Thibodeau v. Gilbert et al., 2011 NBQB 356

A motor vehicle accident in April 2009 resulted in serious injuries. The plaintiffs brought an action against the defendants Gilbert and Boone, who were respectively the operator and owner of one of the motor vehicles involved in the accident. The defendant Gilbert’s insurer, Economical Mutual Insurance (“Economical”), was added as a third party to the proceedings. Under Rule 23 of the New Brunswick Rules of Court (“Determination of Questions Before Trial”), Economical applied for dismissal of the third party claim against it and an order that it did not have a duty to defend the defendant Gilbert.

The Standard Automobile Policy issued by Economical to Ms. Gilbert afforded third-party liability coverage while driving an automobile other than the described automobile in the policy. However, Section 5 of the general provisions, definitions and exclusions of the policy qualified this by stating that such other automobile must not be owned or regularly or frequently used by the insured or by any other person or persons residing in the same dwelling premises as the insured.

Economical argued that at the time of the accident, the defendants Gilbert and Boone were residing together at the defendant Gilbert’s residence, and that therefore the provision in Economical’s policy affording coverage to the defendant Gilbert while driving the automobile was not met. At discovery, both defendants had admitted that the defendant Boone worked away from home but when he was not away for work, he often stayed with her.

The defendant Boone gave evidence at discovery that he considered his parents’ residence to be his permanent address. It was this address which appeared on his driver’s licence and to which his mail was delivered. In addition, the defendant Boone testified that he did not pay rent or contribute to any of the defendant Gilbert’s household expenses except for food. Based on this, counsel for the plaintiffs and defendants argued the evidence of the defendants’ living arrangement was ambiguous and did not satisfy the stringent requirement of a hearing under Rule 23.

The Court stated that to grant an order under Rule 23, the evidence before it must be clear, unambiguous, and almost reaching the standard of beyond a reasonable doubt. In this case, parts of the discovery testimony were in direct conflict with the pleadings. The Court decided that for it to make a determination of residency on such contradictory evidence in the context of a Rule 23 proceeding was not supported by case law.

Economical’s application was dismissed, with costs in the cause.

Winkel v. Wawanesa Mutual Insurance Co., 2011 NBQB 353

An insured apartment building owner suffered loss as a result of two heavy rainstorms which caused extensive water damage to the interior of the building. The insured claimed indemnification for the loss and submitted a Proof of Loss to his insurer.

The insurer denied coverage on the basis of three different exclusions for water damage found in the insured’s policy. The insured contested the exclusions and commenced an action against the insurer pursuant to Rule 80 of the Rules of Court.
The evidence before the Court was that a contractor who had worked on the building at the time of the storms failed to protect portions of the building where siding had been removed and was open to the weather. The insured conceded that the contractor was responsible for his loss, but argued that the insurer should indemnify him and then recover its expenses against the contractor through separate court action, if it wished.

The insured argued that the policy provisions dealing with water damage were ambiguous and open to interpretation. According to him, these ambiguities had to be interpreted in his favour according to the legal doctrine of contra proferentem, resulting in coverage for his losses. The insured also submitted that by denying his claim, the insurer had broken its obligation to deal with him in utmost good faith, the legal principle of uberrima fides.

For its part, the insurer filed a dispute note indicating that it did insure the building in question but that the insured was not afforded coverage. Its position was that the exclusions, as set out in two letters to the insured, were clear and unambiguous, and the effect of the exclusions was that no coverage was provided for these types of events.

The Court reviewed the three exclusionary clauses relied on by the insurer. It found that two of the three clauses did not relate to the matter before it. The first of these was a clause denying coverage for damage caused by water on the ground, which was not the case in this matter. The second was a denial of coverage for water damage to property left out “in the open,” which for purposes of this case was held to mean property left outside.

As for the third exclusionary clause, it provided that “[w]e will not pay for loss or damage to...[t]he interior of any building caused by or resulting from rain...whether driven by wind or not.” The Court held that this third clause was applicable and expressly excluded coverage for the type of damage suffered by the insured. Consequently, no indemnity to the insured was provided for in the policy.

The insured’s claim was dismissed with costs.