Hunter as Litigation Administrator for the Estate of the Late Hunter et al. v. Thompson et al.; Kingsway General Insurance Company et al., Third Parties Kavanaugh v. Thompson et al.; Kingsway General Insurance Company et al., Third Parties [Indexed as: Hunter Estate (Re)]
65 O.R. (3d) 413
[2003] O.J. No. 2395
Docket Nos. C39119 and C39120
Court of Appeal for Ontario
Weiler, Laskin and Goudge JJ.A.
June 17, 2003
Insurance -- Automobile insurance -- Interpretation and construction -- Additional automobile -- Section 2.2.1 of Standard Ontario Automobile Policy providing for coverage for additional automobile so long as "we insure all automobiles you own" -- Plain words of s. 2.2.1 requiring that owner insure with insurer all automobiles owned -- Provision not restricted to insured vehicles -- Precondition not met where owner owns automobiles insured with another insurer or left uninsured.
The insured purchased a 1992 GMC pick-up truck on August 22, 1996. At the time of the purchase, she had an automobile insurance policy with the insurer covering a 1988 minivan. She also owned a 1991 Ford pick-up truck which was not insured by the insurer. The GMC pick-up truck was involved in an accident on September 1, 1996. The insured had not notified the insurer of her purchase of that vehicle within 14 days of the purchase. On a motion pursuant to Rule 22 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 for determination of an issue prior to trial, the motion judge held that the newly acquired vehicle was insured by the insurer as an "additional automobile". Section 2.1.1 of the Ontario Standard Automobile Policy provides that a newly acquired replacement or additional vehicle will be covered as long as "we insure all automobiles you own". Before the motion judge, the parties agreed that the Ford truck was "parked". There was no indication whether it was driveable, and the motion judge refused to draw any inference that it was. The insurer appealed. There were newly-agreed facts on appeal that the Ford truck was operable and that it was not insured by any insurer.
Held, the appeal should be allowed.
It was not necessary to read the words "We insure all automobiles you own" as having the words "and that are insured" after them in order to give effect to s. 2.2.1. The plain words of s. 2.2.1 require that the owner insure with the insurer all of the automobiles he owns. If the insured owns automobiles that he insures with another insurer or that he leaves uninsured, the precondition is not met. Since the Ford truck was not insured by the insurer, the precondition in s. 2.2.1 was not satisfied, and there was no insurance coverage on the newly acquired vehicle.
APPEAL by an insurer from a judgment of Del Frate J. (2002), 2002 9225 (ON SC), 63 O.R. (3d) 615, [2003] I.L.R. Â1-4172 (S.C.J.) on a motion for a determination of an issue before trial. [page414]
Rules and regulations referred to Rules of Civil Procedure, R.R.O. 1990, Reg. 194, Rule 22
Frank S.M. Devito, for appellants Kingsway General Insurance Company. David A. Scott, for respondents Gerry Kozowy and Bruce Thompson.
BY THE COURT: --
Nature of Appeal
[1] The appellant, Kingsway General Insurance Company ("Kingsway"), appeals the decision of Justice Robert G.S. Del Frate of the Superior Court of Justice dated October 21, 2002 made pursuant to Rule 22 [of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194], the determination of an issue prior to trial, on an Agreed Statement of Facts. The motion judge held that the respondents' newly acquired vehicle was insured by Kingsway as "an additional automobile" and that as a result Kingsway was obliged to defend and indemnify the respondents, Gerry Kozowy ("Kozowy") and Bruce Thompson ("Thompson"). This appeal arises from the motion judge's interpretation of s. 2.2.1 of the Standard Ontario Automobile Policy.
[2] Section 2.2.1 reads as follows:
A newly acquired automobile is an automobile or trailer that you acquire as owner and that is not covered under any other policy. It can either be a replacement or an additional automobile. The replacement automobile will have the same coverage as the described automobile it replaces. We will cover an additional automobile as long as:
we insure all automobiles you own, and
any claim you make for the additional automobile is made against a coverage we provide for all your other automobiles.
Your newly acquired automobile(s) will be insured as long as you inform us within 14 days from the time of delivery and pay any additional premium required.
[3] Subsequent to the decision being rendered and an appeal being filed the parties agreed on a new fact that was not before the application judge.
[4] The agreed facts with the new fact highlighted in bold is as follows:
Gerry Kozowy purchased a 1992 GMC pick-up truck from Eastside Automart Ltd. in Kenora on August 22, 1996 for the sum of $16,500.
At the time of the purchase Ms. Kozowy had a valid policy of motor vehicle insurance with Kingsway General Insurance [page415] bearing policy #169735 said policy insuring a 1988 Ford Aerostar mini van.
Kingsway General Insurance did not insure all of the automobiles owned by Ms. Kozowy as she also owned a 1991 Ford 1/2-ton pick-up truck that was NOT insured by Kingsway General Insurance Company.
The said 1991 Ford 1/2-ton pick-up truck was in operable condition and was not insured by any insurance company as of September 1, 1996.
On September 1, 1996, Ms. Kozowy's 1992 GMC pick-up was involved in a single vehicle accident near Dryden, Ontario resulting in injuries to Ms. Kavanaugh and the death of Mr. Hunter. At the time of the accident, the Defendant, Bruce Thompson was operating the vehicle with Ms. Kozowy's consent.
Ms. Kozowy had not notified the insurer of her purchase of the 1992 GMC pick-up within 14 days of the purchase.
Ms. Kozowy purchased the vehicle as an additional vehicle and not as a replacement vehicle. She intended to keep the Ford Aerostar van on the road and insured.
Ms. Kozowy would have had to pay an additional premium for the additional vehicle.
[5] On the statement of agreed facts before the motions judge the parties agreed that the 1991 Ford truck was "parked". There was no indication whether the Ford truck was driveable and the motions judge refused to draw any inference that it was. He held that the purpose of the requirement of having all vehicles insured by the same insurer was to prevent any misunderstanding as to which insurer ought to respond if the additional car is involved in an accident should it become necessary. Here there is only one insurer. The motions judge further held that since the accident had occurred within the 14-day notice period required in the policy the additional vehicle was automatically insured. The original insurance premium would necessarily include the risk of any additional coverage for the 14-day notice period.
[6] On this appeal, in light of the newly agreed fact that the 1991 Ford was operable, the focus of the argument was whether the precondition in s. 2.2.1 was met. The parties also made brief submissions on whether a newly acquired automobile is automatically insured for 14 days. [page416]
[7] The respondent submits that the words "We insure all automobiles you own" should be read as having the words "and that are insured" after them. We disagree that it is necessary to read in these words to give effect to s. 2.2.1.
[8] On the facts we have now, the plain words of s. 2.2.1 require that the owner insure with the insurer all of the automobiles he owns. If the insured owns automobiles that he insures with another insurer or that he leaves uninsured, the precondition is not met.
[9] There is nothing in the language of s. 2.2.1 to confine it to circumstances whether there is another insurer. Because the 1991 Ford is operable it is an "automobile" owned by the insured. (We do not know if the vehicle was withdrawn from use so American authority to the effect that such a vehicle is not an automobile for insurance liability purposes is inapplicable.) Since that vehicle was not insured by the appellant the precondition in s. 2.2.1 was not satisfied, and there is no insurance coverage on the newly acquired vehicle. The Motor Vehicle Accident Claims Fund must respond to the claim.
[10] We would not give effect to the argument that, if the precondition is met, the automobile is not automatically insured for 14 days under the policy. Again, on the plain wording of s. 2.2.1, it is automatically insured for 14 days.
[11] The purpose of the precondition that all other vehicles be insured by the same insurer is not entirely clear. It may be that if all other vehicles are insured by the same insurer, there is a statutory inference that the insured will also likely insure the newly acquired or replacement vehicle with the same insurer thereby justifying the granting of a 14-day period of coverage under the existing policy.
[12] The change in the agreed facts and our conclusion on the new set of facts require us to allow the appeal, set aside the decision of the motion judge and in its place order that the appellant is not required to defend and to indemnify the insured, and we so order.
[13] Counsel are agreed that the costs of the appeal should be fixed in the amount of $5,000. In our opinion these costs should include the costs of the motion as well. As a result, we order that costs here and before the motions judge be fixed in the amount of $5,000 all inclusive payable to the appellant.
Appeal allowed.