Schneider et al. v. Doe, Administrator of the Estate of William Maahs et al. [Indexed as: Schneider v. Maahs Estate]
56 O.R. (3d) 321
[2001] O.J. No. 4308
Docket No. C35333
Court of Appeal for Ontario
Laskin, Rosenberg and Cronk JJ.A.
November 9, 2001
Insurance -- Automobile insurance -- Underinsured motorist endorsement -- "Regular use" does not have to be personal use or to have component of personal use in order to satisfy definition of "insured person" under s. 1.6(b)(i) of OPCF 44 endorsement -- Police officer occupying police cruiser which was provided to her for police business and which she never drove for personal business was "insured person" under s. 1.6(b)(i).
The plaintiff, an Ontario Provincial Police officer, was injured in a car crash on duty when the police cruiser she was driving was rear-ended. The driver of the other vehicle had inadequate insurance coverage. However, insurance policies on the plaintiff's own car and on the police cruiser she was driving had underinsured coverage under an OPCF 44 endorsement. A motion was brought to determine which of the two insurers had to respond first to the plaintiff's loss: the appellant insurer of the plaintiff's own car, or the respondent, which insured the police cruiser under a fleet policy. The question turned on whether the cruiser was "provided" for the plaintiff's "regular use". If it was, she was an "insured person" under the fleet policy and, under the OPCF 44 priority rules, the respondent had to respond first to her claim. The motions judge held that, although the plaintiff "regularly" used the cruiser, it was not provided for "her use" because she was not permitted to use it for personal purposes. The appellant appealed.
Held, the appeal should be allowed.
Personal use, or a personal use component to "regular use", is not required to satisfy the definition of "insured person" under s. 1.6(b)(i) of the OPCF 44 endorsement.
APPEAL from an order of Heeney J. (2000), 2000 CanLII 22705 (ON SC), 51 O.R. (3d) 90 on a motion to determine a question of law.
Yamada v. Canadian General Insurance Co. (1981), 1981 CanLII 2982 (ON CA), 129 D.L.R. (3d) 509, [1982] I.L.R. 1-1477 (Ont. C.A.), distd Other cases referred to Axa Boreal Assurances v. Co-Operators Insurance Co. (2000), 2000 CanLII 16839 (ON CA), 50 O.R. (3d) 395, [2001] I.L.R. 1-3888 (C.A.); Brissette Estate v. Westbury Life Insurance Co., 1992 CanLII 32 (SCC), [1992] 3 S.C.R. 87, 96 D.L.R. (4th) 609, 142 N.R. 104, [1992] I.L.R. 1-2888, 47 E.T.R. 109 (sub nom. Brissette Estate v. Crown Life Insurance Co.); Chilton v. Co-operators General Insurance Co. (1997), 1997 CanLII 765 (ON CA), 32 O.R. (3d) 161, 143 D.L.R. (4th) 647, [1997] I.L.R. 1-3423 (C.A.); Jager v. Liberty Mutual Fire Insurance Co., 2001 ABCA 163, [2001] A.J. No. 820 (C.A.); Riesner v. Liao, [1994] O.J. No. 1033 (Div. Ct.) [Leave to appeal to C.A. dismissed [1995] O.J. No. 2489]; Sittler v. Canadian General Insurance Co., December 3, 1993, O.I.C. File Nos. A000951, A004495; affd August 11, 1995 Rules and regulations referred to Statutory Accident Benefits Schedule -- Accidents Before January 1, 1994, O. Reg. 779/93, s. 3(1) Statutory Accident Benefits Schedule -- Accidents After December 31, 1993 and Before November 1, 1996, O. Reg. 776/ 93, ss. 3, 91(4) Authorities referred to Morse, J., "SEF No. 44 Underinsured Motorist Coverage: The Aftermath of SEF No. 42 and the Borland, Wigle and White Cases" (1986-87) 7 Advocates' Q. 185 Flaherty, J., "SEF 42 -- Underinsured Motorist Coverage and SEF 44 -- Family Protection Endorsement" in The Automobile Insurance Policy (Toronto: Law Society of Upper Canada, 1988) Hockin, P., "Underinsured Motorist Cover -- SEF 44" in Issues in Personal Injury Litigation (London, Ont.: Canadian Bar Association - Ontario, Continuing Legal Education, 1986) Samis, L., "S.E.F. 44 Family Protection Coverage" [1987] Spec. Lect. L.S.U.C.
R. Shaheen, for appellant North Blenheim Mutual Insurance Co. John F. Graham, for respondent The General Accident Assurance Company of Canada.
The judgment of the court was delivered by
LASKIN J.A.: --
Introduction
[1] On January 25, 1997, the plaintiff Patricia Schneider, an Ontario Provincial Police Officer, was injured in a car accident while she was on duty. She was parked on the shoulder of Highway 401 when the police cruiser she was driving was rear-ended by William Maahs. Ms. Schneider has claimed damages of $1,000,000 but the Maahs car carried the minimum third party liability limits of $200,000. However, insurance policies on Ms. Schneider's own car and on the police cruiser she was driving had underinsured coverage under an OPCF 44 endorsement.
[2] The question on this appeal is which of the two insurers must respond first to Ms. Schneider's loss: the appellant North Blenheim Mutual Insurance Company, which insured Ms. Schneider's own car, or the respondent, The General Accident Assurance Company of Canada, which insured the police cruiser under a fleet policy. The question turns on whether the cruiser was "provided" for Ms. Schneider's "regular use". If it was, then she was an "insured person" under the fleet policy and, under the OPCF 44 priority rules, General Accident must respond first to her claim.
[3] On a motion to determine the question, Heeney J. held that though Ms. Schneider "regularly" used the cruiser, it was not provided for "her use" because she was not permitted to use it for personal purposes. He therefore concluded that Ms. Schneider must look to the underinsured coverage under the North Blenheim policy. North Blenheim appeals. For the reasons that follow, I would allow the appeal.
Discussion
[4] The OPCF 44 endorsement, called Family Protection Coverage, is optional coverage for Ontario drivers, though most have it. Its purpose is to provide insurance where a person is injured, as in this case, by an underinsured or inadequately insured motorist. Both Ms. Schneider's insurance with North Blenheim and the OPP's fleet policy with General Accident contained an OPCF 44 endorsement. The North Blenheim policy had a $1,000,000 limit and the General Accident policy a $2,000,000 limit.
[5] Under s. 1.3 of the endorsement, an "insured person who sustains bodily injury" is an "eligible claimant" for OPCF 44 coverage. Where a person is an eligible claimant under more than one policy, the priority rules in s. 18 of the endorsement stipulate that if the person injured is an occupant of an automobile, the insurance on that automobile is first loss insurance. Section 18(a)(i) sets out this rule:
MULTIPLE COVERAGES
- The following rules apply where an eligible claimant is entitled to payment under family protection coverage under more than one policy:
(a) (i) if he or she is an occupant of an automobile, such insurance on the automobile in which the eligible claimant is an occupant is first loss insurance and any other such insurance is excess; . . .
[6] It is not disputed that Ms. Schneider is an insured person and therefore an eligible claimant under the OPCF 44 endorsement in her North Blenheim policy. She is a named insured under that policy. Under s. 1.6(a)(ii) of the OPCF 44 endorsement, an "insured person" includes "the named insured . . . while . . . an occupant of any other automobile . . .".
[7] What is disputed is whether Ms. Schneider was an "insured person" under the OPCF 44 endorsement in the General Accident policy. If she was, the General Accident policy will be first loss insurance because it insured the automobile she occupied when she was injured. The relevant definition of "insured person" is contained in s. 1.6(b)(i) of the endorsement:
1.6(b) if the named insured is a corporation, an unincorporated association, partnership, sole proprietorship or other entity, any officer, employee or partner of the named insured for whose regular use the described automobile is provided and his or her spouse and any dependent relative of either, while
(i) an occupant of the described automobile, a newly acquired automobile or a temporary substitute automobile as defined in the Policy; . . .
[8] The "entity" that is the named insured under the General Accident policy is Her Majesty The Queen in Right of the Province of Ontario and Ms. Schneider, as an OPP Officer, was an employee of Her Majesty. Also, the police cruiser she occupied when she was injured was a "described automobile" under the policy. Thus, the narrow issue is whether the cruiser was "provided" for her "regular use".
[9] Ms. Schneider worked for the Woodstock detachment of the OPP and at the start of each shift was assigned one of the 15 police cruisers in the fleet. The motions judge found at pp. 93-94 O.R. that Ms. Schneider "regularly" used a "described automobile":
In the case at bar, the plaintiff uses a cruiser every working shift. Her use, therefore, is habitual, normal, and recurs uniformly according to a predictable time and manner. While her use is not constant, I am of the view that constancy is not required to satisfy the ordinary meaning of the word "regular". A person can regularly attend a local pub. That does not mean that he is constantly there, only that he is frequently there according to a predictable pattern. A person works at his regular occupation. That does not mean that the person is constantly working, only that he normally works there during his working shifts, which are predictable and uniform.
I conclude that the plaintiff "regularly" uses a "described automobile" by virtue of her normal, habitual and long- standing use of an assigned cruiser for the duration of every working shift, in accordance with a predictable time and manner.
[10] Counsel for General Accident did not challenge this finding in oral argument, but in his factum he contended that because Ms. Schneider could be assigned any one of the 15 cruisers in the fleet, the particular cruiser she was driving when she was injured was not provided for her regular use. This contention has no merit. Under the General Accident policy, the "described automobiles" are the fleet. Therefore, when Ms. Schneider was injured, she occupied a described automobile. OPCF 44 coverage does not require her to occupy any particular cruiser as long as the cruiser she did occupy was in the fleet.
[11] The crux of the appeal is whether the cruiser was provided for Ms. Schneider's use. The motions judge held that it was not because her use lacked a "personal component". He said at p. 95 O.R.: ". . . the cruiser occupied by the plaintiff was not provided for her use, since she had the vehicle for OPP business only."
[12] The record supports the motions judge's finding that Ms. Schneider used a police cruiser only for OPP business. She drove her own car to and from work. She used a police cruiser during her shift and returned it to the police detachment at the end of her shift. She never drove a police cruiser for "personal use". In my view, however, "personal use" or a "personal component" to "regular use" is not required to satisfy the definition of an "insured person" under s. 1.6(b) (i) of the OPCF 44 endorsement.
[13] An insurance policy is a contract and the ordinary rules of contract interpretation apply to determine the meaning of an insured person. The court must give effect to the intention of the parties by looking at the words they used. See Brissette Estate v. Westbury Life Insurance Co., 1992 CanLII 32 (SCC), [1992] 3 S.C.R. 87 at pp. 92-93, 96 D.L.R. (4th) 609 and Chilton v. Co-Operators General Insurance Co. (1997), 1997 CanLII 765 (ON CA), 32 O.R. (3d) 161 at p. 165, 143 D.L.R. (4th) 647 (C.A.). Admittedly, searching for the intention of the parties to an Ontario car insurance policy is somewhat fictional. The mandatory provisions of the policy and the optional endorsements incorporate standard terms and forms. These terms and forms are written by the insurance industry. The driving public can either accept or reject the coverage that is available but they cannot modify the words of the policy. Still, the court should interpret the policy, including optional endorsements, like the OPCF 44, by first looking at the words actually used. See Chilton at p. 165 O.R.
[14] The definition of "insured person" in s. 1.6(b) of OPCF 44 includes the words "for whose regular use the described automobile is provided". These words do not require personal use or a personal component to regular use. To embellish these words with a personal component amounts to rewriting that part of the definition from "for whose regular use the described automobile is provided" to "for whose regular and personal use the described automobile is provided". Nothing in either the definition of insured person or in the endorsement as a whole warrants this embellishment.
[15] At best, General Accident can claim that the definition in s. 1.6(b) is ambiguous. Even if that were so, any ambiguity must be resolved against the insurer, in this case, General Accident. Although the OPCF 44 endorsement was approved by the Commissioner of Insurance, its terms, as I have said, were drafted by the insurance industry. Any ambiguity in the terms of a contract must be interpreted against the drafter of those terms on the principle that the drafter could have avoided the ambiguous language. If the insurance industry had wanted to insist on a "personal component" to "regular use" it could easily have said so. See Chilton at pp. 168-69 O.R.
[16] In addition, interpreting "regular use" to not require a "personal component" is consistent with the interpretation of the same phrase in the named insured deeming provisions in s. 3(1) of the Statutory Accident Benefits Schedule - Accidents Before January 1, 1994, O. Reg. 779/93, s. 3 and s. 91(4) of the Statutory Accident Benefits Schedule - Accidents after December 31, 1993 and before November 1, 1996, O. Reg. 776/93. See Sittler v. Canadian General Insurance Co.; Sittler v. Pilot Insurance Co., December 3, 1993, O.I.C. File Nos. A000951 and A004495, affd August 11, 1995; Axa Boreal Assurances v. Co- operators Insurance Co. (2000), 2000 CanLII 16839 (ON CA), 50 O.R. (3d) 395 (C.A.).
[17] General Accident makes two main submissions in support of its position. The first relies on the decision of this court in Yamada v. Canadian General Insurance Co. (1981), 1981 CanLII 2982 (ON CA), 129 D.L.R. (3d) 509, [1982] I.L.R. 1-1477 (Ont. C.A.). This first submission found favour with the motions judge. General Accident's second submission focuses on the title of the OPCF 44 endorsement: Family Protection Coverage.
[18] In Yamada, this court also interpreted the words "regular use". It did so, however, not in a clause granting coverage but instead in a clause excluding coverage. Laura Yamada was injured while she was driving a company car. She was a part-time employee who drove the car once or twice a week, always on company business. The company's insurer refused to honour her claim, relying on the following exemption clause in the policy, cited in Yamada at p. 510 D.L.R.:
The insurer shall not be liable under this policy for loss, damage, injury or death arising from the ownership, use or operation of any automobile furnished by the insured to any person, except an active partner or executive officer or a full time employee of the business stated in items 1 and 3 of the application, for his regular or frequent use[.]
[19] The trial judge held that the exemption clause did not apply because Miss Yamada's use of the company car was neither regular nor frequent. He therefore held that she was entitled to recover under the company's policy. This court dismissed the insurer's appeal but on a different ground. The court acknowledged that on the findings of the trial judge Miss Yamada's use of the car might be considered regular or frequent. Still, this court held that the insurer could not rely on the exemption clause to deny coverage because the car was not "furnished" for her use. In this court's view, "something more" than using the car on company business was required to trigger the exemption clause. Dubin J.A. stated, at p. 511 D.L.R.:
We think that something more is required before it can be said that the vehicle was "furnished" to Miss Yamada for her use. Therefore, since the vehicle was "furnished" to Miss Yamada for company business and not for her use, the exemption clause is not operative, and the insurer is liable on the contract of insurance to pay the amount found by the trial Judge to be due.
[20] General Accident contends, and the motions judge held, that the "something more" in this case is a "personal component" to use.
[21] North Blenheim sought to distinguish Yamada on the different wording in the policy: "furnished by the insured to any person . . . for his regular or frequent use", compared to the wording in issue here, "for whose regular use the described automobile is provided". I see little difference in meaning between the word "furnished" and the word "provided". What I think was more significant is that unlike the policy before us, the policy in Yamada had a clause dealing with pleasure use, which also contained the phrase "for whose regular and frequent use an automobile is furnished". Pleasure use has a personal component and this additional clause informed the court's interpretation of the exemption provision.
[22] But what mainly distinguishes Yamada from this case is the different context for the clause in question. As I have already said, in Yamada the court was interpreting a clause excluding coverage; here the court must interpret a clause providing coverage. A court's interpretation of these clauses differs. As a general rule, clauses in an insurance policy providing coverage are interpreted liberally or broadly in favour of the insured; conversely, clauses excluding coverage are interpreted strictly against the insurer. See Chilton at p. 167 O.R. General Accident argues that the court in Yamada did not invoke this general rule because it reversed the trial judge's finding on "regular or frequent use". I disagree. In requiring something more than business use to come within the exemption, this court interpreted the clause narrowly against the insured. Yamada simply does not apply to the case before us.
[23] Indeed, two more recent cases -- one the decision of Carruthers J. writing for the Divisional Court in Riesner v. Liao, [1994] O.J. No. 1033, leave to appeal dismissed [1995] O.J. No. 2489 (Ont. C.A.), the other the decision of Hunt J.A. writing for the Alberta Court of Appeal in Jager v. Liberty Mutual Fire Insurance Co., 2001 ABCA 163, [2001] A.J. No. 820 -- similarly distinguished Yamada in interpreting the words "regular use" in the context of coverage clauses. Heeney J. did not have the benefit of either of these cases when he relied on Yamada. I conclude that this court's decision in Yamada provides no support for General Accident's position or the result reached by the motions judge. Ms. Schneider need not show a personal component to her regular use to be entitled to coverage under the General Accident policy.
[24] General Accident's other main submission focuses on the title of the OPCF 44 endorsement: Family Protection Coverage. It submits that giving effect to North Blenheim's position would convert family protection coverage into employee protection coverage. General Accident acknowledges that the OPCF 44 endorsement applies to cars used for business but contends that if a company car is provided to an employee for personal use then it becomes a family car. In other words, interpreting regular use to require a personal component is faithful to the title of the OPCF 44 endorsement.
[25] Both the history of underinsured coverage in Ontario and the definition of "insured person" in the current endorsement stand in the way of General Accident's submission. Underinsured motorist coverage has been available to Ontario drivers since 1981. The first form of underinsured coverage was a standard endorsement form (SEF 42) titled simply "Underinsured Motorist Coverage". Although a principal purpose of this coverage was to provide insured persons and their families with financial protection from tortfeasors with insufficient insurance coverage, the SEF 42 endorsement also contained a definition of insured person that applied when the named insured was a corporation, unincorporated association or partnership and that included "any employee or partner of the named insured for whose regular use the described automobile is furnished". In other words, though the main purpose was to protect named insureds and their families, from the beginning coverage was extended to company employees in terms virtually identical to s. 1.6(b) of the OPCF 44 endorsement. See Jerome Morse, "S.E.F. No. 44 Underinsured Motorist Coverage: The Aftermath of S.E.F. No. 42 and the Borland, Wigle and White Cases" (1986-87) 7 Advocates' Q. 185.
[26] Judicial interpretation of the SEF 42 endorsement expanded coverage in ways the insurance industry had not contemplated, causing SEF 42 to be replaced by the Family Protection Endorsement SEF 44, subsequently renamed OPCF 44. Coverage for families was extended. Thus, one feature of the SEF 44 (and OPCF 44) endorsement distinguishing it from SEF 42 is that coverage follows named insureds and their families, not their cars. In other words, the current form of coverage for named insureds and their families is portable, following them as passengers of other cars and as pedestrians. But non-family occupants of the insured car who were protected under SEF 42 are not covered by SEF 44. See Morse, supra; James Flaherty, "SEF 42 -- Underinsured Motorist Coverage and SEF 44 -- Family Protection Endorsement", in The Automobile Insurance Policy (Toronto: Law Society of Upper Canada, 1988); Peter Hockin, "Underinsured Motorist Cover -- S.E.F. 44", in Issues in Personal Injury Litigation (London, Ont: Canadian Bar Association - Ontario, Continuing Legal Education, 1986); Lee Samis, "S.E.F. 44 Family Protection Coverage", [1987] Spec. Lect. L.S.U.C.
[27] Even though the SEF 44 (and OPCF 44) endorsement places greater emphasis on family protection, it retains the part of the definition of insured person that extends coverage to employees of corporations and others for whose regular use a described automobile is provided. The definition of insured person in s. 1.6(b) of OPCF 44 in issue in this appeal is the same as the corresponding policy definition in SEF 42 except for the replacement of the word "furnished" with the word "provided". Therefore, although underinsured motorist coverage in Ontario has emphasized family protection, and although it is currently called "Family Protection Coverage", it has always covered and continues to cover employees of companies and other entities regularly using company cars for business.
[28] Moreover, even the coverage for employees regularly driving company cars can be said to be "family protection coverage" because the coverage applies not only to the employee but also to "his or her spouse and any dependent relative of either". For these reasons, the title of the OPCF 44 endorsement does not support General Accident's position. I conclude that Patricia Schneider is an insured person under the General Accident policy and therefore that this policy is first loss insurance under s. 18(a)(i) of the endorsement.
Conclusion
[29] I would allow the appeal, set aside the order of the motions judge and in its place declare that Patricia Schneider is an insured person under the OPCF 44 endorsement in the General Accident policy and that the General Accident policy is first loss insurance. I would award North Blenheim its costs of the motion and of the appeal.
Appeal allowed.