COURT OF APPEAL FOR ONTARIO
DOHERTY, LASKIN and JURIANSZ JJ.A.
B E T W E E N :
erzebet heuvelman, by her Litigation Guardian HYLTON LAVAL, JENNIFER HEUVELMAN and OWEN HEUVELMAN, minors under the age of eighteen years, by their Litigation Guardian, HYLTON LAVAL, and HYLTON LAVAL
Raymond A.D. Watt for the appellant
Plaintiffs (Respondents)
- and -
BRUCE WHITE and CGU TRADERS GENERAL
James L. Vigmond Brian M. Cameron for the respondents
Defendants (Appellant)
Heard: October 21, 2004
On appeal from the order of Justice Alfred J. Stong of the Superior Court of Justice dated April 21, 2004 reported at [2004] O.J. 1716.
LASKIN J.A.:
1The issue on this appeal is whether the motions judge erred in concluding that the appellant insurer could not deduct the amount payable under a personal liability umbrella insurance policy from the amount it was required to pay the respondent Erzebet Heuvelman under her OPCF 44R endorsement.
2Heuvelman was injured in a car accident caused by the defendant White’s negligence. Her damages were settled for more than $2.5 million. White was insured under a standard Ontario Automobile Policy with third party coverage limits of $300,000. He also held a personal liability umbrella insurance policy, which included coverage of up to $1,000,000 for liability arising out of a car accident. Heuvelman was insured by the appellant under a standard Family Protection Endorsement – the OPCF 44R – attached to her automobile policy. This endorsement had coverage limits of $500,000.
3The endorsement indemnified Heuvelman if she was injured by an “inadequately insured motorist” up to the limits of the endorsement ($500,000) less money available from all other motor vehicle liability insurance. In determining the appellant insurer’s liability, both parties agree that White’s third party limits of $300,000 must be subtracted from the $500,000 limits of Heuvelman’s OPCF 44R endorsement. The appellant contends that it is also entitled to subtract White’s $1,000,000 coverage under his umbrella policy and therefore owes Heuvelman nothing. Heuvelman contends that the coverage under the umbrella policy should not be subtracted and therefore the appellant must pay her $200,000.
4The motions judge held that Heuvelman was entitled to $200,000. I agree for three reasons:
the wording of s. 1.8 and s. 4 of the OPCF 44R endorsement;
this court’s decision in Keelty v. Bernique (2002), 2002 22040 (ON CA), 57 O.R. (3d) 803; and
the well established principle that ambiguities in car insurance coverage must be interpreted adversely to the insurer.
5Heuvelman’s entitlement to payment under OPCF 44R was governed by s. 4 of the endorsement. The applicable part of s. 4 read as follows:
The insurer’s maximum liability under this [endorsement]… is the amount by which the limit of family protection coverage [$500,000] exceeds the total of all limits of motor vehicle liability insurance…of the inadequately insured motorist [i.e. White]….(my emphasis).
6The narrow issue on this appeal then is whether White’s personal liability umbrella policy provides “motor vehicle liability insurance”. The definition section in OPCF 44R shows that it does not do so. “Limit of motor vehicle liability insurance” is a defined term in s. 1.8 of the policy:
“limit of motor vehicle liability insurance” means the amount stated in the Certificate of Automobile Insurance as the limit of liability of the insurer with respect to liability claims, regardless of whether the limit is reduced by the payment of claims or otherwise.
7The Certificate of Automobile Insurance is one of the contract documents making up OAP 1, which is the standard Ontario Automobile Policy. Although it provides coverage for automobile accidents, a personal liability umbrella policy is not part of the standard Ontario Automobile Policy and therefore no Certificate of Automobile Insurance is included in it. Accordingly on a plain reading of s. 4 and s. 1.8 of the OPCF 44R, coverage under White’s umbrella policy does not reduce the appellant insurer’s obligation to Heuvelman under her Family Protection Endorsement.
8Counsel for the insurer submits that this interpretation of the endorsement produces anomalous results. He says, for example, that if Heuvelman’s damages were limited to $1.3 million then White’s insurance coverage – both the third party limits and the umbrella policy – would pay for the loss and his client would pay nothing under OPCF 44R. Why, he asks rhetorically, should the result be different because Heuvelman’s damages exceed $1.3 million? This submission confuses entitlement and priorities. Entitlement, which is the issue on this appeal, is governed by s. 4 of OPCF 44R. Priorities, applicable to counsel’s example, is governed by s. 7 of the endorsement.
9My conclusion on the wording of the endorsement is buttressed by this court’s decision in Keelty. Although that case dealt with different issues, the court still had to determine whether the car insurance coverage under a personal liability umbrella policy was a motor vehicle liability policy. This court said that it was not at para. 25:
In my view, the coverage provided by Option W does not come within either. Option W provides uninsured/underinsured coverage but it is not part of a motor vehicle liability policy. Motor vehicle insurance is highly regulated in this province under Part VI of the Insurance Act, R.S.O. 1990, c. I.8. Under s. 227, the Commissioner must approve the form of policy, endorsement or renewal of automobile insurance. The umbrella policy and Option W are not part of that scheme. Sections 239 and following in Part VI under the heading “Motor Vehicle Liability Policies” set out the requirements of a motor vehicle liability policy. The State Farm Fire umbrella policy and Option W do not comply with those requirements. For example, it does not provide liability coverage to the limits required by s. 251 or coverage with respect to the benefits set out in the No Fault Benefits Schedule.
10Rosenberg J.A., writing for the court, went on to confirm that the umbrella policy did not provide automobile insurance (at para. 28):
Although it contains uninsured motorist coverage, the purpose of the umbrella policy is to “provide individuals with affordable protection against excess judgments of third parties rather than provide individuals with automobile insurance”.
11Here, the insurer tries to distinguish Keelty on two bases. First, it says that Keelty dealt with whether an automobile policy is a motor vehicle liability policy, whereas the question under s. 4 is whether the umbrella policy includes motor vehicle liability insurance. Second, it says that unlike the umbrella policy in Keelty, White’s umbrella policy includes an additional policy endorsement.
12On the first point, I am inclined to agree with Heuvelman that if the umbrella policy is not a motor vehicle liability policy it does not provide motor vehicle liability insurance.
13On the second point, I do not think that the additional endorsement assists the insurer. The policy endorsement included in White’s umbrella policy, but not in the umbrella policy in question in Keelty states:
In the event of a loss resulting from the ownership, maintenance, operation, use, loading or unloading of an automobile insured under this policy, coverage under this policy will apply in accordance with the liability coverage provided by the required underlying automobile liability policy, subject to any further broadenings under this policy.
This provision also applies to Underinsured Motorist Coverage if listed as a coverage on the Declarations of this policy.
All other provisions of this policy apply.
14The effect of this endorsement is unclear. However, I do not see how it improves the insurer’s position. On its face, the wording does not change the Keelty characterization of the umbrella policy.
15At best, the insurer’s position demonstrates some ambiguity in coverage. But that ambiguity does not help the insurer. This court’s jurisprudence has long recognized that ambiguities in Ontario’s automobile insurance coverage must be resolved against the insurer. See, for example, Chilton v. Co-Operators General Insurance Co. (1997), 1997 765 (ON CA), 32 O.R. (3d) 161 (C.A.).
16For these reasons I would dismiss the appeal with costs fixed in the agreed amount of $6,000 including disbursements and GST.
RELEASED: October 26, 2004
“D.D.”
“John Laskin J.A.”
“I agree Doherty J.A.”
“I agree R.G. Juriansz J.A.”