ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: CV-08-090207-00
DATE: 20121018
B E T W E E N:
COACHMAN INSURANCE COMPANY Applicant
Michael Best/Vanessa Kee, for the Applicant
- and -
LOMBARD CANADA Respondent
Jamie Trimble, for the Respondent
HEARD : October 5, 2012
RULING
MULLINS J.
[ 1 ] Coachman Insurance Company seeks a declaration that Lombard Canada is obliged to indemnify Colin Adams with respect to claims arising from a motor vehicle accident. The application is brought pursuant to rule 14(3)(a). This rule allows for the determination of rights that depend on the interpretation of a contract. (The formal wording of the relief sought in the Application is a little different and speaks to priority of policies.)
[ 2 ] Colin Adams was sued for personal injuries caused to another in the collision. The collision occurred on Queen Street East in the City of Toronto on September 10, 2002. At the time, Mr. Adams was an employee of Cliffwood Productions. Cliffwood Productions is a subsidiary of Sony Pictures Entertainment. The vehicle he was operating was owned by S & R Car Rentals Toronto (Central) Limited and rented/leased to Clifford Productions.
[ 3 ] S & R was insured with the Applicant, Coachman Insurance Company, under the terms of a standard Ontario automobile policy. Coverage under that policy is excluded for vehicles leased for a period of longer than 30 days.
[ 4 ] Lombard Canada insured Mr. Adams’ employer under the terms of a Commercial General Liability policy. The Lombard policy provided coverage for automobiles leased for a period more than 30 consecutive days.
[ 5 ] The vehicle was in Mr. Adams’ possession for 59 consecutive days. It had been in his possession more than 30 days as of the date of the motor vehicle collision on September 10, 2002.
[ 6 ] The primary issue to be decided in this proceeding is whether the car operated by Mr. Adams on September 10, 2002, had been rented/leased for a period of more than 30 days, in which case coverage arises under the Lombard policy, or whether it was rented for a series of periods under a succession of contracts, all of which were less than 30 days, in which case coverage falls under the Coachman policy.
[ 7 ] The application is supported by an Affidavit sworn by the Regional Vice President of Claims, on behalf of Coachman Insurance Company. In response, Lombard Canada relies upon the Affidavit evidence of Ed Lammi. Mr. Lammi is the Executive Vice President of production at Sony Pictures Entertainment Inc., having first been engaged in the early months of 2002. He works in Culver City, California.
[ 8 ] Mr. Lammi deposes as follows:
To my knowledge, there is no one remaining with Sony or the subsidiary who was involved in this particular project that has any direct knowledge of the rental arrangements in this case.
[ 9 ] Mr. Lammi deposes that as long as he has been with Sony, certain standard practices were followed with respect to rental vehicles. Vehicles rented for film shoots were not rented for more than 30 days under any one contract. This was to ensure that neither Sony nor its’ subsidiary were burdened with a rental obligation longer than necessary and so as to correspond with the insurance arrangements under their CGL policy. In keeping with these practises, new contracts would be arranged for vehicles required, from time to time and lasting cumulatively more than 30 days. Vehicles would not be returned to the rental company until such time as no longer needed.
[ 10 ] A preliminary issue was raised by the Respondent. It contends that Coachman is estopped from seeking a determination of the issue because an earlier application raising exactly the same issue has already been adjudicated. Put another way, the issue is res judicata .
[ 11 ] By application CV-08-090207 heard on July 31, 2008, the same declaration sought here was before the court. The evidence was essentially the same. The only new or further evidence is the Affidavit of Mr. Lammi.
[ 12 ] In argument today, counsel concur that there need not be a trial of any issue in order for this application to be determined. There is no further or better evidence that a trial will yield. Neither seeks to test the evidence of the other by cross-examination. The documents and evidence available here today are all that, practically speaking, will ever be available.
[ 13 ] The justice who heard the earlier version of this application endorsed her decision and gave her reasons as follows:
The motion by Coachman is allowed for the following reasons:
Clearly there was only one rental agreement;
Thereafter there were only invoices;
The dues dates on the invoices clearly refer to payment due and not return of vehicle dates;
The lessee never was given another rental agreement to sign and cannot be taken to have re-rented his vehicle (he kept same vehicle, and licence throughout);
His employer was official renter and was billed directly by leasing company.
This is not on its face an owner rental by Adams b[ut] employer rental. So, I reject the respondent’s alternative argument. Costs fixed at $4,000.00 all in, payable in 30 days.
R. Boyko J.
[ 14 ] The decision of Justice Boyko was appealed. On January 27, 2009, the Court of Appeal
made the following endorsement:
This appeal must be allowed. There was no evidence before the motion judge on which she could make the determinations she was asked to make or purported to make.
In light of the complete absence of evidence, it was a palpable and overriding error to make findings of fact. Furthermore, even if the documents before the motion judge had been properly before her, the conclusory nature of the reasons make them impossible of review. The reasons are wholly inadequate.
Moreover, the reasons themselves are logically inconsistent. For example, the same document is found first to be an agreement and then to be nothing more than an invoice.
In the circumstances it is not possible to decide the question of law on which the parties seek a determination.
[ 15 ] Ironically, though the Court of Appeal ruled that Justice Boyko was wrong for, among other reasons, deciding this matter where there was a “complete absence of evidence”, there is little to no more, or better, evidence upon which both parties now urge this matter be decided.
[ 16 ] For reasons explained by counsel, neither party has tendered any evidence from anyone actually involved in the car rental arrangements. There are but four or five single surviving pages of any documents that related to the arrangements by which the vehicle came to be in the possession of Mr. Adams. These few pages and the Affidavit evidence are the only materials available to the court from which to make findings of fact, draw inferences, and give the interpretation sought.
[ 17 ] The Respondent contends, correctly, that the parties and the issue(s) before the court on the hearing of the first application are the same as here today. Given the ruling of the Court of Appeal, the Respondent argues, the “issue” has been determined and the Applicant should be estopped from proceeding again.
[ 18 ] As best I can appreciate the ruling of the Court of Appeal, though the reasons given are not discernibly less cryptic than those of Justice Boyko, it ruled only that the factual record before my sister justice was not sufficient for her to have decided the issue and that her reasons were inadequate. I do not interpret the endorsement of the Court of Appeal to mean that the substantive issue – that is, which of two insurance policies must respond – was wrongly decided on the merits, only that it ought not to have been decided at all. Only Justice Boyko’s decision to decide was overturned. The Court of Appeal did not substitute its’ reasoning on the merits, because this could not be decided on the record as it was before Justice Boyko and ipso facto before it.
[ 19 ] The outcome of the appeal does not, in my view, give rise to an issue estoppel on the substantive question. If there was an estoppel, the interpretation of the rental contract and a determination of which of two insurance policies must respond would remain unanswered in perpetuity. If the issue was res judicata , there would be an answer to the question already in existence.
[ 20 ] Following the decision of the Court of Appeal, the Applicant might better have revived the earlier application and sought an order for trial of the issue, given that the Court of Appeal did not, and obviously would not, on the record as they saw it, substitute the proper decision on the merits. This is, however, but a procedural matter the costs of which may be addressed to the extent that this has not already occurred. This should not stand in the way of adjudication on the merits of the case.
[ 21 ] The Respondent relies upon the contents of the documents and submits that there are commercial realities to be considered as reflected in the Affidavit evidence of Mr. Lammi.
[ 22 ] In my view, Mr. Lammi’s evidence should be weighed with caution. He had been in his job but several months before the event of the collision in September 2002. As scant as the evidence is, it is clear that the rental arrangements were made in the City of Toronto where the collision occurred and the subsidiary company was operating. There is no background evidence offered to explain how or why, a newly engaged Vice President located at the parent company in California, would have any knowledge of, or experience with, the car rental or insurance arrangements of a subsidiary company carrying on a film shoot in Toronto. Mr. Lammi’s evidence is lacking in substance and detail. Without either, I find it to be of little assistance.
[ 23 ] Given this, I am left with virtually the same evidence that was before Justice Boyko. This evidence is scant. There are several single page extracts of documents relating to the rental arrangements. These appear to be of standard form. It is clear these pages are only parts of multi-page documents. The pages identify S & R Car Rentals Toronto (Central) Limited at 271 Front Street East, Toronto, Ontario (under the Budget Sears Car and Truck Rental logo). Each page has a field titled “rental agreement”. There are four different numbers in the rental agreement fields. The pages name a renter, driver, credit card number, and purchase orders. These are the same on all. The vehicle number, licence number, and vehicle description is the same. Though each page calls for a renter’s signature, none bear such. Each of the pages bears time-out and time-in stamps. In order of date, the first document reports a time-out for the rented vehicle of July 29, 2002, and a time-in of August 8, 2002. Kilometres-out is listed at 20,000, and kilometres-in at 21,000. The second reports a time-out of August 8, 2002, and a time-in of August 29, 2002, with kilometres-out at 21,000 and kilometres-in at 21,900. The third reflects a time-out of August 29, 2002, and a time-in of September 19, 2002. Kilometres-out is listed at 21,900, and kilometres-in at 23,000. The fourth reflects a time-out of September 19, 2002, and a time-in of September 25, 2002, with kilometres-out at 23,000 and kilometres-in at 29,689.
[ 24 ] The documents bear what I consider to be a standard form accounting stamp. The information associated with the accounting stamp reflects one purchase order, namely 1686 and one account number - 164840.
[ 25 ] The Respondent submits that the Applicant has not met the burden of proof upon it. This was to establish that there was one contract of more than 30 days duration. It should be inferred from the fact of there being a series of documents, each with a different number in the field titled “rental agreement”, reflecting different periods and recognising a series of times-in-times-out, that there were four contracts, each of less than 30 days duration.
[ 26 ] Like Justice Boyko, I find that the purpose served by the documents was to record and give effect to billing arrangements for the car rental/lease between Clifford Productions and S&R Car Rentals. I interpret them to document and refer to one contract, of an indeterminate duration, for one and the same driver, and for one and the same vehicle, pursuant to which Mr. Adams was in possession of the rented vehicle on September 10, 2002, when it was involved in a collision.
[ 27 ] I find therefore, that the term of the rental agreement was for more than 30 days as of the date of loss. It is the Lombard policy under which the insuring obligations arise.
[ 28 ] If the parties are unable to agree with the costs disposition that should be made, they may make submissions in writing. Those submissions should not exceed three pages in length and should be exchanged and submitted to the court within 15 days.
A.M. MULLINS J.
Released: October 18, 2012