ING Insurance Company of Canada v. Lombard General Insurance Company of Canada

[Indexed as: ING Insurance Co. of Canada v. Lombard General Insurance Co. of Canada]

98 O.R. (3d) 522

Court of Appeal for Ontario,

Weiler, Feldman and Juriansz JJ.A.

July 15, 2009

Insurance -- Automobile insurance -- Priorities -- Injured passenger suing driver and owner of motor vehicle -- Driver insured under automobile insurance policy issued by Insurer A -- Owner insured under policy issued by Insurer B which included umbrella liability coverage -- Automobile coverage provided as part of umbrella liability coverage specified to be subject to terms and conditions of SPF 7 -- Umbrella policy constituting owner's policy -- Insurer B required to respond in priority to Insurer A under s. 277(1) of Insurance Act -- Insurance Act, R.S.O. 1990, c. I.8, s. 277(1).

M was seriously injured while a passenger in a car owned by MVL, leased by it to P, and driven by K with P's permission. K sued MVL, P and K. There was a substantial possibility that her damages would exceed $1 million. At the time of the accident, K was insured under an automobile insurance policy provided by ING. MVL was insured under a policy issued by Lombard. The Lombard policy included umbrella liability coverage in the amount of $9 million. The automobile coverage provided as part of the umbrella liability coverage was specified to be "subject to all the terms and conditions of the Standard Excess Automobile Policy SPF No. 7", which was specifically stated to form part of the policy. On an application to determine priority between the umbrella fidelity coverage provided by Lombard and the automobile liability insurance provided by ING, the application judge ruled that the Lombard policy provided first-loss insurance and had to respond in priority to the ING policy. Lombard appealed.

Held, the appeal should be dismissed.

The umbrella policy was an owner's policy and was required to respond in priority to the ING policy under s. 277(1) of the Insurance Act.

APPEAL from the judgment of Jennings J. (2009), 2009 CanLII 1667 (ON SC), 94 O.R. (3d) 669, [2009] O.J. No. 256 (S.C.J.) granting an application for a declaration that the insurance policy issued by the respondent was required to respond to an accident in priority to the applicant's policy.

Cases referred to Avis Rent A Car System v. Certas Direct Insurance Co. (2005), 2005 CanLII 16075 (ON CA), 75 O.R. (3d) 421, [2005] O.J. No. 1951, 197 O.A.C. 214, 22 C.C.L.I. (4th) 159, [2005] I.L.R. I-4413, 18 M.V.R. (5th) 61, 139 A.C.W.S. (3d) 359 (C.A.) Statutes referred to Insurance Act, R.S.O. 1990, c. I.8, s. 277(1)

Stephen R. Moore, for appellant. David F. Murray, for respondent. [page523]

[1] Appeal Book Endorsement BY THE COURT: -- The issue on this appeal is whether the application judge erred in granting ING's application for a declaration that the insurance policy provided by Lombard was required to respond to an accident in priority to the policy provided by ING.

[2] Despite the able argument of the appellant we are of the opinion that this case is governed by this court's decision in Avis Rent A Car System v. Certas Direct Insurance Co. (2005), 2005 CanLII 16075 (ON CA), 75 O.R. (3d) 421, [2005] O.J. No. 1951 (C.A.). Even if the SPF#7 did not respond to the Manousos claim, the umbrella policy including the endorsement is an owner's policy and so, as held by Jennings J., it would still be required to respond in priority to the ING policy under s. 277(1) of the Insurance Act, R.S.O. 1990, c. I.8.

[3] Accordingly, the appeal is dismissed with costs to the respondent in the amount of $6,500, all inclusive.

Appeal dismissed.