CITATION: Skunk v. Ketash, 2016 ONSC 2019
COURT FILE NO.: CV-14-0382
DATE: 2016-03-22
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Christopher Skunk,
Edward S.E. Kim, for the Plaintiff
Plaintiff
- and -
Laurel Ketash and Jevco Insurance Company,
No one appearing for the Defendant Laurel Ketash
Douglas Treilhard, for the Defendant Jevco Insurance Company
Defendants
HEARD: November 26, 2015, and January 6, 2016, at Thunder Bay, Ontario
Mr. Justice W.D. Newton
Decision On Motion
Overview
[1] The defendant, Jevco Insurance Company (“Jevco”), moves for summary judgment dismissing the plaintiff's claim.
[2] The plaintiff's claim against Jevco is based on what is commonly called uninsured motorist coverage – coverage available to an insured, such as the plaintiff, when an insured is injured by the conduct of someone operating an uninsured vehicle. A claim is also made under the underinsured endorsement – the OPCF 44R - Family Protection Coverage.
[3] In this case, the vehicle was owned by the plaintiff's spouse and insured with Jevco but became uninsured when it was taken without consent by the defendant Ketash.
[4] Jevco argues that an insured cannot make a claim when the uninsured vehicle is owned by the policyholder notwithstanding that the vehicle only became uninsured through theft by a third party. Jevco relies upon Fosker v. Thorpe, 2004 CanLII 3358 (ON SC). The plaintiff argues, with respect, that Fosker was improperly decided.
The Facts
[5] The facts are not significantly in dispute although I did have to ask counsel to re-attend before me to clarify the position of the parties on the circumstances surrounding how the vehicle came into the possession of the defendant Ketash.
[6] According to the statement of claim, Mr. Skunk alleges that he was a passenger in a car driven by Ms. Ketash and that he sustained injuries in a single car accident arising from Ms. Ketash's negligence. His injuries include cervical and thoracic fractures requiring removal of vertebrae, grafting and internal fixation.
[7] Mr. Skunk sues Jevco claiming that Jevco must provide coverage to him under the uninsured and underinsured coverage of the automobile insurance policy issued to his spouse, the owner of the vehicle driven by Ms. Ketash.
[8] Ms. Ketash has not defended the action. It is agreed that Ms. Ketash did not have automobile insurance at the time of the accident. Jevco states that Mr. Skunk took the vehicle without Mrs. Skunk's consent. Mr. Skunk denies this.
[9] Jevco denied coverage to Ms. Ketash because its investigation had determined that she was charged with theft of the vehicle. As of the date of the motion neither counsel could confirm whether Ms. Ketash was convicted of this offence.
[10] Although not pleaded in the statement of claim, the plaintiff alleges the following facts in his factum:
The plaintiff borrowed his wife's car and picked up some friends, which included the defendant, Laurel Ketash. They stopped at a store and the plaintiff got out of the car and went into the store. On returning to his car, Ms. Ketash, had taken the driver's seat. The plaintiff got into the passenger seat as Ms. Ketash drove off. Ms. Ketash lost control of the car at a high rate of speed.
[11] On these facts, it is not clear that there is a lack of consent.
[12] Jevco argues that the determination of the consent issue is irrelevant because the fact of ownership of the vehicle by Ms. Skunk precludes any claim by Mr. Skunk under the uninsured or underinsured coverage regardless of whether or not the vehicle was taken without consent.
The Law
[13] The issue arises from the definition of uninsured automobile found in s. 265(2) of the Insurance Act, R.S.O. 1990 c. I.8 which provides:
"Uninsured automobile," means an automobile with respect to which neither the owner nor driver has applicable and collectable bodily injury liability and property damage liability insurance for its ownership, use or operation, but it does not include an automobile owned by or registered in the name of the insured or his or her spouse. [Emphasis added.]
[14] The following sections of the standard automobile policy are also relevant:
OAP1
1.8.2 Excluded Drivers and Driving Without Permission
Except for certain Accident Benefits coverage, there is no coverage (including coverage for occupants) under this policy if the automobile is used or operated by a person in possession of the automobile without the owner’s consent or is driven by a person named as an excluded driver of the automobile. [Emphasis added.]
Liability Coverage
3.2 Who is Covered
You are covered when you, or anyone else in possession of a described automobile with your consent, uses or operates it. We will consider these other people insured persons. [Emphasis added.]
Uninsured Automobile Coverage
5.1 Introduction
5.1.1 Uninsured Automobile Schedule
This Section of the policy describes the terms and conditions of the coverage set out in the Uninsured Automobile Schedule under the Insurance Act (Ontario). If there is a difference between the interpretation of the wording of this Section and the interpretation of the wording in the Schedule, the Schedule prevails. However, 5.3.3 in this Section is an addition to the coverage provided by the Schedule.
5.1.2 What is an Uninsured Automobile?
An uninsured automobile is one for which neither the owner nor driver has liability insurance to cover bodily injury or property damage arising out of its ownership, use or operation, or the insurance is not collectible. However, this does not include an automobile owned by or registered in the name of the insured person, their spouse or their same-sex partner. [Emphasis added.]
[15] The following sections of the Family Protection endorsement are also relevant:
OPCF 44R
Family Protection COVERAGE
1.5 “inadequately insured motorist” means
(a) the identified owner or identified driver of an automobile for which the total motor vehicle liability insurance or bonds, cash deposits or other financial guarantees as required by law in lieu of insurance, obtained by the owner or driver is less than the limit of family protection coverage; or
(b) the driver or owner of an uninsured automobile or unidentified automobile as defined in Section 5, "Uninsured Automobile Coverage" of the Policy [Emphasis added.]
1.11 “uninsured automobile” means an automobile with respect to which neither the owner nor driver thereof has applicable and collectible bodily injury liability and property damage liability insurance for its ownership, use or operation, but does not include an automobile owned by or registered in the name of the insured or his or her spouse. [Emphasis added.]
INSURING AGREEMENT
- In consideration of a premium of $ ........ or as stated in the Certificate of Automobile Insurance to which this change form is attached, the insurer shall indemnify an eligible claimant for the amount that he or she is legally entitled to recover from an inadequately insured motorist as compensatory damages in respect of bodily injury to or death of an insured person arising directly or indirectly from the use or operation of an automobile.
[16] It is the addition of the clause in s. 265 (2) – "but it does not include an automobile owned by or registered in the name of the insured or his or her spouse" which is at the heart of this dispute.
[17] Does that clause stand alone as Jevco asserts and preclude coverage based on the mere fact of ownership? Or, does it, as the plaintiff alleges, modify "uninsured vehicle" so that there is no uninsured coverage if the vehicle involved is one owned by the insured or spouse which the insured or spouse has chosen not to insure?
Fosker v. Thorpe
[18] This same issue was before Quinn J. in Fosker v. Thorpe. He set out the facts as follows:
[5] On November 18, 2000, the plaintiff drove to the home of her daughter and parked her automobile ("Ford") at the front of the residence. When she exited the residence, the Ford was in the process of being stolen. The thief ran her down with the Ford.
[19] Quinn J. reviewed the policy and Insurance Act provisions and when confronted with the argument that to deny coverage in these circumstances was absurd, Quinn J. concluded that the definition of uninsured vehicle was "clear and unambiguous”:
[27] "[W]here, by use of clear and unequivocal language capable of only one meaning, anything is enacted by the legislature, it must be enforced however harsh or absurd or contrary to common sense the result may be . . . The fact that a provision gives rise to absurd results is not . . . sufficient to declare it ambiguous and then embark upon a broad-ranging interpretative analysis": see R. v. McIntosh, supra, at p. 704 S.C.R.
[28] Consequently, absurdity is not enough. Neither is harshness. There must first be ambiguity.
[29] The wording of s. 265(2) of the Insurance Act, whether taken alone or in the "entire context" of that statute, is clear and unambiguous, as is O.A.P. No. 1, s. 5.1.2 and the OPCF 44R -- Family Protection Endorsement, s. 1.11. As a result, I find that, because the Ford is owned by the plaintiff and she is the insured under the Policy, it is not an "uninsured automobile" as defined in the Policy or the legislation. The Ford is specifically excluded from the definition. The wording of the definition may lead to a harsh or even an absurd result but that is insufficient to permit me to rewrite the legislation or the Policy. Perhaps the legislature should have exempted the circumstances at bar from the exclusion. If so, that is a gap I am not permitted to fill see R. Sullivan, Sullivan and Driedger on the Construction of Statutes, 4th ed. (Markham: Butterworths, 2002), at p. 136
[20] Quinn J. therefore dismissed the action deciding that there was no coverage under the uninsured coverage because the vehicle was owned by the insured.
[21] Quinn J. also considered whether the underinsured coverage (now OPCF 44R) applied and concluded that it did not since he had already determined that the "Ford" was not an uninsured automobile. His reasons disclose that the motion was "argued as a case of statutory interpretation, not contractual interpretation." (Fosker at para. 30)
[22] Fosker has been favorably commented upon although no case citing Fosker involved facts similar to Fosker. (See Wing v. 1198281 Ontario Ltd., 2006 CanLII 42263 (ON SC), [2006] O.J. No. 5040 at para. 13; George v. George, 2008 CanLII 8420 (ON SC), [2008] O.J. No. 832 at para. 16; and Jubenville v. Jubenville, 2012 ONSC 5678, [2012] O. J. No. 5201 at para. 15.)
Principles of Statutory Interpretation and the Purpose of Uninsured Motorist Coverage
[23] Section 64(1) of the Legislation Act, 2006, S. O. 2006 c. 21 states:
Rule of liberal interpretation
- (1) An Act shall be interpreted as being remedial and shall be given such fair, large and liberal interpretation as best ensures the attainment of its objects. 2006, c. 21, Sched. F, s. 64 (1).
[24] In B010 v. Canada (Citizenship and Immigration), 2015 SCC 58, Chief Justice McLachlin stated:
The modern rule of statutory interpretation requires us to read “the words of an Act . . . in their entire context, in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament”: R. Sullivan, Sullivan on the Construction of Statutes (6th ed. 2014), at p. 7; Bell ExpressVu Limited Partnership v. Rex, 2002 SCC 42, [2002] 2 S.C.R. 559, at para. 26. [para 29]
[25] In Chambo v. Musseau et al.,(1993) 15 O.R. (3d) at 305, C.A. Osborne J.A. discussed the purpose of uninsured motorist coverage and how the legislation should be interpreted:
The legislative intent was to internalize costs to the activity (driving a motor vehicle) which created them. Before March 1980 the costs resulting from the negligence of an uninsured driver were externalized, in that they were paid by the taxpayers generally, through the Motor Vehicle Accidents Claim Fund. In my view, the uninsured motorist coverage legislation is remedial and should be given a broad and liberal interpretation. [at para. 11] [Emphasis added.]
[26] The plaintiff argues that the purpose of the uninsured and unidentified coverage is to protect people who "fall through the cracks" in the automobile insurance scheme. As the Court of Appeal said in Loftus v. Robertson et al. (2009), 2009 CanLII 92137 (ON CA), 96 O.R. (3d) 721 at para. 41:
[41] Third, case law interpreting s. 265 of the Insurance Act has noted that the section was enacted to alleviate "the plight of motorists injured by drivers of uninsured automobiles" and that the purpose of this section is to provide "'a safety net' for victims injured by the actions of uninsured motorists" and at the same time "internalize costs to the activity (driving a motor vehicle) which created them": Barton v. Aitchison, at p. 287 O.R.; Gignac v. Neufeld (1999), 1999 CanLII 2182 (ON CA), 43 O.R. (3d) 741, [1999] O.J. No. 1295 (C.A.), at p. 750 O.R.; Chambo v. Musseau, at p. 308 O.R.
The Interpretation of s. 265 (2) of the Insurance Act
[27] On its plain reading, "uninsured automobile" means an automobile without applicable and collectible insurance. Carved out of that group of automobiles are uninsured vehicles owned by the insured and/or the insured's spouse. It seems obvious that the mischief that the legislature intended to prevent was claims made by insureds arising from the use of their or their spouse's uninsured automobiles. Coverage should not be granted when the insured deliberately chooses not to insure all of the automobiles that they own.
[28] The problem in the Fosker case is that the "Ford" was insured but became uninsured through the actions of the "thief". What defeated coverage was not the fact of ownership; coverage was defeated by the actions of the "thief" who took the vehicle without consent, thereby making it an uninsured automobile. Had the driver had consent, then there would be coverage for Ms. Fosker's injuries.
[29] Given that the purpose of the uninsured motorist scheme is to provide a "safety net for victims injured by the actions of uninsured motorists" and to "internalize costs to the activity", the legislature could not have intended to exclude people like Ms. Fosker from coverage when her properly insured vehicle became uninsured through the illegal act of a stranger.
[30] In my view, the section is at least ambiguous – is the intent to exclude all vehicles owned by the insured or uninsured vehicles owned by the insured? Therefore, the interpretation that is most broad and liberal is the interpretation that spreads, rather than closes, the safety net.
[31] Unlike Quinn J., I do not find the section clear and unambiguous. I find the section to be worded poorly. Nevertheless, but for Quinn J.'s analysis of the underinsured coverage issue, I would be obliged to follow Fosker based on the principle of judicial comity.
The OPCF 44R Endorsement
[32] OPCF 44R is optional coverage with standardized policy wording:
The essence of this endorsement is that the insured protects himself, by making the extra payment, from the risk of being injured by an inadequately insured motorist. (Somersall v. Friedman 2002 SCC 59, [2002] S.C.J. No. 60 at para. 18)
[33] As the SEF 44 is not a creation of statute but rather a contract, the principle of interpretation is this:
[17] If a section of a policy is ambiguous, it is a well- established principle in insurance law that any ambiguity must be resolved against the insurer who drafted the document: Chilton v. Co-Operators General Insurance Co. (1997), 1997 CanLII 765 (ON CA), 32 O.R. (3d) 161, [1997] O.J. No. 579 (C.A.). In cases such as the one before me, where the clause is intended to exclude coverage, it will be construed against the insurer. (Pepe v. State Farm 2010 ONSC 2977, [2010] O.J. No. 2138) [Emphasis added.]
[34] The effect of these clauses is to exclude coverage. As I have concluded that the wordings of the contract are ambiguous, the ambiguity is construed against the insurer. As Quinn J. in Fosker approached the motion solely on the basis of "statutory interpretation, not contractual interpretation", these principles of contractual interpretation were not before him. Accordingly, is open to me to apply the principles of contractual interpretation and I therefore conclude that vehicles owned by the insured or spouse, if insured, are “uninsured automobiles” when taken without consent. Therefore, I conclude that Ms. Ketash, if she took the vehicle without consent, is an "inadequately insured motorist" under the OPCF 44R – Family Protection Coverage. As such, I conclude that there may be coverage and Jevco's motion for summary judgment is dismissed.
[35] The parties agreed that the successful party would be entitled to its partial indemnity costs fixed in the amount of $3000.
“Original signed by”____
The Hon. Mr. Justice W.D. Newton
Released: March 22, 2016
CITATION: Skunk v. Ketash, 2016 ONSC 2019
COURT FILE NO.: CV-14-0382
DATE: 2016-03-22
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Christopher Skunk,
Plaintiff
- and -
Laurel Ketash and Jevco Insurance Company,
Defendants
DECISION ON MOTION
Newton J.
Released: March 22, 2016
/mls