Marcus B. Snowden

The respondents, facing multiple class actions related to the manufacture and distribution of opioids over a 20-year period, sought coverage for defence costs from their successive primary and excess liability insurers.

The application judge allowed the respondents to select a single primary insurer to fund the entire defence, permitted the exhaustion of self-insured retentions (SIRs) using payments from other insurers, granted relief from forfeiture for pre-tender defence costs, and required insurers to sign a Defence Reporting Agreement (DRA) to receive privileged defence information.

The Court of Appeal allowed the insurers' appeals in part, holding that defence costs must be allocated on a pro rata time-on-risk basis, that the insureds must exhaust each applicable SIR before an insurer's duty to defend is triggered, and that relief from forfeiture was unavailable for pre-tender costs.

The Court upheld the DRA requirement for insurers seeking to associate in the defence to mitigate reasonable apprehensions of conflict of interest.

Supplemental reasons issued to correct an error in the court's previous decision (2022 ONSC 12).

The court corrected paragraph 4 to clarify that Lloyds should not have been listed as a party challenging the forum of the action.

The plaintiffs brought an action against multiple insurers for indemnity regarding environmental damage.

Several foreign defendants failed to deliver statements of defence within the required time limits, and one was noted in default.

The defendants sought an extension of time to defend or bring jurisdictional motions, arguing the court should wait for the outcome of a parallel proceeding commenced by one of the insurers in the United States.

The court refused to delay the Ontario proceeding, finding no prejudice to the defendants in requiring them to respond timely, and ordered the defendants to deliver their statements of defence or motion records by a specified deadline.

The appellant developer contracted with an electrical contractor to construct two solar energy projects.

The contractor named the appellant as an additional insured under its commercial general liability policy for liability arising out of the contractor's operations.

After fires caused by transformers selected by the appellant, the appellant settled claims with the project purchaser and sought coverage from the insurer.

The Court of Appeal upheld the trial judge's finding that the appellant's liability did not arise out of the contractor's operations, as the contractor merely installed the transformers chosen by the appellant.

The appeal was dismissed.

Following the dismissal of the plaintiff's action for insurance coverage, bad faith, and professional negligence, the successful defendants sought costs.

Economical sought substantial indemnity costs based on unaccepted offers to settle.

The court rejected this, finding no egregious misconduct by the plaintiff, and awarded costs on a partial indemnity scale.

The court fixed the partial indemnity hourly rates at 60% of actual rates and assessed the reasonableness of the time and disbursements claimed, including expert witness fees.

The court awarded $356,452.49 in costs to Economical and $183,979.82 to FCA, emphasizing the objective of fixing an amount that is fair and reasonable for the unsuccessful party to pay.

The City of Markham brought an application seeking a declaration that AIG had a duty to defend it in an underlying personal injury action, and that the City was entitled to appoint independent counsel at AIG's expense due to a conflict of interest.

AIG conceded the duty to defend but disputed the right to independent counsel, pre-tender costs, and argued Lloyd's should share defence costs.

The court found a reasonable apprehension of conflict of interest, entitling the City to independent counsel.

The court denied pre-tender costs based on policy wording and held AIG responsible for all defence costs, including uncovered claims, subject to a right of reimbursement from Lloyd's.

The City of Markham brought an application seeking a declaration that AIG had a duty to defend it in an underlying personal injury action, and that the City was entitled to appoint independent counsel at AIG's expense due to a conflict of interest.

AIG conceded the duty to defend but disputed the right to independent counsel, pre-tender costs, and argued Lloyd's should share defence costs.

The court found a reasonable apprehension of conflict of interest, entitling the City to independent counsel.

The court denied pre-tender costs based on policy wording and held AIG responsible for all defence costs, including uncovered claims, subject to a right of reimbursement from Lloyd's.

In this addendum to a previous judgment, the Court of Appeal amended its declaration regarding the duty to defend under commercial general liability policies.

The court removed Royal & Sunalliance Insurance Company of Canada from the declaration, as it had settled prior to the appeal.

The court also removed a stipulation regarding a Professional Services Exclusion, which the insurers had withdrawn reliance upon.

Finally, based on a prior agreement between the parties, the court vacated its previous costs award and directed submissions for full indemnity costs.

The appellants appealed a motion judge's decision that their insurers had no duty to defend them in an underlying action regarding defective septic systems.

The Court of Appeal found that the motion judge erred by applying the 'Your Work' exclusion after correctly identifying that the underlying pleadings raised the mere possibility of consequential damages.

Because consequential damages are not excluded by the 'Your Work' exclusion, the mere possibility of such claims triggered the insurers' duty to defend.

The appeal was allowed and a declaration compelling the insurers to provide a defence was granted.

Contractors sought declarations compelling three commercial general liability insurers to defend them in an underlying construction action concerning alleged defects in septic systems installed in a residential subdivision.

The court considered whether the pleadings disclosed “property damage” caused by an “occurrence” under the policies and whether exclusions, including the “your work” and “professional services” exclusions, applied.

Although the pleadings raised a mere possibility of property damage caused by an occurrence, the court found that the “your work” exclusion applied and that the subcontractor exception was not established on the pleadings because the alleged supplier of filter sand was merely a supplier and not a subcontractor.

As a result, the insurers had no duty to defend.

The motion for a declaration compelling a defence was dismissed.

On motions under Rule 21, the court considered insurance coverage issues arising from alleged failures of valves installed in condominium HVAC systems that led to flooding claims.

The court held that the duty to defend could be determined on the pleadings and policy wording, notwithstanding unresolved factual disputes relating to waiver, estoppel, misrepresentation, fortuity, and exclusions.

Reading the underlying claims broadly and drawing reasonable inferences, the court found a mere possibility that the defective valves deteriorated progressively from installation through failure, thereby constituting property damage during both insurers' policy periods.

Continental's motion denying any duty to defend was dismissed, and declarations were granted that the claims potentially fell within both policies, with Continental bound to defend.

The Court of Appeal for Ontario issued a costs endorsement following an appeal and cross-appeal.

The appellant was awarded costs of the appeal on a partial indemnity scale fixed at $45,000.

The appellant and other responding insurers were awarded additional costs fixed at $20,000.

The appellant insurer appealed a summary judgment ordering it to pay US$15 million for defence costs under a directors' and officers' liability policy.

The dispute centered on whether an exclusion clause (Endorsement #14) unambiguously excluded coverage for claims against the insured's directors and officers acting in their capacity as executives of a bankrupt former subsidiary.

The Court of Appeal found the exclusion clause ambiguous, as it could reasonably be interpreted to either exclude or preserve coverage depending on the capacity in which the executives were sued.

Because the factual matrix did not resolve the ambiguity and the motion judge had not made findings regarding the parties' reasonable expectations, the Court of Appeal allowed the appeal, set aside the summary judgment, and returned the matter to the Superior Court for trial.