Enterprise Rent-A-Car v. Intact Insurance, 2018 ONSC 3517
CITATION: Enterprise Rent-A-Car v. Intact Insurance, 2018 ONSC 3517
DIVISIONAL COURT FILE NO.: 038/18
DATE: 20180605
ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT
MORAWETZ R.S.J., GORDON R.S.J. and CONWAY JJ.
BETWEEN:
ONTARIO CORPORATION NUMBER 1009329 cob as ENTERPRISE RENT-A-CAR and/or ENTERPRISE RENT-A-CAR
Appellant
– and –
INTACT INSURANCE COMPANY
Respondent
Jay M. Silber, for the Appellant
Jonathan Heeney, for the Respondent
HEARD at Toronto: June 5, 2018
CONWAY J. (Orally)
[1] Ontario Corporation Number 1009329 cob as Enterprise Rent-A-Car and/or Enterprise Rent-A-Car (“Enterprise”) appeals from the judgment of Morgan J. dated December 14, 2017 with respect to an insurance coverage priority dispute.
Facts
[2] On June 29, 2013, Adi Perets was involved in a motor vehicle accident while operating a rental car from Enterprise. At the time of the accident, Ms. Perets was living with her parents. She was insured under a standard Ontario Automobile Policy (the “Policy” or “OAP1”) issued to her father by Intact Insurance Company (“Intact”) for two vehicles that she drove regularly. Ms. Perets was a “listed driver” under the Policy. She was not a named insured.
[3] In June 2015, Ms. Perets was named as one of the defendants in an action arising from the motor vehicle accident. There was a priority dispute between Enterprise and Intact as to the policy coverage in responding to the plaintiffs’ claim. Enterprise agreed to defend Ms. Perets in the action under a Reservation of Rights until the priority dispute was resolved.
[4] In October 2017, the action settled and Enterprise contributed $30,000 towards the settlement on behalf of Ms. Perets. Enterprise then brought an application for a declaration that Intact was the “first loss” insurer and sought an order that Intact reimburse Enterprise for the $30,000 plus legal fees of $17,483 in defending the action.
[5] The application judge dismissed Enterprise’s application. He determined that insurance coverage under the Policy for a rental car was not available to Ms. Perets and that the priority provisions in s. 277(1.1)(2) of the Insurance Act, R.S.O. 1990, c. I.8 (the “Act”) did not apply. As a result, liability coverage for the action fell to Enterprise’s insurer.
Standard of Review
[6] The standard of review on an appeal of a question of law is correctness. With respect to errors of fact, the appellant must show that the trial judge has made a palpable and overriding error (Housen v. Nikolaisen, 2002 SCC 33, at paras. 8 and 10).
Analysis
[7] Section 277(1.1) of the Act sets out the order in which multiple insurance policies are to respond where a rental car is involved in a motor vehicle accident, as follows:
Firstly, insurance available under a contract evidenced by a motor vehicle liability policy under which the lessee of the automobile is entitled to indemnity as an insured named in the contract.
Secondly, insurance available under a contract evidenced by a motor vehicle liability policy under which the driver of the automobile is entitled to indemnity, either as an insured named in the contract, as the spouse of an insured named in the contract who resides with that insured or as a driver named in the contract, is excess to the insurance referred to in paragraph 1.
Thirdly, insurance available under a contract evidenced by a motor vehicle liability policy under which the owner of the automobile is entitled to indemnity as an insured named in the contract is excess to the insurance referred to in paragraphs 1 and 2.
[8] Enterprise relies on the provisions of s. 277(1.1)(2). It submits that the applications judge erred in not finding that Ms. Perets was “an insured named in the contract” and/or “a driver named in the contract” in the Policy such that the priority provisions of s. 277(1.1)(2) would apply and Intact would be the “first loss” insurer ahead of Enterprise’s insurer.
[9] We disagree. The language of s. 277(1.1)(2) refers to insurance that is “available” to the insured person. The Court of Appeal has held that the priority provisions of s. 277(1.1) of the Act are only triggered if insurance is “available”: Enterprise Rent-a-Car Canada Limited v. Meloche Monnex Financial Services Inc., 2010 ONCA 277, at para. 20.
[10] The issue is whether, as a listed driver under the Policy, insurance coverage was “available” to Ms. Perets for the rental vehicle. The applications judge held that it was not. We agree.
[11] Section 2.2.4 of the OAP1 provides that liability coverage is available for rental vehicles, but only when rented by “you” (defined in s. 1.3 as the named insured) or your spouse:
Automobiles, other than a described automobile, are covered as described in this subsection when rented by you, or by your spouse who lives with you, for periods of not more than 30 days, but only with respect to the liability of the person renting the automobile arising from the negligence of the driver of that automobile…
[12] The term “named insured” means the person or entity in whose name the policy is issued: Portch v. Markel Insurance Co. of Canada, 1996 CarswellOnt (Ont Insurance Comm.), para 82. In this case, Ms. Perets’ father was the named insured. She was a “listed driver” only.
[13] Since Ms. Perets was not the named insured or his spouse, under the clear and unambiguous language of the OAP1 she was not covered for a rental vehicle: see Ontario (Minister of Finance) v. Intact, 2013 ONSC 1457, paras. 32-34.
[14] Enterprise submits that there is a discrepancy between the wording of the Act and the OPA1 with respect to who is afforded coverage when operating a rental vehicle, and that the statutory language must prevail. Enterprise further submits that because Ms. Perets meets the definitions used in s. 277(1.1)(2) of the Act (“insured named in the contract”, “driver named in the contract”), she had insurance available to her under the Policy.
[15] We reject these submissions. First, we see no conflict between the interaction of s. 277(1.1) of the Act and terms of the Policy. Section 277(1.1) only applies if indemnity under a policy is available. That availability must first be determined according to the terms of the policy. If coverage is not available under those terms, the statutory provisions do not come into play.
[16] Second, s. 277(1.1) of the Act simply sets out the priority ranking of the various insurance coverage that is available where a rental car is involved in an accident. It does not purport to create insurance coverage where none is available. In this case, it is clear that insurance coverage was not available to Ms. Perets for the rental car since she was only a listed driver under the Policy. Section 277(1.1)(2) therefore did not apply and it fell to Enterprise’s insurer to provide coverage for the accident.
[17] The appeal is dismissed. Costs payable by Enterprise to Intact in the amount of $2,800 on a partial indemnity basis, all inclusive.
MORAWETZ R.S.J
[18] I have endorsed the Appellant’s Appeal Book and Compendium as follows: “For oral reasons delivered today, the appeal is dismissed with costs fixed at $2,800.00 inclusive.”
___________________________ CONWAY J.
I agree
MORAWETZ R.S.J.
I agree
GORDON R.S.J.
Date of Reasons for Judgment: June 5, 2018
Date of Release: June 6, 2018
CITATION: Enterprise Rent-A-Car v. Intact Insurance, 2018 ONSC 3517
DIVISIONAL COURT FILE NO.: 038/18
DATE: 20180605
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
MORAWETZ R.S.J., GORDON R.S.J. and CONWAY JJ.
BETWEEN:
ONTARIO CORPORATION NUMBER 1009329 cob as ENTERPRISE RENT-A-CAR and/or ENTERPRISE RENT-A-CAR
Appellant
– and –
INTACT INSURANCE COMPANY
Respondent
ORAL REASONS FOR JUDGMENT
CONWAY J.
Date of Reasons for Judgment: June 5, 2018
Date of Release: June 6, 2018