And people say lawyers are geeks.
An interesting case which probably is a cure for insomnia for most, the case of Brown v. Belair v. Wawanesa, 2014 ONSC 5487 (CanLII) is a dispute between insurers as to which insurer is responsible for responding to a 2006 MVA.
The car accident involved two cars and the car (that appears to be) at fault has an insurance coverage problem. So the question is which insurer will have to respond (ie pay) the plaintiff's claim for damages.
The problem is that the driver of the ‘at fault’ car was driving the car which he thought was owned by his parents. His parents had insured that car. Unfortunately, the parents had transferred the car to the adult son some months prior to the MVA - he was in the process of paying them $9,000 for the car but had only paid $7,000 thus far - without changing the insurance coverage and without, apparently, telling the son that his name was now registered as the owner of the car.
8 Years After Accident, Why are the Insurers Still Fighting?
There are frequent arguments between insurers as to who is responsible for responding to car accident claims, usually related to Accident Benefits claims and/or done under the loss transfer provisions.
Normally it does not take 8 years to resolve a dispute between insurers.
What we have, in this Brown case, is fascinating stuff. In my world on insurance litigation, this is a pretty cool set of facts.
So the question becomes - what to make of the valid insurance policy, premiums paid, on the adult son's car?
In other words, does the insurance follow the car insured or does it relate to the person(s) insured?
The Problems Raised by this Case
I know both counsel on this case and it is easy to see both sides of the argument.
On the one hand, a principle behind the car insurance industry in Ontario is to cast the net wide to find insurance coverage. That is because the Ontario government guarantees minimum insurance coverage in the event you are hurt in a car accident and there is no insurance coverage (ie you are a pedestrian hit by an uninsured vehicle) - this in in the form of the MVACF, which is the Motor Vehicle Accident Claims Fund, which offers Accident Benefits coverage and also up to $200,000 in tort coverage if no other insurer exists. The idea is to search for applicability of any private insurance to respond, in priority to government insurance.
On the other hand, a private insurer has to be able to know what risk an insured poses when they offer insurance - ie the problem here is that the parents transferred ownership of the car but did not, unfortunately, change the insurance coverage (word of advice: don't do that. Always notify insurers of change in ownership). So the insurer is saying that if they were advised of the change in owner, that they may have declined to insure the adult son (ie due to a poor driving history) or charged more by way of premiums.
On the other hand, assuming you had a third, if the parents had kept ownership in their names, would the adult son have been covered as long as he had obtained consent to drive (ie he didn't steal the car)? Thus the legal wrangling - Wawanesa took the step of naming the adult son as an excluded driver the day after the accident and the emphasis in the argument as to whether consent was sought/given to the adult son to drive that day.
Disposition of this Summary Judgment Motion
Mr. Justice Firestone has drilled down to the lack of evidence on the issue of consent. The adult son says he had consent. The step-mother denies this and says there was no consent. The father has remained silent on the issue.
The reasoning is as follows:
As set out by Firestone, J.:
Gregory Chang
Toronto Personal Injury and Insurance Lawyer
An interesting case which probably is a cure for insomnia for most, the case of Brown v. Belair v. Wawanesa, 2014 ONSC 5487 (CanLII) is a dispute between insurers as to which insurer is responsible for responding to a 2006 MVA.
The car accident involved two cars and the car (that appears to be) at fault has an insurance coverage problem. So the question is which insurer will have to respond (ie pay) the plaintiff's claim for damages.
The problem is that the driver of the ‘at fault’ car was driving the car which he thought was owned by his parents. His parents had insured that car. Unfortunately, the parents had transferred the car to the adult son some months prior to the MVA - he was in the process of paying them $9,000 for the car but had only paid $7,000 thus far - without changing the insurance coverage and without, apparently, telling the son that his name was now registered as the owner of the car.
8 Years After Accident, Why are the Insurers Still Fighting?
There are frequent arguments between insurers as to who is responsible for responding to car accident claims, usually related to Accident Benefits claims and/or done under the loss transfer provisions.
Normally it does not take 8 years to resolve a dispute between insurers.
What we have, in this Brown case, is fascinating stuff. In my world on insurance litigation, this is a pretty cool set of facts.
So the question becomes - what to make of the valid insurance policy, premiums paid, on the adult son's car?
In other words, does the insurance follow the car insured or does it relate to the person(s) insured?
The Problems Raised by this Case
I know both counsel on this case and it is easy to see both sides of the argument.
On the one hand, a principle behind the car insurance industry in Ontario is to cast the net wide to find insurance coverage. That is because the Ontario government guarantees minimum insurance coverage in the event you are hurt in a car accident and there is no insurance coverage (ie you are a pedestrian hit by an uninsured vehicle) - this in in the form of the MVACF, which is the Motor Vehicle Accident Claims Fund, which offers Accident Benefits coverage and also up to $200,000 in tort coverage if no other insurer exists. The idea is to search for applicability of any private insurance to respond, in priority to government insurance.
On the other hand, a private insurer has to be able to know what risk an insured poses when they offer insurance - ie the problem here is that the parents transferred ownership of the car but did not, unfortunately, change the insurance coverage (word of advice: don't do that. Always notify insurers of change in ownership). So the insurer is saying that if they were advised of the change in owner, that they may have declined to insure the adult son (ie due to a poor driving history) or charged more by way of premiums.
On the other hand, assuming you had a third, if the parents had kept ownership in their names, would the adult son have been covered as long as he had obtained consent to drive (ie he didn't steal the car)? Thus the legal wrangling - Wawanesa took the step of naming the adult son as an excluded driver the day after the accident and the emphasis in the argument as to whether consent was sought/given to the adult son to drive that day.
Disposition of this Summary Judgment Motion
Mr. Justice Firestone has drilled down to the lack of evidence on the issue of consent. The adult son says he had consent. The step-mother denies this and says there was no consent. The father has remained silent on the issue.
The reasoning is as follows:
- The father maintained a monetary interest in the vehicle, despite the transfer of ownership of the car to the adult son, prior to the accident, within the Registry’s system – the father received an insurance rebate on the car insurance policy as a result of the accident and the father accepted the property damage payment of $9,000 for the damaged vehicle;
- The adult son (driver) said he had implied consent from the father and express consent from the step-mother,
- The step-mother expressly denies giving consent that day; and
- The father has remained silent on the issue of consent.
As set out by Firestone, J.:
[34] Regarding the issue of consent, Brian alleges that Donna (whose consent would satisfy the requirement of s. 239(1) of the IA) provided express consent the morning that he took the vehicle and further that Herbert’s consent can be implied.
[35] Brian’s version of events on the day of the collision, and his testimony regarding the location and pattern of use of the subject vehicle, is directly contradicted by Donna’s viva voce evidence given at the hearing of this motion. Donna testified that she never gave anybody consent to drive the car. Based on her direct evidence, I find that Donna did not give express consent to Brian to drive the car. Further, based on this testimony her implied consent cannot be inferred.
[36] In light of such conflicting evidence between Brian and Donna on the key issues of ownership and the possibility of Herbert’s implied consent, Herbert’s evidence is necessary before a proper determination can be made by way of summary judgment. In the record before me there is no evidence from Herbert regarding the sort of use he allowed Brian to have of the vehicle, or that it was understood between them that the car would be available in the case of an emergency. A finding of the latter would support Belair’s position that because there was an emergency situation, Herbert would have allowed Brian to use the car, and as a result consent can be implied.
[37] Wawanesa is not attempting to resist Belair’s s. 258(1) claim on the basis of a misrepresentation or other default by the named insured. As a result, the issue in this case is a coverage dispute which turns upon whether Brian, the alleged tortfeasor, was an “insured” under Wawanesa’s policy at the time of the collision. The answer to that question depends on whether Brian had the requisite consent (either express or implied) of the named insured to operate the vehicle on the day in question.
[38] I do not accept Belair’s submission that Campanaro stands for the proposition that an insurer is absolutely liable under s. 258 of the IA when any automobile listed in its policy is involved in a collision. A third party’s action against an insurer under s. 258(1) must be “a claim against an insured for which indemnity is provided by a contract evidenced by a motor vehicle liability policy.”
[39] Not every person who operates a listed automobile is “an insured” for whom “indemnity is provided.” To fall into that category, one must not only be driving an automobile listed on the policy, but be either (a) a named insured or (b) driving with insured’s consent. The principle set forth in Campanaro is that once it is established that the operator of a motor vehicle was in fact an “insured,” such that a s. 258(1) claim by a third party is possible, then ss. 258(4) and (5) prevent the insurer from raising a misrepresentation or default by the insured in defense.This summary judgment motion has been adjourned, to allow for the father to give evidence on the motion, at which point the motion will be decided.
Toronto Personal Injury and Insurance Lawyer
No comments:
Post a Comment