Zefferino v. Meloche Monnex Insurance Company
[Indexed as: Zefferino v. Meloche Monnex Insurance Co.]
Ontario Reports
Court of Appeal for Ontario,
Rosenberg, MacPherson and LaForme JJ.A.
March 1, 2013
114 O.R. (3d) 535 | 2013 ONCA 127
Case Summary
Insurance — Brokers — Negligence — Trial judge finding that defendant owed duty of care to plaintiff and breached applicable standard of care by failing to properly offer optional income replacement benefit — Trial judge dismissing plaintiff's negligence action on basis that he had not shown necessary causal connection between breach and his loss — Plaintiff's appeal dismissed — Fact that claim arose out of alleged negligence by insurance broker not relieving plaintiff of requirement to [page536] prove that breach caused loss — Trial judge not erring in finding that plaintiff would not have purchased additional insurance had it been offered.
The plaintiff sued the defendant in negligence, alleging that it failed to offer optional income replacement benefits and that he suffered a loss as a result. The trial judge dismissed the action. He accepted that the defendant owed the plaintiff a duty of care and breached the applicable standard of care by failing to properly offer optional income replacement benefits. However, he found that the plaintiff failed to show on a balance of probabilities the necessary causal connection between the breach and his loss. The plaintiff appealed, arguing that on a claim arising out of insurance broker negligence, the plaintiff need not prove that the acts or omissions of the insurer caused the loss.
Held, the appeal should be dismissed.
The insurance broker context of the claim did not relieve the plaintiff of the requirement to prove that the defendant's breach caused his loss. The trial judge did not err in finding that the plaintiff would not have purchased additional insurance had it been offered.
Cases referred to
Fletcher v. Manitoba Public Insurance Co., 1990 CanLII 59 (SCC), [1990] 3 S.C.R. 191, [1990] S.C.J. No. 121, 74 D.L.R. (4th) 636, 116 N.R. 1, J.E. 90-1652, 71 Man. R. (2d) 81, 44 O.A.C. 81, 1 C.C.L.I. (2d) 1, 5 C.C.L.T. (2d) 1, [1990] I.L.R. Â1-2672 at 10547, 30 M.V.R. (2d) 260, 23 A.C.W.S. (3d) 1248, EYB 1990-67585, consd
APPEAL from the judgment of Reid J., [2012] O.J. No. 57, 2012 ONSC 154 (S.C.J.) dismissing a negligence action.
Jane L. Poproski and Andrew L. Rudder, for appellant.
R. Donald Rollo, David Visschedyk and Stuart M. Ghan, for respondent.
Endorsement
[1] Endorsement BY THE COURT: -- The appellant commenced an action against the respondent relating to an insurance contract between the parties. The appellant alleged that the respondent failed to offer optional income replacement benefits and claimed a loss of income replacement benefits the appellant says should have been available.
[2] The appellant brought a summary judgment motion; the respondent agreed to this route for disposing of the action.
[3] In a judgment dated January 9, 2012, Reid J. dismissed the appellant's action. He accepted the appellant's submissions that the respondent owed him a duty of care and breached the applicable standard of care by failing to properly offer optional income replacement benefits. However, he held against the appellant, saying [at para. 42] that "he fails in the third issue necessary to establish a successful claim in negligence in that he has not shown on a balance of probabilities the necessary causal connection between the defendant's breach of duty and his loss". [page537]
[4] The appellant appeals on the causation issue. The respondent cross-appeals on the standard of care issue.
[5] The appellant submits that on a claim arising out of insurance broker negligence, the plaintiff need not prove that the acts or omissions of the insurer caused the loss. In her very helpful submissions, Ms. Poproski argues that the insured need only show that the insurer had a duty to inform the insured, that it breached its duty of care and that there was a gap in coverage. The appellant submits that this exception from the normal rule that a plaintiff must prove causation can be justified by the fact that insurance contracts are different from normal contracts and that to do otherwise would place an impossible burden on the insured. The appellant relies upon the following passage from the leading case of Fletcher v. Manitoba Public Insurance Co., 1990 CanLII 59 (SCC), [1990] 3 S.C.R. 191, [1990] S.C.J. No. 121, at pp. 226-27 S.C.R.:
The respondent submits that even if it had provided more information in its flyer, Mr. Fletcher would not have purchased UMC since he failed to read the flyer. Therefore, MPIC argues that it should not be held liable for the appellants' loss since its acts or omissions did not cause that loss. Mr. Fletcher was the author of his own misfortune.
This argument is without merit. The finding that MPIC did not discharge its duty to inform the appellants does not hinge solely on the adequacy or inadequacy of the flyer. Rather, it rests on the combined effect of MPIC's initial omission to tell Mr. Fletcher about UMC when he first bought his coverage, the misleading renewal form and flyer, and MPIC's failure to mention UMC when he paid for his renewal in person. Faced with this combination of acts and omissions by the respondent, the appellants cannot be viewed as the authors of their own misfortune.
[6] We cannot agree with this submission. First, the immediately following paragraph from Fletcher indicates that the insured in that case was entitled to succeed because he had proved that the insurer's negligence resulted in damages [at p. 227 S.C.R.]:
The trial judge found that Mr. Fletcher would have purchased UMC had he been told of its availability. Had MPIC not breached its duty, the Fletchers would have been covered against loss caused by an underinsured motorist up to a limit of $2,000,000. The shortfall between the underinsured motorist's insurance and the appellants' loss was $887,090. I therefore find that the respondent's breach of duty caused the appellants' loss and hold it liable for damages in the amount of the shortfall.
(Emphasis added)
[7] Second, earlier in her reasons for judgment in Fletcher, Wilson J. makes clear that whether the negligence caused a loss is a question of fact. There is no suggestion that because of the insurance broker context the plaintiff is relieved of the normal [page538] burden of proof. See, for example, the following excerpts from pp. 205-206 S.C.R.:
These authorities, in my view, make crystal clear the test for determining when it is appropriate for an appellate court to depart from a trial judge's findings of fact: appellate courts should only interfere where the trial judge has made a "palpable and overriding error which affected his assessment of the facts." The very structure of our judicial system requires this deference to the trier of fact. Substantial resources are allocated to the process of adducing evidence at first instance and we entrust the crucial task of sorting through and weighing that evidence to the person best placed to accomplish it. As this Court and the House of Lords have repeatedly emphasized, it is the trial judge who is in the best position to assess the credibility of testimony. An appellate court should not depart from the trial judge's conclusions concerning the evidence "merely on the result of their own comparisons and criticisms of the witnesses": see Lord Sumner in The S.S. Hontestroom, supra, at p. 47.
In the appeal now before us Finlayson J.A. departed from the trial judge's findings of fact on at least two counts. He did not accept McKeown J.'s finding that Mr. Fletcher had relied on the respondent's employees for information and advice. Nor did he accept McKeown J.'s finding that had Fletcher been offered UMC, he would have purchased it. Yet at no point did Finlayson J.A. apply the test that this Court set out in "Kathy K", supra, and Lewis v. Todd and McClure, supra. No attempt was made to spell out whether and in what respects the trial judge's findings of fact constituted "palpable and overriding errors". Instead, Finlayson J.A. explained his decision to depart from the trial judge's findings of fact by observing that the trial judge had "stretched the evidence in favour of Fletcher". He refused to give much credence to the testimony of Fletcher, calling it "self-serving" and "entirely subjective", and concluded by observing that he did not propose to give much weight to the trial judge's findings of fact.
With respect, I do not think that it was open to the Court of Appeal to depart from the trial judge's findings of fact absent evidence of a palpable and overriding error. An appellate court should not substitute its views about the facts for those of the trial judge without carefully applying the strict test which has been developed over the years by the highest courts in England and Canada. Absent some manifest and palpable error, the trial judge's assessment of the witnesses' credibility must be allowed to stand.
Mr. Fletcher also testified that if he had been advised about the availability of UMC, he would have purchased it for additional safety. McKeown J. commented, at p. 632, that "This is credible since the cost was only $15. He had always followed his insurance broker's advice in Ontario, and [his former insurance broker] said that he was an insurance conscious person." In summarizing his findings McKeown J. said: "I find that if John Fletcher had been offered underinsured motorist coverage he would have purchased the coverage."
McKeown J.'s findings of fact must stand. There is no reason to believe that he made a "palpable and overriding error". He concluded, as he was entitled to do, that Mr. Fletcher was an extremely credible witness. On that basis he [page539] found that Mr. Fletcher relied on the respondent's employees for information and advice and that he would have purchased UMC had it been offered. These findings are entirely reasonable and it is no more open to this Court than it was to the Court of Appeal to depart from them.
(Emphasis added)
[8] Thus, the Supreme Court treated it as a question of fact whether the insured would have purchased the additional insurance, if there had not been a breach of the duty of care. In Fletcher, the trial judge's finding of fact that the insured would have purchased the additional insurance stood, absent a palpable and overriding error.
[9] In this case, the trial judge came to the opposite conclusion. He found as a fact, after assessing the evidence in a procedure agreed to by the appellant, that the appellant would not have purchased the additional insurance. We have not been persuaded that the trial judge made any palpable and overriding error in making this finding of fact.
[10] In our view, the trial judge carefully reviewed the relevant facts and reached a conclusion that was open to him. He noted that the appellant had never before purchased anything other than basic automobile insurance coverage and that according to the insurer's records, the appellant's wife indicated that optional coverage was declined because there was no need. He also drew, permissibly in our view, an adverse inference against the appellant because his wife, who dealt with the respondent's representatives, provided no evidence about her dealings with those respondents.
[11] Finally, we do not agree that requiring proof of the elements of the tort would put an impossible burden on the insured. Each case will turn on its own facts. In Fletcher, the insured adduced a body of evidence that led the trial judge to find that he would have purchased the insurance had it been offered. The difficulty in this case is that there was nothing but the bald and self-serving assertion in the appellant's affidavit. There was nothing in the record to explain why the appellant would have taken the additional insurance. Against the bald assertion was the appellant's history of never taking the additional coverage although he and his wife had dealt with at least five different insurance companies over the years. And, as we have said, there was the significant gap in the appellant's case because of his failure to call his wife, who had dealt with the respondent's representatives on all but one occasion.
[12] The appeal is dismissed. It follows that it is not necessary to consider the cross-appeal. There will be no costs of the cross-appeal. [page540]
[13] The respondent is entitled to its costs of the appeal fixed at $5,000, inclusive of disbursements and HST.
Appeal dismissed.
End of Document