Meadows et al. v. Meloche Monnex Insurance Brokers Inc./Meloche Monnex Courtiers D'Assurances Inc. [Indexed as: Meadows v. Meloche Monnex Insurance Brokers Inc.]
102 O.R. (3d) 312
2010 ONCA 394
Court of Appeal for Ontario,
Gillese, Lang and Rouleau JJ.A.
June 2, 2010
Insurance -- Insurer's obligation to defend -- Insured sued by plaintiff for damages allegedly suffered when insured physically attacked him without provocation -- Insurer refusing to defend insured on basis that policy excluded coverage for intended acts -- Application judge allowing application for declaration that insured had duty to defend on basis that self- defence is not intentional act -- Insurer's appeal allowed -- Plaintiff's claim could only succeed on basis that he was assaulted by insured -- Assault intentional act and excluded from coverage -- No duty to defend existing.
The insured was being sued by S for damages allegedly suffered when the insured physically attacked S without provocation. The insurer denied that it had an obligation to defend the insured as the insurance policy specifically excluded coverage for intentional acts. The insured brought an application for a declaration that the insurer owed him a duty to defend. In support of the application, he filed affidavit evidence and his statement of claim, in which it was pleaded that he acted in self-defence when he hit S. In the insured's submission, acting in self-defence is not an intentional act within the meaning of the policy. The application was granted. The insurer appealed.
Held, the appeal should be allowed.
The result was the same whether or not it was permissible to refer to the additional materials filed on the application: there was no duty to defend. Although the statement of claim referred to negligence, it was clear from a reading of the pleading as a whole that the gravamen of the claim was assault and battery, which are intentional torts. If S's action succeeded, he would have shown that he was assaulted by the insured. That is an intentional act and was excluded from coverage. If S did not succeed, there was nothing to indemnify and, therefore, no insured claim. There was no reasonable interpretation of the claim that would result in S succeeding in negligence even if the court found that there was no assault, on the basis that the insured was acting in self- defence, but negligently used excessive force. [page313]
APPEAL from the judgment of Manton J. of the Superior Court of Justice dated December 1, 2009 granting an application for a declaration that the insurer had an obligation to defend the insured.
Cases referred to Thorne v. Royal & SunAlliance Insurance Co. of Canada, [2003] N.B.J. No. 322, 2003 NBCA 61, 230 D.L.R. (4th) 587, 261 N.B.R. (2d) 119, 125 A.C.W.S. (3d) 499, distd Glassford v. TD Home & Auto Insurance Co. (2009), 2009 CanLII 10397 (ON SC), 94 O.R. (3d) 630, [2009] O.J. No. 1011, [2009] I.L.R. 1-4823, 176 A.C.W.S. (3d) 221, 73 C.C.L.I. (4th) 135 (S.C.J.); Hawkes v. TD Home & Auto Insurance Co. (2007), 2007 CanLII 82795 (ON SC), 88 O.R. (3d) 796, [2007] O.J. No. 5368, 58 C.C.L.I. (4th) 197 (S.C.J.), consd Other cases referred to Monenco Ltd. v. Commonwealth Insurance Co., [2001] 2 S.C.R. 699, [2001] S.C.J. No. 50, 2001 SCC 49, 204 D.L.R. (4th) 14, 274 N.R. 84, [2002] 2 W.W.R. 438, J.E. 2001-1712, 155 B.C.A.C. 161, 97 B.C.L.R. (3d) 191, 32 C.C.L.I. (3d) 165, [2001] I.L.R. I-3993, 108 A.C.W.S. (3d) 159; Nichols v. American Home Assurance Co., 1990 CanLII 144 (SCC), [1990] 1 S.C.R. 801, [1990] S.C.J. No. 33, 68 D.L.R. (4th) 321, 107 N.R. 321, J.E. 90-643, 39 O.A.C. 63, 45 C.C.L.I. 153, [1990] I.L.R. Â1-2583 at 10058, 20 A.C.W.S. (3d) 699; Non-Marine Underwriters, Lloyd's of London v. Scalera, [2000] 1 S.C.R. 551, [2000] S.C.J. No. 26, 2000 SCC 24, 185 D.L.R. (4th) 1, 253 N.R. 1, [2000] 5 W.W.R. 465, J.E. 2000-935, 135 B.C.A.C. 161, 75 B.C.L.R. (3d) 1, 18 C.C.L.I. (3d) 1, 50 C.C.L.T. (2d) 1, [2000] I.L.R. I-3810, 96 A.C.W.S. (3d) 479 Rules and regulations referred to Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rule 14.05(3) (d), (h)
Marc D. Isaacs, for appellant. John J. Cardill, for respondents.
The judgment of the court was delivered by
[1] ROULEAU J.A.: -- The appellant, Meloche Monnex, appeals the judgment declaring that the appellant had a duty to defend Brent Meadows in an action brought in the Ontario Superior Court by David Skidmore for civil intentional assault and battery. The application judge concluded the claim came within the terms of coverage of the respondents' homeowner's insurance policy issued by the appellant. For the reasons that follow, I would allow the appeal and set aside the application judge's decision replacing it with a dismissal of the application.
Facts
[2] The respondent Brent Meadows is a defendant in an action brought by David Skidmore. Skidmore's claim relates to injuries he allegedly suffered in a physical altercation with Brent Meadows in a Carlton University residence while they were both [page314] students there in September 2003. In the action, Skidmore claims damages of approximately $750,000 against Brent Meadows, his friend Benjamin Crawford and Carlton University. Skidmore's claim describes an unprovoked attack. Brent Meadows, in his statement of defence, argues that he acted in self- defence.
[3] Brent Meadows' lawyer notified the appellant of the claim. The respondents took the position that the claim against Brent Meadows came within the terms of coverage of their homeowner's policy purchased from the appellant. As a result, the respondents claimed that the appellant had the duty to defend Brent Meadows in the action.
[4] After examining the claim, the appellant took the position that the policy did not cover intentional acts such as those alleged by Skidmore. They therefore advised the respondents that they would not be providing a defence to the action. The respondents then brought the within application under rule 14.05(3)(d) and (h) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 for a determination of their rights under the insurance contract. Specifically, they sought declarations that the appellant owed a duty to defend Brent Meadows in Skidmore's action and that Brent Meadows was entitled to retain and instruct his own solicitor in the action.
[5] In support of the application, the respondents filed affidavit evidence and their statement of defence, arguing that these were required to set out their position that Brent Meadows was acting in self-defence when he hit Skidmore. In the respondents' submission, acting in self-defence is not an intentional act within the meaning of the policy and, as a result, would fall within coverage.
[6] The appellant argued that the court should not consider the extrinsic evidence in determining whether the insurer has a duty to defend. Rather, the court is confined to the statement of claim, the document that makes the allegations against the insured, to determine the nature of the allegations. In the appellant's submission, the allegations in the statement of claim are of intentional acts, which are not covered by the policy of insurance and do not give rise to a duty to defend.
[7] The application judge accepted that it had seemed to be settled law that only the document making allegations against the insured should be considered in determining the existence of a duty to defend, but held that a recent line of authority has allowed an exception to this principle where an insured claims self-defence against an alleged intentional tort. In these cases, [page315] the courts have considered extrinsic documents and concluded that insurers are required to defend the allegations.
[8] The application judge also held that "self-defence is not an 'intended act' within the meaning of the insurance policy". He considered Brent Meadows' statement of defence and affidavit evidence filed by the respondents and came to the conclusion that the appellant had a duty to defend Brent Meadows in the Skidmore action. He awarded the respondents substantial indemnity costs.
Issues
[9] The appellant submits that the application judge erred in (1) considering extrinsic evidence beyond the statement of claim; (2) concluding that there was an obligation to defend; and (3) awarding substantial indemnity costs.
Discussion
[10] The appellant argues that the duty to defend is to be decided entirely by reference to the statement of claim and the terms of the policy. In the appellant's submission, it is clear from the statement of claim that an intentional act is alleged and it is equally clear from the policy of insurance that intentional acts are excluded from coverage. It is the position of the appellant that the application judge erred in law by considering evidence beyond the statement of claim in the Skidmore action in determining whether the appellant owed a duty to defend the respondent and in concluding that the claim might trigger an obligation on the appellant to indemnify. The appellant also appeals the costs order made in favour of the respondents.
[11] The respondents submit that the application judge was entitled to consider the statement of defence and the affidavit evidence filed by the respondents on the motion. It is apparent from a review of that material that the respondents' position is that Brent Meadows was acting in self-defence. This, in the respondents' view, does not constitute an intentional act within the meaning of the insurance policy and the application judge, applying Thorne v. Royal & SunAlliance Insurance Co. of Canada, 2003 NBCA 61, [2003] N.B.J. No. 322, 230 D.L.R. (4th) 587 (C.A.), Hawkes v. TD Home & Auto Insurance Co. (2007), 2007 CanLII 82795 (ON SC), 88 O.R. (3d) 796, [2007] O.J. No. 5368 (S.C.J.) and Glassford v. TD Home & Auto Insurance Co. (2009), 2009 CanLII 10397 (ON SC), 94 O.R. (3d) 630, [2009] O.J. No. 1011 (S.C.J.), properly found that it came within the terms of [page316] coverage of the policy. In support of their position, the respondents rely on Thorne and Glassford.
[12] For the reasons that follow, it is my view that whether or not reference is made to the additional materials, the result is the same. There is no duty on the appellant to defend and the appeal ought to be allowed.
[13] It is well settled that "[i]t is not necessary to prove that the obligation to indemnify will in fact arise in order to trigger the duty to defend. The mere possibility that a claim within the policy may succeed suffices": Nichols v. American Home Assurance Co., 1990 CanLII 144 (SCC), [1990] 1 S.C.R. 801, [1990] S.C.J. No. 33, at p. 810 S.C.R.
[14] To trigger the duty to defend, the insured must therefore show the basis on which the policy may be called upon to indemnify. In order to determine whether there is a "possibility" that the claim will come within the terms of the policy, we look first to the statement of claim. As set out in Monenco Ltd. v. Commonwealth Insurance Co., 2001 SCC 49, [2001] 2 S.C.R. 699, [2001] S.C.J. No. 50, at para. 28:
The starting premise for assessing whether an insurer's duty to defend has been triggered rests in the traditional "pleadings rule". Whether an insurer is bound to defend a particular claim has been conventionally addressed by relying on the allegations made in the pleadings filed against the insured, usually in the form of a statement of claim. If the pleadings allege facts which, if true, would require the insurer to indemnify the insured for the claim, then the insurer is obliged to provide a defence. This remains so even though the actual facts may differ from the allegations pleaded.
[15] The court in Monenco, at para. 31, went on to explain that where the pleadings are not framed with sufficient precision to determine whether the claims are covered by a policy, the insurers' obligation to defend will be triggered where, on a reasonable reading of the pleadings, a claim within coverage can be inferred. Any doubt as to whether the pleadings bring the incident within the coverage of the policy ought to be resolved in favour of the insured.
[16] The Supreme Court of Canada has, however, cautioned that the terms used and assertions made in a statement of claim are not necessarily determinative of whether coverage under a policy is triggered. In Non-Marine Underwriters, Lloyd's of London v. Scalera, 2000 SCC 24, [2000] 1 S.C.R. 551, [2000] S.C.J. No. 26, at para. 79, Iacobucci J. said that "[w]hat really matters is not the labels used by the plaintiff, but the true nature of the claim". In other words, courts should look behind the literal terms contained in the pleadings to assess whether the legal claims put forward are supported by the factual allegations. [page317]
[17] In Scalera, at para. 89, Iacobucci J. explained that in the context of an insurance contract's intentional injury exclusion clause, the goal is to determine the gravamen of the complaint, and whether one can infer an intent to injure from that complaint. Where both a negligence and an intentional tort claim arise from the same actions and cause the same harm, the negligence claim is "derivative, and it will be subsumed into the intentional tort for purposes of the exclusion clause analysis": Scalera, at para. 85.
[18] In the present case, although the claim refers to negligence, it is clear from a reading of the statement of claim as a whole that the gravamen of the claim is assault and battery, intentional torts.
[19] This is apparent from a reading of para. 8 of the statement of claim, which provides as follows:
The particulars of the negligence of the Defendants Meadows and Crawford are as follows: (a) they violently and viciously assaulted the Plaintiff; (b) they knowingly and intentionally caused harm to the Plaintiff; (c) they inflicted severe harm to the Plaintiff despite knowing that he did not intend to cause them any harm; (d) they initiated an unprovoked attack against the Plaintiff when he attempted to come to the aid of another student they were harassing; (e) they continued to viciously assault the Plaintiff even after he was rendered unconscious; and (f) they continued to violently assault the Plaintiff even whe[n] they knew or ought to have known that he could not defend himself against said attack.
[20] The insurance policy at issue in the present case does not provide coverage for intentional torts. The coverage portion of the policy states, "[w]e will pay all sums which you become legally liable to pay as compensatory damages because of unintentional bodily injury or property damage" (emphasis removed). This is confirmed by an exclusion clause in the policy that states, "[w]e do not insure claims arising from . . . bodily injury or property damage caused by any intentional or criminal act" (emphasis removed).
[21] The practical result, therefore, is that if the plaintiff in the action succeeds, he will have shown it to be an assault. This is an intentional act and is excluded from coverage. If the plaintiff does not succeed in the action, there is nothing to indemnify and, therefore, no insured claim. [page318]
[22] The respondents argue that a third option exists: David Skidmore's action may succeed in negligence even if the court finds that there has been no assault. This, the respondents argue, would be on the basis that Brent Meadows was acting in self-defence but negligently used excessive force in his self- defence.
[23] In my view, there is no reasonable interpretation of the claim that would result in such a finding. As I have noted above, either Brent Meadows will be found liable for assault and battery or he will, as he alleges in his statement of defence, be found not to be liable on the basis that he was acting in self-defence. In the present appeal, there is no suggestion that Brent Meadows' act -- hitting the appellant -- is anything other than intentional. If a tort is intended, it does not matter that the result is more harmful than the actor should or even could have foreseen: see Scalera, at para. 99.
[24] In reaching his conclusion that there may be a duty to indemnify, the application judge relied on extrinsic evidence. In Monenco, the Supreme Court of Canada expressed that caution should be used when looking beyond the statement of claim in order to determine the "substance" and "true nature" of the claim. While not prohibiting consideration of extrinsic evidence, Justice Iacobucci writing for the court stated, at para. 36, that "[w]ithout wishing to decide the extent to which extrinsic evidence can be considered, I am of the view that extrinsic evidence that has been explicitly referred to within the pleadings may be considered to determine the substance and true nature of the allegations, and thus, to appreciate the nature and scope of an insurer's duty to defend".
[25] Assuming without deciding that we can refer to the extrinsic evidence filed by the respondent, this evidence does no more than set out the respondents' position that Brent Meadows was acting in self-defence and provide context for this allegation. It does not raise the possibility that the claim might somehow succeed in negligence, thereby triggering the duty to indemnify.
[26] As to the respondents' and the application judge's reliance on the cases of Thorne, Hawkes and Glassford, in my view the Thorne decision has no application to the issues raised in the present action. That case involved a commercial general liability policy and not a homeowner's policy. The coverage provisions in that policy were different than the appellant's policy. More importantly, the exclusion from coverage for intentional bodily injury in the policy at issue in Thorne contained an exception whereby the exclusion did not apply to bodily injury resulting [page319] from the use of reasonable force to protect persons or property. It is because the intentional tort exclusion contained an exception for self- defence that the New Brunswick Court of Appeal concluded that, reading the policy as a whole, the coverage envisaged by the policy encompassed the duty to defend where self-defence was raised. Otherwise, the exception to the exclusion would be meaningless.
[27] The homeowner's policy at issue in our proceeding does not contain the exception found in the policy in Thorne. In clear terms, it indicates that it does not cover claims for injury caused by any intentional act. There is, therefore, no basis for concluding that the parties to the agreement intended that the coverage provisions of the policy be interpreted as including a duty to defend where self-defence is at issue. As to the Hawkes and Glassford decisions, to the extent that they are inconsistent with these reasons, I disagree with them.
[28] In conclusion, therefore, I am of the view that on a reasonable reading of the claim it is apparent that it is strictly one for the intentional torts of assault and battery. When the terms of the policy are considered, it is clear that there is no possibility that the obligation to indemnify will be triggered by such a claim and therefore there is no duty to defend.
[29] As a result, I would allow the appeal and set aside the application judge's decision, replacing it with a dismissal of the application. I would award the appellant costs of the appeal fixed at $6,000 and costs of the application fixed at $6,000, both inclusive of GST and disbursements.
Appeal allowed.