CITATION: Reeb v. Guarantee Company, 2016 ONSC 7511
COURT FILE NO.: CV-15-22443
DATE: 20161206
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Ryan Reeb
Applicant
– and –
The Guarantee Company of North America and The Co-operators General Insurance Company
Respondents
Kevin C. Bunt, for the Applicant
Jeffery M.K. Garrett, for the Respondents
HEARD: November 28, 2016
REASONS
BONDY J.:
A. BACKGROUND
- Introduction
[1] This is an application brought by the applicant, Ryan Reeb (“Ryan”), seeking a declaration that he is an insured under two policies of insurance.
[2] The first is policy number WR 0001133095 (the “Guarantee policy”) issued to his father Tim Reeb (“Tim”) by the respondent Guarantee Company of North America (“Guarantee”).
[3] The second (the “Co-operators policy”) was issued to Tim's second wife, Theresa Curry-Reeb (“Theresa”), by the Co-operators General Insurance Company (“Co-operators”).
[4] The underlying action involves a claim by James Riley (“James”) that he was injured on February 25, 2007 at his parent’s home on Churchhill Line, Sarnia, Ontario, by Ryan.
[5] On February 25, 2007, James and Ryan were playing at James’ house. They were both 14 years of age at the time. James’ mother had received a call and, as a result, left on an errand. Accordingly, James and Ryan were in the house alone. They were playing a game using “BB guns”. There is consensus that Ryan fired a “pellet” which struck James in his left eye. As a result, James is now blind in that eye.
- The Issue
[6] The respondent insurers concede that the applicant meets the definition of “insured person” in both policies.
[7] The insurers, however, seek to avoid coverage pursuant to the “intentional act” exclusions in their respective policies.
[8] Under “Coverage E - Legal Liability”, the Guarantee Policy provides the following:
[W]e pay all sums which you become legally liable to pay as compensatory damages because of bodily injury or property damage… [Y]ou are insured for claims made against you arising from: … legal liability for unintentional bodily injury or property damage arising out of your personal actions anywhere in the world.
[9] The Guarantee policy also states:
[Y]ou are not insured for claims arising from:
(5) bodily injury or property damage caused by any intentional or criminal act or failure to act by
(i) any person insured by this policy; or
(ii) any other person at the direction of any person insured by this policy.
[10] The “Legal Liability” section of the Co-operators policy provides:
We will pay all sums which you become legally responsible to pay as compensatory damages because of unintentional bodily injury or property damage up to the limit of insurance stated on the Certificate of Insurance. You are insured for legal liability arising out of your personal actions anywhere in the world.
[11] The Co-operators policy also states:
[Y]ou are not insured for claims made against you arising from:
• bodily injury or property damage caused intentionally by you or at your direction or resulting from your criminal acts or omissions.
B. ANALYSIS
- Introduction
[12] “An insurer is required to defend a claim where the facts alleged in the pleadings, if proven to be true, would require the insurer to indemnify the insured for the claim”. See: Progressive Homes Ltd. v. Lombard General Insurance Co. of Canada, 2010 SCC 33, [2010] 2 S.C.R. 245, at para. 19; Nichols v. American Home Assurance Co., 1990 CanLII 144 (SCC), [1990] 1 S.C.R. 801, at pp. 810-11; Monenco Ltd. v. Commonwealth Insurance Co., 2001 SCC 49, [2001] 2 S.C.R. 699, at para. 28; Jesuit Fathers of Upper Canada v. Guardian Insurance Co. of Canada, 2006 SCC 21, [2006] 1 S.C.R. 744, at paras. 54-55. “[C]overage provisions should be construed broadly and exclusion clauses should be construed narrowly.” See: Ontario Society for the Prevention of Cruelty to Animals v. Sovereign General Insurance Co., 2015 ONCA 702, 127 O.R. (3d) 581, at para. 39; Reid Crowther & Partners Ltd. v. Simcoe & Erie General Insurance Co., 1993 CanLII 150 (SCC), [1993] 1 S.C.R. 252, at p. 269. “Where there is genuine ambiguity or doubt, the duty to defend ought to be resolved in favour of the insured.” See: Sovereign, at para. 42; Monenco, at para. 31.
[13] The duty to defend, however, extends only to claims that could potentially trigger indemnity under the policy absent any language to the contrary: see Non-Marine Underwriters, Lloyd’s of London v. Scalera, 2000 SCC 24, [2000] 1 S.C.R. 551, at para. 49.
[14] In this case, when read in isolation, the pleadings appear to fit within the description of perils insured against and to not come within the exclusion clauses. I say that because all of the particulars pleaded are founded in negligence. None of the pleadings are suggestive of an intentional tort.
[15] In considering whether a claim could potentially trigger indemnity under the policy, however, the court must look beyond the labels used by the plaintiff in the pleadings to ascertain the “substance” and “true nature” of the claims. See: Tedford v. TD Insurance Meloche Monnex, 2012 ONCA 429, 112 O.R. (3d) 144, at para. 14; Monenco, at paras. 34-35; Scalera, at para. 79. That is because “a plaintiff may draft a statement of claim in a way that seeks to turn intention into negligence in order to gain access to an insurer's deep pockets. See: Scalera, at para. 84; and E. S. Pryor, “The Stories We Tell: Intentional Harm and the Quest for Insurance Funding” (1997) 75 Tex. L. Rev. 1721, at p. 1735.
[16] In this case, I find that is precisely what the plaintiff has attempted to do. That is to disguise an intentional tort as negligence.
[17] I reiterate Ryan and James had been playing a game where they intended to shoot each other with the BB guns. There was consensus that at the time the injury occurred they were in James’ bedroom playing the shooting game. They had both built what Ryan referred to as “forts” or what James referred to as “walls”. Their purpose was to hide behind in order to avoid being hit with pellets from the other person. According to James, those walls were about knee-high.
[18] In James’ discovery/cross-examination, he testified that during the game he had been hit with a pellet at least once prior to being hit in the eye. When asked if it was in the groin area that he had been shot, James responded, “yes something like that.” James testified that immediately before he had been shot in the eye, a “timeout” had been called. It was his evidence that the two of them had stood up and while they were both standing facing each other, Ryan shot point-blank at his eyeball. According to James, Ryan was looking at him at the time.
[19] Ryan's evidence differs somewhat.
[20] In an affidavit sworn August 21, 2015, Ryan states, “both James Riley and I were playing a game. I did not intend to injure James nor did I intend for the pellet to strike James in the eye.” Similarly, in his September 4, 2014 examination for discovery, Ryan’s evidence was that he did not intend to shoot James in the eye and that the injury to James was an accident.
[21] In Ryan's discovery, he testified at questions 307-311 that the two had in the past played with guns shooting each other and that they might have been hit from time to time. Ryan acknowledged that the force of those pellets would leave a welt on either he or James. Similarly, at his November 11, 2016 examination, Ryan confirmed that the purpose of the game was to hit each other with the pellets and that the point of hitting the other person was to cause “red welts and some level of pain.”
[22] Ryan’s evidence at discovery was similar to that of James in that he testified that the two had built forts to hide behind and avoid being hit by the other person. According to Ryan, at one point James had called a “pause”, meaning a timeout. Ryan had responded by exposing himself. James then shot him. According to Ryan, a short time later he reciprocated. Ryan called a pause and when James exposed himself, Ryan shot him. This was the shot that hit James in the eye. According to Ryan's evidence at discovery, he reached his hand above the wall of his “fort” and fired a pellet at James. At the time he could not see James as “… my fort was obstructing my view, and I just shot.”
[23] In his November 11, 2016 examination, Ryan agreed that the fateful pellet had been shot “towards James”. He also agreed that he was “trying to hit [James] somewhere.” In other words, Ryan acknowledged that he intended to fire the fateful shot, he acknowledged that he intended that the shot hit James, and he acknowledged that he intended that the shot injure James and cause “some level of pain.” Ryan acknowledged that “the point of the game” was to hit each other with pellets. In that same examination, Ryan also admitted that he was aware that the pellets “could cause some injury.” Ryan also agreed that he had seen “some amount of pain” and a dent and welt associated with a pellet injury.
[24] The only thing Ryan ultimately denies was an intention to hit James in the eye, and an intention to injure him to the extent that he did.
[25] I did not find it appropriate to, at this stage, decide which version of the events is more likely correct. It seems to me that determination should be left to the trial judge, who will have the benefit of hearing the witnesses speak in their own words and with the assistance of counsel through the process of examination and cross-examination.
[26] Accordingly, I proceeded with this analysis on the assumption that the position most beneficial to Ryan, that is his version of the events, would be found at trial to be correct.
- The law
[27] At paras. 50-52 of the decision in Scalera, the Supreme Court sets out a three stage process to determine whether or not a particular claim could trigger indemnity. I summarize those three steps as follows:
First, the court should determine which of the plaintiff's legal allegations are properly pleaded. In doing so, courts are not bound by the legal labels chosen by the plaintiff.
At the second stage, the court should determine if any claims are entirely derivative in nature. The duty to defend will not be triggered simply because a claim can be cast in terms of both negligence and intentional tort. If the alleged negligence is based on the same harm as the intentional tort, it will not allow the insured to avoid the exclusion clause for intentionally caused injuries.
At the third stage the court must decide whether any of the properly pleaded, non-derivative claims could potentially trigger the insurer's duty to defend.
- Application of the law to the facts
[28] In this case, it is the first and second stages that are in issue.
[29] I find at the first stage that the applicant’s legal allegations are not properly pleaded. I say that because the labels used by the applicant are consistent only with negligence while the evidence supports an intentional act. The pleadings are silent as to Ryan having intentionally pointed the gun in James’ direction and intentionally firing the handgun with the intention of hitting and injuring James.
[30] I reiterate that James stated that Ryan was facing him and looking directly at him when he “shot point-blank” at James’ “eyeball”. Similarly, Ryan's admissions are all consistent with an intentional tort. I reiterate Ryan acknowledged that he intentionally pointed the gun in James direction, that he intended to shoot James, and that he intended to injure James. Ryan also acknowledged that he had baited James to expose himself to the intentional shooting by calling a “pause”. I cannot think of a more intentional sequence of events. The only thing denied by Ryan was the intention to cause the particular injury that had resulted from James being hit in the eye with the pellet rather than in some other body part.
[31] I reiterate that at the second stage, if the alleged negligence is based on the same harm as an intentional tort, it will not allow the insured to avoid the exclusion clause for intentionally caused injuries.
[32] Applicant’s counsel maintains that the injuries that would result from shooting James with a pellet in a place other than his eye would “not rise to the level” of the injuries sustained when the pellet struck James’ eye. Applicant’s counsel maintains that the intended “minor transient injuries” are not the same as “serious and permanent injuries to his eye.” As a result, applicants counsel maintains that although the act was intended, the consequences were not.
[33] I find the distinction between shooting James in the eye and shooting him in some other body part to be a distinction without consequence. There are several reasons I say that.
[34] The first reason is that “if a tort is intended, it will not matter that the result was more harmful than the actor should, or even could have foreseen.” See: Scalera, at para. 99; A. M. Linden, Canadian Tort Law, 6th ed. (1997), at p. 45; Bettel v. Yim (1978), 1978 CanLII 1580 (ON SC), 20 O.R. (2d) 617 (Co. Ct.), at p. 628:
[35] The second reason is because there is no effective distinction between an exclusion clause which covers “intentional acts” and one which covers “intentional injuries”. See: Buchanan v. Gan Canada Insurance Co. 2000 CanLII 5756 (ON CA); and Sansalone v. Wawanesa Mutual Insurance Co., 2000 SCC 25, [2000] 1 S.C.R. 627. Where the tort was intended, it doesn't matter if the result was more harmful than intended. See: Gan, at para. 20 and Bettel v. Yim, at p. 628.
[36] The third reason is because in his examination of November 11, 2016, Ryan acknowledges at question 105 that “if you shot someone in the face or eye you could seriously injure them.” He agreed and added that, as a result, he himself was not allowed to own guns of any kind. In other words, Ryan knew what was at stake when he pulled the trigger with the gun pointed in James’ direction.
[37] As a result, I find that the damages resulting from the negligence pleaded were entirely derived from the intentional shooting and, accordingly, were subsumed for purposes of the exclusion clause. In other words, the harm which resulted from that intentional shooting was the same harm upon which the claims in negligence are based. See: Scalera, at paras. 85 and 130. It follows that even if the plaintiff is successful at trial, the respondents will have no duty to indemnify because of the exclusion clause for intentional acts.
- The case law relied upon by the applicant
[38] I find that the case law relied upon by the applicant does not address the core issue of the exclusion clause for intentional conduct. I find each of the cases distinguishable. The following are examples of my reasons for coming to that conclusion.
[39] Some cases, such as Sovereign, considered the fortuity principle. The fortuity principle aids in precluding coverage for harm caused by an intentional act where the insured intended to inflict the actual harm complained about by the plaintiff. In other words, it is not enough that the act be intended, but there also must be an intention to inflict the actual harm which results. See: Sovereign, at para. 48; Liberty Mutual Insurance Co. v. Hollinger Inc. (2004), 2004 CanLII 10995 (ON CA), 236 D.L.R. (4th) 635 (Ont. C.A.), at paras. 18-19. A fortuitous loss is one that is neither intentional nor inevitable. See: Sovereign, at para. 44; Hollinger, at para 16; ING Insurance Co. of Canada v. Miracle, 2011 ONCA 321, 105 O.R. (3d) 241, at para. 23.
[40] “The fortuity principle does not preclude coverage for an intentional act with unintended consequences. Rather, it precludes coverage for an intended act with intended consequences.” See: Sovereign, at para. 48; Hollinger, at paras. 18-19. In this case we have an intended act, the firing of the gun, with an intended consequence: some level of injury to James. Believing Ryan’s evidence, it was the level of injury that was unintended. However, I reiterate that where a tort is intended, it does not matter if the result was more harmful than intended. See: Gan, at para. 20.
[41] In Sovereign, the Ontario Court of Appeal found that the application judge did not err in finding that the insurer had a duty to defend, notwithstanding the harm was caused by the insured’s intentional act. Sovereign is clearly distinguishable, however, because in Sovereign, the court found that although “malicious prosecution involves intentional conduct”, the policy specifically provided coverage for “malicious prosecution”. See: Sovereign, at para. 63.
[42] Notwithstanding, there are principles referred to in Sovereign which are of assistance here. As was observed in Sovereign, the fortuity principle is not an absolute principle but rather an interpretive aid. The court should “search for an interpretation which, from the whole of the contract, would appear to promote or advance the true intent of the parties at the time of entry into the contract.” See: Sovereign, at para. 65; Consolidated-Bathurst Export Ltd. v. Mutual Boiler and Machinery Insurance Co., 1979 CanLII 10 (SCC), [1980] 1 S.C.R. 888, at p. 901. In the circumstances of this case, I do not find the fortuity principle of assistance to Ryan. It would be unfair to require the insurance company to indemnify Ryan on the basis that although he intended to injure James, he did not intend to specifically injure his eye. It would render the exclusion clause meaningless if insurance companies had to in each case prove that the precise injury, no more or no less, was intended at the time one person deliberately shot the other.
[43] In several of the applicant’s cases there were evidentiary voids at the time the motion was brought. In other words, the motion was premature for evidentiary reasons. As an example, at paras. 16-18 of the decision in Simone v. Economical Mutual Insurance Co., 2013 ONSC 3223, 23 C.C.L.I. (5th) 115, it is clear that there is an evidentiary void as to the issue of a negligence claim which might advance with merit. As a result, it was too early in the process to determine if the negligence allegations would be determined to be a derivative of the intentional assault.
[44] Similarly, the decision in R.D.F. (Litigation Guardian Of) v. Co-operators General Insurance Co., 2003 MBQB 190, 176 Man. R. (2d) 316, involves a fire that was intentionally lit. Kaiser J., however, was unable to establish on the available evidence whether there was an intention to damage property, nor did the pleadings allege such an intention. The court concluded that it was entirely conceivable that the fire had been intentionally lit but negligently allowed to spread and cause damage. Again, it was too early in the proceedings to establish whether there was an intention to damage property. I reiterate that in the case before me, there was an intention to injure.
[45] In other cases put forth by the applicant there was no suggestion whatsoever of an intent to injure. As an example, in Savage v. Belecque, 2012 ONCA 426, 111 O.R. (3d) 309, the plaintiff was held by someone inside an automobile, pulled for some distance, and then fell. The driver of the car then violently reversed the vehicle not realizing the plaintiff had fallen behind it. The plaintiff was injured in the process. In that case, there was no suggestion that there was any intent to injure, as was the case here.
[46] Similarly in Gamblin v. O'Donnell, 2001 NBCA 109, 244 N.B.R. (2d) 102, a hunter in one hunting party fired at a truck belonging to another hunting party. The bullet struck the plaintiff, who was a passenger in that truck, in the head. Again, there was a finding that the defendant had no intention to injure the plaintiff. In the case before me, the intent to injure is admitted.
[47] In Mitsios v. Aviva Insurance Co. of Canada (2008), 2008 CanLII 5591 (ON SC), 89 O.R. (3d) 556 (S.C.), one employee, the plaintiff, sprayed the other, the defendant, with water. The defendant placed the plaintiff in a headlock. The plaintiff lost his balance and was injured. Again, although the headlock itself was intentional, there was no intent to injure. I reiterate Ryan's acknowledgment of the intent to injure.
[48] In other cases it was clear that although the action was intended, the consequences were not. For example, in Stats v. Mutual of Omaha Insurance Co., 1978 CanLII 38 (SCC), [1978] 2 S.C.R. 1153, the court considered the issue of whether the death of Helen Kathleen Brennan in a motor vehicle accident occurred from “accidental bodily injuries” as a result of the vehicle in which she was riding striking a building. The autopsy of Ms. Brown, who was driving the car, indicated that she was “grossly impaired”. The trial judge concluded that Ms. Brown “voluntarily undertook to drive while her in her impaired condition” and ruled that the collision was not accidental. The Supreme Court found that it was. That case is clearly distinguishable in that there was no suggestion that Ms. Brown had deliberately driven the car into the building. I reiterate that in the case before me, Ryan intended to both shoot and injure James.
[49] Similarly in University of Western Ontario (Board of Governors) v. Yanush (1988), 1988 CanLII 4588 (ON SC), 67 O.R. (2d) 525 (C.A.), the Ontario Court of Appeal found that damage to a school dormitory was caused by negligence notwithstanding the defendant intentionally put some toilet paper on his roommate’s bed with him in it and lit it on fire. The court found that the fire was accidental. At pp. 534-535 of the decision, quoting Blair J.A. at p. 236 of the decision in Stats v. Mutual of Omaha Insurance Co. (1977), 1976 CanLII 50 (ON CA), 14 O.R. (2d) 233 (C.A.), the court distinguished between the mental state of a defendant in an intentional tort as opposed to a tort of negligence. The differences is that in negligence the issue is what the mental state of the actor ought to have been, while in an intentional tort the issue is what the mental state actually was. Again, in the case before me, Ryan intended to injure James. That is what his mental state actually was.
C. ORDER
[50] For all of these reasons, the application is dismissed.
D. COSTS
[51] At the conclusion of the motion I asked counsel to address the issue of costs. I directed each counsel to assume that they would win the motion on all issues and asked that they come up with an “all in” amount. Counsel agreed that if either party won on all issues, reasonable costs of the motion should be assessed at $6,500.00, all inclusive. In this case, the respondent was entirely successful.
[52] Accordingly, I order costs payable by the applicant to the respondent in the amount of $6,500, all inclusive. Those costs are payable within 30 days and bear interest after that date in accordance with the provisions of the Courts of Justice Act, R.S.O. 1990, c. C.43.
Original signed by Justice Christopher M. Bondy
Christopher M. Bondy
Justice
Released: December 6, 2016
CITATION: Reeb v. Guarantee Company, 2016 ONSC 7511
COURT FILE NO.: CV-15-22443
DATE: 20161206
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Ryan Reeb
Applicant
– and –
The Guarantee Company of North America and The Co-operators General Insurance Company
Respondents
REASONS
Bondy J.
Released: December 6, 2016