COURT FILE NO.: CV-21-1056
DATE: 2022-07-13
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
BRETT BUTTERFIELD
- and –
INTACT INSURANCE COMPANY
Daniel Freudman, for the Applicant
Douglas Wallace and Sean Miller, for the Respondent
HEARD: March 21, 2022 and written submissions
The Honourable Justice Catrina D. Braid
REASONS ON APPLICATION
I. OVERVIEW
[1] In 2019, Brett Butterfield suffered a psychotic episode while at a firearms store. He stabbed the store owner in the honest but deluded belief that he was defending himself and/or his family. He was charged with aggravated assault, but was found Not Criminally Responsible (“NCR”) due to his schizophrenia.
[2] The store owner sued Mr. Butterfield for negligence in attending the store and applying for a firearms licence when he was lucid, when it was reasonably foreseeable that he would injure or kill someone.
[3] Mr. Butterfield is insured by Intact Insurance Company pursuant to a Condominium Unit Owners Policy. This policy includes third party liability insurance (which imposes a duty on the insurer to defend and indemnify the insured against certain enumerated claims) up to a limit of $2 million (“the Policy”). Section II of the Policy sets out certain exclusions for coverage.
[4] It is not in dispute that the claim falls within the insuring agreement. The dispute in this case is whether the exclusions apply. Section II of the Policy states that Intact does not insure claims arising from bodily injury or property damage caused by any intentional or criminal act by any person insured by the policy.
[5] Intact has denied coverage to Mr. Butterfield, stating that the claims are excluded from the policy because the knife attack “was both an intentional act and a criminal act for which no coverage would be afforded under the policy.”
[6] Mr. Butterfield commenced an application seeking a declaration that Intact owes him a duty to defend the action. In these circumstances, the burden of proof lies with Intact to establish, on a balance of probabilities, that the exclusionary clauses apply.
[7] The following issues arise on this application:
A. What is the true nature of the claim?
B. Were Mr. Butterfield’s actions intentional?
C. Were Mr. Butterfield’s actions criminal?
D. Does Intact have a duty to defend?
E. Is Mr. Butterfield entitled to appoint counsel of his own choosing?
[8] For the reasons set out below, I dismiss the application.
II. ANALYSIS
A. What is the True Nature of the Claim?
[9] The Statement of Claim in action CV-21-430 alleges that Mr. Butterfield attended at Dean Carr’s firearms store to purchase a firearm. Mr. Butterfield suffered a psychotic episode causing him to produce a large knife and attack Mr. Carr by stabbing him around his head and neck. The attack allegedly caused serious physical and psychological injury to Mr. Carr, for which he is seeking damages in the amount of $600,000.
[10] The Statement of Claim describes a cause of action against Mr. Butterfield that is grounded in negligence. There is no claim for assault, battery or any other intentional tort. In addition, the Statement of Claim does not state that Mr. Butterfield committed a criminal act.
[11] The Statement of Claim states the following:
At the material time, Brett was suffering from mental illness, was experiencing delusional, psychotic and depressive episodes, and was under the care and supervision of his parents, who, at the material time, had a duty to supervise the said Brett.
On or about the 23rd day of March, 2019, Brett and his mother, Tamy Sue Butterfield, attended Dean’s store to purchase a firearm. Without warning, Brett produced a large knife and attacked Dean, causing Dean serious personal injuries...
Dean states that, in periods of lucidity prior to the subject attack, Brett was negligent, the particulars of which are as follows:
a) he ought not to have applied for a PAL or attended a firearms store, when it was reasonably foreseeable that he may have injured or killed someone in the course of purchasing or possessing a firearm, including Dean…
[12] When considering an exclusion clause in an insurance policy, the court is not bound by the labels used in the Statement of Claim. The court should determine which of the plaintiff’s legal obligations are properly pleaded. When faced with allegations of both intentional and non-intentional tort, a court construing an insurer’s duty to defend must decide whether the harm allegedly inflicted by the negligent conduct is derivative of the harm caused by the intentional conduct. The plaintiff cannot change an intentional tort into a negligent one simply by choice of words. The court must examine the substance of the allegations contained in the pleadings to determine the true nature of the claims. If the alleged negligence is based on the same harm as the intentional tort, the insured will not be permitted to avoid the exclusion clause for intentionally caused injuries: see Non-Marine Underwriters, Lloyd’s of London v. Scalera, 2000 SCC 24, [2000] 1 S.C.R. 551 at paras. 50 and 85.
[13] The decision in Scalera does not stand for the principle that different tort actions cannot arise out of the same occurrence. Rather, it means that a plaintiff cannot convert an assault and battery into an action in negligence solely to ensure that the defendant’s insurer will provide the necessary ‘deep pocket’ to make a judgment recoverable: Godonoaga v. Khatambakhsh (2000) 2000 5737 (ON CA), 49 O.R. (3d) 22 (C.A.), at para. 32.
[14] To ascertain the true nature and substance of the claim, and whether it falls within the ambit of coverage, the court must look beyond any labels used by the plaintiff: Halifax Insurance Co. of Canada v. Innopex Ltd., (2004) 2004 33465 (ON CA), 72 O.R. (3d) 522 (C.A.). If the pleadings are not sufficiently precise to determine whether the claims would be covered by the policy, the insurer’s obligation to defend will be triggered where, on a reasonable reading of the pleadings, a claim within coverage can be inferred: Monenco Ltd v. Commonwealth Insurance Co., 2001 SCC 49. [2001] 2 S.C.R. 699 at para. 31.
[15] Mr. Butterfield’s counsel argues the Claim is grounded in negligence and that Mr. Carr even concedes that Mr. Butterfield was suffering from a mental illness at the time of the attack, which would render him unable to form intent to commit an intentional tort. There is no mention of intentional or criminal acts in Mr. Carr’s Statement of Claim. The Claim is solely based on negligence and as such, the Claim does not fall within the exclusions. Intact has a duty to defend Mr. Butterfield.
[16] Mr. Butterfield’s counsel also argues that the alleged negligent acts (upon which the Claim is based) occurred prior to the attack. Even if the attack was deemed to be intentional or criminal, the Court should treat the alleged negligent act and the intentional tort separately. Mr. Butterfield need only show that one allegation of negligence would succeed to trigger Intact’s duty to defend.
[17] I have carefully reviewed the Statement of Claim. I find that the alleged negligence claim is based on the same harm as an intentional tort of assault (if it had been pleaded). The elements of the negligence and intentional tort are not sufficiently disparate to make them unrelated. While Mr. Butterfield may have been negligent in applying for the firearms permit, there is no causal link between that negligence and the damages, without the intentional tort of assault.
[18] The damages suffered by Mr. Carr clearly flow from the attack. A plaintiff cannot convert the intentional tort of assault into an action in negligence solely to ensure that the defendant’s insurer will provide the necessary ‘deep pocket’ to make a judgment recoverable. The negligence claim is derivative of an intentional tort, which is the true nature of the claim. I shall therefore consider whether the intentional tort of assault is captured by the exclusion clause in the insurance policy.
B. Were Mr. Butterfield’s Actions Criminal?
[19] I shall first address the issue of whether Mr. Butterfield’s actions were criminal.
[20] Mr. Butterfield states that he was rendered incapable of appreciating the nature and quality of his actions as a result of his psychotic episode. As such, he was neither criminally responsible for his actions nor capable of formulating the ill-intent that would exclude him from coverage under the policy.
[21] During the criminal proceedings in the Ontario Court of Justice, the Crown read in the facts of the aggravated assault. Mr. Butterfield went to a firearms store to buy a gun to protect himself and his mother, because he was convinced that someone was going to break into his home and shoot them. While in the store, he felt threatened and formed the belief that the owner of the gun shop, Mr. Carr, had raped and murdered his female friend. Mr. Butterfield left the store and retrieved a hunting knife. He re-entered the store and began slashing and stabbing Mr. Carr in the head. He yelled, “you raped and killed my girlfriend”, and “murderers need to be murdered.”
[22] After his arrest, Mr. Butterfield underwent two forensic psychiatric assessments to determine whether he was criminally responsible at the time of the assault. Both psychiatrists diagnosed him with schizophrenia and concluded that, due to his mental disorder, he did not have the capacity to know that stabbing Mr. Carr was morally wrong.
[23] Mr. Butterfield acknowledged that the Crown could prove the offence beyond a reasonable doubt. The Court found that Mr. Butterfield committed the act that constitutes the offence and made a finding of NCR due to a mental disorder.
[24] The insurance policy term “criminal act” is unambiguous and means any breach of the Criminal Code. The language of the exclusion permits the insurer to exclude indemnification for damages caused by contravention of the criminal law regardless of the intent or lack of intent to cause damage. The exclusion applies even without proof of intention to cause the injury, so long as the act that causes the harm is criminal in nature. A criminal conviction is not required: Eichmanis v. Wawanesa Mutual Insurance Co., 2007 ONCA 92, 84 O.R. (3d) 668, at paras. 24-27.
[25] Coverage can be denied under the criminal act exception when a person is convicted of a criminally negligent or other general intent offence. The insurer need not demonstrate an intent to injure in addition to the criminal act: Eichmanis, at paras. 5, 17 and 22; and Yates v. Co-operators General Insurance Co. (2007) 2007 82786 (ON SC), 85 O.R. (3d) 475 at paras. 7 and 17.
[26] A criminal conviction requires the Crown to prove the actus reus (the physical act) and the mens rea (the guilty mind or intent). No person is criminally responsible for an act they committed while suffering from a mental disorder rendering them incapable of appreciating the nature and quality of their actions or of knowing that it was wrong: s. 16(1) of the Criminal Code, R.S.C. 1985 c. C-46. To be found NCR within the meaning of s. 16 means that the accused has committed the act but is not responsible. They are not found guilty or not guilty. Rather, they are exempt: R. v. Chaulk, 1990 34 (SCC), [1990] 3 S.C.R. 1303.
[27] When an accused person is found to have committed a crime while suffering from a mental disorder that deprived them of the ability to understand the nature of the act or that it was wrong, they are diverted into a special stream. The NCR accused is to be treated with the utmost dignity and afforded the utmost liberty compatible with their situation: Winko v. British Columbia (Forensic Psychiatric Institute), 1999 694 (SCC), [1999] 2 SCR 625, at paras. 21 and 42.
[28] Where the court finds that an accused committed the act that formed the basis of the offence charged, but was at the time suffering from mental disorder so as to be exempt from criminal responsibility by virtue of subsection 16(1), the court shall render a verdict that the accused committed the act but is NCR on account of mental disorder: s. 672.34 of the Criminal Code. Where an NCR verdict is rendered, the accused shall not be found guilty or convicted of the offence: s. 672.35 of the Criminal Code.
[29] There are two arms of the s. 16 defence, which are as follows:
Appreciating the nature and quality of their act: If an accused is incapable of appreciating the nature and quality of their act under the first arm, the mens rea is negated: R. v. Abbey, 1982 25 (SCC), [1982] 2 S.C.R. 24 at p. 34. It is an inability to understand the physical consequences of the wrongful act. In such a case, the accused had no intention to bring about the consequence of death: R. v. Chaulk, at p. 1321.
Knowing it was wrong (or knowing the penal consequences): If an accused is incapable of knowing their act is wrong under the second arm, their incapacity does not go to the mens rea of the offence. In such a case, the insanity claim is manifested not as a denial of actus reus or mens rea, but rather as a defence in the nature of an excuse or exemption based on the fact that the accused's mental condition rendered them incapable of knowing that the act was wrong. The second branch is based on a claim to be excused for what would otherwise be criminal behaviour: Chaulk, at pp. 1321-1324.
[30] It is not necessary to prove both arms of s.16. Only one needs to be proven: R. v. Ejigu, 2016 BCSC 2278, at para. 342
[31] The court must be satisfied that both the actus reus and the mens rea of the offence have been established before an NCR finding is made. This requirement is for the protection of the accused, since consequences will be imposed upon the NCR finding being made. The court cannot proceed to a determination on the NCR issue until the Crown has proven the case beyond a reasonable doubt: R. v. Tshiamala, 2022 ONSC 422, at paras. 34 and 46.
[32] In this case, Justice McKay of the Ontario Court of Justice must have been satisfied that the actus reus and mens rea of the offence of aggravated assault were proven, beyond a reasonable doubt, when he found that Mr. Butterfield committed the criminal act and found him not criminally responsible. An NCR finding is not available absent a finding that the elements of the offence have been made out. Mr. Butterfield admitted that he intended to stab Mr. Carr, although he was under a delusional belief about what Mr. Carr had done and did not appreciate that stabbing Mr. Carr was morally wrong. The court’s finding was clearly made under the second arm of the s.16 defence.
[33] In Dhingra v. Dhingra, 2012 ONCA 261, Mr. Dhingra was the beneficiary under his wife’s life insurance policy. He killed his wife and was found NCR on account of mental disorder. The Court of Appeal for Ontario stated that the public policy rule that a person who kills another should not be permitted to profit from the crime does not apply where that person has been found NCR of the killing on account of mental disorder. As a person found NCR is not morally responsible for his or her act, there is no rationale for applying the rule.
[34] Although Mr. Butterfield’s counsel relies heavily on the ruling in Dhingra, I do not accept that this decision provides any assistance. The court’s comments regarding the impact of an NCR ruling are distinguishable since the facts of the case were completely different. The ruling in Dhingra pertained to a common law public policy exclusion only, and the court was not interpreting an intentional or criminal act exclusion in an insurance policy.
[35] In this case, Mr. Butterfield acknowledged that he committed the criminal act and the Ontario Court of Justice found that he committed the criminal act. I therefore find that the damages claimed in the action were caused by a criminal act of Mr. Butterfield.
C. Were Mr. Butterfield’s Actions Intentional?
[36] I shall now examine whether the Mr. Butterfield’s actions were intentional.
[37] There are two Canadian cases that offer guidance regarding intentional act exclusion when the insured’s mental state is called into question.
[38] In Whaley v. Cartusiano, (1990) 1990 6650 (ON CA), 72 O.R. (2d) 523 (C.A.), the insured shot his neighbour, severely injuring him. He was charged with assault but was acquitted by reason of insanity. The plaintiff brought an action for damages for assault. The insurer denied coverage on the basis that the bodily injury was intentionally caused.
[39] The court in Whaley held that a policy of insurance deals with matters governed by the civil as opposed to the criminal law. When the policy speaks of intentional acts, it refers to civil responsibility rather than criminal responsibility. The definition of intent should be that imposed by civil law and not by criminal law. A defendant to a civil action will be relieved of liability if he was incapable of appreciating the nature and quality of his actions, but will not be excused if he understood this but did not realize his actions were wrong.
[40] The defendant in Whaley intended to shoot the plaintiff and knew that, by discharging the firearm, he would kill or injure the plaintiff. His act fell within the exclusion clause in the policy and the insurer was not liable.
[41] In Darch Estate v. Farmer’s Mutual Insurance Co., 2011 ONSC 3696, the deceased’s estate brought an action against the insurer for damages for loss due to a fire set by the deceased’s son. The son had suffered head injuries in a car accident in 1978 and was found NCR at his criminal trial for arson.
[42] The insurer in Darch Estate argued that the loss was excluded by the policy, which excludes losses caused by intentional, wilful or criminal acts of insured persons. The test for determining whether an individual suffering from a mental disorder is responsible for his tortious act in a civil case is whether the defendant was able to appreciate the nature and consequences of his act. The court held that the son knew what he was doing when he obtained and poured gasoline, lit matches and set the house on fire, despite his other delusions. Therefore, the intentional act exclusion of the policy applied.
[43] In submissions, Mr. Butterfield’s counsel suggested that the trial judge may find that Mr. Butterfield’s psychosis was so extreme that he was not capable of appreciating the nature and quality of his act, which would render him immune from intentional tort liability. However, the defendant's conduct would have to be akin to that of a robot or an automaton for the court to exonerate him. In this case, I find that there is absolutely no evidence of such an extreme state.
[44] Two forensic psychiatric assessments were undertaken to determine whether Mr. Butterfield was criminally responsible at the time of the assault. Both psychiatrists diagnosed him with schizophrenia and concluded that, due to his mental disorder, he did not have the capacity to know that stabbing Mr. Carr was morally wrong. The criminal court found that Mr. Butterfield committed the act that constitutes the offence, but found that Mr. Butterfield was NCR on the basis that he did not have the capacity to know that stabbing Mr. Carr was morally wrong. As I stated previously, the criminal court clearly proceeded under the second branch of the s. 16 analysis with respect to Mr. Butterfield.
[45] Mr. Butterfield formed the intention to stab Mr. Carr and then took several steps to fulfill his intention. He left the store and went to retrieve a hunting knife. He returned to the store with the hunting knife in hand. He walked up to Mr. Carr and stabbed him, yelling that he needed to be murdered. Mr. Butterfield’s stated goal was to harm Mr. Carr.
[46] Mr. Butterfield understood the physical nature and consequences of his act. He clearly did not appreciate that what he was doing was morally wrong given the schizophrenia diagnosis, but that does not change the fact that his actions were intended to harm Mr. Carr. Mr. Butterfield’s actions demonstrate a clear intention to injure or kill Mr. Carr with a large knife, even if it was based on a delusional belief wherein he did not know his actions were morally wrong.
D. Does Intact Have a Duty to Defend?
[47] When the pleadings allege fact which, if true, would require the insurer to indemnify the insured for the claim, then the insurer is obliged to provide a defence. Even if the allegations are false or groundless, they are assumed to be true for the purposes of such coverage assessment and determination. In order for the duty to defend to arise, it is not necessary to prove that the duty to indemnify will certainly arise. The mere possibility that a claim within the policy may succeed is enough to trigger the duty to defend: Nichols v. American Home Assurance Co. 1990 144 (SCC), [1990] 1 S.C.R. 801 at p. 810.
[48] In this case, I find that the knife attack was both an intentional act and a criminal act. Intact has established, on a balance of probabilities, that the exclusionary clauses in the insurance policy apply. Intact does not owe a duty to defend or indemnify Mr. Butterfield against the claims in the action.
E. Is Mr. Butterfield Entitled to Appoint Counsel of his Own Choosing?
[49] In light of the fact that there is no duty to defend, I need not address the request for an order that Mr. Butterfield be entitled to appoint counsel of his own choosing.
III. COSTS
[50] In the event that the parties cannot agree as to costs, they are directed to provide written submissions. The submissions shall be no longer than two typed pages, double-spaced, in addition to any relevant Bill of Costs and written Offers to Settle. Intact shall provide costs submissions by August 1, 2022; and Mr. Butterfield shall provide any response by August 15, 2022.
[51] In the event that submissions are not received from either party by August 15, 2022, costs shall be deemed settled. Costs submissions shall be filed in the usual manner and also sent by email to Kitchener.SCJJA@ontario.ca, marked for the attention of Justice Braid.
IV. CONCLUSION
[52] For all of these reasons, the application is dismissed.
___________________
Braid, J.
Released: July 13, 2022
COURT FILE NO.: CV-21-1056
DATE: 2022-07-13
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
BRETT BUTTERFIELD
- and –
INTACT INSURANCE COMPANY
REASONS ON APPLICATION
CDB
Released: July 13, 2022