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The Teen Male Behaviour Exclusion
Published in the July 2007 issue of Litigation Notes - View Article
Two recent Ontario decisions have examined the question of whether an insurance policy must respond to damages resulting from criminal or intentional acts. Both involved joking around that got out of hand. However, the result of the decisions applies equally to most liability policies.
Liability policies often contain exclusions in respect of injuries caused intentionally or by criminal activity. Typical policy language states: “You are not insured for claims made or actions brought against you for bodily injury or property damage caused by any intentional or criminal act, or failure to act, by any person insured by this policy.” The courts in both recent cases applied a straight forward interpretation of the exclusion.
The first case, ING Insurance v. Mitsios, involved two young employees of a grocery store, Dan Mitsios and Kevin Walters, who began wrestling after Walters sprayed Mitsios with cleaning water. According to the statement of claim, Mitsios responded by putting Walters in a head-lock causing him to lose his balance. He fell and suffered serious, permanent injuries. He sued Mitsios and the court had to consider whether a homeowner’s policy covering Walters required the insurer to provide a defence to the claim. The insurer denied coverage, relying on an exclusion for intentional acts. The insurer argued that a head-lock cannot be a non-deliberate act and that it is an assault. In considering whether the insurer is required to provide a defence, the court will look to what allegations are pleaded rather than going further to determine whether the allegations can be proven. It was not alleged that Mitsios intended to injure Walters. Plaintiff’s counsel characterized events as horseplay. The Court applied well established caselaw stating that the intentional act exemption only applies where the injury was intended, not just an act causing unintended injury. It concluded that the exclusion therefore did not apply because, while the head-lock was intentional, the resulting injury was not alleged to be. The Court distinguished other cases where injury resulted from a fight, or where injury was more severe than intended, because in such cases there was an intent to cause harm.
The second case, Eichmanis v. Wawanesa Insurance, involved an adolescent who shot a house guest in the abdomen while pointing a loaded shotgun at him in fun. He backed into a wall and the gun discharged accidentally, seriously injuring his friend. The shooter pleaded guilty to criminal negligence causing bodily harm. The friend commenced a lawsuit which named the liability insurer of the aunt and uncle with whom the shooter lived. The insurer denied liability under the policy relying on an exclusion for criminal acts. On a motion to consider this issue, the court concluded that the exclusion did not apply, but the finding was reversed on appeal.
In the first instance, the motions judge decided that only criminal acts of a deliberate nature were excluded from coverage under policies of this sort, distinguishing criminal negligence as mere recklessness. The Court of Appeal disagreed, concluding that coverage is excluded for acts prohibited by the Canadian Criminal Code, including criminal negligence. The motions judge had also sought to apply the same reasoning about intent to injure that was the basis of the Mitsios decision. Because there was no intent to shoot the plaintiff, or to cause any harm, the exclusion was found not to apply. The Court of Appeal again disagreed, stating that the intent to injure requirement did not apply to criminal acts. The exclusion applies to criminal acts, or it applies to non-criminal acts which are intended to injure. Otherwise the inclusion of the word “criminal” in the exclusion would have no purpose because any act intended to injure would be excluded, whether criminal or not.
ING Insurance v. Mitsios. (2007), 84 O.R. (3d) 715
Eichmanis v. Wawanesa Insurance (2007), 84 O.R. (3d) 668