February 20, 2018 07:00
The lawyers of the law firm Lavery, Jonathan Lacoste-Jobin and Bernard Larocque, presented 13 rulings that have had an impact on the case-law in the annual Review of the case law 2017 in insurance law.
1. Automobile insurance act
a. Godbout, c. Pagé, 2017 SCC 18
Therese Godbout and Gilles Gargantiel have both been victims of two car accidents separate. They allege to have suffered additional injury due to faults attributable to a third party. Ms. Godbout has undertaken an action for civil liability against the medical staff who cared for and Mr. Gargantiel against the agents of the Sureté du Québec, that would have been negligent according to him. The two plaintiffs have received compensation from the Société de l’assurance automobile du Québec (S. A. A. Q).
The appeal of the plaintiffs is dismissed as the automobile insurance Act grants civil immunity in respect of the injury caused by an automobile accident. By cashing the allowance of the S. A. A. Q, the claimants were not therefore to civil remedies, including, in this case, the police officers and medical staff.
2. Nullity ab initio of an insurance policy
a. Lavallée c. The insurance Company Elite, 2017 QCCA 220
Gilles Lavallée has purchased a recreational vehicle and ensures it a few months later for 140 000 $ for Elite. The following year, the vehicle caught fire and was completely destroyed. At the time of the submission of insurance, Mr. Lavallée does not reveal that the recreational vehicle had been purchased in an auction in the United States for $ 60,000 US and that at the time of purchase, the vehicle was to receive reparations of $ 113,000 US.
The court held that the plaintiff has made proof of bad faith by conspiring to extort to the insurer the amount of insurance and that it was his responsibility to provide information to the insurers at the time of submission.
b. El-Ferekh c. Intact insurance company, 2017 QCCS 4077
Steven El-Ferekh buys a building, but it is her brother Robbie El-Ferekh (as the nominee) which formalizes the purchase. At the time of the underwriting of home insurance, Steven is pretending to be Robbie and responds to issues of the broker. The shelter caught fire in November 2012.
The legal action of the insured is rejected, because a nominee has no insurable interest. The insurance contract is therefore void. The survey also demonstrated that false statements on the use of the building have been made during the underwriting of the risk.
c. Intact Insurance v. Town of Montreal, 2017 QCCS 3062
The insured of the plaintiff Intact Insurance have suffered damage due to a fire in their building. Intact has filed a subrogation action against a company that has made the operations of melting of the tubing in the water system of the City of Montreal. Intact submitted that these works have been the cause of the fire. The company also continues to pursue the civil liability insurer of the company that submits an application to dismiss on the grounds of a lack of interest to be Intact because of the nullity ab initio of the insurance policy of the company.
The proof of the annulment ab initio of the insurance policy has not been able to do in the preliminary stage, accordingly, the request for dismissal may be premature. The tribunal applied the principles of caution before dismissing an action at a preliminary stage.
3. The requirement of disclosure of risks
a. Group Anderson inc. c. Euler Hermes Canada 2017 QCCS. 4509,
call. Motion to dismiss appeal denied 2017 QCCA 1951.
The plaintiff, a Group Anderson inc., has benefited from a policy of credit insurance fromEuler Hermes Canada. This first one has supplied parts to a question, which has not fully paid the amounts due. However, the credit insurer has refused to indemnify its insured, because it failed to declare circumstances of a nature to influence the insurer in his risk assessment or of the applicable premium. The difficulties of a case that the insured had not been reported.
The Court stated that it was up to the insurer to demonstrate the existence of a link of relevance between the subject of the false statement or the reluctance and risk assessment. As the insurer has maintained a position of denial of coverage in spite of the information obtained subsequently, he was sentenced to reimburse rune part of the legal fees incurred by the insured.
4. Notice of a claim
a. R. C. Mr. Modular inc. c. Royal & Sun Alliance company of Canada
insurance, 2017 QCCS 1850.
R. C. M. Modular factory buildings of modular house and during a long transport, the protective film of many modules has been damaged. Exposed to the weather, the water lines are present on some modules, and traces of mold were discovered. Repairs are made, but no notice is given to the insurer at that time. The opinion is fact just a few months later.
RSA Caanda invokes article 2470 of the civil Code of Quebec and denies the coverage because of delayed reporting. According to the article of the law, the insured should notify its insurer as soon as it becomes aware of the loss. The appeal has therefore been rejected.
5. Insurance coverage for fraud vs. Theft
a. 6916643 Canada inc. c. Intact insurance company, 2017 QCCA 660.
The company 6916643 Canada inc. has been the victim of a fraud in a sale of goods on the faith of a certified cheque and falsified. It alleges that the fraud of which she was the victim amounts to theft and is claiming the value of the goods to his insurer.
The judge of first instance concluded that the fraud does not constitute a theft within the meaning of the insurance policy and that it is not physical damage, but lose recovery because of a subterfuge. The judge refused permission to appeal.
6. Exclusion for criminal acts
a. Desjardins financial Security life assurance company c. Emond,
2017 SCC 19.
A motorcyclist died during a police chase at high speed. The heirs demanded the payment of the benefit provided for in the contract of life insurance held at Desjardins financial Security. However, the insurer invoked an exclusion clause general grounds that no benefit is paid by the insurer when the accident occurs while the insured is participating in a criminal act.
The tribunal concluded that, according to Article 2402 of the civil Code of Québec, a general exclusion applies only to criminal acts exclusively offences and non-offences hybrid. The insurer must pay the indemnity.
7. Obligation to minimize the damage
a. 9124-4541 Quebec inc. c. Intact insurance company, 2017 QCCA 40.
The insured, 9124-4541 Quebec inc., has been the victim of a fire in its plant poultry processing. The openings made by the fire have been closed a month after the disaster, despite the recommendations of the claims adjuster of the insurer, Intact Insurance. The insured has received nearly $ 800,000 of compensation, but continues to the insurer to ask for an extra allowance of more than $ 8 million related to the loss of income as well as damages to buildings and equipment of the factory.
The Court acknowledges that the insured has not acted in a prudent manner, does not minimize its damages, which is contrary to its obligations, contained both in the policy of insurance in the civil Code of Québec. The Court of appeal therefore concludes that the damage to the equipment was caused by the failure of the insured to perform the emergency work in a timely manner.
8. Calculation of insurance indemnity
a. Management Ignièce inc. c. Lloyd » s Underwriters, 2017 QCCS 1410.
A building was purchased at a price of $ 650,000 for the purpose of a residence for retired people independent of the company Management Ignièce. The insurance policy amounted to 1 825 000 $ and the evaluation report of the replacement value of the building at 1 844 345 $. In 2012, a fire swept through the building. The insured to his insurer, Lloyd’s Underwriters, it is ordered to his insurers to rebuild the building or that they are doomed with the insurance broker to pay him the amount of the cost of reconstruction of the building’s replacement value, without price limits (approximately $ 4.6 million).
The Court demonstrates, however, that there is an absence of fault of the insurance brokers because the broker has fulfilled his obligation of means and had properly briefed his client about the choice of the police. As the insured has not shown its intention to rebuild the building (the absence of construction permits, among others). Thus, the building must be compensated at replacement value depreciated.
9. Plurality of insurance
a. Coop Fédérée c. general insurance Company Co-Operators, 2016
QCCS 6302, call. Motion to dismiss appeal dismissed 2017 QCCA 575.
Coop Fédérée has been the victim of a stratagem of spear which results in a transfer in fraud of nearly $ 5 million. He held two insurance policies for property, with the Co-Operators (subscribed for a guarantee limit of $ 15 million) and the other with the Liberty (relating to fraud and diversion to a limit of 1 million dollars). Liberty will indemnify the insured up to limit of insurance. The Co-operators denied coverage, because the insurance company is of the opinion that Liberty was a specific font and was, in this case, the primary insurance line. Liberty has also filed an action against Co-operators, seeking to be reimbursed in part for the loss suffered.
The Court concluded that there was a plurality of insurance. Thus, the two insurers should share the indemnity according to the theory based on the maximum liability. This means that the contribution of each insurer is proportional to the limit of insurance.
10. Duty to defend
a. Union Lofts Wilson c. 1061 St-Alexandre, 2017 QCCS 5988.
Union Lofts Wilson has acted as the general contractor for the renovation of a building. After the work, a list of deficiencies is issued and the insured requests to sub-contractors to perform the work required. The owner of the building, 1061 St-Alexandre, dissatisfied with the work, filed an application instituting proceedings for damages against the insured and various co-defendants. The insured has presented a request in order to force its insurer to take up its defence. The insurer refused to assume the defence alleging that the claim is not a claim that caused property damage within the meaning of the policy. According to him, only the damage resulting from the cracking and collapse of concrete slabs are covered.
The Court concludes that the damages claimed by the plaintiff corresponds to the cost of correcting deficiencies and non-conformities alleged. However, the insured is not a guarantee of insurance for a claim which relates only to the costs incurred by the improper performance of works, so that no damage is occurred. Thus, only the damage resulting from the cracking and collapse of concrete slabs entail the obligation for the insurer to assume the defense of its insured.
11. Communication of documents
a. Chubb Insurance Company of Canada v. Domtar inc., 2017 QCCA 1004
Domtar purchased the shares of Weston in a company and continued by the latter on the application of a price adjustment clause provided for in the contract of purchase action. The parties began a mediation and Domtar has asked its insurer, Chubb, to participate. The latter declines the invitation. After the settlement of the action, Domtar has pursued its insurers, primary and excess to claim the amount disbursed in the framework of mediation as well as the defense costs incurred. The insurers have asked to get the documents, correspondence and opinions legal. Domtar has refused, invoking the obligation of professional secrecy.
The Court of appeal is of the opinion that the insured has waived the privilege because the nature of the complaint, order the disclosure of the documents in question. Thus, the insurer is entitled to know the content of the legal advice received by Domtar relating to the risks of continued Weston. The invitation to participate in the mediation involves necessarily a waiver of privilege. In addition, as the litigation is finished, the privilege no longer holds. The Court of appeal stated that the generic information should therefore be transmitted.