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Insurer Not Liable to Pay Interest and Costs Due to Insured’s Conduct

Martin et al v Estate of Pierrette Landry and Pembridge Ins. Co., 2023 NBKB 32.

Reading Time: 3 minutes  (approx.)

By: Weston McArthur (Articled Clerk) 

The Plaintiffs were all involved in a motor vehicle accident in which Pierrette Landry (now represented by her Estate) attempted suicide by crossing the center lane into oncoming traffic. Ms. Landry’s insurer was Pembridge Insurance Company.

In Cooperators General Insurance Company et al v Martin et al, 2022 NBCA 15 (which we previously reported on), the Court of Appeal held that Pembridge, a third party, was only responsible for paying the statutory minimum of $200,000 in coverage for the entire claim. This was because Ms. Landry engaged in illegal activity when she attempted suicide, whereby breaching the public policy rule in section 2 of New Brunswick’s Insurance Act, RSNB 1973, c I-12.

In this Motion, the Plaintiff were seeking interest and costs over the maximum $200,000 to be awarded. The New Brunswick Insurance Act refers to motor vehicle policies of insurance as contracts of indemnity. At paragraph 18, Chief Justice DeWare explained that “[i]n this case, the policy of insurance and its resulting obligations imposed on the insurer, Pembridge, have been vitiated as a result of the intentional conduct of the insured, Ms. Landry”.

Stated differently, Chief Justice DeWare found that insurers are not liable to pay interest and costs with regard to motor vehicle policies of insurance where an insured’s conduct relieves them of their duty to indemnify. Ultimately, the Court ruled in favour of Pembridge.

Link: 2023 NBKB 32 (CanLII) | Martin et al v. Estate of Pierrette Landry and Pembridge Ins. Co. | CanLII

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