Rochon et al. v. Rochon

[Indexed as: Rochon v. Rochon]

Ontario Reports

Ontario Superior Court of Justice,

MacLeod-Beliveau J.

April 11, 2014

119 O.R. (3d) 747 | 2014 ONSC 2337

Case Summary

Insurance — Subrogation — Defendant unnamed insured on plaintiffs' residential insurance policy — Defendant's negligence in working on car in plaintiffs' garage resulting in fire which caused extensive damage to property — Plaintiffs' subrogated action against defendant dismissed — Plaintiffs' insurer not permitted to sue its own insured for losses paid out under policy.

The plaintiffs were insured by Grenville under a residential insurance policy. The defendant, the plaintiffs' son, was an unnamed insured on the policy. While the defendant was working on his car in the plaintiffs' garage, a fire started and caused extensive damage to the property. Grenville paid out the property damage loss to the plaintiffs and brought a subrogated action seeking to recover that amount from the defendant's automobile insurer, Economical. The plaintiffs also sought to recover their uninsured loss.

Held, the action should be allowed in part.

The plaintiffs had established that the defendant was negligent and that the defendant's negligence caused the fire and resulting damage. The defendant had connected his vehicle's battery to a battery charger with jumper cables to provide a source of power. The fire was started by electrical arching caused by a poor connection on the battery post. The defendant did not take reasonable care to ensure that his battery connections were secure.

Grenville could not subrogate its claim against Economical as the defendant fell within the definition of "you" and "your" as an insured on the multi-peril section of the policy that paid out the loss. An insurer cannot sue any of its insured for losses paid out under the same policy, no matter how negligent the insured was in causing the loss.

The plaintiffs were entitled to judgment for their uninsured loss.

Scott v. Wawanesa Mutual Insurance Co., 1989 105 (SCC), [1989] 1 S.C.R. 1445, [1989] S.C.J. No. 55, 59 D.L.R. (4th) 660, 94 N.R. 261, [1989] 4 W.W.R. 728, J.E. 89-916, 37 B.C.L.R. (2d) 273, [1989] R.R.A. 722, 9 C.C.L.I. (2d) 268, [1989] I.L.R. Â1-2462 at 9524, EYB 1989-66984, 15 A.C.W.S. (3d) 400, apld

Morawietz v. Morawietz, 1986 7783 (ON SC), [1986] O.J. No. 582, 18 C.C.L.I. 108, [1986] I.L.R. Â1-2082 at 8023, 38 A.C.W.S. (2d) 148 (C.A.), revg 1984 6000 (ON SC), [1984] O.J. No. 243, 5 C.C.L.I. 11, [1984] I.L.R. Â1-1749 at 6745, 24 A.C.W.S. (2d) 46 (H.C.J.), distd

Rankin v. North Waterloo Farmers Mutual Insurance Co. (1979), 1979 1827 (ON CA), 25 O.R. (2d) 102, [1979] O.J. No. 4275, 100 D.L.R. (3d) 564, [1979] I.L.R. Â1-1131 at 337, [1979] 2 A.C.W.S. 509 (C.A.), consd

Other cases referred to

Erison v. Higgins (1974), 1974 518 (ON CA), 4 O.R. (2d) 631, [1974] O.J. No. 2003, 48 D.L.R. (3d) 687 (C.A.); Fontaine v. British Columbia (Official Administrator), 1998 814 (SCC), [1998] 1 S.C.R. 424, [1997] S.C.J. No. 100, 156 D.L.R. (4th) 577, 223 N.R. 161, [1998] 7 W.W.R. 25, J.E. 98-715, 103 B.C.A.C. 118, 46 B.C.L.R. (3d) 1, 41 C.C.L.T. (2d) 36, 34 M.V.R. (3d) 165, 78 A.C.W.S. (3d) 203; [page748] Grey & Bruce Mutual Insurance Co. v. MacKinnon Plumbing & Heating, [2009] O.J. No. 5448, [2010] I.L.R. I-4940 (S.C.J.); Imperial Oil Ltd. v. Commonwealth Construction Co., 1976 138 (SCC), [1978] 1 S.C.R. 317, [1976] S.C.J. No. 115, 69 D.L.R. (3d) 558, 12 N.R. 113, [1976] 6 W.W.R. 219, 1 A.R. 161, [1976] I.L.R. Â1-804 at 331; Interlake Tissue Mills Co. v. Salmon, 1948 74 (ON CA), [1948] O.R. 950, [1948] O.J. No. 511, [1949] 1 D.L.R. 207 (C.A.); Lacombe v. Don Phillips Heating Ltd., 2005 33036 (ON SC), [2005] O.J. No. 3936, [2005] O.T.C. 800, 30 C.C.L.I. (4th) 257, 142 A.C.W.S. (3d) 504 (S.C.J.); Murphy (Guardian ad litem) v. Beaton, 1992 4595 (NS SC), [1992] N.S.J. No. 251, 114 N.S.R. (2d) 187, 14 C.C.L.I. (2d) 184, [1992] I.L.R. Â1-2870 at 1985, 34 A.C.W.S. (3d) 133 (S.C. (T.D.)); Ryan v. Victoria (City), 1999 706 (SCC), [1999] 1 S.C.R. 201, [1999] S.C.J. No. 7, 168 D.L.R. (4th) 513, 234 N.R. 201, [1999] 6 W.W.R. 61, J.E. 99-357, 117 B.C.A.C. 103, 59 B.C.L.R. (3d) 81, 44 C.C.L.T. (2d) 1, 50 M.P.L.R. (2d) 1, 40 M.V.R. (3d) 1; Sooter Studios Ltd. v. 74963 Manitoba Ltd. (c.o.b. Sooter Bridal Salon), [2005] M.J. No. 194, 2005 MBQB 114, [2006] 5 W.W.R. 497, 196 Man. R. (2d) 222, 32 R.P.R. (4th) 316, 139 A.C.W.S. (3d) 1086

ACTION to recover the amounts paid out under an insurance policy and to recover the uninsured loss.

R. Steven Baldwin, for plaintiffs.

Bruce Nelson, for defendant.

MACLEOD-BELIVEAU J.: —

The Issues

[1] This case is a dispute between the residential home owner's insurance company of the plaintiffs and the automobile insurance company of the defendant after a fire loss. Grenville Mutual Insurance Company ("Grenville") issued a residential insurance policy to the named plaintiffs, Paulette Rochon and Marcel Rochon, in return for a premium. Grenville contracted to indemnify the plaintiffs in the event of loss or damage to their property and certain detached private structures, including the garage. The named defendant, Francois Rochon, is their son who resided in the home with them.

[2] The defendant owned a 2009 Chevrolet Cobalt motor vehicle. Economical Insurance ("Economical") issued an Ontario Automobile Policy of insurance to the defendant in accordance with the statutory requirements in return for a premium. On March 28, 2010, the defendant drove his vehicle into the detached garage on the plaintiffs' property in order to install new auxiliary lights underneath the headlights on the front of his vehicle. He connected the vehicle's battery to a battery charger with jumper cables to provide a source of power and turned the car engine off. He worked on the repairs and left the garage. While he was away, the vehicle caught on fire. The fire spread to the structure of the garage, causing significant property damage. [page749]

[3] Grenville paid out the property damage loss to the plaintiffs in the amount of $148,581.65. Approximately $50,000 of this amount was for damage to the structure of the garage itself, $52,000 was for damage to the contents of the garage, and the balance was paid to various contractors for repairs. Grenville seeks to recover from Economical in this subrogated claim, the sum of $148,581.65 as it alleges that the fire was as a result of the defendant's negligent use and operation of a motor vehicle. In addition, the plaintiffs seek judgment for their uninsured loss of $8,000 for a total judgment claimed by the plaintiffs as against the defendant of $156,581.65.

[4] The issues for the court to determine are:

(1) Have the plaintiffs established that the defendant was negligent and that the defendant's negligence caused the fire and damage?

(2) If negligence is established, are the plaintiffs (Grenville) entitled to subrogate their claim against the defendant (Economical)?

Position of the Plaintiffs

[5] The plaintiffs seek judgment against the defendant for $156,581.65. The plaintiffs' position is, firstly, that the cause and origin of the fire have been proven on the balance of probabilities and that it has been established that the defendant's negligence caused the fire and subsequent damages. Secondly, having proven the defendant's negligence, the plaintiffs' position is that the defendant is an "at fault" insured person within the group of insured persons on the policy. As such, the plaintiffs, as "innocent insured" persons on the policy, can sue the defendant for their subrogated damages as the fire loss in this case was as a result of the defendant's negligent use and operation of a motor vehicle. The plaintiffs' insurer Grenville is therefore entitled to judgment against the defendant's insurer Economical for $148,581.65, being the sum paid out to the plaintiffs for their property loss. The named plaintiffs are further entitled to judgment against the named defendant for $8,000 for their uninsured loss for a total judgment in favour of the plaintiffs of $156,581.65.

Position of the Defendant

[6] The defendant's position is that the action should be dismissed for two reasons. Firstly, the evidence does not support a finding of negligence by the defendant on a balance of probabilities, and the plaintiffs cannot recover their damages for any fire that accidently begins. Secondly, the defendant is an unnamed [page750] insured on the plaintiffs' home owner's insurance policy and therefore the plaintiffs have no right of subrogation in law as against the defendant. Where multiple individuals fall within the same definition of "insured persons" on a policy which has insured a loss, one insured cannot then sue another insured for that loss. As the definition of "insured persons" on this policy, as it is captured in the terms of "you" and "your" as they are used and defined within the policy, includes the defendant son who lived with his plaintiff parents, they are all insured persons under the same policy of insurance, being the policy that insured the loss. Consequently, the basic principle that you cannot sue yourself applies, and the action should be dismissed.

Background

[7] The plaintiffs are the former owners of a residential property situated in Embrun, Ontario. The property included a house and a sizable detached garage or workshop. The garage, at the time of the fire, was used for personal purposes only. The defendant, born April 20, 1988, was 21 years old in March of 2010, and lived with his parents on the property. He worked full-time in Ottawa as a technician-mechanic at an equipment and hydraulic shop.

[8] In October of 2008, the defendant purchased a brand new 2009 Chevrolet Cobalt. The garage on the property was more like a workshop and would accommodate three or four vehicles. It was stocked with car hoists, tools and miscellaneous equipment. The garage was used in the past for painting heavy equipment and machinery like backhoes and excavators. After the business closed, the garage was used by the defendant to do personal general maintenance work, including maintenance work on his vehicles.

[9] In the late evening of March 28, 2010, the defendant worked on his vehicle in the garage. He wanted to install auxiliary light strips, which he had just purchased, on the front of the vehicle underneath the headlights. In order to do that, he needed to direct power to the headlights to be able to check his wire and electrical connections. The defendant used the car battery as his source of power and he hooked it up to a battery charger. Using the car battery allowed him to work on the vehicle without the engine running. Using the battery charger ensured that the vehicle battery itself would not be drained while he worked on the vehicle. The battery in a 2009 Chevrolet Cobalt is located in the trunk.

[10] The car battery was the original battery that came with the vehicle; it was brand new. The battery had not been replaced [page751] or repaired. The defendant did, however, notice a glitch or problem with the battery or the alternator; he was not sure which one. In the past, when he had turned on the vehicle, he would sometimes hear a "click" sound and the battery would be almost fully discharged, preventing him from starting his vehicle. The defendant travelled with two portable battery chargers in his trunk to ensure that he could charge up or boost the battery, start the vehicle and get to work. He did not take the car in to get the problem repaired.

[11] When he began his work that night, the defendant opened the trunk and pulled up the flooring in the trunk to expose the battery. He used a pipe to prop open the floor covering over the battery. There was a large variable volt battery charger in the garage that sat on a dolly. It was plugged into the wall and the cord hung down from above. The defendant set the correct voltage to charge a 12-volt car battery. He then attached the jumper cables to the positive and negative battery posts on the battery with the correct clamps. He turned the battery charger on, and then he turned the vehicle lights on. He started his work at the front of the vehicle for about five minutes, and then he checked the connections again on the battery charger in the trunk. Everything looked fine. The defendant continued to work at the front of his vehicle for about an hour.

[12] By that time, the battery in the defendant's cellphone/ MP3 player had died. The charger was in the house. The defendant walked by the rear of the car and glanced in at the battery and the connections. Everything looked fine. He had no concerns about leaving with the charger on. He closed the garage doors from the outside so people could not see in from the road. He walked back to the house to get his charger, which was about a two minute walk from the garage. He picked up the charger in the house, used the bathroom and got a Pepsi, all of which took about 30 to 45 minutes.

[13] When he started to walk back to the garage, the defendant noticed the fire. He saw flames, as well as smoke coming out from the top of the door. He started running and yelling and lost his phone, the charger and his Pepsi. He opened the doors and saw flames mainly in the trunk of his car, which quickly spread to the rest of the vehicle. Eventually, the fire spread to the structure of the garage, causing extensive property damage.

[14] Mr. Richard Lamoureux, a professional engineer with DFA Engineering Services Inc., was hired by Grenville to investigate the fire. He was qualified by the court to give expert opinion evidence as to the origin and cause of motor vehicle fires, including motor vehicle fires which are electrical in origin, which [page752] is one of the areas of his expertise. He determined that the origin of the fire was in the trunk of the vehicle at the positive battery post and that the cause of the fire was electrical arching due to a poor or loose connection between the battery charger and the positive battery post.

[15] He attended at the property on March 31, 2010, three days after the fire. The defendant's vehicle was outside in front of the garage, which was locked. There was no one home. He spoke to the defendant by phone and made some notes. Mr. Lamoureux's recollection of their conversation was that the defendant told him that, in the past few weeks before the fire, he had to routinely charge his car battery as it was drained. On the evening of the fire, he had used the garage charger. He told Mr. Lamoureux that he had set the charger, had plugged it into the wall and had tripped on a cord. He had left the car for a short while and, when he had come back, the car was engulfed in flames.

[16] The defendant denies that he had told Mr. Lamoureux that he had tripped over a cord when leaving the garage that night. The defendant testified that Mr. Lamoureux had asked him a broad, general question about what kinds of things could possibly have started the fire. The defendant had answered with a number of possibilities, only one of which was tripping on a cord. He had said it could have been a problem with the charger, a loose wire or connection, tripping on a cord as there were a lot of them around, or a loose connection. At his examination for discovery, he said he could have tripped over a cord, but not that he remembered having done so. At trial, he testified in chief that he had not tripped over any cord. In cross-examination, he agreed that it was possible that he had tripped on a cord.

[17] Mr. Lamoureux determined that the fire started in the trunk and then spread to the passenger compartment of the vehicle. The vehicle's fuel system and dashboard were relatively intact. There was little fire damage underneath the vehicle. The most damaged area in the trunk was around the battery. He found that the positive jumper cable had completely melted and had become part of the battery. The metal bottom lip of the trunk had substantial arching damage. He pulled off a section of the jumper cable and its interior copper wire was very embrittled. This indicated to him that the jumper cable had received more heat than it would have in a fire, which, in turn, suggested that it was involved as part of an electrical short- circuit.

[18] His opinion was that the electrical arching was caused by a poor connection between the battery charger and the clamp on the positive battery post. This would cause resistance heating of [page753] the insulation around the jumper cable wire and clamp and the plastics on the battery itself, which can ignite. If the electrical cable's insulation chars, and touches metal on the vehicle, it can cause short-circuiting, electrical arching and fire.

[19] The electrical current on a vehicle is a direct current, and when arching occurs, it can short out the charger, but electricity continues to flow to the vehicle. The trunk area of this vehicle had a loonie-sized hole in the metal lip of the trunk, which indicated to Mr. Lamoureux that a significant amount of electrical arching had, in fact, occurred. He was unable to examine the charger itself, as the garage was locked. He never asked for access to the garage, either then or at later date.

[20] He testified that it was very important to have a good connection to the battery terminal. It is important to make sure that the clamps are secured onto the terminal with a tight fit, and to visually examine the connection in order to ensure both a secure connection, and that there is no smoking or sparking.

[21] Mr. Lamoureux's opinion was that the clamp connection could have been loose to begin with or, that if the defendant had tripped on a cord, he could have loosened the connection. The defendant could have done a visual check of the connection, particularly before leaving the vehicle. It is considered to be safe practice to get a good connection, and to make sure that the terminals are clean and in good condition. Mr. Lamoureux noted that the charger was plugged into an outlet above a shelf or mezzanine, and that the defendant had to reach up for it.

[22] In cross-examination, Mr. Lamoureux agreed that he did not examine the charger and that some of the jumper cables were never recovered. He was unable to say if the cable that was recovered was the positive or the negative cable, but he testified that it was irrefutable that the part of the cable that was recovered had definite signs of being short-circuited because of its embrittled wire.

Agreed Facts

[23] Certain undisputed facts in this case have been admitted by the parties. The quantum of damages of $148,581.65 for the insured loss is admitted. The quantum of damages of $8,000 for the uninsured loss is admitted. The quantum of total damages of $156,581.65 is admitted.

[24] It is admitted that the defendant is an unnamed insured on the plaintiffs' residential insurance policy with Grenville and that he is subject to the term and conditions of the policy. It is admitted that the work done by the defendant on the vehicle and [page754] the subsequent fire are within the definition of being related to the "use and operation of a motor vehicle".

[25] It is admitted that the defendant has valid liability insurance coverage with Economical of $156,581.65, and that, if the defendant's negligence is established, Economical will indemnify the plaintiffs in that amount, subject to the court's decision on the subrogation issue in this case. It is admitted that the subrogated amount is $148,581.65. It is admitted that the balance of damages of $8,000 is a direct claim of the plaintiffs against the defendant and Economical.

Relavant Terms of the (Grenville) Homeowner's Policy and the (Economical) Automobile Policy

[26] The plaintiffs' homeowner's policy consists of two parts: the declaration page and the policy itself. The declaration page provides that Marcel Rochon and Paulette Rochon are the named insured on the policy. The declaration page specifically provides that the insurance covers certain detached private structures that include the garage.

[27] The Grenville policy has five sections:

(1) Section 1 -- Property Coverages;

(2) Section 2 -- Liability Coverage;

(3) Section 3 -- Limited Coverages;

(4) Section 4 -- Miscellaneous Coverages; and

(5) Conditions; Statutory and Additional.

[28] The Grenville policy has essentially two main areas of coverage; one for multi-peril loss, and the other for third party liability. Fire loss is not treated separately, nor does it have a specific rider in the policy. Fire is included in the general list of insured perils covered under Section 1 -- Property Coverages, in the policy.

[29] The definition of who is insured by the Grenville policy is found on p. 1-1 of the policy and refers to the terms "You" and "Your". The policy itself provides that the definition of "You" and Your" applies to ss. 1, 2, 3 and 4 of the policy. It reads as follows:

"You" and "Your" means the person(s) named as Insured on the Declaration Page and, while living in the same household, his or her spouse, the relatives of either or any person under the age of 21 in their care. "Spouse" includes either of two persons who are not married to each other and have lived together continuously for a period of not less than three years or, in a relationship of some permanence where there is a child born of whom they are the natural or adoptive parents, and have cohabited within the [page755] preceding year. Only the person named on the Declaration Page may take legal action against us.

[30] Section 15 of the statutory conditions provides that written notice from the insurer is only given to the insured named in the contract.

[31] Sections 5, 6 and 11 of the additional conditions provide that it is "your" duty to take reasonable steps to recover lost property; that "you" transfer "your" rights of recovery against others to the insurer; and that, in the event of a claim under the policy"you" must submit to an examination under oath and produce all relevant documents in "your" possession at the insurer's request.

[32] The plaintiffs' homeowner's insurance policy provides for coverage for named and unnamed insured for loss of buildings and contents by fire. It also provides liability coverage for claims in negligence, brought against the insured by third persons. The liability section specifically provides"You are not insured for claims: 1. Resulting from the ownership, use or operation of any motorized vehicle, trailer or watercraft, except those for which coverage is provided by this policy." As stated above, the work done by the defendant on his vehicle constituted the "use and operation of a motor vehicle".

[33] The defendant's automobile insurance policy provides the defendant with third party liability coverage caused by his negligence in the use and operation of a motor vehicle.

Analysis

The negligence issue -- have the plaintiffs established that the defendant was negligent and that the defendant's negligence caused the fire and damage?

[34] The answer is yes. I find that the plaintiffs have established on a balance of probabilities that the defendant was negligent and that the defendant's negligence caused the fire and damage.

[35] In Ryan v. Victoria (City), 1999 706 (SCC), [1999] 1 S.C.R. 201, [1999] S.C.J. No. 7, at para. 28, the Supreme Court of Canada stated:

Conduct is negligent if it creates an objectively unreasonable risk of harm. To avoid liability, a person must exercise the standard of care that would be expected of an ordinary, reasonable and prudent person in the same circumstances. The measure of what is reasonable depends on the facts of each case, including the likelihood of a known or foreseeable harm, the gravity of that harm, and the burden or cost which would be incurred to prevent the injury. [page756]

[36] The plaintiffs, in this case, urge me to find that the mere fact that the defendant's vehicle caught on fire is prima facie evidence of negligence. This is because vehicles do not, in the ordinary course of things, catch on fire in the absence of negligence. It follows, then, that the very fact that the defendant's vehicle caught on fire is evidence of the defendant's negligence. The burden, therefore, is on the defendant to show an explanation of the cause of the fire which is equally consistent with the nonexistence of negligence on his part. They argue that the defendant has provided no evidence to meet this burden. The plaintiffs are effectively advancing the doctrine of res ipsa loquitur"the thing speaks for itself". They rely on Erison v. Higgins (1974), 1974 518 (ON CA), 4 O.R. (2d) 631, [1974] O.J. No. 2003 (C.A.) and Interlake Tissue Mills Co. v. Salmon, 1948 74 (ON CA), [1948] O.R. 950, [1948] O.J. No. 511 (C.A.).

[37] In Fontaine v. British Columbia (Official Administrator), 1998 814 (SCC), [1998] 1 S.C.R. 424, [1997] S.C.J. No. 100, the Supreme Court of Canada lay to rest res ipsa loquitur as a doctrine of law. The court stated, at para. 26:

Whatever value res ipsa loquitur may have once provided is gone. Various attempts to apply the so-called doctrine have been more confusing than helpful. Its use has been restricted to cases where the facts permitted an inference of negligence and there was no other reasonable explanation for the accident. Given its limited use it is somewhat meaningless to refer to that use as a doctrine of law.

[38] This does not mean that there is no merit to the plaintiffs' argument, only that I must be careful to afford it appropriate weight. The fact that vehicles do not ordinarily catch fire in the absence of some negligence is one piece of evidence which I may use in my determination of whether or not the defendant was negligent. Alone, it may or may not be sufficient evidence to create a prima facie case for the plaintiffs, requiring the defendant to provide some evidence to disprove that case. The plaintiffs argue that I may infer negligence from the fact of the fire itself, and that this places an evidentiary burden on the defendant. In Fontaine, the Supreme Court went on to clarify its position on the issue of res ipsa loquitur, at para. 27:

[Res ipsa loquitur] was nothing more than an attempt to deal with circumstantial evidence. That evidence is more sensibly dealt with by the trier of fact, who should weigh the circumstantial evidence with the direct evidence, if any, to determine whether the plaintiff has established on a balance of probabilities a prima facie case of negligence against the defendant. Once the plaintiff has done so, the defendant must present evidence negating that of the plaintiff or necessarily the plaintiff will succeed. [page757]

[39] I agree that the nature and origin of the fire speaks to negligence and places an evidentiary burden on the defendant to challenge this inference. The defendant did not lead any evidence to negate the evidence of the plaintiffs as to the origin or cause of the fire. Mr. Lamoureux's expert opinion was solidly based on the physical evidence discovered at the scene and no contrary opinion or evidence was called. The physical evidence, as relayed by Mr. Lamoureux, is that the origin of the fire was at the positive terminal post of the battery where the most extensive fire damage was found. The cause of the fire was electrical arching caused by a poor connection on the battery post. I accept his evidence as being credible and reliable. I accept his evidence as to the origin and cause of this fire.

[40] The poor connection on the battery post caused resistance overheating and deterioration of the insulation covering the jumper cable. When the wire inside the cable touched the rear metal lip of the trunk, electrical arching occurred, causing a loonie-sized hole to form in the metal lip of the trunk, and the fire started. The only person who could have made that poor connection to the battery post was the defendant.

[41] There is no issue that the defendant put his vehicle in the garage and connected the battery charger to his car battery. No one else was involved. The defendant attached the jumper cables to the positive and negative battery posts. The defendant testified that he had used a battery charger before and that, in fact, used them regularly. The charger in question belonged to his father and had multiple voltage settings on it. The defendant set the charger to the correct 12-volt setting. He could not remember if the charger also had a control for boosting. He testified that he knew that a good connection on the battery charger was required to prevent possible electrical arching. He testified that the connection needs to be secure and needs special attention.

[42] The plaintiffs rely on the evidence of Mr. Lamoureux that the defendant told him that he had tripped over a cord to support their allegation of the defendant's negligence. In his examination for discovery taken on December 12, 2012, the defendant's evidence on this point was as follows:

Q.126. And you indicated to them [Mr. Lamoureux] that you had tripped over the cord as you were leaving the workshop?

A. Okay, no.

Q.127. Do you remember tripping over the cord?

A. I could have, but not at my -- how do you say that? Not that I remember, but you know. [page758]

[43] The alleged cord in question was the cord from the charger to the outlet. The evidence is that this cord was suspended and hanging from the ceiling, but the defendant testified that there were a lot of other cords around on the floor. The connection the defendant made to the battery post was either loose to begin with or he did something that made it loose such as tripping on a cord on his way out of the garage. In making a loose connection, the defendant failed to meet the standard of care required in the use of this type of equipment. He also failed to check these connections sufficiently while doing repairs to his vehicle in the garage.

[44] He specifically failed to check the connections before he left the garage to go to the house for his phone charger. Considering the inherent danger in the use of chargers and batteries, both generally and while doing active repairs on the vehicle, a glance into the trunk of his vehicle on the way out of the garage was insufficient to ensure that the clamps had not shifted while making the repairs, and to ensure that his battery connections continued to be a tight fit.

[45] I find that the defendant did not take reasonable care to ensure that his battery connections were secure. A fire of this nature does not ordinarily happen if proper care is taken. He knew that he needed a secure connection. He checked those connections five minutes into his work and he thought that they were fine. He failed to properly monitor those connections. While I do not consider it reasonable or expected that a person must be present at all times when they are simply charging a battery, the defendant was charging a battery and, at the same time, using the battery as a source of power while making repairs to his vehicle. Considering the risks involved, the defendant should have checked his battery connections regularly. In particular, he should have checked those connections when he left the garage after working on his vehicle that night to ensure that they continued to be a tight fit.

[46] I find that the defendant did not act in a careful and diligent manner expected of a reasonable person in the circumstances. I find that the cause of the fire and subsequent damage was due to the defendant's negligence in failing to make a safe and proper connection to the positive battery post with the jumper cables, which created a fire risk. He failed to check and monitor that battery connection while making repairs to his vehicle. He failed to take reasonable and proper care when he exited the garage. Had there been a good connection, there would not have been a fire. Negligence has been established. The plaintiffs have [page759] established that the defendant was negligent and that the defendant's negligence was the cause of the fire and damage.

The subrogation issue -- if negligence is established, are the plaintiffs (Grenville) entitled to subrogate their claim against the defendant (Economical)?

[47] The answer is no. I find on the facts of this case that Grenville is not entitled to subrogate their claim against Economical.

[48] An insurer cannot subrogate against its own insured. In the Grenville policy of insurance, there is no definition of who is an "Insured". Rather, the policy defines "You" and "Your". Importantly, this definition applies to all four sections of the Grenville policy. As the defendant son is an unnamed insured on the policy, by the definition of "You" and "Your" in the policy, the defendant son's rights are the equivalent of his parents throughout the policy.

[49] The defendant was not separately insured for loss of property. He did have contents and tools on the property and thereby had an insurable interest in the loss. However, because his loss was in relation to the operation and use of a motor vehicle, he cannot recover these losses from Grenville as it is expressly excluded on the policy. Grenville cannot subrogate its claim against Economical as the defendant falls within the definition of "You" and "Your" as an insured on the multi-peril section of the policy that paid out the loss.

[50] In Murphy (Guardian ad litem) v. Beaton, 1992 4595 (NS SC), [1992] N.S.J. No. 251, 114 N.S.R. (2d) 187 (S.C. (T.D.)), Davidson J. held, at p. 8 (QL), that:

No right of subrogation can arise in favor of the insurer against its own insured, since by definition subrogation arises only with respect to rights of the insured against third persons to whom the insurer owes no duty . . . No right of subrogation arises against a person who holds the status of an additional insured, whether by the terms of the policy or the operation of a statute.

[51] See, also, Lacombe v. Don Phillips Heating Ltd., 2005 33036 (ON SC), [2005] O.J. No. 3936, 30 C.C.L.I. (4th) 257 (S.C.J.), at paras. 12 and 23-24 (Master Beaudoin); Imperial Oil Ltd. v. Commonwealth Construction Co., 1976 138 (SCC), [1978] 1 S.C.R. 317, [1976] S.C.J. No. 115.

[52] In Grey & Bruce Mutual Insurance Co. v. MacKinnon Plumbing & Heating, [2009] O.J. No. 5448, [2010] I.L.R. I-4940 (S.C.J.), at paras. 10 and 12-15, the claim of an insurer bringing a subrogated claim against one insured, amongst a group of insured, who was the alleged tortfeasor and who had therefore caused the loss could not succeed. An insurer cannot sue any of [page760] its insured for losses paid out under the same policy, no matter how negligent they were in causing the loss.

[53] This case is distinguishable from Morawietz v. Morawietz, 1986 7783 (ON SC), [1986] O.J. No. 582, 18 C.C.L.I. 108 (C.A.), revg 1984 6000 (ON SC), [1984] O.J. No. 243, 5 C.C.L.I. 11 (H.C.J.). In that case, the insurer brought a subrogated claim by the parents, as named insured, against their son, whose negligence caused the loss. The Court of Appeal allowed the subrogated claim against the son, given the unique factual situation of that case. Essential to the Court of Appeal's decision was the fact that the son was not an insured under all parts of the policy; specifically, the son was not an insured under the part of the policy under which the parents had claimed and been paid coverage for the loss caused by his negligence. The son had no insurable interest in the loss. In that policy, there were three distinct sections: fire, multi-peril and liability, and the definition of "insured" varied between the sections. The loss was paid out under the fire section, in which the definition of "insured" included only those who owned the property. As only the plaintiff parents, and not the son, had an ownership interest in the property, the son was not an "insured" for the purposes of the section under which the loss was paid out. Therefore, the subrogated claim was allowed against the son.

[54] Morawietz, supra, stands for the principle that if you are not a named insured, and do not fall under any extended definition of insured, in the section of the policy that paid out the loss, and you had no insurable interest in the loss, then the insurer can sue to recover the loss against you. Its application is very limited, given that it requires a fact situation where the definition of "insured" varied as between the different sections of the insurance policy, and that the loss was specifically claimed and paid out under a section in which the individual who caused the loss is not an "insured", despite being an "insured" as per the definition under and pertaining to a different section. This is not the case here.

[55] In this case, there is no separate section of the policy for fire loss. While the term "insured" is not defined in the Grenville policy, the policy refers to "you" and "your", which are defined terms. Furthermore, the definitions of "you" and "your" apply to all sections of the policy. The definition clearly captures the defendant, who is an insured throughout the policy as defined in "You" and "Your". It follows, as of particular importance to this case, that the defendant is an insured under Section 1 of the policy, covering fire loss, which was paid out to the plaintiffs. As well, the defendant had an insurable interest in the loss as some of his contents and tools were in the garage and lost in the [page761] fire. As an insurer cannot sue any of its insured for losses paid out under the same policy, no matter how negligent they were in causing the loss, the action cannot succeed.

[56] The plaintiffs argue that Morawietz should be more broadly interpreted as standing for the principle that an insurer can sue an insured under the same policy where the damage in question is to property in which the defendant insured had no insurable interest. The plaintiffs rely on Sooter Studios Ltd. v. 74963 Manitoba Ltd. (c.o.b. Sooter Bridal Salon), [2005] M.J. No. 194, 2005 MBQB 114, 196 Man. R. (2d) 222, at para. 46, where the court states:

The case of Morawietz v. Morawietz, 1986 7783 (ON SC), [1986] O.J. No. 582 (Ont. C.A.) (Morawietz), (Ontario Court of Appeal), decided that an insurer is not precluded from bringing a subrogated action against someone insured under the same policy giving rise to its subrogation rights where the damage in question is to property in which the defendant had no "insurable interest".

[57] The plaintiffs also rely on Rankin v. North Waterloo Farmers Mutual Insurance Co. (1979), 1979 1827 (ON CA), 25 O.R. (2d) 102, [1979] O.J. No. 4275 (C.A.). In that case, the Ontario Court of Appeal held that an insurer has separate obligations to each insured, such that an innocent insured may still claim for losses caused by the wrongful acts of another person having an insurable interest under the policy, even where the policy excludes losses caused by wilful misconduct.

[58] I cannot agree with the plaintiffs' interpretation of Morawietz, nor do I find Rankin to have any value to my decision. In my opinion, the Supreme Court of Canada's case Scott v. Wawanesa Mutual Insurance Co., 1989 105 (SCC), [1989] 1 S.C.R. 1445, [1989] S.C.J. No. 55 provides an answer to both arguments. In Scott, as in Rankin, the plaintiff parents sought indemnification for a loss suffered when their home was damaged by a fire deliberately set by their son. The policy excluded any loss caused by the wilful misconduct of the insured, or of any person whose property was insured under the policy. The definition of "insured" included the son, as a person under 21 living at the property and as a relative of the named insured.

[59] The Supreme Court found that the policy was clear and unambiguous with respect to both the definition of "insured" and the exclusion clause. There was no ability to distinguish between different insured as to their specific insurable interests. In so finding, the Supreme Court upheld the British Columbia Court of Appeal's decision that Rankin simply should not be followed. At para. 44, L'Heureux-Dubé J. writes:

In my view, the terms of the insurance policy are perfectly clear and unambiguous. The policy does not cover the type of risk which occasioned [page762] this loss. Such risk was specifically excluded. The wording of the exclusion clause for the purposes of the present case is unambiguous, as is the definition of "Insured". I am in complete agreement with the statement of Macdonald J.A., writing for the Court of Appeal, at p. 62, that:

In the case at bar the policy does not insure "loss or damage caused by a criminal or wilful act or omission of the Insured or of any person whose property is insured hereunder". Clearly Charles Scott falls within the definition of "Insured" which I quoted earlier. He was a resident of the household and a relative of a named insured. And he was an "other person under the age of 21 in the care of an Insured".

It is unnecessary to decide whether the indemnification obligation is joint or several. The exclusionary clause is unambiguous. Assuming the position more favourable to the respondents [here appellants], that it is several, the exclusionary clause bars recovery where the loss is caused by a wilful act of the insured. This clause is therefore fatal to the respondent's [here appellant] claim. Rankin is right in point. The exclusion clause in that case was in the same language as provision (d). It follows that, in my opinion, Rankin should not be followed.

[60] In Scott, the Supreme Court reiterates that the effect of an insurance policy is a matter of contractual interpretation. What is in the contract is what prevails and, absent ambiguity, no further inquiry is required or appropriate: see Scott, para. 51. Here, the defendant falls within the definition of "You" and "Your" as an unnamed insured on the policy, and it is clear that Grenville cannot bring a subrogation claim against its own insured. It is of no consequence whether or not the defendant himself had ownership over contents which were insurable.

[61] Additional conditions 5, 6 and 11 of the Grenville policy are also instructive on the issue. These contractual conditions required the insured, the defendant, to take reasonable steps to recover lost property, transfer his right against others to the insurer Grenville and to submit to an examination under oath and produce all documentation in his possession at Grenville's request. In accordance with this contractual requirement, the defendant was required to speak to Grenville's adjuster and provide a statement, which he did, to assist Grenville in recovering the loss. This requirement is contrary to his interest if he can now be sued under the same policy by Grenville, his own insurer. The only way these contractual requirements make sense is that these conditions relate to the conditions required of the insurer's own insured on the policy to recover losses from third persons, not their own insured.

[62] Even if the defendant was required to have an "insurable interest" in the plaintiffs' property in order to be an "insured" on the issue of subrogation, the Supreme Court in Scott made it clear that such an insurable interest can exist absent legal ownership. At para. 50, the court states: [page763]

In my view, even if we were to accept the more narrow definition suggested by the appellants, it would be impossible to say that the insurable interest of the infant Charles Scott was limited to his personal possessions. He had a direct relationship to the family home and its contents, since they were his source of accommodation and support. To apply the analysis in Kosmopolous, supra, Charles Scott had occupation, use and enjoyment of the family home. He received a benefit from its existence. As a dependent living in that home, he suffered a direct prejudice when it was destroyed by fire. The interests of parent and child in this case, to borrow the words of Viscount Cave in his dictum in Dumas, supra"are inseparably connected so that a loss or gain necessarily affects them both, the misconduct of one is sufficient to contaminate the whole insurance".

[63] The case law concerning condominium insurance policies and builders' construction insurance policies, which was presented to me by the parties, does not apply as these types of policies are quite different in their contractual terms than a homeowner's policy of insurance.

[64] For all the above reasons, the subrogated claim cannot succeed and is dismissed. The plaintiffs shall have judgment against the defendant in the amount of $8,000 for the uninsured loss.

Costs

[65] If the parties are unable to agree on the issue of costs by April 30, 2014, I will receive counsel's brief written submissions, together with a costs outline from the plaintiff on or before May 16, 2014, and from the defendant on or before May 30, 2014. The plaintiff may reply on or before June 10, 2014, after which time the costs issue shall be determined by me based on the materials filed.

Judgment to Issue

[66] For all of the above reasons, a judgment shall issue as follows:

(1) The plaintiffs' subrogated claim in the amount of $148,581.65 is dismissed.

(2) The plaintiffs shall have judgment against the defendant in the amount of $8,000 for their uninsured loss.

(3) The issue of costs is reserved.

Action allowed in part.

End of Document