Burndred v. Topley and Sanders Investments Ltd. et al., 2009 ABQB 541

• Judge: Hughes, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: September 23, 2009
• Citations: 2009 ABQB 541;(2009), 504 A.R. 133 (QB)

Burndred v. Topley & Sanders Inv. Ltd. (2009), 504 A.R. 133 (QB)

MLB headnote and full text

Temp. Cite: [2009] A.R. TBEd. NO.044

Deborah Rose Burndred and David Neil Burndred (plaintiffs) v. Topley and Sanders Investments Ltd. carrying on business under the firm name and style of Topley Sanders Jepson General Insurance and Jim Jepson (defendants) v. Peace Hills General Insurance Company (third party)

(0401 06959; 2009 ABQB 541)

Indexed As: Burndred v. Topley and Sanders Investments Ltd. et al.

Alberta Court of Queen's Bench

Judicial District of Calgary

Hughes, J.

September 23, 2009.

Summary:

The defendant insurance agent ("Topley") applied to Peace Hills General Insurance Company for a homeowner's policy in respect of the plaintiffs' home. Peace Hills issued a policy to the plaintiffs. The plaintiffs' home was struck by lightning and destroyed by the resulting fire. Peace Hills' position was that the plaintiffs were not entitled to coverage under the policy's guaranteed replacement cost endorsement because they had failed to comply with certain conditions. The plaintiffs sued Topley for the shortfall. Topley joined Peace Hills as a third party. The plaintiffs' claim was settled. Topley applied for an order declaring Peace Hills liable to indemnify or make contribution. Peace Hills applied for an order dismissing the third party action.

The Alberta Court of Queen's Bench found that Topley was precluded from claiming contribution from Peace Hills and dismissed Topley's third party action. Topley was prevented from recovering under s. 3(1)(c) of the Tort-feasors Act, "as to find with Topley would upset the principle that a negligent agent is not entitled to be indemnified by its principal".

Agency - Topic 3326

Relations between principal and agent - Agent's right to indemnity - General - [See second Practice - Topic 1121 ].

Agency - Topic 3353

Relations between principal and agent - Principal's right to indemnity - Negligent acts of agent - [See third Practice - Topic 1121 ].

Insurance - Topic 545

Agents - Liability of insurer for acts of agent - Negligence - [See third Practice - Topic 1121 ].

Insurance - Topic 549

Agents - Liability of insurer for acts of agent - Vicarious liability - [See first Practice - Topic 1121 ].

Practice - Topic 1121

Parties - Third party or subsequent party procedure - When available - Claim for contribution or indemnity - An insurance agent relied on s. 3(1)(c) of the Tort-feasors Act to base its claim for contribution or indemnity against an insurer - The agent submitted that the insurer was a joint tort-feasor in that the insurer, as the agent's principal, was vicariously liable for the acts of its agent - On that submission, the agent fell within the statutory basis for its claim - The Alberta Court of Queen's Bench stated that, on the basis of Miller v. Guardian Insurance Co. of Canada (Alta. C.A.), it was clear that an insurer was vicariously liable for its agent, even if that agent acted negligently - However, whether the agent could claim indemnity from the insurer "is an entirely different question" - See paragraph 21.

Practice - Topic 1121

Parties - Third party or subsequent party procedure - When available - Claim for contribution or indemnity - The plaintiffs' claim against the defendant, an insurance agent ("Topley"), was settled - Topley relied on s. 3(1)(c) of the Tort-feasors Act (Alta.) to base its claim for indemnification or contribution against its principal, the insurer ("Peace Hills") - Peace Hills sought an order dismissing Topley's third party action - The Alberta Court of Queen's Bench addressed vicarious liability and indemnification between principal and agent in the insurance context in Alberta - See paragraphs 18 to 29 - The court concluded that "[w]hether or not Peace Hills is considered a joint tort-feasor is not material as s. 3(1)(c) provides that a party may be liable as a joint tort-feasor or otherwise. The question is whether the 'damage' referred to in the first clause of this subsection falls within the meaning of the phrase 'the liability regarding which the contribution is sought' in the final clause. If so, then Topley would be precluded by the final clause from claiming indemnification from Peace Hills" - In the end result, the court dismissed Topley's third party action - See paragraph 30.

Practice - Topic 1121

Parties - Third party or subsequent party procedure - When available - Claim for contribution or indemnity - The plaintiffs' claim against the defendant, an insurance agent ("Topley"), was settled - Topley relied on s. 3(1)(c) of the Tort-feasors Act (Alta.) to base its claim for indemnification or contribution against its principal, the insurer ("Peace Hills") - The Alberta Court of Queen's Bench found that Topley was precluded from claiming contribution from Peace Hills and dismissed Topley's third party action - "[A] negligent agent is not entitled to be indemnified by its principal" - It was Peace Hills that had a right of indemnity against its negligent agent, Topley - The indemnity owed by Topley to Peace Hills, while different from the mere dollar amount paid to the plaintiffs by Topley, fell within the language of the final clause of s. 3(1)(c) - "[E]ach party cannot have a right of indemnity against the other ... Topley is thereby prevented from recovering under s. 3(1)(c)" - See paragraphs 36 to 40.

Practice - Topic 1138

Parties - Third party or subsequent party procedure - Third party notice - Striking out of - [See third Practice - Topic 1121 ].

Torts - Topic 7162

Joint and concurrent tortfeasors - Joint tortfeasors - What constitutes - [See second Practice - Topic 1121 ].

Cases Noticed:

Canada Deposit Insurance Corp. v. Canadian Commercial Bank (2000), 269 A.R. 49; 2000 ABQB 440, refd to. [para. 11].

MacKay v. Farm Business Consultants Inc. et al. (2006), 397 A.R. 301; 384 W.A.C. 301; 2006 ABCA 316, refd to. [para. 16].

Weyerhaeuser Co. v. Jenner et al. (2006), 397 A.R. 349; 384 W.A.C. 349; 2006 ABCA 300, refd to. [para. 16].

Miller v. Guardian Insurance Co. of Canada (1995), 175 A.R. 382; 33 Alta. L.R.(3d) 280 (Q.B.), affd. (1997), 200 A.R. 332; 146 W.A.C. 332; 53 Alta. L.R.(3d) 338 (C.A.), consd. [para. 19].

Dechant v. McKechnie Agency Ltd. et al. (1999), 253 A.R. 14; 1999 ABQB 734 (Master), consd. [para. 23].

Bos v. Brauer et al. (1992), 174 A.R. 137; 102 W.A.C. 137 (C.A.), consd. [para. 24].

Herr et al. v. Herr (1991), 121 A.R. 176 (Q.B.), consd. [para. 25].

Lee v. Tremblay et al. (1993), 144 A.R. 301 (Q.B.), consd. [para. 28].

Statutes Noticed:

Tort-Feasors Act, R.S.A. 1980, c. T-6, sect. 3(1)(c) [para. 14].

Counsel:

Robert D. Maxwell (Fasken Martineau DuMoulin LLP), for the defendants/applicants;

Anne L. Kirker (Macleod Dixon LLP), for the third party/respondent.

This application was heard before Hughes, J., of the Alberta Court of Queen's Bench, Judicial District of Calgary, who delivered the following judgment on September 23, 2009.