Kahlon v. ACE INA Insurance et al.

[Indexed as: Kahlon v. ACE INA Insurance]

Ontario Reports

Court of Appeal for Ontario

Lauwers, Huscroft and Trotter JJ.A.

November 9, 2018

144 O.R. (3d) 141 | 2018 ONCA 906

Case Summary

Insurance — Automobile insurance — Underinsured motorist endorsement — Plaintiff operating truck owned by his company and leased to B Inc. as independent contractor for B Inc. — Plaintiff suffering serious injuries when struck by underinsured driver — Insurer of plaintiff's own personal vehicle appealing decision of motion judge that it was obliged to provide underinsurance coverage to plaintiff — Decision in favour of insurer potentially affecting other drivers of commercial vehicles — Appeal adjourned sine die so that parties could provide court with more evidence about how drivers of commercial vehicles obtain underinsured coverage.

The plaintiff's company owned and leased a tractor to B Inc., and the plaintiff operated it as an independent contractor for B Inc. under fleet insurance provided by ACE. The plaintiff suffered serious injuries when he was struck by an underinsured driver in Florida. He had automobile insurance on his own personal vehicle through Allstate. The motion judge declared that Allstate was obliged to respond to the plaintiff's underinsurance claim. Allstate appealed.

Held, the appeal should be adjourned sine die.

A finding in favour of Allstate could potentially affect other drivers of commercial vehicles and their families. The court had limited evidence before it concerning if and how Ontario-based truck drivers and other drivers of commercial vehicles obtain underinsured coverage. The parties were invited to enlarge the record to provide the court with the information and context necessary to reach a just outcome.

Rules and Regulations Referred To

Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rule 21.01(1)(a)

Parties and Counsel

APPEAL from the judgment of Whitten J. (2018), 141 O.R. (3d) 384, [2018] O.J. No. 438, 2018 ONSC 784 (S.C.J.).

Sheldon A. Gilbert, Q.C., for appellant.

Joseph A. Cescon, for respondent Kulwinder Singh Kahlon.

Patrick J. Monaghan, for respondent ACE INA Insurance.

Decision

[1] BY THE COURT: -- The court expressed several concerns to counsel about the appeal as presented and, after hearing their submissions, decided to adjourn the hearing of the appeal sine die to permit the parties to address the concerns, if so advised.

The Factual Context

[2] Mr. Kahlon's corporation, Kohuja Transport Inc., owned and leased a tractor to Bell City Transport Systems Incorporated. Mr. Kahlon operated it as an independent contractor for Bell City Transport under fleet insurance provided by ACE INA Insurance.

[3] On May 24, 2011, Mr. Kahlon was in Florida operating the tractor with a trailer. He stepped out of the tractor when it was stopped in a lineup to determine the cause of the delay. He was struck by a Florida-based domestic vehicle operated by a member of the MacDonald family. Mr. Kahlon suffered serious injuries, including a traumatic brain injury. The insurance coverage available on the MacDonald vehicle was only $20,000, which was insufficient to cover the damages flowing from Mr. Kahlon's injuries. The motion judge identified this as an obvious situation of "underinsurance".

[4] Mr. Kahlon had automobile insurance on his personal vehicle through Allstate Insurance Company of Canada. Both the Allstate policy and the ACE INA fleet policy had OPCF 44R Family Protection Coverage, which covers underinsurance.

The Decision under Appeal

[5] The motion judge heard three motions under rule 21.01(1)(a) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. The parties effectively sought a determination as to whether either of Allstate or ACE INA were obliged to provide underinsurance coverage to Mr. Kahlon under the OPCF 44R endorsement in the respective policies.

[6] The motion judge granted summary judgment to Mr. Kahlon and declared that Allstate was obliged to respond to his underinsured coverage claim. The motion judge declared that ACE INA was not obliged to respond.

[7] Allstate appealed. Mr. Kahlon cross-appealed seeking coverage under the ACE INA policy.

Discussion

[8] In a nutshell, this appeal involves the availability in Ontario of underinsured coverage to truck drivers like Mr. Kahlon. Allstate's position is that a combination of the provincially prescribed language of its OPCF 44R endorsement and the provincially prescribed insurance policy for automobiles (OAP1), in particular, s. 2.2.3, leads to the inescapable conclusion that truck drivers like Mr. Kahlon do not have underinsured coverage under their personal automobile policies for injuries they sustain as drivers of their trucks.

[9] The argument advanced by Allstate could extend more broadly to drivers of other commercial vehicles and persons related to such drivers. There are likely thousands of people who would be affected by a ruling in favour of Allstate's argument. The implications could be serious for such drivers and their families.

[10] The parties are entitled to have their appeal decided; at the same time, however, courts are obliged to understand and take into account the context within which contractual interpretation will operate. The court has limited evidence before it about how Ontario-based truck drivers and other drivers of commercial vehicles obtain underinsured coverage, if in fact they do, and whether the interpretation urged by Allstate would have a surprising impact on Ontario insureds.

Disposition

[11] Accordingly, the panel decided to give the parties the opportunity to enlarge the record, perhaps with expert evidence, in order to provide the court with the information and context necessary to reach a just outcome in this case. The appeal was adjourned sine die. If the parties prefer the court to appoint amicus, they should advise the court. Otherwise the court requests the parties to develop a plan for responding to the court's concerns including timelines.

[12] This panel is seized, and the progress of the case towards the next hearing date will be case-managed by Lauwers J.A. The first case-management conference call will be arranged by court staff for early December 2018.

Appeal adjourned.

End of Document