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“Involvement” in an Accident: Low threshold for Coverage
Published in the July 2009 issue of Transportation Notes - View Article
On June 27, 2005, Petal Seetal was in a crosswalk crossing on a green light, when Oswald Quiroz, Jr. (driving his father’s uninsured automobile) drove through a red light and struck Ms. Seetal. After the impact, Ms. Seetal was carried on the hood of the car until he struck the taxi operated by Mr. Manoj Bali who was in the proper lane, waiting to make a left hand turn.
Because neither Seetal nor Quiroz had insurance, Seetal claimed Statutory Accident Benefits from the taxi driver’s insurer, Lombard Canada Ltd. Lombard initially paid these benefits, but sometime later took the position that the benefits were paid in error.
Nearly two years after the accident, Seetal (and some of her family members) commenced an action against Quiroz. This action was undefended, and, as a result, Quiroz was noted in default. Typically, in these circumstances, plaintiff’s counsel will request that the statutory Motor Vehicle Accident Claims Fund (“MVACF”) put in a defence on behalf of the uninsured motorist (Quiroz, in this case). In the event that the defence of the uninsured motorist should not be accepted by the Court, MVACF would be responsible for up to the statutory minimum coverage limit for motor vehicle liability insurance, which, at the time, was $200,000.
After the noting in default, a claims administrator from MVACF advised Seetal to amend her claim to include the taxi driver as a defendant if she wanted MVACF to participate in the resolution of the claim. This request was made on the basis that s. 7(3) of the Motor Vehicle Accident Claims Act (Ontario) provides that MVACF will pay a judgment only if the judgment is in an action against all “persons against whom the applicant might reasonably be considered as having a cause of action.”
The claim was so amended and Mr. Bali, the taxi driver, was named as a defendant. The MVACF then took the position that, since an insured party was now in the action, it did not have to participate in the claim. Relying on s. 22(1) and (3) of its governing legislation, MVACF argued that since Seetal had access to Bali’s uninsured motorist coverage, MVACF was no longer exposed to liability. Lombard would be responsible for defending the claim not only on behalf of its insured, but also, on behalf of the uninsured motorist. Accordingly, Seetal also added Lombard as a party defendant.
This fact situation gave rise to three interlocutory motions, heard by Justice Perell in June 2009.
The first motion was brought by the taxi operator, Bali, for summary judgment. The motion was granted, because there was no evidence of negligence on his part.
The second motion was brought by Lombard to strike the claim against it. Lombard argued that its insured taxi driver was “not involved” in Seetal’s accident. In essence, it argued that there were two “accidents.” The first being Quiroz striking Seetal; the second being Quiroz striking Bali. The MVACF opposed this motion.
In his decision, Justice Perell conducted a detailed review of the various sections of the legislation that deal with this issue, but, in the end, the matter turned on whether the taxi driver was “involved” in the accident. He found that, in fact, Bali was involved, even though he was not negligent.
As support for this ruling, Justice Perell cited R. v. Hamman where, in a criminal context, the Court had to determine whether a vehicle involved in a race against another driver who crashed into a pole was “involved in an accident”. In particular, he relied on the portion of that ruling where the Court held that “… the word ‘involved’ does not import any element of cause or contribution to a particular accident. A person may be involved in an accident without causing or contributing to its cause.”
Justice Perell also considered the case of Janousek v. Halifax Insurance Co. where the plaintiff was hit by an uninsured motorist who, following that collision, struck a concrete and metal fence that sent debris onto three unoccupied, parked automobiles, causing damage to them. In Janousek, the plaintiff sought coverage from the insurer of the three damaged automobiles. The Court held that coverage should not be afforded because those automobiles were “not even passive objects at the scene”, but, rather became “implicated” merely because debris from the fence fell on them.
Justice Perell bridged the gap between Hamman and Janousek by holding that the Court should take a “fact-based approach … where courts without providing a comprehensive definition simply recognize involvement when they see it.” The Court did, however, provide a rough test (carefully indicating that it was not a comprehensive definition). Justice Perell held that the term “a person who is involved in an accident involving the insured vehicle” includes (a) a person who caused or contributed to the accident; and (b) a person who is a person against whom the injured person might reasonably be considered as having a cause of action.
In the current case, he found that coverage applied because the taxi driver needed to be named in an action in order to get the MVACF in play, and, secondly, even though Mr. Bali’s operation of his taxi was not negligent, he had more direct involvement in the claim than did the owners of the parked cars in Janousek.
Accordingly, the second motion was dismissed and the claim against Lombard was allowed to stand.
Finally, the third motion was brought by Seetal for a declaration that she qualified for insurance coverage from Lombard pursuant to the uninsured motorist provisions of the Insurance Act (Ontario). In the alternative, Seetal sought a declaration that MVACF was to provide coverage for the claim. Given the ruling on the second motion, Justice Perell made a declaratory order that Ms. Seetal qualified for coverage under Lombard’s policy.
Seetal v. Quiroz, 2009 CanLII 29207 (ON S.C.)