Craig v. Allstate Insurance Co. of Canada, (2002) 161 O.A.C. 140 (CA)

• Judge: Carthy, Weiler and Cronk, JJ.A.
• Court: Court of Appeal (Ontario)
• Case Date: January 10, 2002
• Jurisdiction: Ontario
• Citations: (2002), 161 O.A.C. 140 (CA)

Craig v. Allstate Ins. Co. (2002), 161 O.A.C. 140 (CA)

MLB headnote and full text

Temp. Cite: [2002] O.A.C. TBEd. MY.071

James D. Craig, Jeanne Craig and Jamie Craig, by his Litigation Guardian, James D. Craig (respondents) v. Allstate Insurance Company of Canada (appellant)

(C35933)

Indexed As: Craig v. Allstate Insurance Co. of Canada

Ontario Court of Appeal

Carthy, Weiler and Cronk, JJ.A.

May 29, 2002.

Summary:

The infant plaintiff was injured in Florida when his tricycle collided with a school bus. The plaintiff and his parents sued the school board and the bus driver in Florida. The action was settled. The plaintiff received $100,000 (US), the maximum available under Florida's sovereign immunity legislation. His parents also received $100,000 (US). He sued his parents' automobile insurer, seeking indemnification under the Family Protection Endorsement in the policy, which included underinsured coverage limits of $1 million (Cdn). The insurer moved under Civil Procedure Rule 21.01 for a determination of issues prior to trial.

The Ontario Superior Court, in a decision reported at [2001] O.T.C. 141, held that the plaintiff had a cause of action against the insurer under the endorsement. The court held that the limits available to the plaintiff were $700,000 (Cdn). The insurer appealed.

The Ontario Court of Appeal dismissed the appeal.

Insurance - Topic 5006

Automobile insurance - Compulsory government schemes - General - Uninsured or underinsured motorist - What constitutes - The infant plaintiff was injured in a Florida accident involving a school bus - His action against the school board and the bus driver was settled for $100,000 (US), the maximum available under Florida's sovereign immunity legislation - He sued his parents' automobile insurer, seeking indemnification under the Family Protection Endorsement in the policy, which included underinsured coverage - The insurer argued that the tortfeasors were not "inadequately insured motorist[s]" within the meaning of the endorsement because the school board had a self-insured retention of $300,000 (US) and excess general liability coverage of $700,000 (US) - The Ontario Court of Appeal rejected the argument - The excess insurance was not available to the plaintiff because of the statutory limit - Allstate's interpretation of the endorsement and the definition of "inadequately insured motorist" did not conform with the purpose of the endorsement and, if accepted, would dilute the underinsured motorist coverage - See paragraphs 28 to 42.

Insurance - Topic 5187

Automobile insurance - Compulsory government schemes - Uninsured or underinsured motorist coverage - Requirement of "legally entitled to recover" - The infant plaintiff was injured in a Florida accident involving a school bus - His action against the school board and the bus driver was settled for $100,000 (US), the maximum available under Florida's sovereign immunity legislation - He sued his parents' automobile insurer, seeking indemnification under the Family Protection Endorsement in the policy, which included underinsured coverage - The insurer argued that the plaintiff was not "legally entitled to recover" more than the settlement amount - It claimed that the tortfeasors' liability was a precondition to its liability under the endorsement - It asserted that the Florida sovereign immunity law was substantive law and, therefore, applied to preclude the plaintiff from seeking to recover damages in excess of the settlement amount - The Ontario Court of Appeal rejected the argument - See paragraphs 13 to 27.

Cases Noticed:

Somersall v. Friedman et al. (2000), 129 O.A.C. 68 (C.A.), leave to appeal granted (2001), 268 N.R. 396 (S.C.C.), refd to. [para. 14].

Chambo v. Musseau et al. (1993), 65 O.A.C. 291; 15 O.R.(2d) 305 (C.A.), refd to. [para. 14].

Johnson and Johnson v. Wunderlich; Wunderlich Estate and Commercial Union Assurance Co. (1986), 18 O.A.C. 89; 57 O.R.(2d) 600 (C.A.), refd to. [para. 14].

Beausoleil et al. v. Canadian General Insurance Co. et al. (1992), 55 O.A.C. 383; 8 O.R.(3d) 754 (C.A.), refd to. [para. 14].

Barton v. Aitchison (1982), 39 O.R.(2d) 282 (C.A.), refd to. [para. 14].

Walker v. Allstate Insurance Co. of Canada (1986), 56 O.R.(2d) 11 (H.C.), affd. (1989), 67 O.R.(2d) 733 (C.A.), refd to. [para. 15].

Tolofson v. Jensen and Tolofson, [1994] 3 S.C.R. 1022; 175 N.R. 161; 77 O.A.C. 81; 51 B.C.A.C. 241; 84 W.A.C. 241; [1995] 1 W.W.R. 609, refd to. [para. 22].

Michigan Millers Mutual Insurance Co. v. Bourke et al. (1992), 607 So.2d 418 (S.C. Fla.), refd to. [para. 25].

MacKenzie v. Zurich Insurance Co. (1990), 65 D.L.R.(4th) 765 (Ont. H.C.), refd to. [para. 26].

Buchan v. Non-Marine Underwriters Lloyd's, London et al. (1999), 97 O.T.C. 24; 44 O.R.(3d) 685 (Sup. Ct.), refd to. [para. 26].

Thai v. Dao et al. (1998), 70 O.T.C. 119; 5 C.C.L.I.(3d) 96 (Gen. Div.), refd to. [para. 26].

Joe v. Guardian Insurance Co of Canada et al. (1999), 124 O.A.C. 298 (C.A.), refd to. [para. 36].

Schneider v. Maahs Estate et al. (2001), 151 O.A.C. 239; 56 O.R.(3d) 321 (C.A.), refd to. [para. 38].

Chilton v. Co-Operators General Insurance (1997), 32 O.R.(3d) 161 (Gen. Div.), refd to. [para. 38].

Wigle et al. v. Allstate Insurance Co. of Canada (1984), 6 O.A.C. 161; 49 O.R.(2d) 101 (C.A.), leave to appeal refused (1985), 59 N.R. 73; 8 O.A.C. 320 (S.C.C.), refd to. [para. 38].

Coombe v. Constitution Insurance Co. (1980), 29 O.R.(2d) 729 (C.A.), leave to appeal refused (1981), 35 N.R. 355 (S.C.C.), refd to. [para. 38].

Scalera v. Lloyd's of London (2000), 253 N.R. 1; 135 B.C.A.C. 161; 221 W.A.C. 161; 185 D.L.R.(4th) 1 (S.C.C.), refd to. [para. 39].

Non-Marine Underwriters, Lloyd's of London v. Scalera - see Scalera v. Lloyd's of London.

Despotopoulos v. Jackson, [1992] I.L.R. 1645 (Ont. Gen. Div.), refd to. [para. 41].

Authors and Works Noticed:

Flaherty, James M., SEF 42 - Underinsured Motorist Coverage and SEF 44 - Family Protection Endorsement, in The Automobile Insurance Policy (1988), p. H-12 [para. 42].

Samis, L., S.E.F. 44 Family Protection Coverage, [1987] Spec. Lect. L.S.U.C. 175, generally [para. 8].

Counsel:

Richard F.L. Rose, for the appellant;

Joseph L. Sullivan, for the respondents.

This appeal was heard on January 10, 2002, by Carthy, Weiler and Cronk, JJ.A., of the Ontario Court of Appeal. Cronk, J.A., delivered the following decision on May 29, 2002.