Ruling says family protection endorsement stands in priority to personal umbrella policy
The Ontario Court of Appeal has affirmed a Superior Court judge’s finding that an injured plaintiff’s family protection endorsement (OPCF 44R), not the defendant’s personal umbrella liability policy (PLUP), would respond next in priority to the plaintiff’s claims.
In Rodriguez-Vergara v. Lamoureux, 2025 ONCA 620, the first at-fault defendant was driving a vehicle owned by her mother, the second at-fault defendant, in February 2017. The vehicle struck the plaintiff.
The plaintiff sued the at-fault defendants for damages for injuries suffered during the incident.
Certas insured the mother’s vehicle under a standard automobile policy with liability limits of $300,000 and insured the mother under a PLUP with liability limits of $1 million.
Royal & Sun Alliance Insurance Company of Canada (RSA) insured the plaintiff under a standard automobile policy with liability limits of $1 million. This policy attached an OPCF 44R, which provided coverage in the event of the insured’s involvement in an accident with an underinsured motorist.
The parties agreed that:
However, the parties disagreed about whether the plaintiff’s OPCF 44R or the mother’s PLUP would respond next in priority to the plaintiff’s claims.
Certas moved for a declaration that the plaintiff’s OPCF 44R stood in priority to the mother’s PLUP.
RSA’s cross-motion requested leave to bring a third-party claim against Certas and a declaration that RSA could subrogate against Certas for any payments made to the plaintiff.
In July 2024, a motion judge of the Ontario Superior Court of Justice determined that – after paying the mother’s third-party liability limits of $300,000 – the plaintiff’s OPCF 44R would respond next for a maximum of $700,000, followed by the mother’s PLUP.
The judge explained that the plaintiff’s OPCF 44R could not deduct from its damages payment any amounts available from the mother’s PLUP and could not subrogate against the at-fault defendants for payments made to the plaintiff.
Lastly, the judge said RSA could not bring a third-party claim against Certas.
The Court of Appeal for Ontario dismissed the appeal.
First, the appeal court ruled that the motion judge appropriately determined that the plaintiff’s OPCF 44R stood in priority to the PLUP, correctly interpreted the OPCF 44R in its full legal context, and reached conclusions consistent with the appeal court’s jurisprudence.
The appeal court held that the judge made no error in interpreting s. 7(a) of the OPCF 44R. The appeal court agreed with the interpretation that s. 7 referred to matters falling under the automobile regulations or motor vehicle liability policies.
The appeal court added that s. 7 clarified that amounts available to the plaintiff from an inadequately insured motorist’s insurers meant amounts from the total motor vehicle liability insurance or funds in lieu of insurance, not all types of insurance, such as a PLUP.
Next, the appeal court decided that the judge correctly determined that RSA, as the OPCF 44R insurer, could not reduce its limits by or deduct from its damages payment any amounts available under the mother’s PLUP.
The appeal court said RSA could not deduct the PLUP policy limit from amounts paid under the OPCF 44R, given that the PLUP was not a motor vehicle liability insurance policy and s. 7(a) covered motor vehicle liability insurance policies.
Lastly, the appeal court ruled that the judge correctly determined that RSA could not commence a third-party claim or subrogate against Certas for payments under the plaintiff’s OPCF 44R held by RSA.
The appeal court agreed with the judge that RSA’s suggested approach would result in an absurd finding, reversing the OPCF 44R’s statutory priority for responding to the injured party’s claims.
The appeal court concluded that RSA had no right to initiate a third-party claim against Certas and no cause of action in tort or contract against Certas.
