Every week, Bell Temple LLP selects and reports on interesting and relevant decisions from the Ontario Superior Court of Justice, Ontario Court of Appeal, and Supreme Court of Canada.
This week’s case reports are written by Devon McIntyre
Jack-O’s Sorts Bar v. US Liability Insurance Co., 2023 ONSC 5925
This decision stems from a involves a Statement of Claim brought against the owner of a sports bar located in Woodstock, Ontario, both in his personal capacity and as the directing mind of the bar, and a subsequent Third Party Claim brought by the bar against its liability insurer after coverage was denied. The Third Party liability insurer brought a motion for Summary Judgment to dismiss the Third Party Claim, and the sole issue before the Court was whether the insurer owed a duty to defend to the bar.
The Court correctly identified that a duty to defend is derived from the allegations against an insured contained in the pleadings, and the interpretation of the policy wording. If the facts alleged in the pleading would, if true, require the insurer to indemnify, then the insurer has the duty to defend. It is triggered by the mere possibility of coverage. The pleadings are to be interpreted broadly, with any doubt to be resolved in favour of the insured.
The thrust of the plaintiff’s allegations in this case were that the owner of the sports bar overserved him which caused him to fall off a barstool, after which the owner escorted the plaintiff out of the bar into an alley and allegedly assaulted him.
The Third Party Defendant insurer initially denied coverage on the basis that the sports bar’s Commercial General Liability policy contained an “Assault or Battery Exclusion” that precluded coverage for:
Any “actions”, claim or demand based upon any actual or alleged “assault” or “battery”, or out of any act of omission in connection with the prevention or suppression of any “assault” or “battery”, including the use of reasonable force to protect persons or property…
Further, no coverage is provided for any claim, demand or “actions” in which the underlying operative facts constitute “assault” or “battery”.
This exclusion applies to all “bodily injury”… sustained by any person, including emotional distress and mental anguish, arising out of, directly or indirectly result from, in consequence of, or in any way involving “assault” or “battery”… arising out of or caused in whole or in part by negligence or other wrongdoing with respect to…
The sports bar Defendant acknowledged that the allegations of intentional acts including the alleged assault would not trigger coverage, however they attempted to argue that the Plaintiff’s action included personal injury claims in negligence that they submitted were severable from those claims that fell within the exclusion clauses. They also contended that the plaintiff’s allegation of a fall from the barstool was severable from the uncovered claims.
The Court however disagreed, citing the broad language of the exclusion clauses which were drafted such that terms such as “assault” or “battery” needed only be part of the chain of events leading to the claimant’s injuries, and that the exclusion clauses negated coverage for bodily injury “arising out of, directly or indirectly resulting from, in consequence of, or in any way involving assault or battery”.
The Court ultimately found in favour of the moving Third Party and granted Summary Judgment dismissing the Defendant sports bar’s claim for defense and indemnity.
Kalkanis v. Lofranco, 2023 ONSC 6065
https://www.canlii.org/en/on/onsc/doc/2023/2023onsc6065/2023onsc6065.html
This is a somewhat unusual decision in which the Court refused a motion by the defendants to make a seemingly conventional amendment to their Statement of Defence. The defendants sought to amend their pleading to include a single additional sentence stating “The plaintiff has failed to mitigate her damages.”
Associate Justice Robinson acknowledged that in general amendments sought under Rule 26.01 are presumptively approved, thought it is not an absolute right, and the four factors to consider on a motion to amend pleadings, (which were set out in Marks v. Ottawa (City), 2011 ONCA 248), are as follows:
- an amendment should be allowed unless it would cause an injustice that could not be compensated in costs;
- the proposed amendment must be shown to be an issue worthy of trial and prima facie meritorious;
- an amendment should not be allowed that, if originally pleaded, would have been struck; and,
- the proposed amendment must contain sufficient particulars
In this case, the plaintiff argued that the defendants’ proposed amendment was not sufficiently particularized. The defendants argued that particulars of a mitigation defence are not required in personal injury actions because mitigation is always an issue, and that it is a well established principle that a plaintiff in a personal injury action has a duty to mitigate.
Associate Justice Robinson agreed that the plaintiff has a duty to mitigate, but in light of the nature of the plaintiff’s allegations, which did not arise solely from injuries suffered in a motor vehicle accident, further particulars were required. In this case, the plaintiff sought damages for alleged solicitor negligence in handling her claims arising from a motor vehicle accident, including purported negligent advice in settling her claims. The plaintiff also claimed damages for alleged sexual assault, sexual exploitation, and psychological manipulation in which the defendant Lawyers were essentially alleged to have been knowingly complicit. Associate Justice Robinson specifically noted that the plaintiff sought damages from the defendants’ conduct due to depression, loss of self-esteem, loss of sexual desire, impaired ability to trust others and form intimate, familial, and interpersonal relationships, impaired ability to deal with persons in authority, and ongoing psychological treatment and counselling.
The defendants clearly and collectively denied the plaintiff’s allegations of misconduct in their Statement of Defence, and denied her characterization of events. Associate Justice Robinson found however that in the context of the plaintiff’s specific allegations, particulars of any alleged failure to mitigate were necessary, and gave the example that particulars would presumably include details on how the defendant Lawyers allege that the plaintiff could or should have mitigated the losses from their alleged negligence in handling and recommending settlement of her claims or the alleged damages from her claimed psychological distress and other impacts from the defendants’ purported misconduct.
Although Associate Justice Robinson denied the defendants’ motion, it was noted that the defendants remained free to bring a further motion to amend their Statement of Defence to include an allegation that the plaintiff failed to mitigate so long as it included sufficient particulars.
