In Rocky Heights v. Biber, the court refused to allow a subrogated claim by an insurer of a landlord to proceed against a tenant.
The claim arose out of a residential fire. The fire was caused by the tenant leaving a boiling pot of oil unattended. The tenant was an officer of the landlord.
A form to the CGL policy issued to the landlord indicated that all rights of subrogation were waived against any corporation, firm, individual, or other interest with respect to which insurance was provided under the form.
The tenant argued that this waiver of subrogation clause was applicable because insurance coverage was provided for the personal property of officers of the tenant.
The landlord’s insurer argued that a subrogated claim could be maintained in respect of negligence outside of the tenant’s duties as an officer. The insurer relied on the definition of “insured”, which included executive officers and directors, but only with respect to their duties as officers or directors.
Justice Ferguson disagreed with the insurer’s position. She stated that any ambiguity between the waiver of subrogation clause and the definition of “insured” should be interpreted in favour of the tenant, pursuant to the contra proferentem rule.