Land.Cases

Question 1

Whiten vs Pilot Insurance Co:
- Facts
- Issues
- Ruling (3- T/A/SC)

Answer 1

Facts:
- House burns down.
- Insurer pays for shelter then ceases payments claiming arson without evidence

Issues: (act bad faith)
- Did Pilot Insurance Co use the power imbalance to force insured into a smaller settlement?

Rulings: T/A/SC: 1M punitive / 100K / 1M

Question 2

Awards of the type of the ‘Whiten vs Pilot Insurance Co’ should consider…?
and what are the 4/6 details-dimensions ?

Answer 2

Consider PROPORTIONALITY along several DIMENSIONS:
1. Blameworthiness of Insurer
2. Vulnerability of victim
3. Harm to victim
4. Deterrence to insurer
5. consider other Penalties insurer may have incurred
6. punitive award should not been seen by the insurer as a “License” (no financial gain for insurerd)

(BVH-DPL)

Question 3

Identify the 3 purposes of punitive damages.

Answer 3

1. Deterrence
2. Denunciation
3. Retribution

(DDR)

Question 4

Somersall v Scottish & York :
- Facts
- Issues
- Ruling (3- T/A/SC)

Answer 4

Facts:
- Victim injured by under-insured driver.
- Sign limits agreement (no suing for more than tortfeasor limit) with other driver
- claims against insurer for excess beyond agreement.

Issues:
-The insurer contested the claims because the Somersalls entered into a limits agreement, which impaired their subrogation rights.

Ruling: T/A/SC: Insurer / Insured / Insured

Reasoning: At time of accident, SEF44 was in effect so subsequent limits agreement did not prevent coverage.
* Subrogation Rights Arise ONLY after full indemnification

Question 5

Define limits agreement.

Answer 5

agreement between injured party & tortfeasor where:
• tortfeasor admits liability
• injured party will not sue for more than tortfeasor’s limits

Question 6

Briefly explain the SEF 44 endorsement.

Answer 6

Endorsement providing coverage to insured when tortfeasor is under-insured

Question 7

In the ‘Somersall v Scottish & York’ case, what was the reasoning behind the Supreme Court ruling?

Answer 7

At time of accident, SEF 44 was in effect, therefore:
→ subsequent limits agreement did not prevent coverage under SEF 44

+* Subrogation Rights Arise ONLY after full indemnification

Question 8

Sansalone v Wawanesa case :
- Facts
- Issues
- Ruling (2-T/A)

Answer 8

Facts:
- BC Transit bus drivers sexually abused a teenager
- Wawanesa DENIED defense & coverage: policy terms exclude bodily injury caused intentionally

Issues: How does duty to defend relate to duty to indemnify:
- Does insurer have a duty to defend where indemnification is beyond scope of policy ?

Ruling: T/A: Insured / Insurer
- Trail: duty to defend because bus drivers may have mistakenly believed consent had been given
- Appeal: no duty to defend
- Majority: If act is intentional and injury is natural & probable then there is intention to cause injury ; therefore excluded by policy

Question 9

What was the ` majority reasoning` in the ‘Sansalone v Wawanesa’ case?

Answer 9

IF act is intentional AND injury is natural and probable
THEN there is intention to cause injury, therefore excluded by policy.

**Duty to defend only when there is a possibility of policy coverage

Question 10

What was the minority reasoning in the ‘Sansalone v Wawanesa’ case?

Answer 10

Act WAS intentional BUT injury was not
- defendant had invalid belief of consent
- there IS a duty to defend but not indemnify

Question 11

Nichols v American Home Assurance case :
- Facts
- Issues
- Ruling (3- T/A/SC)

Answer 11

Facts:
- Nichols accused of fraud but found innocent.
- Sought defence costs from insurer
- but claim denied

Issues:
- Does insurer have a duty to defend where indemnification is beyond scope of policy.

Rulings: T/A/SC: Insured / Insured / Insurer
- Appeal: Dismissed appeal: duty to indemnify vs duty to defend different; pay defense since defendant was innocent
- SC : Duty to defend only when there is a possibility of policy coverage
* Fraud beyond scope of coverage –> no duty to indemnify –> no duty to defend

Question 12

Amos v ICBC case :
- Facts
- Issues
- Ruling (3- T/A/SC)

Answer 12

Facts:
- the insured, Amos, was shot by gang in California while driving rental car
- claims no-fault Accident Benefits against his BC auto policy
- ICBC denied the claim, that the shooting was unrelated to the use of car

Issues:
- shooting, intentional act, could be considered to have “arisen out of the use of a car”.

Ruling: T/A/SC: Insurer / Insurer / Insured

SC established a two-part test to determine coverage:
* Purpose Test: Was the car being used in a normal way?
* Causality Test: Was there a link (possibly indirect) between use of car and shooting?
Ruling SC: Yes to both purpose & causality tests, and damage was “arising out of” use of car

Question 13

2 questions the Supreme Court of Canada considered in reaching a verdict in the Amos v ICBC

Answer 13

PURPOSE TEST: was the car being used in a normal way?
CAUSALITY TEST: was there a link (possibly indirect) b/w use of car and shooting?

Question 14

Alie v Bertrand Frere Construction case:
- Facts
- Issues (2)
- Ruling (2)

Answer 14

Facts:
- Defective concrete requires replacement of basements of 140 houses in Ottawa (built between 1986 and 1988)

Issues:
1. Indemnity trigger:
- Different years were covered by different insurers &
- which policies were triggered?
2. Defense trigger:
- How are defence costs allocated between primary & excess insurers?

Ruling:
1. INDEMNITY TRIGGER: Continuous Trigger
- Coverage is triggered from the first exposure to the time the damage becomes manifest
- assume that damages are evenly spread over all years
2. DEFENCE TRIGGER:
- excess/umbrella policies have duty to defend
- ..they follow the terms of the underlying policy AND do not specifically exclude duty to defend

Question 15

Resurfice v Hanke case:
- Facts
- Issues
- Ruling (3-T/A/SC)

Answer 15

Facts:
- Hanke badly burned in freak Zamboni accident: sued manufacturer
- Hanke claimed: gas and water tanks looked similar & easily confused

Issues:
What was the cause of injury?
1 - design negligence?
2 - causal link between design flaw and Hanke’s injuries?
2 tests if defendant’s actions is the cause of injury:
* Standard Causation Test: “but for” rule.
* Alternative Causation Test: “material contribution”, when “but for” can’t establish causation.

Ruling: T/A/SC: Insurer / Insured / Insurer
Trail :
- use But for test: Insurer wins :
- Would explosion still have occurred BUT FOR making gas/water tanks similar?
- YES, defendant NOT liable.
Appeal :
- use Material Contribution Test: Insured wins
SC:
- Defendant wins, apply "but for" test, NOT “material contribution” test
- The “but for” test was enough since accident was not reasonably foreseeable.

But for test: Would accident have occurred but for the defendant’s negligence? yes: defendant not liable; no: defendant liable

Material contribution test: Requires that the negligent action materially contributed to the risk of harm. Less rigorous than the ‘but for’ test.

Question 16

Briefly describe the but for causation test.

Answer 16

“but for” CAUSATION TEST: Would accident have occurred but for the defendant’s negligence?
if YES: defendant NOT liable
if NO: defendant liable

Fr: l’accident aurait-il eu lieu sans la négligence du défendeur ?

Question 17

Briefly describe the 'material contribution' causation test.

Answer 17

• requires that the negligent action MATERIALLY CONTRIBUTED to the risk of harm
• less rigorous than the ‘but for’ test
• In order to apply this test, there are 2 requirements:
  1. The “but for” test, can’t establish causation.
  2. Accident must be reasonably foreseeable.

Question 18

Briefly describe the 2 requirements for the application of the “material contribution” causation test to be applicable.

Answer 18

1. The “but for” test, can’t establish causation.
2. Accident must be reasonably foreseeable.

Question 19

Morrow v Zhang (AB 2004) case:
- Facts
- Issues (2)
- Ruling (2-T/A)

Answer 19

Facts:
- Alberta introduced minor injury regulation to address rising costs.
- Morrow suffered challenged constitutionality of $4K cap on minor injuries

Issues:
1. Cap stigmatizes minor injuries because it treats such victims as malingerers
2. Cap is discriminatory because it treats minor injuries differently regarding non-pecuniary damages

Ruling: insured/insurer
- Trial : cap is discriminatory & struck down
- Appeal: appeal reverses original ruling (cap is upheld)
1. cap is designed to lower premiums for everyone
2. cap does not discriminate against minor injuries

Question 20

PIPEDA report case :
- Facts
- Ruling

Answer 20

Facts:
- an ON couple complained of increase in property insurance rates because Insurer used their credit score

Ruling:
- Privacy Commissioner rules use of credit score is acceptable.
- Commissioner notes that the standard insurance form is deficient & misleading:
1. Consent must be meaningful (Website said credit score may be used, but it was always used)
2. Insurer should be explicit regarding its intent

Question 21

Aviva v Pastore case:
- Facts
- Issues
- Ruling (2-Delegate/T/A)

Answer 21

Facts:
- Pastore sustained complications from ankle injury in 2002 auto accident.
- He sought catastrophic impairment designation
- Aviva rejected cat impairment designation.

Issues:
- for class 4 designation, is it enough to show marked impairment in just 1 functional category? for Pastore, this was Daily living

Ruling: Insured/Insurer / Insured
- Delegate: Marked impairment in daily living, classify as class 4 cat impairment
- Ruling T: Reversed Delegate decision since exceeded jurisdiction.
- Ruling A: Divisional Court erred in standard of review (reasonableness) so class 4 cat impairment reinstated.

Definition class 4 cat impairment:
Marked impairment significantly impeding useful functioning in at least 1 of: (DSCW)
Daily living
Social interaction
Concentration
Work activities

Question 22

Define Class 4 cat impairment.

Answer 22

Marked impairment significantly impeding useful functioning in at least 1 of: (DSCW)
- Daily living
- Social interaction
- Concentration
- Work activities

Question 23

There is currently a big gap in compensation between (non-cat & cat) impairment, what should we done?

Answer 23

There should be a provision for something between minor injury and cat impairment.

Question 24

Kusnierz v Economical case:
- Facts
- Issues
- Ruling (2-T/A)

Answer 24

Facts:
- plaintiff had leg amputated following auto accident (as passenger)
- sought classification as catastrophically impaired

Issues:
- Can physical impairment of 50% be combined with a mental impairment % to reach 55% threshold for SABS (Statutory Accident Benefits Schedule) cat impairment

Ruling: T/A: Insurer / Insured
1. Trail : No cat impairment, SABS does not explicity state that physical & mental impairment can be combined.
2. APPEAL: Allowed cat impairment since combining physical & mental is more reasonable and modern interpretation

implication: More would qualify for cat impairment but still rare and no material impact on AA (Availability / Affordability)

Question 25

Belanger v Sudbury case: - Facts - Issues - Ruling (`2-T/A`)

Answer 25

**Facts**: - 20 year-old `woman catastrophically injured` in head-on collision `due to icy road in Sudbury `Ontario **Issues**: - Was the `city liable for failing to maintain roadway in good condition` during a winter storm? **Ruling**: `Insured`/`Insured` - TRAIL: `City was liable` for plaintiff's injuries. Salting & plowing occurred but insufficient given the storm conditions. - APPEAL: Rejected defendant's "statutory defense" and `upheld trial judge's decision`. City is `expected to adapt to conditions`, not just blindly follow procedures. ## Footnote Statutory defense: No liability because could not reasonably be expected to know about the reformed ice.

Question 26

Precision Plating v AXA Pacific Insurance case: - Facts - Issues - Ruling (`2-T/A`)

Answer 26

**Facts**: - Insured had a `fire on premises causing chemicals to overflow and contaminate` neighboring property **Issue**: Does insurer have a `duty to defend`? - `pollution/contamination is EXCLUDED` by policy - but insured argued that `cause of loss `was fire & therefore covered **Ruling**: Insured / Insurer 1. TRIAL: Insurer must defend: - policy terms were `ambiguous` - should `not exclude contamination caused by fire` 2. APPEAL: Insurer's appeal `allowed no duty to defend` Third party `claims were for CONTAMINATION not for fire` (thus excluded from coverage)

Question 27

Compare the 'Precision Plating v AXA Pacific Insurance' case to other duty-to-defend cases.

Answer 27

Compare to: `no duty to defend because no duty to indemnify` 1. Sansalone v Wawanesa (sexual abuse) 2. Nichols v American Home (fraud) Precision `Plating was different` however: - `pollution/contamination was clearly excluded` - insured `argued cause of loss was fire not pollution` (unsuccessful on appeal)

Question 28

Saadati v Moorhead case: - Facts - Issues - Ruling (`3-T/A/SC`)

Answer 28

**Facts**: - Mr. Saadati sustained injuries in an auto accident when his vehicle was hit by Mr. Moorhead's vehicle - Accident `caused him to suffer serious mental injury` according to his friends and family (`witness`) **Issues**: - is Mr. Saadati eligible for `non-pecuniary damages for physical and/or mental injury based on witness testimony alone`? **Ruling**: TRIAL: - Physical injury claim rejected by trial judge - mental injury: `testimony of friends and family was sufficient proof of psychological injury` -> `100K in non-pecuniary` damages awards. APPEAL: - overturned - Saadati had not demonstrated a `medically recognized `psychiatric or psychological `injury` SUPREME COURT: - plaintiff does not have to prove a specific recognized mental illness - Reason -> recovery for 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 casual relationship` 4. `Factual causal relationship`. 5. Establishment that the `mental injury is serious & prolonged, and rises above ordinary anxieties, & fears`. → all 5 criterias were met

Question 29

What will be the impact of the 'Saadati v Moorhead' case on future similar cases?

Answer 29

The `law of negligence must afford equal protections to victims mental and physical injuries.` This case will have a significant impact on future cases dealing with compensation for mental injuries.

Question 30

Tomec v Economical case: - Facts - Issues - Ruling (`2-T/A`)

Answer 30

**FACTS**: - insured (Tomec) was `hit by a vehicle` as a pedestrian - injuries `were serious but not catastrophic` -` granted 104 weeks` of ACB (Attendant Care Benefits) and HK (House Keeping) - `Economical stopped` benefits and `reclassified Her as CAT`. - CAT impairment `removes the limits for original benefits, but Eco denied claim` because of the `2 years statutory limits and therefore claim had expired`. **Issues**: - Does the `discoverability principle apply` so that the statutory time limit can be extended? **Ruling**: 1. TRAIL: `Discoverability does not apply`. Tomec` did not apply for extended benefits` by Sept 12, 2012. therefore `Tomec cannot apply for` (or receive) extended benefits 2. APPEAL: `Discoverability did apply` to the limitation period. 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 ## Footnote **Discoverability principle** states that a `limitation period does not begin to run until the plaintiff knows`, or ought to have known, that they have a claim

Question 31

'Loblaws vs RSA' case: - Facts - Issues (3) - Ruling (`3-T/A`)

Answer 31

**Facts**: - `Long-tail opioid class actions against Loblaws` across several provinces in Canada - `Multiple CGL insurers covered successive years`; differing SIRs/deductibles and no overlap **Issues**: 1. `How to allocate defense costs` among consecutive insurers: * `Insured want All-Sums approach` (one insurer covers all costs then the insurer seek contribution later) * `Insurer want Time-on-Risk approach` (costs are split according to each insurer's period of coverage) 2. Self-Insured Retention issue: `which SIR to use` 3. `Pre-Tender Costs`: Can Loblaws recover legal `costs incurred before tender/notice` to insurers. **Ruling**: TRAIL: - All-Sums approach/ SIR (Self-Insured Retention) Credit Across Policies / Yes - Pre-Tender Costs APPEAL: - All Sums Rejected for `Time-on-Risk (Insurers only pay defense costs for their coverage periods)` - SIRs Must Be Separate: `Each insurer's deductible must be met individually` - No Pre-Tender Recovery - `Legal costs incurred before insured notifies insurer aren't recoverable but can offset SIR.`

Question 32

Which Landmark Legal Cases went to the Supreme Court (7)?

Answer 32

1. **Nichols v American Home** - Duty to Defend 2. **Fletcher vs MPIC** - duty of care to inform customers of available coverages 3. **Whiten v Pilot** - Punitive 4. **Resurfice v Hank**e - Negligence 5. **Amos v ICBC** - arising out of 6. **Saadati v Moorhead** -mental illness 7. **Somersall v Scottish&York** - limited agreement / SEF44 endorsement

Question 33

Which Landmark Legal Cases deal with duty to defend (3+2)?

Answer 33

PRIMARY insurer: - Sansalone v Wawanesa - Nichols v American Home - Precision Plating v Axa Pacific Insurance - Loblaws vs RSA EXCESS insurer: - Alie v Bertrand Frere construction

Question 34

Which Landmark Legal Cases have catastrophic injury as the main issue (3)?

Answer 34

Aviva v Pastore Kusnierz v Economical Tomec v Economical

Question 35

Does insurer have a duty-to-defend when act is beyond scope of policy?

Answer 35

NO: see (Sansalone v Wawanesa), (Nichols v American Home), (Precision Plating v Axa Pacific Insurance)