The ability of accident victims to recover damages from insurance companies will now be restricted following the Supreme Court of Canada’s decision earlier this month that further defined what is covered under a motor vehicle policy, say some lawyers.
In a pair of unanimous decisions - Citadel General Assurance Co. v. Vytlingam and Lumbermens Mutual Casualty Co. v. Herbison - the Supreme Court ruled in favour of two motor vehicle insurance companies, finding them not liable to pay damages. In both cases, said the court, the vehicles in question did not play a direct or indirect role in causing the injuries suffered by those seeking damages.
“What it’s going to mean, it looks like - to other people, to innocent accident victims - is that their rights to recover are going to be somewhat restricted,” says Stanley Tessis, lawyer for the Vytlingam family.
However, Geoff Adair, lawyer for Citadel, says the decision provides a clear test for deciding what is covered under an automobile policy. “The law was uncertain as to whether the mere involvement of an automobile by the wrongdoer was sufficient to trigger the wrongdoer’s automobile insurance,” he says.
The importance of the decision, says Adair, is that a claim against someone else will not be covered by their insurance unless their actions as a motorist, not just as someone using a car, caused the injury. The question that faced the Supreme Court in both cases was whether the tort that caused the injuries was separate from the use of the car.
The first case involved Ontario resident Michael Vytlingam, who was driving through North Carolina when his vehicle was struck by a large boulder dropped from an overpass by Todd Farmer and Anthony Raynor, who were high on alcohol and drugs at the time. Vytlingam received catastrophic injuries, while Farmer and Raynor were prosecuted, convicted, and received substantial prison sentences.
The Vytlingams received “no-fault” benefits of more than $1 million from their Ontario insurer. As a result of Farmer being inadequately insured, they also requested their insurer to pay his civil damages amount, assessed at over $960,000 plus post-judgment interest. As Farmer’s vehicle had been used to transport the rocks to the bridge and to escape, the Ontario Superior Court and the Court of Appeal found the insurer liable and allowed the claims.
The insurance company argued that coverage should be denied in this instance, as Farmer used “the vehicle for the purpose of getting weapons to the scene of a crime.” The court disagreed, noting that “the insurer is selling peace of mind to its insured and the endorsement will frequently (and properly) be invoked despite criminality, as in the case of an insured injured by a drunk driver, for example.”
The court also noted that the crime itself consisted of dropping the rocks from a highway overpass, not transporting rocks across the countryside.
“The car-related activities are severable from the tort,” wrote Justice Ian Binnie, adding that the fact that the word “indirectly” appears in the policy does not get around this.
“The claim did not arise from the ownership or directly or indirectly from the use or operation of a motor vehicle. Although the use of [Farmer’s] vehicle . . . fell within the scope of the ordinary activities to which automobiles are put, the word “indirectly” is not sufficient to overcome the requirement for an unbroken chain of causation linking the conduct of the tortfeasor as a motorist to the injuries in respect of which the claim is made,” says Binnie.
The related case involved a member of a yearly deer-hunting party, who was driving to his hunting area in the dark when he thought he saw a deer. The hunter, Fred Wolfe, got out of his truck, removed and loaded his rifle, and took a shot, hitting another member of the hunting party, Harold Herbison.
Wolfe was found liable in negligence to Herbison and his family, who sought recovery from Wolfe’s insurer under his motor vehicle liability insurance policy, claiming that Herbison’s injury resulted “directly or indirectly” from the use or operation of Wolfe’s truck. The trial judge dismissed the claim, but a majority at the Court of Appeal set aside the decision and found the insurer liable.
In Herbison, Wolfe was using his vehicle for transportation, its ordinary use. But independently of this, he interrupted his motoring to start hunting, also breaking the chain of causation, says the court.
“Can it be said that Wolfe’s negligent shooting was fairly within the risk created by his use or operation of the insured truck, or did the use of the truck merely create an opportunity in time and space for the damage to be inflicted, without any causal connection direct or indirect to the legal basis of Wolfe’s tortious liability? Clearly, I think, the latter is the case,” wrote Binnie.
“The injury cannot be said to have arisen “directly or indirectly from the use or operation” of the insured truck within the meaning of s. 239(1),” noted Binnie.
Barry Laushway, lawyer for Herbison, says the Supreme Court is “definitely signalling a restriction of claims such as this. It’s hard for us to imagine a case where there would be an indirect damage caused in the circumstances that the Supreme Court of Canada has set out.
“It’s clearly a restriction on the rights of plaintiffs to sue insurance companies,” he says.
Mark Charron, counsel for Lumbermens Insurance, says that in both of these cases “you can’t just say that because one uses a motor vehicle to transport you somewhere that everything that happens once you get there can be related back to the motor vehicle.”