NEWMARKET

COURT FILE NO.: CV-12-108756-00

DATE: 20140409

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

ALINA DUMITRASCU

Plaintiff

– and –

STATE FARM FIRE AND CASUALTY COMPANY

Defendant

A. Ruzza, for the Plaintiff

B. Vallis, for the Defendant

HEARD: February 18, 2014

HEALEY

[1] The defendant State Farm Fire and Casualty Company (“State Farm”) seeks the following orders:

i. An order compelling the plaintiff Alina Dumitrascu, and her spouse, Emanuel Sodoma, to attend an Examination Under Oath, pursuant to the terms of the plaintiff’s State Farm homeowners policy;

ii. An order requiring the plaintiff to deliver a sworn Proof of Loss;

iii. An order that the within action be stayed pending the attendance of the plaintiff and Mr. Sodoma at an Examination Under Oath, and pending the delivery of a sworn Proof of Loss by the plaintiff;

iv. Costs of the motion.

[2] The request for the plaintiff to submit a sworn Proof of Loss is granted on consent.

[3] The main issue for argument on this motion was whether the plaintiff and Mr. Sodoma should be required to attend for an Examination Under Oath in accordance with the requirements of their homeowners policy. State Farm argues that it will be prejudiced if an Examination Under Oath is not permitted, because at this time they are not in a position to make a decision about denial of coverage, and are therefore not even in a position to put in a defence to the plaintiff’s action.

[4] At the conclusion of argument, I directed that each counsel provide supplementary facta to address the following narrow point of law: what effect, if any, does s. 148 of the Insurance Act, R.S.O. 1990, c.I.8 (the “Act”) have on the relief requested by State Farm, namely, that the policyholders attend for an Examination Under Oath as stipulated by the policy. Counsel for the plaintiff took that as an opportunity to file an affidavit responding to State Farm's motion and supporting affidavit. All evidence to be considered on the motion was to be filed in accordance with the Rules of Civil Procedure prior to the hearing. At the outset of the motion on February 18, 2014, the plaintiff moved for an adjournment in order to file material. For the reasons given by the court on that date, that request was denied and the motion proceeded. In the face of the plaintiff’s failure to initially file material and the dismissal of her request for an adjournment to do so, it is thoroughly inappropriate for an attempt to be made to put this evidence before the court, without first seeking leave. Accordingly, the affidavit submitted by the plaintiff is being disregarded by the Court in its entirety.

[5] The plaintiff made no argument regarding whether Mr. Sodoma was a proper person to attend such examination, should it be ordered. There is further no issue regarding whether this a fire insurance policy, to which part IV of the Insurance Act would apply. The policy is a multi-peril policy, and not a policy of fire insurance. At page 24, under the heading "Conditions", the policy states:

The peril of fire is incidental to the multi-peril coverage offered by this homeowner's policy and it is not intended that this policy be governed by legislation specific to fire insurance.

[6] Counsel for the plaintiff argues that the requirement in the homeowners policy to have the plaintiff attend for an Examination Under Oath is unlawful because the insured has not delivered a sworn Proof of loss, which is a necessary precondition before the insurer can compel the plaintiff to submit to an Examination under Oath. Condition 19 of the policy expressly provides that the right to an examination arises only after submission of the Proof of Loss. While this may be true, this argument holds no merit given that the plaintiff has agreed on consent to deliver a sworn Proof of Loss by April 18, 2004.

[7] Counsel for the plaintiff relies on Foster v. Chubb Insurance Co. of Canada, [1999] O.J. No. 132 (Gen. Div.) for the proposition that an attempt by the insurer to insert additional conditions in a policy beyond the statutory conditions outlined in the Act are not binding on the insured. There are two problems with this argument. First, State Farm has not attempted to incorporate statutory conditions into the policy to make them enforceable as contractual terms; it is clear from the policy itself that its drafters intended that the statutory conditions set out in part IV of the Act should not apply. Second, Foster involved a claim for fire loss, and I agree with the submission of State Farm's counsel that the wording of the judgment in that case suggests that the policy in question was a fire policy. In that regard, it offers no assistance to the plaintiff.

[8] The plaintiff argues that State Farm has attempted to incorporate other statutory conditions in the Act into the homeowner's policy, and therefore s. 148 applies.

[9] The statutory conditions applicable to fire policies are not applicable to multi-peril policies of insurance: KP Pacific Holdings Ltd. v. Guardian Insurance Co. of Canada, 2003 SCC 25, [2003] S.C.J. No. 24. The issue was recently considered in Ontario in Boyce v. Co-operators General Insurance Co., 2012 ONSC 6381, 2012 CarswellOnt 14212 (S.C.J.), varied on other grounds 2013 ONCA 298, [2013] O.J. No. 2568 (C.A.). Justice Quigley noted that the applicability of Part IV of the Act, including the Statutory Conditions, are governed by s. 143 of the Act. Considering the Supreme Court’s ruling in K.P. Pacific, his Honour ruled that the Statutory Conditions did not apply to the multi-peril policy in question, stating at para. 37:

I find that the facts and the law with respect to this case fall squarely within the ambit of KP Pacific Holdings. As the legislation in Ontario uses substantially the same wording as the legislation in British Columbia referred to in KP Pacific Holdings, it appears clear that a multi-peril policy, such as the one issued to the Plaintiffs, cannot be considered fire insurance. The peril of fire is an "incidental peril" to the coverage provided and therefore excluded from the application of Part IV (Fire insurance) of the Insurance Act by virtue of s. 143 (1) (c) of the Insurance Act. As a result of KP Pacific, the case of Garballa v. State Farm General Insurance [2000] O.J. No. 2533 (S.C.J.) has been overruled.

[10] I agree with counsel for State Farm that K.P. Pacific and Boyce are dispositive of the issue at hand. The policy in question is not a policy of fire insurance, and as such Part IV of the Act and the Statutory Conditions there in are of no application. Accordingly, s. 148, which prohibits "variation or omission of or addition to any statutory condition" is of no application.

[11] This court orders that:

(1) The plaintiff Alina Dumitrascu, and her spouse, Emanuel Sodoma, shall attend an Examination Under Oath within 60 days of this order;

(2) On consent, that the plaintiff shall deliver a sworn Proof of Loss by April 18, 2014.

[12] Having reviewed the costs outlines and submissions of both of the parties, and having regard to the factors set out in Rule 57.01(1), this court orders that the plaintiff shall pay costs of this motion on a partial indemnity basis to State Farm fixed in the amount of $3,000 inclusive of fees, disbursements and HST and payable in 30 days.

HEALEY J.

Released: April 9, 2014