Claims (January 01, 2008)

Go-kart not an “automobile” on private track, court rules

A go-kart operated on a private track is not an “automobile” according to the standard Ontario automobile insurance contract, the Ontario Court of Appeal ruled in Adams v. Pineland Amusements Ltd.

Denis Potvin was driving a go-kart on a track owned and operated by Pineland Amusements Ltd. when he allegedly lost control of his go-kart after colliding with another go-kart driven by his father, Roland Potvin.

Representatives of Denis filed an action against Pineland and Roland for damages related to injuries suffered by Denis. Pineland filed a cross claim alleging that Roland caused or contributed to the injuries of his son.

Roland had an automobile insurance policy with Kingsway General Insurance Company and issued a third-party claim against Kingsway, stating it had a duty to defend and indemnify him in the main action and cross-claim.

But even though a go-kart is technically considered a vehicle, it cannot meet the legal requirements of the Highway Traffic Act relating to registration, licensing and the equipment of motor vehicles, Ontario Court of Appeal Justice Russell Juriansz wrote for the court.

Since a go-kart cannot meet these regulatory requirements, then under the Compulsory Automobile Insurance Act, a go-kart cannot be and is not required to be insured by a motor vehicle policy, he continued.

Juriansz said Roland’s automobile insurance policy does not cover the main claim made by Denis’ representatives, in that it “does not cover damages for injuries resulting from a go-kart accident in the circumstances of the case.” Kingsway, Juriansz added, “does not have the duty to defend Roland Potvin in the main action or in the cross claim by Pineland Amusements Ltd.”

Insurer obliged to defend influence of ’33-or-free’ policy on pizza delivery driver

An Ontario Superior Court judge has ordered an insurer to defend a pizza company on allegations that the company’s “30-minutes-or-it’s-free” delivery policy caused driver negligence leading to a collision.

Pizza Pizza Limited faces court allegations of negligence in relation to its speedy delivery policy, which promises delivery in up to 30 minutes or else the driver is required to pay for a late pizza out-of-pocket.

The allegations stem from an incident in which a Pizza Pizza delivery person struck and injured a pedestrian. The plaintiff alleged Pizza Pizza failed to have safe driving policies in place, failed to test the driver for his propensity for speed and failed to investigate his driving record.

In Aviva Insurance Company of Canada vs. Pizza Pizza Limited, Pizza Pizza argued it was entitled to coverage by Aviva under a commercial general liability (CGL) policy.

Aviva argued it has no duty to defend and is not obligated under its CGL Policy to cover the plaintiff’s claims. Furthermore, the insurer argued, those claims ought to be covered by ING Canada’s non-owned policy.

“I accept Pizza Pizza’s view there is a non-automobile related concurrent claim in relation to injury caused by Pizza Pizza’s corporate policy,” writes Ontario Superior Court Justice Beth Allen.

“I find the pleadings do give rise to the possibility that the plaintiff’s injuries were caused by Pizza Pizza’s delivery policy and failure to screen drivers’ driving records. I find that claim is independent of the claim that involves the use or operation of an automobile, and for that reason, falls outside the scope of the exclusion in Aviva’s CGL policy.”

ING has a duty to defend under its non-owned policy on the automobile related claims, she added.

Adventures in vicarious liability

Two men struggling for control of a rented vehicle made it difficult to assess vicarious liability in a case involving the interpretation of an Insurance Act exclusion, the Ontario Court of Appeal has ruled.

And a motions judge erred in deciding the factual issues by means of a summary judgment.

In Henwood v. Coburn, George Fitzgerald rented a vehicle from Ontario Car and Truck Rentals and listed the driver as Peter Henwood.

Fitzgerald, a supplier of meat products, asked Henwood, a door-to-door frozen meat salesman, to take Frederick Coburn along on his sales trip so that Coburn could be trained. Coburn had neither a driver’s license nor car insurance.

Henwood and Coburn went to a local tavern at the end of the day. At that time, according to Henwood, Coburn began drinking and became belligerent. When Henwood refused to drive Coburn home to Barrie, Coburn allegedly punched Henwood in the face and stole the keys to the truck.

Coburn drove away, but Henwood was somehow able to hop into the passenger side of the vehicle while it was moving. According to Henwood, Coburn was drunk and would not listen to Henwood’s attempts to tell him to stop the vehicle and slow down. The vehicle left the road, crashed into a field and Henwood was injured.

The issue is who is vicariously liable for Henwood’s injuries. A motions judge applied Section 192(2) of the Insurance Act, which states: “the owner of a motor vehicle is liable for loss or damage sustained by any person by reason of negligence in the operation of the vehicle unless the motor vehicle . . . was without the owner’s consent in the possession of some person other than the owner or the owner’s chauffeur.”

The motions judge found as fact that the owner was liable because the vehicle was in possession of the operator with the owner’s consent and dismissed the owner’s application for summary judgment.

However, the Court of Appeal judge found that the motion judge “exceeded his role under Rule 20 by granting summary judgment when there were material facts to dispute. In my view, it is no answer to say that Henwood invited the motion judge to make findings of fact.”

The judge set aside the order of motion that Henwood was in possession and remitted the matter to trial.