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30 Sep 2019

Failure to provide update on son’s whereabouts to insurer insufficient to void coverage

by Jason Caissie
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Ruddell v. Gore Mutual Insurance Company, 2019 ONCA 328

Alan Stewart was driving a vehicle owned by his mother Gayle Bass which was insured by Gore Mutual Insurance Company.  Mr. Stewart lost control of the vehicle and injuries were suffered by a passenger, Michael Ruddell who started an action against Mr. Stewart and Ms. Bass.

When the action was first filed, Ms. Bass gave Gore Mutual her son’s address so that the action could be served on Mr. Stewart.  The action was served on both Mr. Stewart and Ms. Bass, along with a letter from Gore Mutual advising that the damages may exceed the policy limits. The letter from Gore Mutual also requested that they keep the insurer apprised of any subsequent changes in addresses.

The solicitor hired by Gore Mutual to defend Ms. Bass and Mr. Stewart tried to locate the two of them to get them to attend at an examination for discovery.  Both Ms. Bass and Mr. Stewart were no longer at their prior addresses and despite undertaking a skip trace, the insurer was unable to locate either of them.  The solicitor hired by Gore Mutual filed a motion to be removed as solicitor, which was successful, and Ms. Bass and Mr. Stewart were noted in default. 

Gore Mutual took the position that Ms. Bass had failed to meet the requirements of the policy, which included a requirement to cooperate with the insurer in the defence of the claim.  The question of whether Ms. Bass’ actions or inactions was a breach of the policy which removed her right of indemnity under the policy was brought before the Court.

The Court found that there needed to be a substantial non-cooperation before the insured would lose coverage and the insurer would bear the onus of proving substantial non-cooperation.  The Court found that there was no evidence to suggest that Ms. Bass and her son had acted in concert with each other to actively fail to cooperate.  The evidence showed that both individuals had always had nomadic lifestyles, and that this was the reason why Ms. Bass could not or did not provide updated information to her insurer.

The Court found that the insurer was required to indemnify Ms. Bass and Mr. Stewart, and that decision was upheld by the Court of Appeal.

You can read Ruddell v. Gore Mutual Insurance Company in its entirety here.

At Foster & Company, we represent institutions and individuals looking for help understanding insurance coverages and responding to claims. Contact us by phone at 506-462-4000 or reach us online for advice.