In Ferro v. Weiner, the late Enid Weiner owned a house on Lake Eugenia. From the late 1980s or early 1990s, it was Enid’s sole residence, before she moved to a nursing home in 2008 or 2009. Although she never resumed full-time residence at the house, her three adult children and their families all continued to use it as a cottage. She would occasionally stay there with them. At all relevant times she was the sole owner of the house.
In May 2010, a young man drowned at the house while attending a party. Enid’s daughter Regan, son Scott, and daughter-in-law Sandy were at the house during the incident. The victim’s parents and sister sued Enid, Regan, Scott, and Sandy.
Scott’s insurer, TD Insurance, defended and settled the plaintiffs’ claims. TD then brought a summary judgment motion, seeking a declaration that Intact Insurance was bound to defend and indemnify all defendants against the claims advanced by the plaintiffs. Intact insured Enid as the sole named insured under a Homeowners – Broad Form policy. TD argued that the defendants were insured under the Intact policy because they were all “living in the same household” as Enid at time of the incident.
The motion was granted, and the motion judge ordered a declaration that Scott, Sandy, and Regan were insured under the Intact Policy. She found that Scott and his family were not visitors to the house. She noted that Scott attended at the house when he wished and cared for it, as an owner would, and that he later took an ownership interest in it. Referring to Canadian Universities’ Reciprocal Insurance v. Halwell Mutual Insurance Co. (2002), 2002 CanLII 27712 (ON CA), she held that “household” can have a flexible meaning, and that “the meaning must be gleaned from interpreting its use in the policy of insurance using the rules of interpretation of contracts and of insurance policies, including that any ambiguity is to be resolved in favour of the insured.” She found that in the context of the intact policy and the property in question, Scott and his family were included in Enid’s household.
The Court of Appeal disagreed and allowed Intact’s appeal. The Court of Appeal held that the phrase “living in” was relevant to the question of whether the house was Scott’s residence. It was not.
The Court also held that the word “household” in the context of a homeowners policy refers to a community, most readily understood by analogy to a family unit:
A household is constituted not only by its members’ patterns of living with each other, but also by their settled intentions. Accordingly, courts have found that a person can maintain membership in a household despite lengthy absences from a common residence, provided there is continued self-identification as a member of the household, with a settled intention to return to the common residence. For example, university students do not necessarily cease to be members of their parents’ household when they move away for the academic year, provided they continue to view the parental home as home base and have an intention to return: Canadian Universities’. Similarly, a parent who is absent from the family home for extended periods because of the requirements of work does not therefore cease to be a member of the household during those absences as long as the parent intends to return…
On the facts of this case, the Court held that applying the established common law understanding of “household,” the facts found by the motion judge were incapable of supporting a finding that Enid and Scott, Sandy, and Regan had a “common life with the intimacy, unity, and permanence required to constitute a household.” At the time of the accident, Enid was living in a nursing home. Scott lived with his family in the city and had organized his life around his urban household. Prior to entering the nursing home, Enid lived with Scott’s brother, and not with Scott and his family.
It is also interesting to consider how the Court of Appeal rejected the respondents’ argument calling for a broad interpretation of the coverage clause at issue:
Whether a case involves a coverage clause or exclusion clause may influence the result in borderline cases, but this is not a borderline case. Where the facts are inconsistent with a person being a member of a household in accordance with settled jurisprudence, the fact that the case involves a coverage clause provides no assistance.
Mr. Demetriou claimed he was robbed of a $550,000.00 ring (a family heirloom) that he was wearing on a gold chain around his neck while walking alone on a beach in Punta Cana. He had added the ring to his insurance policy with AIG prior to the trip and, upon returning to Canada, he reported the theft and made an insurance claim.
AIG commenced investigations which included meeting with Mr. Demetriou, performing several examinations under oath and obtaining affidavits from Mr. Demetriou and various family members. However, prior to completing these investigations, AIG had already determined that litigation would be required to resolve this claim and had even advised a company that collects and supplies information to the insurance industry that nothing was owing on the claim and the claim file was closed. Ultimately, the claim was formally denied on the basis that there was insufficient information to substantiate the claim. Notably, during the course of its investigation, AIG identified some suspicious circumstances surrounding the loss and also discovered that Mr. Demetriou had made a prior (and extremely similar) claim under a different policy with a different insurer.
Mr. Demetriou subsequently sued AIG. At an early stage in the litigation, counsel for Mr. Demetriou sought to confirm, by way of obtaining an order for particulars, whether AIG was alleging fraud. This was due to the fact that AIG’s statement of defence was largely boilerplate and there were several exclusion clauses in the policy stating that intentional or dishonest acts committed by an insured were not covered. AIG specifically denied that it was relying on the exclusion clauses and refused to provide any particulars of fraud. However, it also advised that it reserved the right to rely on those provisions should further information become available.
Mr. Demetriou brought the subject motion for summary judgment, which was granted, as the judge found he had complied with his obligations under the policy to prove his claim. The judge refused to place any weight on the suspicious evidence put forward by AIG, stating that AIG had “expressly disclaimed any reliance on fraud or deliberate acts”. The judge also refused to allow AIG to amend the statement of defence at the motion and specifically noted that the case to date had been conducted on the basis that no fraud was being alleged and it was “simply too late to reverse course now”.
Punitive damages were awarded against AIG in the amount of $50,000.00. AIG was criticized on the basis that it had no intention of paying the claim from an early stage but still required Mr. Demetriou and members of his family to submit to EUOs and provide numerous documents. The judge was also unimpressed that AIG had refused to admit that it intended to allege fraud, despite being ordered to do so by the court. These actions offended the court’s sense of decency and warranted punitive damages.
Notably, the case was silent on whether or not, on a balance of probabilities, the plaintiff had proven that the theft occurred. While such a conclusion is arguably implied, it is not specifically stated. This raises some concern that the judge may have conflated the distinct issues of the insurer’s allegations with respect to fraud and the plaintiff’s burden to prove that the loss actually occurred. It will be interesting to see whether any appeal is forthcoming.
This case truly highlights the importance of always dealing with an insured in good faith and also pleading fraud in the right circumstances. Notably, Rule 25.06(8) of the Rules of Civil Procedure specifically requires a party alleging fraud to provide sufficient particulars, in other words, the material facts upon which the party alleging fraud relies. Had AIG provided particulars of the alleged fraudulent circumstances in its statement of defence or when ordered to do so by the court, the outcome of this summary judgment motion may have been different. Ultimately, insurers need to be careful when navigating suspicious claims. Proper investigations need to be undertaken as soon as possible, and, insurers should not prejudge a claim prior to the completion of these investigations. If an insurer is in a position to deny a claim based on fraud, the pleadings must be clear. The insurer should set out the material facts and advise of policy exclusions that it intends to rely on in order to position itself properly when proceeding in litigation. An insurer who attempts to allege fraud covertly does so at its own peril.
Julianne defends insurance claims covering all aspects of general insurance liability including motor vehicle accidents, occupiers’ liability, slip and falls, subrogated losses and general negligence claims. Read more...
The Plaintiff suffered injuries after tripping on a speed bump in a parking lot owned by the Defendant. While the parties agreed to damages, the matter proceeded to trial on the issue of liability. The Court considered whether the Defendant breached its duty of care under the Occupiers’ Liability Act.
In describing the accident, the Plaintiff admitted that she did not know what caused her to trip and fall. In fact, she did not even know that she had tripped on a speed bump. It was not until she returned to the parking lot two weeks later, after meeting with a lawyer, when she noticed that there was a piece of the speed bump that was missing. Upon seeing this, the Plaintiff claimed that this was what caused her to fall. Specifically, in her Examination for Discovery testimony, which she confirmed at trial, the Plaintiff explained “there was a piece missing and maybe that’s [where] I tripped and then I fell.”
Both parties called forensic consulting engineers as experts to testify as to whether the speed bump was compliant with applicable codes and standards. On hearing this evidence, the Court found that the speed bump markings were compliant with the standard practice for walking surfaces. Further, the markings provided advanced warning to the raised pavement service, making it clearly visible to prudent road users. The Court noted that the yellow border and grid markings provided a clear contrast to the surrounding black asphalt surface. In reviewing the photographs taken, the Court concluded “even a cursory downward glance by anyone crossing in the area of the speed bump would have readily revealed the existence of the speed bump.” Further, the Court found that even if the speed bump was not painted solid yellow and/or had an irregular shape on the side of the speed bump, this was not a breach of the standard of care.
In order to be successful, the Plaintiff must be able to establish that an act on the part of the occupier caused her injury. An inference of causation must be based on objective facts, rather than speculation. The Court found that the Plaintiff failed to meet this test. In the present case, at best, the Plaintiff was only able to advance a theory based on her subjective belief that she tripped either (1) on the speed bump; or (2) “maybe” it was because of a “broken” or “missing” piece. However, there was no objective evidence to establish that the fall was because of a deficiency of the speed bump markings or its condition. Therefore, the Claim was dismissed.
This case serves as an important reminder that the burden is on the Plaintiff to establish that the Defendant has breached their duty of care under the Occupiers’ Liability Act. Mere speculation is not enough.
This case involves an accident at QK Fitness (“QK”) when the plaintiff, Fatemeh Hosseinkhani (the “plaintiff”), tripped and fell on a dumbbell during a gym class. She sued QK for negligence. QK successfully brought a motion for summary judgment to dismiss the plaintiff’s action arguing that it could not be negligent for two reasons: because the plaintiff signed a waiver or, in the alternative, that the plaintiff was solely responsible for her accident. The plaintiff took the position that she had no opportunity to read the Agreement before she signed it, that no one brought the exclusion of liability clause to her attention when she signed it, and that the defendant failed in its duty of care to properly instruct the plaintiff on the safe use of round dumbbells.
The plaintiff joined QK in February 2014 on a one-year membership agreement. Upon joining, she was given a tour of the facility and, at its conclusion, was presented with an Agreement to sign. Clause 3.3 “Exclusion of Liability” appeared on the reverse side of the Agreement. This clause released QK from any liability for personal injury arising out a member’s participation in a program or use of the facilities and/or arising out of the negligence of QK. The plaintiff signed the Agreement.
On August 8, 2014 the plaintiff participated in an exercise class requiring the use of two dumbbells and a low step. She had been participating in this class about once every two weeks since joining the club. As there were not enough hexagonal plastic covered dumbbells, the plaintiff used a pair of circular metal dumbbells located in the room where the class was being taught. The plaintiff would usually use the hexagonal dumbbells, but had occasionally used the circular ones.
Some exercises involved using the step, others required the use of dumbbells and some required the use of both. About 20 minutes into the class, during an exercise requiring the step, and not the dumbbells, the plaintiff placed her dumbbells about 18 inches in front of her, on her right-hand side, as instructed by the fitness instructor. The plaintiff received no instructions on what type of dumbbells to use or how to place the dumbbells when they were not in use. The plaintiff was instructed to step off the step to her right. When she did so, she stepped on one, or both, of the dumbbells. She believes that one, or both, of the dumbbells rolled from their original position and caused her to fall. The plaintiff suffered a burst fracture of her T12 vertebrae.
Exclusion of Liability Clause
The court relied on the Court of Appeal decision Schnarr v Blue Mountain Resorts Limited, 2018 ONCA 313 which confirmed the ability of occupiers to obtain waivers or exclusions of liability under section 3(3) of the Occupiers Liability Act (“OLA”); however, to rely on such an exclusion of liability, the occupier must take “reasonable steps” to bring the restriction or exclusion to the attention of the person to whom the duty of care is owed, as set out in section 5(3) of the OLA. Reasonable steps may be apparent in the Agreement itself (ie) large instructions such as “PLEASE READ CAREFULLY” the exclusion of liability clause, red lettered instructions such as “THE CONDITIONS WILL AFFECT YOUR LEGAL RIGHTS INCLUDING THE RIGHT TO SUE OR CLAIM FOR COMPENSATION FOLLOWING AN ACCIDENT”, or having the person sign or initial the specific provision providing for the exclusion or restriction.
In this case, the court found that QK did none of these things and, therefore, failed to meet the requirement in section 5(3) of the OLA. On this basis, the defendant’s motion for summary judgment could not be satisfied. The court then went on to consider QK’s second argument, that it bore no responsibility for this accident.
Negligence on the Part of the Defendant
According to section 3 of the OLA, to succeed in a claim against QK, the plaintiff must pinpoint some act or failure on the part of QK that caused the plaintiff’s injury before liability can be established (see Hamilton v Ontario Corporation #2000533 o/a Toronto Community Housing Corporation, 2017 ONSC 5467). The presence of a hazard does not, in itself, lead to the conclusion that QK has breached its duty. QK is not required to take unrealistic or impractical precautions against known risks (see Drummond v The Cadillac Fairview Corp Ltd., 2018 ONSC 4509).
In the present case, the court noted there was no allegation that the round dumbbells were defective or inherently dangerous when properly used. Rather, the allegation was that the defendant failed to properly warn or instruct the plaintiff on their proper use. There is no evidence that round dumbbells are a known hazard. To the contrary, the evidence of the defendant was that they were routinely used by participants in the exercise class without incident.
The only issue left for the court was whether QK had a duty to instruct the plaintiff regarding the proper placement of the dumbbells when not in use. The plaintiff relied on the Miltenberg v Metro Inc., 2012 ONSC 1063 decision, where the plaintiff was injured after a tub of ice cream fell on her as she reached for the bottom of two tubs stacked on the top shelf of the freezer. In that case, the court held that to avoid liability, a person must exercise the standard of care that would be expected of an ordinary, reasonable and prudent person in the same circumstances. The court refused to accept the plaintiff’s argument that the defendant had a duty to warn customers that reaching for goods on the top shelf could cause injury. The court found that risk to be obvious. The court, in Miltenberg, also rejected the plaintiff’s argument that there should have been signs warning customers that items may fall from their placement on higher shelves as “customers do not need to be warned that ice cream containers or any item could fall on them if not gripped properly.”
The plaintiff, In the subject case, also relied on a couple of cases involving the standard of care to be exercised by school authorities when providing supervision and protection of students and tried to argue that the same duty of proper training and instruction was applicable to an exercise instructor at QK, a gym for adults. In rejecting this argument, as well, the court found that children require more supervision and instruction than adults. And, the cases the plaintiff relied on involved a child injured playing tackle football and a child who was injured while doing a somersault over a boxhorse as part of a gymnastics program. Both of these activities are inherently dangerous, an both require instruction and the progressive development of specific skills (see Thomas v Hamilton, 1994 CanLII 739; 20 OR (3d) 598 (C.A.) and Thornton v Board of School Trustees of School District No. 57, 1976 CanLII 1083 (BCCA),  S.W.R. 240, 73 D.L.R. (3d) 35 (BCCA).
In the subject case, the court found that the exercise activities involved were simple and the skills involved were rudimentary. Neither the exercises themselves nor the equipment used were inherently dangerous. There was no evidence that the round dumbbells represented an unusual hazard or that the defendant had any reason to believe that they were hazardous. There is no evidence that the round dumbells were not reasonably safe for the purpose for which they were intended. The evidence suggests they had been used thousands of times without incident.
More importantly, the court also found that a round dumbbell might roll is an obvious risk. An occupier does not have to warn an adult about obvious risks (see Jassal v Hilcox, 2016 ONSC 5523).
The court held that the plaintiff had not proven a case of negligence against the defendant for failure to warn her that a round dumbbell placed on the floor on its side could roll and granted summary judgment to the defendant. The plaintiff’s action was dismissed.
This decision clarifies the ability of occupiers to obtain waivers under the OLA so long as reasonable steps are taken to ensure the exclusion is brought to the attention of the person signing the waiver and that an occupier is not required to provide warnings about obvious risks.
Limitation periods continue to be a hot topic in the context of disability benefits. A recently released Divisional Court decision seems to have shed a little light on this matter. In Western Life Assurance Company v. Penttila, the insurer brought a summary judgment motion to dismiss the plaintiff’s claim due to being statute barred and out of time. The motion was denied. The insurer appealed the motion judge’s decision.
The relevant dates in this matter are as follows:
May 16, 2012 - the plaintiff was approved for long term disability benefits due to back problems.
February 19, 2013 – the insurer advised the plaintiff that her benefits would be denied as of March 7, 2013 due to a change in the definition of her disability. The insurer’s correspondence advised that she could appeal its decision by providing a written request for review along with supportive medical documentation.
April 8, 2013 – the plaintiff advised the insurer that she wished to appeal the denial, and provided further medical information.
November 13, 2013 - the insurer requested reports from two doctors from the plaintiff and advised: “upon receipt of all of the above requested information, we will complete our review of your appeal and advise you of the decision.”
The plaintiff provided the requested documentation. On October 21, 2014, the insurer advised that the file had been reviewed and that its position “remained unchanged.”
May 25, 2015 - the plaintiff requested a letter from the insurer that outlined its decision from its review of her file.
June 18, 2015 - the insurer sent a letter advising that it could not conclude on the basis of the information available that she was unable to perform her occupation and that benefits beyond March 6, 2013 remain declined.
June 6, 2016 - the plaintiff issued a Statement of Claim.
At the summary judgment motion, the insurer argued that the Statement of Claim was issued outside of the two year limitation period, which should have commenced as of either February 19, 2013 (the date of the denial letter) or March 7, 2013 (the initial termination date). The motion judge held that either October 21, 2014 (the date the insurer denied the plaintiff’s appeal) or June 18, 2015 (the date of the insurer’s final letter) were the applicable dates on which a reasonable person would have understood that a proceeding was a legally appropriate means to seek a remedy.
On appeal, the Divisional Court found that the motion judge was correct in holding that the triggering event for the commencement of the two-year limitation period was the date upon which it would be legally appropriate to commence legal proceedings to seek payment of disability benefits that the insurer refused to pay. Given that there was an agreed upon right to appeal the insurer’s denial directly to the insurer, it would be premature to commence legal proceedings until that process ran its course.
As a result, the Divisional Court upheld the Motion Judge’s decision, dismissed the summary judgment motion and awarded costs to the plaintiff.
This decision supports the idea that the limitation period for commencing a claim at Court in the disability context only begins to run once there is a final, clear, unequivocal denial of benefits. It also supports the idea that the limitation period only commences once it becomes “legally appropriate” to commence a Court proceeding. If there is another method of appeal that is either agreed upon or should reasonably be concluded prior to commencing a Court proceeding, the limitation period will likely commence only after that appeal process is completed.
This means that insurers should be very wary about providing open-ended rights to insureds to appeal the denial of disability benefits. The insurer should be able to demonstrate that a final decision was made and that the decision was communicated to the insured in a way that makes the denial clear and unequivocal.
Gabe Flatt has an insurance law practice that has focused exclusively on insurance defence for the past 8 years. He has developed an expertise in complex priority and loss transfer disputes as well as general coverage issues.