At our weekly meeting, Emmanuel Couture-Tremblay discussed the recent decision of the Ontario Superior Court in Morgan v. Co-Operators General Insurance et. al., 2022 ONSC 7254.
This simplified procedure action involved a claim for water damage that occurred at the plaintiff’s property on December 9, 2019.
The Plaintiff was the owner of a residential townhouse unit, whose tenant moved out on October 15, 2019. Renovations then began on October 17 and were completed on November 4. The Plaintiff listed the Property for sale shortly thereafter.
The Plaintiff had previously purchased home insurance from Co-operators and decided to purchase an additional Comprehensive Water Endorsement. Both the renewed Policy and the Water Endorsement became effective on November 17, 2019.
On December 9, 2019, the Plaintiff was notified that a pipe had burst at the Property and the water leakage had caused severe damage. The contractor determined that a water supply line at the upstairs toilet had “snapped”. Co-operators advised the Plaintiff that there was no coverage for the water damage.
On December 8, 2020, the Plaintiff commenced this action seeking $100,985.10 in damages against the Defendants for breach of contract, breach of fiduciary duty and negligence, among other things. Co-operators served its summary judgment motion and requested that its motion be heard prior to the examinations.
The relevant issues are:
- Is this an appropriate matter for summary judgment?
- Is there any coverage available for the water damage under the Policy?
- If there is no coverage, is Co-operators entitled to summary judgment?
1. Is this an appropriate matter for summary judgment?
In Combined Air Mechanical Services Inc. v. Flesch, 2011 ONCA 764, 108 O.R. (3d) 1, the ONCA discussed the availability of summary judgment motions in simplified procedure matters. It stated that summary judgment motions in simplified procedure actions should generally be discouraged where there is competing evidence from multiple witnesses, to allow for cross-examinations and oral evidence.
However, it also stated that there will be cases where a summary judgment motion is appropriate and where the claim can be resolved by using the powers set out in Rule 20.04 in a way that also serves the efficiency rationale in Rule 76.
The court stated that the determination of the issue of whether the Policy covers the water damage could be separated from the other issues in the main action.
Seeing as there was no competing evidence on the issue, the positions only conflicted on the legal interpretation of the insurance provisions. Accordingly, the judge found that this was an appropriate matter for summary judgment.
2. Is there any coverage available for the water damage under the Policy?
The judge was satisfied that there is no genuine issue requiring a trial respecting coverage under the Policy. The evidence presented on the motion was sufficient to permit the necessary findings of fact to be made and to apply the law to those facts in a proportionate, more expeditious and less expensive way to achieve a just result.
The court found that the cases relied upon by the Plaintiff to argue that the term “vacant” is ambiguous were factually different from this case. The insurance contract in Shaeen v. Meridian Insurance Group Inc., 2011 ONSC 1578, did not define the terms “vacant” or “unoccupied”. As a result, that court had to refer to the relevant case law to give meaning to those terms.
In Maracle v. Bay of Quinte Mutual Insurance Co. et al., 2010 ONSC 5217, Leroy J. defined “vacant”:
“The word vacant should be interpreted not only by reference to the question whether at the time of loss the house was unoccupied, connected to the power grid or contained household goods, but in light of all the surrounding circumstances, particularly the actions and intentions of the insured, to determine whether the premises were vacant.”
In this case, the term “vacant” was defined in the Policy, and the term “unoccupied” is not used. The court did not agree with the Plaintiff that the phrase “when all residents have moved out with no intention of moving back in” is unclear. The judge stated that this is a plain and understandable description of what the term “vacant” means within the Policy.
The judge did not accept that the visits to the Property by the Plaintiff and his son make the dwelling not “vacant”. The judge adopted the holdings in Wu v. Gore Mutual Insurance Company (2009), 100 O.R. (3d) 131 and in Maracle, that more is needed than just occasional visits. Here, there was no evidence that anyone was intending on moving back in or that anybody lived there for more than 30 consecutive days.
The court found that the language of the Vacancy Exclusion Clause is clear and unambiguous and excludes coverage in the circumstances of this case.
The court also found that the Exceptions Clause did not apply as argued by the Plaintiff, as it deals with freezing and there was no evidence that the water leak at the Property was due to freezing. As a result, the exception provision that no insurance against loss or damage where an insured is “away more than five (5) consecutive days” and has arranged for “a competent person to enter the dwelling daily to ensure heating is maintained” was not relevant and had no application.
The judge found that there was sufficient evidence before the court to find as a fact that the Property was “vacant” at the time of the loss and that the Vacancy Exclusion Clause applied. As a result, there was no coverage under the Policy for the water damage that occurred at the Property.
3. If there is no coverage, is Co-operators entitled to summary judgment?
The court stated that it was prepared to grant partial summary judgment and declare that there was no coverage under the Policy for the water damage that occurred at the Property.
Seeing as the parties did not attend at examinations for discovery, or have cross-examinations on the affidavits, the action was set to proceed to trial on the remaining issues.
Co-operators’ motion for summary judgment was granted, in part. The Court declared that Co-operators is not liable to the Plaintiff for coverage and there are no amounts owing to the Plaintiff pursuant to the Policy.
This decision provides insight for when summary judgment can be granted in a simplified procedure action, notably when there is no competing evidence on the issue. This decision also indicates how the courts assess vacancy for the purposes of home insurance coverage.