Judge Confirms Limited Use Of Extrinsic Evidence For Duty To Defend
An insurer’s duty to defend an action against its insured is triggered by the mere possibility that a claim could be made under the insured’s policy. Traditionally, a court’s analysis of whether this duty is triggered is based solely on the pleadings. However, in some limited circumstances the courts have permitted a consideration of “non-controversial” evidence.
A recent decision of the Ontario Superior Court provides a good illustration of when such extrinsic evidence is and is not appropriate. While higher authorities have opened the door to extrinsic evidence, the court stops short of permitting insurers to engage in adversarial fact-finding inquiries.
B.C. Court Of Appeal Finds Costs To Remedy Damage Caused By Defective Workmanship Is Not Excluded By Workmanship/Design Exclusion
The British Columbia Court of Appeal recently confirmed in Acciona Infrastructure Canada Inc. v. Allianz Global Risks US Insurance Co. that a Workmanship/Design Exclusion does not exclude the costs to remedy damage caused by defective workmanship. The lower court decision was previously reported on in Covered. Acciona is the first case in Canada to consider the LEG 2/96, “Defects Exclusion” clause used in Course of Construction (“COC”) policies in Canada. While the outcome of this appeal decision is definitely pro-insured, the lasting impact of this decision will depend on whether the court’s reasoning is restricted to the unique facts of this case or applied more broadly to resulting damage claims generally.
Bullies And Their Parents Not Covered For Lawsuits Under Home Insurance Policy
In Unifund Assurance Company v. D.E., the Ontario Court of Appeal ruled that the parents of a school-age bully are not covered for their negligent supervision under their home insurance policy.
We recently reported on D.E. v. Unifund Assurance Company, a trial level decision where the Court declared that an insurer, Unifund, had to defend and indemnify parents of an alleged school-age bully. The decision was overturned and the Court of Appeal’s reasoning is precedent-setting and instructive to both insurers and policy holders.
Pure Economic Loss Claim Applies To Patent Defects That Are Not Imminently Dangerous
The Manitoba Court of Appeal has held that a defendants’ motion for summary judgment should be dismissed, rejecting their argument that claims for pure economic loss for patent defects that are not imminently dangerous should not proceed to trial. This is yet another in a long line of cases interpreting the seminal Supreme Court of Canada decision in Winnipeg Condominium Corp. No. 36 v. Bird Construction Co., where the Court held a defendant liable for a dangerous defect even though there had been no damage to persons or property (i.e. a pure economic loss claim).
A Cautionary Tale: The Party That Imposes Specifications For Methods And Materials Is Responsible For Its Defects
The Ontario Court of Appeal has held that where a plaintiff has imposed the methods and materials that the defendant must use to complete a project, the defendant is absolved of responsibility if the project proves to be defective, as the risk has been allocated to the plaintiff. Although this decision is not a typical products case, the considerations are similar to those that a court reviews in a case involving the implied warranty of fitness under the provincial Sale of Goods acts.
Carefully Consider That Additional Insured Endorsement – It May Still Protect You!
The Ontario Superior Court of Justice recently held that an additional insured was covered by a policy, where there was no direct claim against the named insured, even though the coverage was limited to claims arising from the negligence of the named insured. The most common additional insured endorsements are generally speaking very restrictive in their application. As this case demonstrates, such an endorsement may still provide protection to an additional insured even where the plaintiff has no direct claim against the named insured.
Product Liability Risks And Market Globalization
Globalization of industry has resulted in materials and components often being supplied from multiple markets across the world. When something goes wrong, and claims arise, it can prove difficult to enforce your contractual rights to indemnity. What could go wrong?
Unfortunately, lots. If your client, as the manufacturer or local distributor, has not taken effective steps to ensure that its product is manufactured properly, your client could find itself facing substantial fines from regulatory authorities along with class actions that can put a serious dent in your client’s bottom line.
Insurance Clauses: Priceless Or Worthless?
Contracts provide an ideal opportunity for the efficient allocation of risk, and insurance clauses can cover much of this ground, often with no concessions from your client. This opportunity can be lost when the clause does not really fit the particular transaction, or where the coverage is not available when later required. Even a carefully drafted clause may be worthless, if the parties do not turn their minds to how it will apply to the specific circumstances and avoid some common traps, as discussed below. For a more thorough discussion, please sign up for our upcoming CBA webinar “Negotiating and Drafting Effective Risk Allocation: Integrated Liability and Insurance Clauses” (Fall 2015).
Manufacturer Fails To Set Aside Jury Decision Imposing Liability For Failure To Warn
A recent decision by the Ontario Court of Appeal, illustrates the difficulties faced by companies that try to challenge a jury’s findings. In Stillwell v. World Kitchen Inc., the plaintiff was injured when a Dutch oven he was washing broke into four large pieces, severely lacerating his wrist. The jury awarded damages of $1.1 million less 25% for the plaintiff’s contributory fault. The jury did not find that there was a manufacturing or design defect, but instead found that the defendants failed to adequately warn the plaintiffs. The warning that the product was prone to break if dropped or subjected to a hard impact was not found on the outside of the box or in the warning section of the manual, but was instead in the “Remember” section of the manual.
What Killed The Bunnies? The Importance Of Causation
A commercial rabbit farmer found out that the implied warranty of merchantability under Ontario’s Sale of Goods Act provides no protection where causation is not proven and the contractual documents provided no basis to determine the acceptable level of toxins and other contaminants in rabbit feed.