Ramon V. Andal

The plaintiffs moved for summary judgment against the defendant insurance company seeking payment of a remnant judgment balance of $353,520.92 under a Mortgage Brokers Errors and Omissions Liability Policy.

The plaintiffs had obtained a default judgment against a mortgage broker and related parties for misappropriating trust funds.

The court determined that while the policy contained a fraud endorsement, it was limited to coverage for failure to advance or secure mortgage funds.

Since the liability arose from failure to repay trust funds held in trust rather than from failure to advance mortgage funds, the fraud endorsement did not apply.

The general policy exclusions for intentional, dishonest, and fraudulent acts therefore removed all coverage, and the action was dismissed.

Capital Sewer Servicing Inc. appealed a Superior Court decision that found it liable to indemnify and defend Crosslinx Transit Solutions Constructors under a subcontract.

The dispute arose from property damage claims by third parties during a light rail transit project.

Capital argued that Crosslinx, by undertaking to provide wrap-up insurance, had assumed the risk of such damages, and that the "hold harmless" clause did not include a duty to defend.

The Court of Appeal dismissed the appeal, affirming that a covenant to insure does not, as a matter of law, automatically transfer risk.

The court emphasized that contractual intent is derived from a holistic reading of the agreement, and found the subcontract's express indemnity provisions, coupled with the mutual intent clause, clearly imposed the obligation on Capital.

The "hold harmless" provision was also found to include a duty to defend, given the broad definition of "Claims" in the contract.

This application concerned a dispute over contractual indemnity and duty to defend obligations between a general contractor (Crosslinx) and its subcontractor (Capital Sewer Servicing Inc.) following property damage claims related to a construction project.

Capital argued that a "Wrap Up" insurance policy, under which it was a Named Insured, negated its indemnity obligations.

The court rejected Capital's argument, emphasizing that specific indemnity provisions in the subcontract took precedence over general insurance clauses, and that the requirement for Capital to obtain its own liability insurance implied an assumption of risk for its negligence.

The court granted Crosslinx's application, confirming Capital's duty to indemnify and defend, and dismissed Capital's cross-application.

The Town of Lincoln sought a declaration that AIG Insurance Company of Canada had a duty to defend it under a public entity general insurance policy.

The Town was a defendant in a negligence action alleging sewage overflow due to a ruptured pipe, disrepair of a storm sewer, and improper land grading.

AIG denied coverage based on a pollution exclusion clause.

The court found that the claim against the Town had two branches: one related to the pumping station and sewage flood (potentially subject to exclusion), and another related to the storm sewers and land grading (not subject to the exclusion).

As the second branch was not derivative and concerned a different wrongdoing, the pollution exclusion did not apply to it.

Therefore, the insurer had a duty to defend.

The defendant Sovereign General Insurance Company brought a motion under Rule 21.01(1)(b) to strike out the plaintiffs' claim and Bank of Montreal's cross-claim, arguing no reasonable cause of action.

Sovereign contended that the claim for recovery of an unpaid judgment against a mortgage broker's errors and omissions policy was not covered by s. 132(1) of the Insurance Act due to pure economic loss, and was outside the policy's scope or excluded.

The court accepted that s. 132 did not apply to pure economic loss but found it was not "plain and obvious" that the claim lacked a reasonable cause of action under the policy itself, particularly regarding whether the underlying agreement constituted "professional services" of a mortgage broker.

The motion to strike was dismissed.

The applicant, Freyssinet Canada Limitée, brought a Rule 21 motion to determine a question of law regarding whether Parkway Infrastructure Constructors (PIC) is precluded from recovering damages claimed in its counterclaim, which are also claimed against Builder's Risk insurers.

Freyssinet argued that a covenant to insure in the Project Agreement, and potentially an implied term in the Subcontract, allocated risk away from it.

The court dismissed the motion, finding that material facts were in dispute, the enforceability and interpretation of the Subcontract were contested, and a full factual record was necessary for proper adjudication.

The court also found no legal bar to PIC's counterclaim, noting that PIC was not acting as an insurer bringing a subrogated claim against its own insured.

Following a trial involving competing defences, the court addressed costs where each side experienced partial success.

The defendants succeeded on a late‑amended secondary defence but failed on their primary defence alleging deliberate misrepresentation by the plaintiff.

Most pre‑trial costs related to the unsuccessful fraud allegation, while only a small portion of the trial addressed the successful defence.

Applying Rule 57.01(2) of the Rules of Civil Procedure and considering the timing of the amendment and the nature of the allegations, the court ordered that the plaintiff recover costs incurred prior to the amendment while each party bear its own trial costs.

The applicant, the Ontario Society for the Prevention of Cruelty to Animals, sought a declaration that its insurer owed a duty to defend it in three separate lawsuits alleging malicious prosecution, false arrest, and defamation arising from animal cruelty investigations.

The insurer denied coverage, relying on policy exclusions for intentional acts, willful violation of penal statutes, and the fortuity principle.

The Superior Court of Justice found that the underlying claims were covered by the policy, the exclusions did not apply (except for one property damage claim), and the fortuity principle did not preclude coverage because the resulting harm was not intended.

The insurer was ordered to defend the actions.

The plaintiff sought payment under a critical illness insurance policy after being diagnosed with thyroid cancer.

The insurer rescinded the policy alleging the insured failed to disclose sleep apnea during the application process.

The court held the insurer was not entitled to rescind the contract because the application questions were ambiguous and the insured reasonably did not understand sleep apnea to fall within the categories asked.

However, the insurer successfully relied on a contractual 90‑day exclusion clause because signs leading to the cancer diagnosis began before the 91st day after the policy came into effect.

As a result, coverage was excluded despite the insurer’s failed rescission argument.

The applicant sought a declaration requiring its insurer to pay legal defence costs in a wrongful dismissal action brought by a former employee.

The insurance policy excluded indemnity for wrongful termination damages but contained an endorsement providing up to $100,000 in legal defence costs for claims including wrongful termination, subject to a deductible.

The insurer refused coverage, arguing the claim involved intentional conduct and was excluded by policy terms and the fortuity principle.

The court held that the pleadings contained at least a possibility that the claim fell within coverage and therefore triggered the insurer’s duty to defend.

The insurer was ordered to pay the applicant’s defence costs relating to the wrongful dismissal claim, subject to the deductible and policy limits.