Insurer not liable when insured’s move from home triggered policy’s vacancy exclusion clause

Court agrees with insurer’s argument that case involves no genuine issue requiring trial

Insurer not liable when insured’s move from home triggered policy’s vacancy exclusion clause
The Ontario Superior Court of Justice granted the insurer’s motion for summary judgment

The Ontario Superior Court of Justice has recently ruled that an insurer was not liable for a property insurance claim because the policy’s vacancy exclusion clause applied when the plaintiff moved out from the property without intending to return.

In Gregson v. CAA Insurance, 2021 ONSC 3041, the plaintiff’s property suffered water damage, due to a crack in the water pipe to the bathroom sink, that either occurred or was discovered on Mar. 17, 2017. The defendant insurance company insured the property with a policy issued in 2014, which included a vacancy exclusion for situations in which the occupant has moved out without an intention to return.

At the time of the loss, the plaintiff was not residing in the property. In October 2016, she left the property for the hospital due to various infirmities such as cognitive impairment, then transferred to a retirement home. As of Mar. 27, 2017, she was officially deemed incapable of personal care and of managing her property. She transferred into another retirement home, where she resided in a wing for individuals with dementia. She died in September 2019 and was represented in the court proceedings by her litigation guardian.

The insurer submitted that it was not liable for the plaintiff’s claim and that the proceedings were appropriate for summary judgment under Rule 20.04 because there was no genuine issue requiring trial due to the application of the insurance policy’s vacancy exclusion clause, considering that the plaintiff had moved out from the property without an intention to return.

The Superior Court of Justice of Ontario granted the insurer’s motion for summary judgment and dismissed the plaintiff’s action. The court determined that the case was proper for summary judgment because the sole issue of liability was clearly severable from the damages portion of the claim and because the documentary evidence was enough for the court to resolve the case fairly on its merits, given that the plaintiff was deceased and unable to provide viva voce evidence.

The court found that there was no genuine issue for trial regarding whether the plaintiff had an objective intention to return to the property and found that the vacancy exclusion clause applied to deny insurance coverage to the plaintiff. The court, considering the plaintiff’s objective intention in light of all the circumstances, said that it would be unrealistic for her to return home, given her physical condition and lack of capacity.

The actions of the plaintiff’s primary attorney, by virtue of a continuing power of attorney for property dated February 2016, likewise supported the finding that the plaintiff did not intend to return to the property. The court noted the lack of a plan for support services and live-in assistance for the plaintiff in her home and the lack of a concrete plan to discharge the plaintiff from the retirement facility.

The court rejected the argument that the plaintiff’s lack of capacity and deteriorating mental condition crystallized after the water damage was sustained because the medical evidence and the other evidence of the attorney’s actions suggested that the plaintiff lost her ability to form intention after she left the property, even though her lack of capacity was only officially declared ten days after the loss was discovered.

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