Obront v. The Dominion of Canada General Insurance Company[^1]

[Indexed as: Obront v. Dominion of Canada General Insurance Co.]

Ontario Reports

Ontario Superior Court of Justice

Pattillo J.

January 25, 2019

144 O.R. (3d) 725 | 2019 ONSC 594

Case Summary

Insurance — Insurer's obligation to defend — Exclusion clauses — Intentional or criminal acts — Plaintiff suing insured for both negligence and assault and battery arising from same series of acts — Negligence claim derivative of intentional torts — Exclusion clause in insured's homeowner's policy for intentional or criminal acts applying — Insurer having no obligation to defend insured.

The plaintiff sued the applicant for damages for negligence and assault and battery, pleading that, while they were both attending a summer camp, the applicant pulled the plaintiff's head back, kneed him in the back and punched [page726] him in the neck. The respondent insurer denied coverage under a homeowner's policy, relying on an exclusion in the policy for "intentional or criminal acts". The applicant brought an application for a declaration that the respondent had an obligation to defend and indemnify him.

Held, the application should be dismissed.

The application for a declaration that the respondent had a duty to indemnify the applicant was premature, as a finding of a duty to indemnify could only be made following a final determination of the allegations in the action.

The negligence claim and the claim for assault and battery both arose out of the same factual allegations. The negligence claim was derivative of the intentional torts for the purpose of the exclusion clause analysis. It was unnecessary for the plaintiff to specifically plead that the applicant intended to injure the defendant. The trigger for the exclusion arose from an intentional tort, rather than simply conduct that was intentional. The intention to harm or injure is not an essential element of the tort of battery, which requires only intentional contact which is harmful or offensive. The substance of the claim as pleaded was the intentional tort of battery, which was excluded from coverage under the policy based on the intentional acts exclusion. The respondent had no duty to defend the applicant.

Non-Marine Underwriters, Lloyd's of London v. Scalera, [2000] 1 S.C.R. 551, [2000] S.C.J. No. 26, 2000 SCC 24, [ 185 D.L.R. (4th) 1, 253 N.R. 1, [2000] 5 W.W.R. 465, J.E. 2000-935, 135 B.C.A.C. 161, 75 B.C.L.R. (3d) 1, 18 C.C.L.I. (3d) 1, 50 C.C.L.T. (2d) 1, [2000] I.L.R. I-3810, 96 A.C.W.S. (3d) 479, R.E.J.B. 2000-17997, apld

ING Insurance Co. of Canada v. Mitsios (2007), 2007 1917 (ON SC), 84 O.R. (3d) 715, [2007] O.J. No. 338, 45 C.C.L.I. (4th) 88, [2007] I.L.R. I-4575, 154 A.C.W.S. (3d) 951 (C.A.), not folld

Other cases referred to

Buchanan v. Gan Canada Insurance Co. (2000), 2000 5756 (ON CA), 50 O.R. (3d) 89, [2000] O.J. No. 2616, 134 O.A.C. 189, 21 C.C.L.I. (3d) 147, [2000] I.L.R. I-3876, 98 A.C.W.S. (3d) 193 (C.A.); Nichols v. American Home Assurance Co., 1990 144 (SCC), [1990] 1 S.C.R. 801, [1990] S.C.J. No. 33, 68 D.L.R. (4th) 321, 107 N.R. 321, J.E. 90-643, 39 O.A.C. 63, 45 C.C.L.I. 153, [1990] I.L.R. 10058, [1990] ILR Â1-2583 at 10058, 20 A.C.W.S. (3d) 699; Progressive Homes Ltd. v. Lombard General Insurance Co. of Canada, [2010] 2 S.C.R. 245, [2010] S.C.J. No. 33, 2010 SCC 33, 323 D.L.R. (4th) 513, 406 N.R. 182, [2010] 10 W.W.R. 573, J.E. 2010-1683, 293 B.C.A.C. 1, 9 B.C.L.R. (5th) 1, 73 B.L.R. (4th) 163, 89 C.C.L.I. (4th) 161, 93 C.L.R. (3d) 1, [2010] I.L.R. I-5051, E.Y.B. 2010-179515, 2010EXP-3049, 193 A.C.W.S. (3d) 1292

APPLICATION for a declaration that the insurer had an obligation to defend and indemnify the insured.

Alfred Kwinter and Veronica Marson, for applicant.

Christopher I.R. Morrison, for respondent.

PATTILLO J.: —

Introduction

[1] The applicant, Benjamin Obront, seeks a declaration that the respondent, the Dominion of Canada General Insurance Company, has a duty to both defend and indemnify him in respect of the [page727] claim brought against him in the Ontario Superior Court, File No. CV-13-489762 (the "action") pursuant to Homeowners Insurance Policy No. ADH 1817789 issued by the respondent (the "policy").

[2] For the reasons that follow, I have concluded that the application should be dismissed. The respondent has no duty to indemnify the applicant at this stage of the action and, based on the claim as asserted in the action, has no duty to defend.

Background

[3] The action arises out of an incident that occurred on July 5, 2012 at Bayview Glen Day Camp ("Bayview Glen") in Toronto. The plaintiff, who was a counsellor at Bayview Glen at the time, was injured as a result of an incident involving the applicant who, at the time, was a camper at the camp and enrolled in the staff-in-training program.

[4] The action was commenced against the applicant and other defendants by statement of claim issued October 1, 2013. The statement of claim has since been amended two times, most recently by order of the court dated July 5, 2018. The defendants, including the applicant, have filed statements of defence. Pleadings are closed and production and discoveries have been completed.

[5] The operable pleading is the amended, amended statement of claim in the action (the "claim"). It pleads, among other things, that the applicant, who was a minor at the time, "suddenly and without warning . . . approached [the plaintiff] from behind and put his two hands on top of [the plaintiff's] head. He proceeded to pull [the plaintiff's] head back and knee him in the back" (para. 9). As the plaintiff was walking to a nearby bench to sit, the applicant "approached [the plaintiff] and once again pulled his head back and this time punched [the plaintiff] in the neck" (para. 11).

[6] The claim further pleads that the injuries suffered by the plaintiff were caused and/or contributed to by the negligence of the defendants (para. 14). The particulars against the applicant are set out at para. 14 B, and are as follows:

(a) he negligently inflicted harm upon [the plaintiff], by engaging in excessive and dangerous horseplay;

(b) he negligently pulled [the plaintiff's] head back, kneed him in the back and punched him in the neck;

(c) he continued to engage in the excessive and dangerous horseplay on the plaintiff after he had fallen to the ground; [page728]

(d) he behaved in a reckless manner with total disregard to [the plaintiff's] safety, when he knew or ought to have known that such behaviour might cause serious injury; and

(e) he assaulted [the plaintiff] without provocation.

[7] At the time of the incident, the applicant and his parents were insured under the policy which was issued by the respondent.

[8] Based on the allegations in the original statement of claim which described the incidents set out in para. 5 above as an "assault" and did not contain the words "excessive and dangerous horseplay" in para. 14 B, the respondent sent the applicant's parents a reservation of rights letter on February 6, 2014, advising that the applicant was not covered under the policy due to the intentional acts exclusion.

[9] The intentional acts exclusion in the policy reads as follows:

This policy does not apply to:

INTENTIONAL OR CRIMINAL ACTS, meaning bodily injury or property damage resulting from:

an intentional or criminal act by any person or any named insured who is insured by this policy or,

at the direction of any person or named insured who is insured by this policy.

Discussion

[10] As noted, at the outset, the applicant seeks a declaration that the respondent has a duty to both defend and indemnify him in respect of the plaintiff's claim in the action.

[11] Both in his factum and during argument, the applicant sought to conflate the duty to defend and the duty to indemnify. As noted in Nichols v. American Home Assurance Co., 1990 144 (SCC), [1990] 1 S.C.R. 801, [1990] S.C.J. No. 33, at para. 17, the duty to defend is much broader than the duty to indemnify and independent from it. Simply put, the duty to defend is triggered by allegations in the statement of claim while the duty to indemnify is determined only when covered allegations are finally determined in an action.

[12] As stated by McLachlin J. (as she then was) in American Home, at para. 13:

The respondent also relies in this connection on the contention that the duty to defend is broader than and independent of the duty to indemnify. This is so, in the sense that the duty to defend arises where the claim alleges acts or omissions falling within the policy coverage, while the duty to indemnify arises only where such allegations are proven at trial. But it does not follow that the duty to defend is so broad that it arises with respect to allegations which are clearly beyond the scope of the policy. [page729]

[13] The policy, s. E, para. 1, provides that the respondent's obligation is to pay on behalf of the policyholder "all sums you become legally liable to pay". Further, with respect to coverage under s. E, the policy states at p. 9 that no legal action shall be brought against the respondent "until the amount of your obligation to pay has been finally determined either by judgment against you, or by an agreement which has our consent".

[14] To the extent therefore that the applicant seeks a declaration that the respondent has a duty to indemnify under the policy, that relief is premature. A finding of indemnification can only be made following a final determination of the allegations in the action. That portion of the application is therefore dismissed.

[15] The real issue before the court at this stage is whether the respondent has a duty to defend the action on the applicant's behalf.

[16] The Supreme Court of Canada summarized the duty to defend in Progressive Homes Ltd. v. Lombard General Insurance Co. of Canada, [2010] 2 S.C.R. 245, [2010] S.C.J. No. 33, 2010 SCC 33, at paras. 19 and 20 as follows:

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 (Nichols v. American Home Assurance Co., 1990 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). It is irrelevant whether the allegations in the pleadings can be proven in evidence. That is to say, the duty to defend is not dependent on the insured actually being liable and the insurer actually being required to indemnify. What is required is the mere possibility that a claim falls within the insurance policy. Where it is clear that the claim falls outside the policy, either because it does not come within the initial grant of coverage or is excluded by an exclusion clause, there will be no duty to defend (see Nichols, at p. 810; Monenco, at para. 29).

In examining the pleadings to determine whether the claims fall within the scope of coverage, the parties to the insurance contract are not bound by the labels selected by the plaintiff (Non-Marine Underwriters, Lloyd's of London v. Scalera, 2000 SCC 24, [2000] 1 S.C.R. 551, at paras. 79 and 81). The use or absence of a particular term will not determine whether the duty to defend arises. What is determinative is the true nature or the substance of the claim (Scalera, at para. 79; Monenco, at para. 35; Nichols, at p. 810).

[17] [Non-Marine Underwriters, Lloyd's of London v.] Scalera, 2000 SCC 24, [2000] 1 S.C.R. 551, [2000] S.C.J. No. 26 also involved the issue of a duty to defend under a homeowner's policy with an intentional act exclusion. At paras. 50 to 52 of the decision, Iacobucci J. discussed how a court should determine whether a claim triggers the duty to defend:

Determining whether or not a given claim could trigger indemnity is a three-step process. First, a court should determine which of the plaintiff's [page730] legal allegations are properly pleaded. In doing so, courts are not bound by the legal labels chosen by the plaintiff. A plaintiff cannot change an intentional tort into a negligent one simply by choice of words, or vice versa. Therefore, when ascertaining the scope of the duty to defend, a court must look beyond the choice of labels, and examine the substance of the allegations contained in the pleadings. This does not involve deciding whether the claims have any merit; all a court must do is decide, based on the pleadings, the true nature of the claims.

At the second stage, having determined what claims are properly pleaded, 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.

Finally, 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. In this appeal, I conclude that the respondent has no duty to defend. The plaintiff has alleged three basic claims against the appellant: sexual battery, negligence, and breach of fiduciary duty.

[18] In discussing how a court should deal with pleadings that contain allegations of both intentional and non-intentional torts, Iacobucci J. stated, at paras. 85 and 86 of Scalera:

Having construed the pleadings, there may be properly pleaded allegations of both intentional and non-intentional tort. When faced with this situation, a court construing an insurer's duty to defend must decide whether the harm allegedly inflicted by the negligent conduct is derivative of that caused by the intentional conduct. In this context, a claim for negligence will not be derivative if the underlying elements of the negligence and of the intentional tort are sufficiently disparate to render the two claims unrelated. If both the negligence and intentional tort claims arise from the same actions and cause the same harm, the negligence claim is derivative, and it will be subsumed into the intentional tort for the purposes of the exclusion clause analysis. If, on the other hand, neither claim is derivative, the claim of negligence will survive and the duty to defend will apply. Parenthetically, I note that the foregoing should not preclude a duty to defend simply because the plaintiff has pleaded in the alternative. As Pryor, "The Stories We Tell: Intentional Harm and the Quest for Insurance Funding", supra, points out at p. 1752, "[p]laintiffs must have the freedom to plead in the alternative, to develop alternative theories, and even to submit alternative theories to the jury". A claim should only be treated as "derivative", for the purposes of this analysis, if it is an ostensibly separate claim which nonetheless is clearly inseparable from a claim of intentional tort.

The reasons for this conclusion are twofold. First, as discussed above, one must always remember that insurance is presumed to cover only negligence, not intentional injuries. Second, this approach will discourage manipulative pleadings by making it fruitless for plaintiffs to try to convert intentional torts into negligence, or vice versa. While courts should not concern themselves with whether or not pleadings are designed to generate insurance coverage, following the guidelines set out above will provide insurers with sufficient protections against manipulative pleadings.

[19] The substance of the plaintiff's legal claims in the action as pleaded in para. 14 B of the claim are for negligence and assault [page731] and battery. They are not pleaded in the alternative. Further, both causes of action arise out of the same factual allegations in the claim that the applicant, without warning, pulled the plaintiff's head back twice, the first time kneeing him in the back and the second time punching him in the neck. Those allegations clearly sound in intentional tort. The negligence claim therefore is derivative of the intentional tort for the purpose of the exclusion clause analysis (Scalera, para. 85).

[20] The applicant submits that in order for the intentional acts exclusion to apply, it must be specifically plead that the defendant (applicant) intended to injure the plaintiff. In support of that submission, the applicant relies on the decision of this court in ING Insurance Co. of Canada v. Mitsios (2007), 2007 1917 (ON SC), 84 O.R. (3d) 715, [2007] O.J. No. 338 (S.C.J.).

[21] Mitsios was an application by ING for a declaration it had no duty to defend Mitsios in respect of a claim against him that alleged the plaintiff sprayed the defendant with a water hose at work and while the defendant was "restraining" the plaintiff, he used "excessive force" and by placing him in a headlock, caused the plaintiff to lose his balance and fall after which the defendant fell on the plaintiff.

[22] The motion judge held that the exclusion clause did not apply because there was no express pleading that the defendant "intended to injure" the plaintiff. In reaching that conclusion, the motion judge relied on the following statement by Iacobucci J. in Scalera, at para. 92:

At the outset, the wording of this clause presents a threshold issue. The respondent argues that the clause requires only an intentional act, not an intent to injure. The majority below agreed with this interpretation. However, I agree with Finch J.A.'s dissent on this point. If the respondent were correct, almost any act of negligence could be excluded under this clause. After all, most every act of negligence can be traced back to an "intentional . . . act or failure to act". As this Court made clear in Canadian Indemnity Co. v. Walkem Machinery & Equipment Ltd., 1975 141 (SCC), [1976] 1 S.C.R. 309, "negligence is by far the most frequent source of exceptional liability which [an insured] has to contend with. Therefore, a policy which would not cover liability due to negligence could not properly be called 'comprehensive'" (pp. 316-17). Consistent with this decision, the purpose of insurance, and the doctrines of reasonable expectations and contra proferentem referred to above, I believe the exclusion clause must be read to require that the injuries be intentionally caused, in that they are the product of an intentional tort and not of negligence.

[23] I agree with the respondent that when Iacobacci J.'s reasons in Scalera are read as a whole, what the learned judge was stating in the above paragraph is that the trigger for the exclusion is that the damage arose from an intentional tort, rather than simply conduct that was intentional. [page732]

[24] It must also be remembered that the intention to harm or injure the plaintiff is not an essential element of the tort of battery. Battery requires only intentional contact which is harmful or offensive. Although Scalera concerned a sexual assault, Iacobucci J. discussed the elements of the tort of battery, at paras. 96 to 99, as follows:

Sexual battery is a form of battery, the traditional test for which is relatively straightforward. In M. (K.), supra, at p. 25, La Forest J. defined assault and battery as "causing another person to apprehend the infliction of immediate harmful or offensive force on her person coupled with the actual infliction of that harmful or offensive force". What is notably absent from this definition is any intent to injure. Professor Klar, in his second edition of Tort Law (1996), makes this point at p. 42:

For

the tort of intentional battery, the defendant must have intended an offensive, physical contact with the plaintiff. The defendant need not have intended to harm or injure the plaintiff, although in most battery cases there is an intention to injure.

A.M. Linden, in Canadian Tort Law (6th ed. 1997), emphasizes this point at p. 43: "A battery can be committed even though no harm or insult is intended by the contact. If the contact is offensive to the recipient, even if a compliment was intended, it is tortious." See also Wilson v. Pringle, [1986] 2 All E.R. 440 (C.A.), at p. 445; Spivey v. Battaglia, 258 So.2d 815 (Fla. 1972); O.M. Reynolds, "Tortious Battery: Is 'I Didn't Mean Any Harm' Relevant?" (1984), 37 Okla. L. Rev. 717.

Intentional battery generally requires only the intent to cause the physical consequences, namely, an offensive touching. Klar, supra, makes this point at p. 30:

Technically, however, the concept of "intention" in the intentional torts does not require defendants to know that their acts will result in harm to the plaintiffs. Defendants must know only that their acts will result in certain consequences. It is not necessary for defendants to realize that these intended consequences are in fact an infringement of the legal rights of others. Intention, in other words, focusses on physical consequences.

To similar effect is Linden, supra, at p. 33: "Conduct is intentional if the actor desires to produce the consequences that follow from an act."

Moreover, if a tort is intended, it will not matter that the result was more harmful than the actor should, or even could have foreseen. Linden, supra, at p. 45, quotes Borins Co. Ct. J. (as he then was) in Bettel v. Yim (1978), 1978 1580 (ON SC), 20 O.R. (2d) 617, at p. 628:

If physical contact was intended, the fact that its magnitude exceeded all reasonable or intended expectations should make no difference. To hold otherwise . . . would unduly narrow recovery where one deliberately invades the bodily interests of another with the result that the totally innocent plaintiff would be deprived of full recovery for the totality of the injuries suffered as a result of the deliberate invasion of his bodily interests.

(Emphasis added) [page733]

[25] In Buchanan v. Gan Canada Insurance Co. (2000), 2000 5756 (ON CA), 50 O.R. (3d) 89, [2000] O.J. No. 2616, 134 O.A.C. 189 (C.A.), the Court of Appeal dismissed an appeal from a decision that an insurer could rely on the exclusion clause in a homeowner's policy. In reaching its decision, the court considered Scalera. At para. 20 of the decision, Macpherson J.A., in reference to the above discussion, noted that Iacobucci J. "held that the relevant distinction to be made is between injuries caused by an intentional tort and those which arise from negligence".

[26] Accordingly, I decline to follow the reasoning in Mitsios. The fact that the claim fails to plead the applicant had an intention to injure does not remove the intentional tort. As discussed, intention to injure is not a requisite for the intentional tort of battery.

[27] The claim pleads the essential elements of the tort of battery. Damages cause by offensive contact. Further, the intention to make physical contact which is offensive is evident, in my view, from the facts as pleaded in the claim. As the respondent submits, one does not grab someone's head, pull it back and knee them in the back and then subsequently punch them in the neck without an intention to make physical contact which is offensive. Nor does describing the conduct as "excessive and dangerous horseplay" ameliorate it or change the true nature of the conduct pleaded.

Conclusion

[28] For the above reasons therefore, I find that the respondent has no duty to defend the applicant in the action. The substance of claim as pleaded is the intentional tort of battery which, based on the intentional act exclusion, is excluded from coverage under the policy.

[29] The application is therefore dismissed.

[30] The respondent is entitled to its costs of the application, if demanded, on a partial indemnity basis. Based on the submissions of counsel at the conclusion of the hearing concerning costs, I fix those costs at $4,500 in total. In my view, having regard to the issues, that amount is fair and reasonable as well as proportionate and well within the reasonable expectations of the applicant based on his costs outline.

Application dismissed.

Notes

[^1]: Vous trouverez la traduction française à la p. 734, post.

End of Document