Co-operators General Insurance Company v. Martin Overley, 1997 ONICDRG 52

OFFICE OF THE DIRECTOR OF ARBITRATIONS

Neutral Citation: 1997 ONICDRG 52 Appeal: P96-00043

Appellant: Co-operators General Insurance Company Respondent: Martin Overley

Before: David R. Draper, Director’s Delegate

Counsel: Stephen M. Malach, Q.C. (for Co-operators) Terry G. Pearce (for Martin Overley)

APPEAL ORDER

Under section 283 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:

1. The appeal is allowed and the arbitration order, dated April 3, 1996, is rescinded.

2. The following order is substituted:

Martin Overley was not injured in an “accident,” within the meaning of Ontario Regulation 672, the Statutory Accident Benefits Schedule - Accidents Before January 1, 1994, and is therefore not entitled to accident benefits from Co-operators General Insurance Company.

3. Martin Overley is entitled to his reasonable appeal expenses, payable by Co-operators General Insurance Company.

March 20, 1997

David R. Draper Director’s Delegate

REASONS FOR DECISION

I. NATURE OF THE APPEAL

This is an appeal by Co-operators General Insurance Company ("Co-operators") from an arbitration decision on a preliminary issue, dated April 3, 1996, concluding that Martin Overley was injured as a result of an “accident” as defined in the Statutory Accident Benefits Schedule - Accidents On or After January 1, 1994 (“the Schedule”).¹

II. PRELIMINARY ISSUE

According to Rule 43.1 of the Dispute Resolution Practice Code, an appeal of a preliminary or interim order will not be heard until the arbitrator finally decides all the issues in dispute, unless the order being appealed finally determines the rights of the parties. Because this was an appeal from a preliminary decision, the parties were asked to make written submissions on whether an exception should be made to this general rule, as allowed by Rule 67.1(b) of the Practice Code.

After reviewing the appeal record and the submissions of the parties, I was persuaded that the appeal should be allowed to proceed, but that the arbitration hearing should not be delayed. Oral appeal submissions were scheduled with the intention that the arbitration would be scheduled in the normal course. Before the resumption of the arbitration hearing, however, the parties agreed to adjourn it pending the outcome of the appeal.

III. BACKGROUND

The arbitration proceeded on the following agreed statement of facts:

1. On Thursday, October 20, 1994, the Applicant [Martin Overley] was in the company of Elizabeth Bartholomew at Dominion House Tavern in Windsor, Ontario.

2. The Applicant left the Tavern with Ms. Bartholomew at approximately 1:15 a.m. and entered a vehicle owned and operated by Ms. Bartholomew.

3. Ms. Bartholomew reversed the vehicle from a parking spot in the tavern lot with Mr. Overley as a passenger. When reversing her vehicle, she struck a parked vehicle in the possession of Edward Grandbois. After striking that vehicle, Ms. Bartholomew moved her vehicle ahead, back into its original parking spot, turned off the ignition and removed the keys.

4. Ms. Bartholomew left her vehicle and walked several feet to the rear of the vehicle she had struck. She was then assaulted by Edward Grandbois. The Applicant was still seated in the passenger seat of the Bartholomew vehicle at the time of that assault.

5. Edward Grandbois opened the passenger door of the Bartholomew vehicle and began assaulting the Applicant while he was still seated in the vehicle. Edward Grandbois then pulled the Applicant out of the vehicle and continued the assault. The entire incident took place within a few minutes of the collision of Ms. Bartholomew’s vehicle with the vehicle that was in the possession of Mr. Grandbois.

6. The Applicant did not suffer injuries when the Bartholomew vehicle struck the other vehicle.

7. The assault by Edward Grandbois on the Applicant caused the Applicant to suffer nasal, jaw and facial fractures, emotional trauma and a closed head injury.

Beyond the agreed statement of facts, the arbitrator was provided with clarification in two areas. He was told that Mr. Overley remained in Ms. Bartholomew’s car following the collision because it was her car and he felt she could take care of herself. The arbitrator was also informed that Mr. Grandbois was convicted of assault in relation to both Ms. Bartholomew and Mr. Overley.

IV. ANALYSIS

A. The definition of “accident”

"Accident" is defined in section 2 of the "Schedule" as follows:

"accident" means an incident in which the use or operation of an automobile causes, directly or indirectly, physical, psychological or mental injury . . .

Although the parties agreed that this was the relevant definition, the arbitrator followed two earlier arbitration decisions holding that this definition must be interpreted in light of the broader language of the Insurance Act - "arising directly or indirectly from the use or operation" of an automobile (Hanlon and Guarantee Company of North America, (October 30, 1995, OIC A-011977), then under appeal; and Lynam and Formosa Mutual Insurance Company, (January 18, 1996, OIC A-010990).

Relying on the broader language of the Act, the arbitrator concluded that Mr. Overley was injured in an “accident.”

The Ontario Court of Appeal recently considered the interpretation of "accident" in the Schedule, concluding that the arbitrator's approach was wrong (Alchimowicz v. Continental Insurance Company of Canada, unreported decision released September 4, 1996 (Court file C23058)). In its endorsement, the Court stated:

The legislation, for whatever reasons, set one test for exclusion of actions and explicitly left the determination of no-fault benefits to be determined by regulation in the schedule. If there is a difference, and there is in the words, it is authorized.²

I take this decision as clear guidance that "accident" must be interpreted according to the definition in the Schedule, not the broader language in the Act. Because the arbitrator’s analysis was based on the words of the Act, it cannot stand. This does not necessarily mean that the result is wrong, but Mr. Overley’s claim must be reconsidered based on the narrower definition in the Schedule.

B. Was this an “accident?”

Co-operators contends that Mr. Overley’s injuries were caused by Mr. Grandbois’ criminal actions, not the use or operation of an automobile. Mr. Overley submits that this was not a random assault. He was injured because he was sitting in Ms. Bartholomew’s car. Her use or operation of the automobile, namely backing into the other vehicle, provoked Mr. Grandbois’ reaction, resulting in his injuries. This, he argues, is sufficient to bring it within the phrase, “causes, directly or indirectly.”

In my recent decision in Hanlon and Guarantee Company of North America, (March 18, 1997, OIC P95-00003), I analysed the definition of “accident” as follows:

In my view, the phrase [“causes, directly or indirectly”] demands a causal relationship between the incident involving the use or operation of an automobile and the person’s injuries, a narrower focus than an accident arising from the ownership, use or operation of a vehicle. Although the addition of “indirectly” may take the analysis beyond proximate cause, a causal relationship still must be found. I agree with following analysis of Director’s Delegate Naylor in Vineski and Federation Insurance Company of Canada, (October 18, 1996, OIC P96-000034):³

I conclude that the phrase “causes, directly or indirectly” takes us somewhat beyond a strict analysis of the doctrine of proximate cause, as suggested in Coxe and The Royal Trust. It allows for consideration of a more remote causal link. However, the link cannot be so remote as to deprive the word “causes” of meaning. As I stated in Ekunah and Simcoe & Erie General Insurance Company, (April 22, 1996, OIC P-003550), it is not enough to show that an automobile was merely the location of the injury, that the injured person was occupying it at the time or that an automobile was involved in some peripheral or incidental way. The use or operation of an automobile must have caused the injuries, whether directly or indirectly. To determine this, paraphrasing Voisin, the role of the automobile in the whole scenario must be considered. [p.14]

The situation in Hanlon also involved an assault following a collision between two vehicles. Mr. Daly was driving his pick-up truck on a public highway when he came up behind another pick-up truck driven by Mr. Hanlon. Mr. Daly claimed that Mr. Hanlon would not let him pass. Mr. Hanlon claimed that he could not get out of Mr. Daly’s way. After some jockeying for position and flashing of high beams, Mr. Daly attempted to pass Mr. Hanlon by driving on the median. The two trucks collided, causing damage to both. Mr. Daly’s right rear tire exploded and his truck spun around twice. The arbitrator found that both drivers used their vehicles to frustrate and intimidate the other.

Mr. Daly attempted to flee the scene by driving away and taking the first exit. Mr. Hanlon pulled over to the side of the highway, examined the damage to his truck and then followed Mr. Daly. Mr. Hanlon drove up to within 15 feet of Mr. Daly’s parked vehicle. He saw Mr. Daly inspecting his flat tire. Satisfied that Mr. Daly was not a big man, Mr. Hanlon got out of his truck. The two started shouting at each other. Mr. Daly was holding a portable cellular telephone that he planned to use to call for assistance if he was unable to change the tire. The arbitrator accepted Mr. Hanlon’s evidence that Mr. Daly crossed the distance between the vehicles and swung at him with the telephone clenched in his fist. The first punch missed, but the second one connected, injuring Mr. Hanlon. The arbitrator also accepted Mr. Hanlon’s evidence that he did not want to fight and did not expect to be assaulted.

Applying the definition of “accident” to these facts, I agreed with the arbitrator that Mr. Hanlon was not injured in an accident as defined in the Schedule:

In Mr. Hanlon’s case, the only role played by the use or operation of an automobile was to create an atmosphere of hostility between him and Mr. Daly. This was not a situation where someone lashed out as an immediate reaction to the driving incident. Mr. Hanlon and Mr. Daly both took a number of intentional actions for which they bear responsibility. While it is possible to say that the driving incident provoked or motivated the assault, I am not persuaded that there is a causal relationship, even an indirect one, between the use or operation of an automobile and Mr. Hanlon’s injuries.

“Cause” has an instrumental aspect that is lacking here. The incident involving the use or operation of an automobile ended with no one being injured. No further consequences were inevitable or linked to any ongoing use or operation of an automobile. Sometime later, in a location removed from the “incident,” there was a verbal confrontation between the two men outside their vehicles. At that point, Mr. Daly attacked Mr. Hanlon. No automobile was the target of the attack, was used in the attack or contributed to Mr. Hanlon’s injuries. I conclude that, like in Alchimowicz, the connection between the use or operation of the automobile and the injury is not sufficient to be covered by automobile insurance. [p.16]

Although Mr. Hanlon’s claim was considered under an earlier version of the Schedule, the definition of “accident” did not change in the version applicable to Mr. Overley’s claim.⁴ I find no reason to conclude that the interpretation should be different and, therefore, my analysis in Hanlon applies here.

As noted by the arbitrator, however, Mr. Overley’s factual situation can be distinguished from Mr. Hanlon’s. The time between the collision and the assault is considerably shorter and fewer deliberate acts took place in the interim. Unlike Mr. Hanlon, Mr. Overley played a passive role and was still sitting in Ms. Bartholomew’s vehicle when he was first assaulted. The question is whether these differences are sufficient to lead to a different result. In my view, it is important to determine what the “incident” is. Mr. Overley applied to Co-operators, Ms. Bartholomew’s insurer, on the basis that he was an “insured person” under her policy. The relevant provision states as follows:

2.- (a) in respect of accidents in Ontario, an occupant of the insured automobile. . .

Mr. Overley was an occupant of Ms. Bartholomew’s automobile when she backed into the other vehicle. The collision could certainly qualify as “an incident involving the use or operation of an automobile,” but Mr. Overley was not injured in this incident.

After the collision, Ms. Bartholomew parked her car, turned off the ignition and got out. Mr. Overley remained an occupant of the automobile. Within a few minutes after the collision, Mr. Grandbois opened the passenger door and started assaulting Mr. Overley. The arbitrator reasonably inferred, in the absence of contrary evidence, that the assault was motivated by the collision. If the assault is the “incident,” however, I have difficulty finding that the use or operation of the automobile - Mr. Overley sitting in it – “caused” the injuries in any meaningful sense.

The remaining possibility is that the entire sequence of events, including both the collision and the assault, was a single “incident.” This is the approach taken in the recent decision of the Alberta Court of Queen’s Bench in Beger v. MacAstocker Estates (Public Trustee of), 1996 CanLII 10516 (AB KB), [1996] A.J. No. 985. In that case, however, the trial judge found that Ms. Beger sustained injuries in the collision that overlapped the injuries she suffered in the subsequent assault. He also found that the collision was simply the first step in a scheme to rob and abduct the driver. The assailant intentionally drove into the rear of Ms. Beger’s car, forcing it off the road and into a ditch. When Ms. Beger managed to pull herself out of her vehicle, he assaulted her and tried to drag her into his car. Because the assailant’s automobile was integral to the whole sequence of events, the judge treated the collision and the assault as an “accident arising out of the use or operation of a motor vehicle.”

The situation here does not have the same unifying features as in Beger. Mr. Overley was not injured in the collision. The assailant, Mr. Grandbois, was not even involved in the collision. The only role played by the use or operation of an automobile was to anger him. Borrowing the words of the District Court of Appeal of Florida, the use or operation of the automobile created “an atmosphere of hostility between the parties.”⁵

This is not a case where the victim was assaulted because he resisted the assailant’s efforts to gain access to or take control of the vehicle.⁶ Nor is it a case where the vehicle was used in the assault or contributed to the injuries.⁷ After Ms. Bartholomew parked her car, turned it off and went to inspect the damage to the other vehicle, Mr. Grandbois assaulted her. He then assaulted Mr. Overley. Absent some continuing contribution of the vehicle, I conclude that the causal connection, even an indirect causal connection, was broken by Mr. Grandbois’ intervening actions. Mr. Overley’s recourse is to sue for damages, which he has done, or apply to the Criminal Injuries Compensation Board.

Although not essential to the decision, it also is not clear from the agreed facts that the automobile was more than the location, or situs, of the assault. When the assault occurred, the vehicle was only being used as a place to sit. The Supreme Court, in Amos, felt it necessary to consider whether the vehicle was “merely the situs of the shooting.” The Court found that it was not merely the situs, but that the shooting “appears to have been the direct result of the assailants’ failed attempt to gain entry to the appellant’s van.”(p.627) This kind of ongoing connection between the vehicle and the assault is lacking in this case. Mr. Grandbois may have attacked Mr. Overley because he was sitting in the vehicle, but it may have been simply because he was with Ms. Bartholomew. In the latter case, the location of the assault is incidental.

V. EXPENSES

Insured persons have generally been awarded their appeal expenses where the insurer appeals, even if the appeal is allowed. I find no reason to take a different approach here. This appeal raised important issues about the scope of automobile insurance coverage not clearly answered in previous decisions. Mr. Overley’s participation was important and helpful. Consequently, he will receive his reasonable appeal expenses, payable by Co-operators.

The arbitrator did not deal with the issue of arbitration expenses, presumably because he felt it would be better addressed at the end of the hearing. Because Co-operators’ appeal is successful, however, the arbitrator will no longer have a chance to do so. If the parties are unable to resolve this issue, I will deal with it based on written submissions filed with the Registrar.

March 20, 1997

David R. Draper Director’s Delegate

Footnotes

1. 1Ontario Regulation 776/93, as amended by Ontario Regulation 635/94.
2. 2This approach was adopted by a different panel of the Ontario Court of Appeal in Wendy Warwick et al. v. Gore Mutual Insurance Company and State Farm Mutual Automobile Insurance Company, unreported decision released January 22, 1997 (Court file C23617).
3. 3The insurer has applied for judicial review of the appeal decision in Vineski.
4. 4The definition of accident was amended in the most recent version of the Schedule, applying to accidents occurring on or after November 1, 1996 (Ontario Regulation 423, as amended - the Statutory Accident Benefits Schedule - Accidents On or After November 1, 1996).
5. 5Race v. Nationwide Mut. Fire Ins. Co, 542 So.2d 347 (Fla. 1989).
6. 6In contrast, see Amos v. Insurance Corp. of British Columbia (1995) 1995 CanLII 66 (SCC), 127 D.L.R. (4th) 618 (S.C.C.); Novak v. Government Employees Insurance Co., 424 So. 2d 178 (Fla. 1983); affirmed 453 So. 2d 1116 (Fla. 1984).
7. 7In contrast, see Iaquone v. Florou et al.; Iaquone v. Aetna Casualty of Canada et al., [1981] I.L.R. & 1-1367 (Ont. S.C.); Dickinson v. Motor Vehicle Insurance Trust, [1987] 61 A.L.J.R. 553 (High Ct. of Australia).