Beck Estate v. Johnston, Meier Insurance Agencies Ltd., (2011) 305 B.C.A.C. 226 (CA)

• Judge: Low, Chiasson and Hinkson, JJ.A.
• Court: Court of Appeal (British Columbia)
• Case Date: May 26, 2011
• Jurisdiction: British Columbia
• Citations: (2011), 305 B.C.A.C. 226 (CA);2011 BCCA 250

Beck Estate v. Johnston, Meier Ins. (2011), 305 B.C.A.C. 226 (CA);

    515 W.A.C. 226

MLB headnote and full text

Temp. Cite: [2011] B.C.A.C. TBEd. MY.049

Estate of Karen Beck by her executor Richard Beck (respondent/plaintiff) v. Johnston, Meier Insurance Agencies Ltd. (appellant/defendant)

(CA038184; 2011 BCCA 250)

Indexed As: Beck Estate v. Johnston, Meier Insurance Agencies Ltd.

British Columbia Court of Appeal

Low, Chiasson and Hinkson, JJ.A.

May 26, 2011.

Summary:

Spouses lived in the matrimonial home owned by the wife from 1995 until June 23, 2005, when they separated and the wife moved out. The wife paid the homeowner's insurance, which was renewed in September 2006 and 2007. The wife and husband both remained co-insureds under the policy. The policy excluded coverage for loss resulting from the deliberate act of a co-insured. On November 25, 2007, the husband murdered his wife, set fire to the matrimonial home, then committed suicide. The insurer, subject to a $187,000 compromise payment for part of the claim, denied coverage for the value of the home under the exclusion clause. The wife's estate brought a negligence action for damages against the insurance agent who renewed the policies in 2006 and 2007. The estate argued that where the insurance agent knew that the spouses had separated, it had a duty to the wife to explain alternate available coverage that would have protected her against the loss of her home by the deliberate act of a co-insured.

The British Columbia Supreme Court, in a judgment reported [2010] B.C.T.C. Uned. 719, allowed the action and awarded the wife's estate the difference between the amount paid by the insurer and the insured value of the home ($160,765). The insurance agent appealed.

The British Columbia Court of Appeal dismissed the appeal.

Insurance - Topic 505

Agents - Liability of agent - General - Duty to inform insured of available coverage - Spouses separated in June 2005 - They lived in the matrimonial home, owned by the wife, for 10 years - The wife left - The husband remained - Both were named insureds - The wife paid the premiums for the homeowner's insurance, which excluded coverage for losses caused by the deliberate act of a named insured - The wife's insurance agent automatically renewed her insurance coverage in September 2007 - The agent knew that the spouses were separated - The wife was not advised that her changed circumstances warranted a review of her insurance needs - The intentional damage exclusion was never brought to the wife's attention - On November 25, 2007, the husband murdered his wife, destroyed the home by fire, then committed suicide - Although the insurer did make a compromise payment, it denied coverage for the full insured value of the home on the basis of the intentional damage exclusion - The wife's estate, seeking coverage for the balance of the insured value, brought a negligence action against the insurance agent - The British Columbia Court of Appeal held that the trial judge did not err in finding the agent liable in negligence - With knowledge that the spouses separated and the wife moved out of the home she was insuring, the agent had a duty to discuss her insurance needs with her, as the changed circumstances presented a foreseeable new risk - The agent had a duty to provide the wife with relevant information about the types of coverage available (including removing the husband as a named insured to protect against the operation of the intentional damage exclusion) - The breach of that duty of care was supported by the evidence - Finally, causation was established where the trial judge did not err in finding that had the wife been advised of her coverage alternatives, it was more likely than not that she would have chosen to remove the husband as a named insured given the risk that he might damage the property.

Insurance - Topic 513

Agents - Liability of agent - General - Negligence - Duty of agent to inform and to obtain coverage - [See Insurance - Topic 505 ].

Torts - Topic 46

Negligence - Standard of care - Particular persons and relationships - Insurance agents, sub-agents or brokers - [See Insurance - Topic 505 ].

Cases Noticed:

Neuzen v. Korn, [1995] 3 S.C.R. 674; 188 N.R. 161; 64 B.C.A.C. 241; 105 W.A.C. 241, refd to. [para. 27].

ter Neuzen v. Korn - see Neuzen v. Korn.

Fine's Flowers Ltd. v. General Accident Insurance Co. (1977), 17 O.R.(2d) 529 (C.A.), refd to. [para. 30].

Fletcher v. Manitoba Public Insurance Co., [1990] 3 S.C.R. 191; 116 N.R. 1; 71 Man.R.(2d) 81; 44 O.A.C. 81, refd to. [para. 30].

Housen v. Nikolaisen et al., [2002] 2 S.C.R. 235; 286 N.R. 1; 219 Sask.R. 1; 272 W.A.C. 1; 2002 SCC 33, refd to. [para. 47].

Authors and Works Noticed:

Fleming, John G., The Law of Torts (7th Ed. 1987), p. 109 [para. 27].

Counsel:

R.S. Brearley, for the appellant;

D.G. Cowper, Q.C., for the respondent.

This appeal was heard on May 11, 2011, at Vancouver, B.C., before Low, Chiasson and Hinkson, JJ.A., of the British Columbia Court of Appeal.

On May 26, 2011, Hinkson, J.A., delivered the following judgment for the Court of Appeal.