decision
Appeal decision

Answer 15

Pastore have car accident and seriously injured to leg after procedure. After using one leg for so long, other leg not working properly.

Assessment made by DAC (Designated Assessment Centre) says its a CAT impairment.

1) Aviva argues that need 4 conditions need to be met to be a CAT impairment:
– daily function
– social function
– concentration
– ability to work
Pastore impacted by 1 out of 4 conditions.

Arbitrator and Director Delegate say:
-1 out of 4 is sufficient to declare CAT impairment
AND
-Physical and mental impairment rating should be on a cumulative basis (difficult to separate one from the other)

Ontario Divisional says :

• 4 out of 4 is required
• Physical and mental must be separated to determine CAT impairment

APPEAL : confirms Director Delegate decision, it is a CAT impairment.
-AVIVA must pay the insured

Question 16

LANDMARK LEGAL - KUSNIERZ v ECONOMICAL

Answer 16

TRIAL : rules that insured was not CAT impaired as the separate physical and mental impairment considered separately do not meet the 55% threshold.

APPEAL : overturned decision. Now allow auto accident victims to combine physical and mental ratings to get a Whole Body Impairment rating of at least 55% to be declared a CAT impairment.

Class of persons considered as CAT impaired would remain small.
it also promotes fairness

Question 17

BAER RENDALL - GLYNN v SCOTTISH UNION

Facts of the case
Conclusion

Answer 17

TRUC : GLYNNdemnity NeGLYNNgence

• Glynn and wife injured in car accident because of negligence of other driver.
• Glynn (plaintiff) got a settlement for medical expenses from tortfeasor.
• But Glynn also wants to recover from his own insurer under section B.
• Question : Does the insurer have the right to subrogate to prevent a double recovery from plaintiff?
• To answer the question, need to know if the contract is one of indemnity:
• IF IT IS A CONTRACT OF INDEMNITY, THE INSURER CAN SUBROGATE. Else, the insurer cannot subrogate.

Conclusion:
Even though the section of the policy dealt with personal accident coverage, since it involved the payment of actual expenses incurred, it is a contract of indemnity, so subrogation applies

Question 18

BAER RENDALL - GLYNN v SCOTTISH UNION

What is a contract of indemnity?

Answer 18

Type of insurance that only restores the insured to his original financial position.
Insured cannot gain from a contract of indemnity.

Question 19

BAER RENDALL- GLYNN v SCOTTISH UNION

2 conditions that an insured must prove to recover from an indemnity contract.

Answer 19

1) must prove THAT THE INSURED EVENT REALLY OCCURRED

2) must prove THAT THE EVENT CAUSED A MONETARY LOSS TO THE INSURED

Question 20

BAER RENDALL- GLYNN v SCOTTISH UNION

Describe how a VALUED POLICY differs from a typical insurance policy.

Answer 20

For a valued policy : insured does not need to prove the amount of loss

insured only needs to prove that the loss comes from a covered event.

Question 21

BAER RENDALL- GLYNN v SCOTTISH UNION

Discuss whether a LIFE INSURANCE policy is an indemnity policy.

Answer 21

Indemnity policy:

1) need to prove event really occurred : yes
2) need to prove event caused a financial loss to the insured : impossible to quantify a loss

• Life insurance is a non-pecuniary loss
• Impossible to indemnify (to compensate for financial loss) for a loss of life.
• Hence, life insurance is NOT an indemnity policy.

Question 22

BAER RENDALL- GLYNN v SCOTTISH UNION

Discuss whether a VALUED POLICY is an indemnity policy

Answer 22

Indemnity policy:

1) need to prove event really occurred : true for a valued policy
2) need to prove event caused a financial loss to the insured : true for a valued policy

• The two conditions apply so YES it is an indemnity policy.
• The insured is only relieved of having to prove the amount of the loss.

Question 23

BAER RENDALL- GLYNN v SCOTTISH UNION

Discuss whether a POLICY THAT PAYS A FIX SUM ON THE HAPPENING OF AN EVENT is an indemnity policy

Answer 23

Indemnity policy :

1) need to prove event really occurred : true for this type of policy
2) need to prove event caused a financial loss to the insured : not necessary for this type of policy

-Hence, this type of contract is not one of indemnity.

Question 24

BAER RENDALL - GLYNN v SCOTTISH UNION

Discuss the doctrine of subrogation

Answer 24

doctrine says that:
AN INSURED SHOULD NOT PROFIT FROM A LOSS
and
SHOULD ONLY BE INDEMNIFIED.
Without subrogation, overcompensation can occur if insured has multiple source of recovery

Question 25

BAER RENDALL

4 combinations of LOSS SHARING between the tortfeasor and collateral sources.

Answer 25

THINK Stephen Harper:
He wins the ELECTION, he CUMULATES the mandates, we would like to be REIMBURSED, we all wish to RELIEVE THE TORFEASOR of his functions.

1) ELECTION : victim can choose the source of compensation
2) CUMULATION : victim can collect from more than one source
3) REIMBURSEMENT : tortfeasor pays full amount of damage and any excess is returned to the collateral source
4) RELIEVING THE TORTFEASOR : tortfeasor’s overall liability is reduced by the amount of the collateral benefit received by the injured person.

Question 26

BAER RENDALL - FLETCHER v MPIC
(Manitoba Public Insurance Corporation)

Facts of the case

Answer 26

Truc : DOC ca MPIC NOT APPLIC

• Manitoban Insured suffered serious injuries (1.8M) with an at-fault driver in Ontario having 500K limit.
• Insured did not have Underinsured Motorist Coverage (UMC)
• When purchasing the policy, the insured asked for MAXIMUM AVAILABLE COVERAGE.
• Insured did not know about UMC, he relied on expertise of MPIC
• At renewal, “not applic” was written for UMC, but insured believed that it meant DID NOT APPLY since he already had the maximum available coverage.

Question 27

BAER RENDALL - FLETCHER v MPIC

Trial Judge decision
Court of Appeal decision
Supreme Court decision

Answer 27

Truc : DOC ca MPIC NOT APPLIC

TRIAL : insureD wins.
-insured had the right to rely upon the cie to explain him available coverages.
-Cie breached its DUTY OF CARE when it failed to advise on the range of coverage available.
COURT OF APPEAL : insureR wins.
-Judgment was reversed : one judge found no duty of care, other judge found a duty of care but that no breach occurred
SUPREME COURT : insureD wins
-Insured relied on insurer for advise and would have purchased UMC

Question 28

BAER RENDALL - DILLON v. GUARDIAN

facts and decision

Discuss the duty of good faith arising from this case

Answer 28

TRUC : une Gardienne absolument responsable a mal fait sa job pcq l’enfant a fini avec un brain injury!

Dillon (at-fault driver) hits a child and causes him brain injury.

• Dillon is covered for 50K by Guardian
• The child counsel ready to settle for smaller amount, but Guardian does not want to.
• It goes to trial. In court, the family of child wins for 78K.
• Insurer pays 50K, so Dillon claims 28K to Guardian.

-Judge finds the insurer ABSOLUTELY LIABLE for amount exceeding policy limit.

insurer may consider that its in his interest not to settle but to go in court because of they believe case in winnable.

• It is a bet.
• If insurer wins, they reap the benefits of the decision not to settle.
• If insurer loses, they must accept to suffer from their decision.

Question 29

LANDMARK LEGAL - BELANGER v SUDBURY

facts, issue, ruling 1, ruling 2

defense - describe the city’s defense strategy

comment - standard of care

Answer 29

20 year-old woman catastrophically injured in head-on collision due to icy road in Sudbury, ON

Was the city LIABLE for failing to maintain roadway in good repair during a winter storm?
Damages of 12M$ had already been agreed upon

Ruling 1 : city was liable for plaintiff’s injuries
Salting and Plowing occurred but were not sufficient given the storm conditions

Appeal : UPHELD.
Appeal court rejected defendant’s “statutory defence” and upheld trial judges decision
City is expected to ADAPT to conditions, NOT just blindly follow procedures

The city attempted a “statutory defense” : they claimed no liability because :
- they could not reasonably be expected to know about the reformed ice
OR
-they could not take reasonable steps to maintain roadway

This 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

Question 30

LANDMARK LEGAL - PRECISION PLATING v AXA PACIFIC INSURANCE

facts, issue, ruling 1, ruling 2

defense - describe the city’s defense strategy

compare to other duty-to-defend cases

Answer 30

Insured had a fire on premises causing chemical to overflow and contaminate neighboring property

Does insure have a DUTY TO DEFEND

• pollution and contamination is EXCLUDED by policy
• but insured argued that cause of loss was fire and therefore covered

Ruling 1
chambers judges held for insured (insurer must defend)
-policy terms were ambiguous
-should not exclude contamination caused by fire

Ruling 2

• insurer’s appeal allowed (no duty to defend)
• Third party claims were for CONTAMINATION not for FIRE (thus excluded from coverage)

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 and contamination was clearly excluded
-insured argued cause of loss was fire not pollution (unsuccessful on appeal)