CITATION: HUGO v. MCNORGAN. 2026 ONSC 4739

COURT FILE NO.: CV-22-1194, CV-22-1195, CV-22-1196, CV-22-1204, CV-22-1208, CV-22-1227, CV-23-2748, CV-24-31

DATE: 20260203

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

LAURIE MARIE HUGO, KYLE MARIE HUGO, by her Litigation Guardian, Laurie Marie Hugo, DAVID PIERRE HUGO AND BRYCE DAVID HUGO, by his Litigation Guardian, Laurie Marie Hugo

Plaintiffs

– and –

PETRONELLA MCNORGAN, GERALD MCNORGAN AND CO-OPERATORS GENERAL INSURANCE COMPANY

Defendants

COURT FILE NO.: CV-22-1195

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

SCARLETT EMLEY, a minor by her Litigation Guardian Tiffany-Ann Stones, AND TIFFANY-ANNE STONES

Plaintiffs

– and –

PETRONELLA MCNORGAN, GERALD MCNORGAN AND CO-OPERATORS GENERAL INSURANCE COMPANY

Defendants

COURT FILE NO.: CV-22-1196

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

KATHERINE VAN GINKEL, JAMES ROBERT STEMP, JACOB STEMP, by his Litigation Guardian, Katherine Van Ginkel, MARGARET VAN GINKEL AND JACOB VAN GINKEL

Plaintiffs

– and –

PETRONELLA MCNORGAN, GERALD MCNORGAN AND SCOTTISHH & YORK INSURANCE CO LIMITED

Defendants

COURT FILE NO.: CV-22-1204

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

ISABELLE BELANGER, a minor by her Litigation Guardian, Jody Belanger, JODY BELANGER, MARTIN BELANGER AND AMELIA BELANGER a minor by her Litigation Guardian, Jody Belanger

Plaintiffs

– and –

PETRONELLA MCNORGAN, GERALD MCNORGAN AND SECURITY NATIONAL INSURANCE COMPANY/TD INSURANCE MELOCHE MONNEX

Defendants

COURT FILE NO.: CV-22-1208

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

KELLI MARIE NORTON AND C.E.M. NORTON, by their Litigation Guardian, Steven Norton

Plaintiffs

– and –

PETRONELLA MCNORGAN, GERALD MCNOGRAN AND PEMBRIDGE INSURANCE COMPANY

Defendants

COURT FILE NO.: CV-22-1227

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

ERICA LEATHORN, by her Litigation Guardian, Emma Leathorn, EMMA LEATHORN AND ROBERT ADAM LEATHORN

Plaintiffs

– and –

PETRONELLA MCNORGAN, GERALD MCNORGAN AND TD HOME AND AUTO INSURANCE COMPANY

Defendants

COURT FILE NO.: CV-23-2748

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

AUTUMN HATTON-GAUTHIER, a minor, by her Litigation Guardian, Joanne Hatton, JOANNE HATTON, JOHN GAUTHIER AND FARRAH KROMPASS, a minor, by her Litigation Guardian, Joanne Hatton

Plaintiffs

– and –

PETRONELLA MCNORGAN, GERALD MCNORGAN AND ALLSTATE INSURANCE COMPANY

Defendants

COURT FILE NO.: CV-24-31

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

KARA GRACE LOUISE TONN, a minor, by her Litigation Guardian, Richard Michael Albert Tonn

Plaintiffs

– and –

PETRONELLA MCNORGAN, GERALD MCNORGAN

Defendants

Gregory Willson for all Plaintiffs/Moving Parties

Brian Bangay for the Defendants McNorgans/Responding Parties

William Woodward for all OPCF 44R Insurer Defendants/Responding Parties, for the Defendants

HEARD: In Writing with brief oral submissions on January 13, 2026

SUPPLEMENTAL reasons for decision

JUSTICE E. TEN CATE

1These supplemental reasons follow my earlier decision dated August 26, 2025.¹

2Shortly after release, the Court of Appeal released its decision in Rodriguez-Vergara v. Lamoureux². With my permission, the parties made further submissions on the effect of Rodriguez-Vergara on two issues: (1) priority of payment as between the OPCF 44R insurers and the umbrella policy; and (2) the subrogation rights of the OPCF 44R’s. These issues were not argued at the initial motion; they were included solely by me in my capacity as case management judge to assist at a settlement conference over which I will eventually preside. The parties consented to this extraordinary procedure to obtain the most expeditious and least expensive determination of multiple claims.

3The plaintiffs and the McNorgan defendants take the position that Rodriguez-Vergara governs priority of payment such that the OPCF 44R policies pay before the umbrella policy, while the OPCF 44R insurers take the opposite position.

4On the issue of subrogation, the plaintiffs and the McNorgan defendants submit that the OPCF 44R insurers have no subrogation rights against their insurer and limited rights to subrogate against them directly. The OPCF 44R insurers submit that they have full subrogation rights against the McNorgans.

Analysis

(a) Priority of Payment

5The priority question turns on whether the policy wording in the SPF 7 endorsement attached to the umbrella policy is as strong as the policy wording in Rodriguez-Vergara.

6I pause to note that in my earlier decision, I incorrectly referred to the umbrella policy as a “PLUP”. In these supplementary reasons, I will refer to the policy as a “PULP” -- the specific umbrella policy held by the McNorgan defendants on the date of loss.

7In Rodriguez-Vergara, the policy under consideration was a State Farm Insurance PLUP (Personal Liability Umbrella Policy). After Desjardins’ acquisition of the Canadian operations of State Farm in 2015, State Farm policies were converted to Desjardins’ policies, resulting in the conversion of PLUP’s to PULP’s (Personal Umbrella Liability Policy).

8The State Farm PLUP offered excess automobile liability coverage through its proprietary wording and a separate underinsured motorist coverage endorsement known as “Option W”. That endorsement provided for uninsured/underinsured coverage up to the limit provided certain conditions were met. The PLUP provided as follows:

Coverage L – Personal Liability: If you are legally obligated to pay damages for a loss, we will pay your net loss minus the retained limit.

The retained limit was defined, in part, as:

The total limits of liability of any underlying insurance you may collect.

The excess nature of the policy was established under Other Conditions:

Other Conditions: This policy is excess over any other valid and collectible insurance except:

a) Insurance written specifically as excess coverage over the retained limit for Coverage L; or

b) Insurance written specifically as excess coverage over the limits of this policy.

(Emphasis added.)

9By contrast, in the Desjardins PULP, the excess automobile coverage is provided by the wording of the “SPF 7 – Standard Excess Automobile Policy” endorsement which provides:

“…the Excess Insurer agrees to indemnify the Insured under the first loss motor vehicle liability insurance against liability imposed by law upon the Insured for an amount or amounts in excess of the limit(s) of the first loss insurance and the underlying excess insurance for loss or damage arising from the ownership, use or operation of the automobile(s) covered under such first loss insurance resulting from Bodily Injury to or Death of any Person or Damage to Property”.³

10In my view, the purpose of the SPF 7 endorsement is to convert the PLUP—which is otherwise a general personal umbrella policy – into one that can respond to automobile-related liability once the primary automobile liability limits have been exhausted. The SPF 7 provides additional third-party liability above the limits of the insured’s primary automobile policy and any listed underlying excess layers. Its role is to extend total available indemnity for serious losses that exceed those underlying limits. The excess insurer’s indemnity obligation is not primary but is triggered when the insured incurs legal liability arising from the ownership, use, or operation of the covered automobile; and the total amount of liability exceeds the stated limits of both the primary policy and any scheduled underlying excess policies. Only after those lower layers are exhausted by actual payment of a covered loss does the excess insurer’s duty to indemnify arise.

11In my earlier decision I determined that the PULP, which included the SPF 7, is not a contract of automobile insurance, a motor vehicle liability insurance policy or an owner’s policy pursuant to the Insurance Act⁴ -- it is a pure excess policy. Although the OPCF 44R insurers disagree, this determination has been made and cannot be relitigated. It therefore logically flows from that determination that the priority scheme outlined by Trimble J. in Rodriguez-Vergara⁵, and affirmed by the Court of Appeal, governs.

12Moreover, Trimble J.’s interpretation is consistent with several important public policy objectives.

13First, the plaintiffs receive consumer protection which is the purpose of the OPCF 44R.⁶ The OPCF 44R Family Protection Coverage, as the name implies, is optional automobile insurance endorsement that protects the insured (and their family) if they are injured or killed by and at-fault driver who is uninsured, underinsured or unidentified. It forms part of the motor vehicle liability policy. This endorsement, while not mandatory, is extremely common and is rarely excluded from in Ontario; it is a standard, inexpensive “add-on” by most insurance companies because it ensures that the innocent insureds can access the full limit of their policy.

14Second, it provides consumer protection to the McNorgan defendants who purchased optional, extended coverage to protect themselves from third-party claims in the very circumstances presented here.

15Third, it aligns with prior decisions of the Court of Appeal in Keelty v. Bernique⁷, Heuvelman v. White⁸, McKenzie v. Dominion of Canada⁹, Benson v. Walt¹⁰ and Smith v. Taylor¹¹.

16Fourth, scarce resources – judicial and non-judicial – are conserved because the policy limits available to each plaintiff increase, thereby decreasing the likelihood of a shortfall between the value of each claim and the available limits, making settlement more likely before trial.

17Superimposing the Rodriguez-Vergara priority scheme on the facts of this case, the effect is as follows:

1. All plaintiffs share pro rata in the underlying limits of the motor vehicle liability policy of $300,000;

2. The plaintiffs in each action then have recourse to their own policies of $1 million each (except for one) for a total of $5.2 million (the underlying limit of $300,000 plus 7 OPCF 44R endorsements of $700,000 each); and

3. The PULP limit of $2 million supplements the total in #2 for a total of $7.2 million in insurance limits. (The one matter in which there is no OPCF 44R carrier, is not precluded from sharing pro rata in the available PULP limits).

18Under the reverse scheme, by definition, no plaintiff would receive more than a pro rata share of the $2.3 million plus the amount available under their respective OPCF 44R’s. In the action without OPCF 44R coverage, the plaintiffs would be required to obtain judgment and then pursue the McNorgans personally. The remaining plaintiffs may or may not receive full damages depending on whether the full measure of their damages is less than the $700,000 available under their own policies plus their pro rata share. Those with damages slightly above $1 million, would receive less, and would likely require a trial.

19The scheme proposed by the OPCF 44R insurers does not further the policy objectives primarily because the pool of money available is smaller. Additionally, it is more likely that trials would be required to establish entitlement to damages, thereby thwarting the parties’ stated objective: to obtain the most expeditious and least expensive determination of the claims.

(b) Subrogation

20The common law right of subrogation is contained in Section 278 of the Insurance Act¹² which provides that an insurer who makes payment may subrogate to all rights of recovery of the insured. The right of subrogation is also recognized in Section 20 of the OPCF 44R endorsement.

21In Rodriguez-Vergara, the Court of Appeal held that the OPCF 44R insurers have no right of subrogation against the at-fault driver’s insurer. Wilson J. for the majority of the Court of Appeal wrote:

The OPCF 44R can subrogate against the at-fault party D’Souza, who was inadequately insured, for its payout to Vegara, to the extent that their liability to Vergara exceeds the defendant’s $300,000 limit and the PLUP’s liability limit.¹³

22Because I am bound by Rodriguez-Vergara, I must also find that subrogation by the OPCF 44R defendants is not available against Desjardins, and only available against the McNorgans directly, where payment by the OPCF 44R exceeds the combined automobile policy and excess policy limits.

Order

23I therefore order the following:

1. Paragraphs 39 to 41 of my earlier decision are vacated;

2. The McNorgan’s automobile policy is primary, followed by the respective OPCF 44R endorsements until exhausted, or until the plaintiff’s damages in any particular action are satisfied, whichever is less, followed by the PULP to its limits to respond to the portions of the claims which exceed the pro rata share of the automobile policy and the OPCF 44R entitlement; and

3. There is no right of subrogation as against Desjardins and subrogation rights against the McNorgans directly are limited to the amount by which payment by the OPCF 44R exceeds the combined automobile policy and excess policy limits.

Costs

24This supplementary proceeding arose from the parties’ agreement to address the Court of Appeal’s decision. In my view, costs are not appropriate, and none are ordered.

“Justice E. ten Cate”

Justice E. ten Cate

Released: February 3, 2026

CITATION: HUGO v. MCNORGAN. 2026 ONSC 4739

COURT FILE NO.: CV-22-1194, CV-22-1195, CV-22-1196, CV-22-1204, CV-22-1208, CV-22-1227, CV-23-2748, CV-24-31

DATE: 20260203

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

LAURIE MARIE HUGO, KYLE MARIE HUGO, by her Litigation Guardian, Laurie Marie Hugo, DAVID PIERRE HUGO AND BRYCE DAVID HUGO, by his Litigation Guardian, Laurie Marie Hugo

Plaintiffs

– and –

Footnotes

1. 1Hugo v. McNorgan, 2025 ONSC 4739.
2. 2Rodriguez-Vergara v. Lamoureux, 2025 ONCA 620.
3. 3The Standard Excess Automobile Policy (SPF 7) is a standardized insurance form in Ontario used to provide excess third-party liability coverage above a primary policy. Its wording is mandated by the provincial regulator, the Financial Services Regulatory Authority of Ontario.
4. 4Insurance Act, R.S.O. 1990, c. I.8.
5. 5Rodriguez-Vergara v. Lamoureux, unreported endorsement of Trimble J. dated July 11, 2024.
6. 6See for example the decision of Myers J. in Abarca v. Vargas, 2015 ONCA 4 at para. 40.
7. 7Keelty v. Bernique, 2002 22040 (ONCA), paras. 25-28.
8. 8Heuvelman v. White, 2004 34619 (ONCA), paras. 9-12.
9. 9McKenzie v. Dominion of Canada, 2007 ONCA 480, paras. 3 and 18-21.
10. 10Benson v. Walt, 2018 ONCA 172, paras. 12-17.
11. 11Smith v. Taylor, 2024 ONCA 223, paras. 31-34 and 37.
12. 12Insurance Act, supra.
13. 13Rodriguez-Vergara v. Lamoureux, 2025 ONCA 620 at para. 22.