Combat Auto Fraud: ISB-U Education Series

Comer v. Pilot illustrates challenges insurers face in proving fraud in court

Cary Comer v. Pilot Insurance Company demonstrates the challenges insurers face when trying a suspected fraud claim, Richard Bickford told delegates at the ISB-U Education Series.

In Comer, the insurance company faced a judge who seemingly sided with the plaintiff at every turn, no matter what evidence the insurer presented to the contrary.

The question before the Ontario Superior Court of Justice was fairly simple: Was the truck stolen? But the court’s manner of answering this question was anything but straightforward. The judge was clearly unimpressed with the insurer’s arguments, and the case demonstrates that meticulous documentation of facts can ultimately overcome even the most skeptical triers of fact.

The evidence

Cary Comer alleged he parked his GMC Sierra, which was towing a boat and a trailer (not covered by the policy and not registered to Comer), in the parking lot of the Pavilion Hotel & Bar on Highway 117 in Baysville, Ont. He stated in court documents that he received a ride home from the bar. The police recovered the truck, trailer and boat on Highway 60 near Algonquin in Park in the Township of Peck in a damaged condition. The vehicle had its hazard lights on, both doors locked and the passenger window rolled down.

Inside the vehicle, the police found an empty beer bottle, half a bottle of whiskey and controlled substances including prescription narcotics. The police found photos on the claimant’s cell phone of marijuana plants.

Comer told police he had the only set of keys to the vehicle. He said nobody else had access to the keys, and that he had locked the vehicle before heading into the bar. The police found no signs of forced entry or damage to the ignition.

Pilot denied the claim after the insured provided a different version of events during an examination under oath than he had told police officers.

Still, the judge said he was “completely unimpressed with evidence based on innuendo from the presence of some hashish in the car, and there is no evidence that the presence of the narcotic drugs was illegitimate.”

Bickford said the police reported it made no sense for a thief to steal a vehicle and leave it on the side of the road with the hazards on and the doors locked. The judge apparently gave short shrift to this argument. According to Bickford, the judge said the thief could have stopped and gone for a pee, turning on the flashers as a warning to other drivers.

The court constantly questioned the insurer’s evidence, dismissing much of it as circumstantial, Bickford said. “The fact that the insured didn’t cooperate with the police was ‘an exercise of his rights under the Charter of Rights and Freedoms,'” Bickford said, citing the judge’s observations in court. “What do you do with that?” Similarly, the court did not interpret the insured’s lack of responsiveness to Pilot’s standard procedures as a sign of fraudulent behaviour. Instead, the judge found it to be a sign that the insured’s “thinking does not seem to be burdened by attention to detail.” The judge went on to note that Comer being slack in his response to insurance procedures is entirely consistent with sloth rather than guile.

“As defense counsel I’m ready to cry,” Bickford said. “I have all this good evidence and it’s all going up in smoke.”

The deciding factor

Despite these challenges, the insurer ultimately won the case. The ‘key,’ as it were, turned out to be the inconsistency of the insured’s evidence related to the location of the car keys.

There was no sign of forced entry or damage to the ignition. The steering wheel was locked. Based on these facts, the judge inferred the driver was in possession of the keys at the time.

In speaking to police, Comer said he had the only set of keys. He told police he had locked the truck before heading in to the bar. During the examination in chief, however, he said he wasn’t certain if he had locked the truck. He said he normally had the keys in his pocket or on the table. Subsequently said he said he thought the keys were in his sweater, which was hung up in the cottage, but when he went to get them, they were not there. In cross-examination, he testified he had two sets of keys when he purchased the truck, but lost one set shortly, so he had only the one set. He reported there was no spare key in the stolen vehicle. He also said there was a key to the cottage, but he did not know where it was. He said he had lost the second set of keys to the vehicle a long time ago and couldn’t find them, guessing that they must have fallen out of his pocket. He told a police constable the keys were in his pocket and that nobody else had another set.

“The inconsistency of these statements, one to another, gives rise to concern about the reliability of Cary Comer’s evidence about keys,” Ontario Superior Court Justice Margaret Eberhard wrote. “Further, it is not logical that Cary Comer would head into Baysville to retrieve his truck without keys.”

The judge determined that since the truck had been driven to the accident with keys, with no reliable evidence that the keys were missing or that another set of keys was used, she was unable to find that the truck was stolen.

Need for proper preparation

“I love that case because it demonstrates the hurdles we face,” Bickford said. “It demonstrates the uphill battle we face. It also demonstrates that with proper evidence, with proper preparation, these cases are defensible. If you handled your claim properly, objectively and your documents show clear concise thinking and objective investigation, then punitive damages should never be attracted.”

Recovery rate for stolen vehicles drastically reduced, suggesting organized crime involvement: OPP

Ontario Provincial Police jurisdictions currently have a recovery rate of about 50 per cent for stolen vehicles, compared to a 90 per cent recovery rate in 1990.

The figures were presented by Stephen Boyd, detective sergeant and program manager for the provincial auto theft team (PATT) at the organized crime enforcement bureau of the OPP.

The theft rate across the province, including the GTA, remains the same every year, give or take one per cent or two per cent, he said. In rural Ontario, 78 per cent of the stolen vehicles are recreational vehicles. The number one stolen vehicle in OPP jurisdiction is the Honda ATV. Roughly $2.7-billion worth of truckloads is stolen every year.

Boyd said the decrease in the recovery rate is indicative of organized involvement in auto theft. And the nature of the organized crime is changing.

He said organized crime traditionally follows a pyramid structure, with a leader at the top and then it fans out to the bottom. “What we are seeing now across the province is this pyramid is becoming flatter and flatter all the time,” Boyd said.

In the past, community and nationality would segregate these groups, but “now it’s like the United Nations” and everybody is working together. “All the lines are becoming blurred and it’s becoming tough for us,” he added.

One of the “hottest trends” is the theft of homemade trailers, cargo and campers. In a project run by PATT, 57 cargo trailers were recovered, with an additional 150 not yet found. These are all registered with the Ministry of Transportation of Ontario (MTO) under the listing “homemade.” Boyd notes there are currently 68,000 homemade trailers registered with the MTO in the last three years. These are homemade campers with a hydraulic slide-out kitchenette, he said. “You can’t build that in your garage, but you can insure it as homemade,” he said, while showing a photo of an upscale camper.

All of this stuff is being registered as homemade when it is not, he said. Embellish a little when the loss occurs, and suddenly every trailer is filled with ATVs and recreational equipment. “By the time we total it all up, we have about $7 million of loss that was supposedly in all these trailers that we got back,” he said.