Engle Estate v. Aviva Insurance Co. of Canada, 2010 ABCA 18

• Judge: Hunt, Ritter and Martin, JJ.A.
• Court: Court of Appeal (Alberta)
• Case Date: June 03, 2009
• Citations: 2010 ABCA 18;(2010), 469 A.R. 342 (CA)

Engle Estate v. Aviva Ins. (2010), 469 A.R. 342 (CA);

      470 W.A.C. 342

MLB headnote and full text

Temp. Cite: [2010] A.R. TBEd. JA.056

Raphael S. Engle, Executor of the Estate of Isaac Engle (respondent/applicant) v. Aviva Insurance Company of Canada (appellant/respondent)

(0801-0360-AC; 2010 ABCA 18)

Indexed As: Engle Estate v. Aviva Insurance Co. of Canada

Alberta Court of Appeal

Hunt, Ritter and Martin, JJ.A.

January 18, 2010.

Summary:

The applicant owned commercial property. It sought a declaration that it was entitled to coverage and indemnity from the respondent insurance company (Aviva) under its policy for damages to its building due to construction work on an adjacent property. Aviva denied coverage based on an exclusion provision dealing with settlement.

The Alberta Court of Queen's Bench, in a decision reported at 459 A.R. 254, held that the exclusion clause was inapplicable and the applicant was entitled to coverage and indemnity from Aviva under the policy for all loss and damage to the building resulting from the construction activities on the adjacent property. Settlement was not the cause of the damage, rather it was a type of damage resulting from the construction activities. Aviva appealed.

The Alberta Court of Appeal dismissed the appeal.

Contracts - Topic 2126

Terms - Express terms - Exclusionary clauses - Interpretation - The applicant owned commercial property - It sought a declaration that it was entitled to coverage and indemnity under its policy for damages to its building due to construction work on an adjacent property - The applicant's insurer (Aviva) denied coverage based on a clause that excluded "loss or damages caused directly or indirectly" to buildings by settling - The trial judge granted the declaration - He held that settlement was not the cause of the damage, rather it was a type of damage resulting from the construction activities - He held that to be considered caused by settlement, the settlement had to be due to natural causes - Aviva appealed - The Alberta Court of Appeal dismissed the appeal - The trial judge's interpretation was the reasonable intention of the parties and this interpretation was reflected in the policy's language - The interpretation that settlement exclusion clauses should exclude all settlement, no matter how occurring, could lead to nonsensical results.

Insurance - Topic 1851

The insurance contract - Interpretation of contract - General - The Alberta Court of Appeal stated the following applicable principles that governed the interpretation of insurance contracts: (1) the court must search for an interpretation from the whole of the contract that promotes the parties' true intent at the time of entering into the contract; (2) where words are capable of two or more meanings, the meaning that is more reasonable in promoting the intention of the parties will be selected; (3) ambiguities will be construed against the insurer, often by use of the contra proferentem rule; (4) an interpretation that will result in either a windfall to the insurer or an unanticipated recovery to the insured is to be avoided; (5) coverage provisions should be construed broadly and exclusion clauses narrowly; and (6) the desirability, at least where the policy is ambiguous, of giving effect to the reasonable expectations of the parties - See paragraph 16.

Insurance - Topic 1859

The insurance contract - Interpretation of contract - Construction - Sensible commercial result - [See Contracts - Topic 2126 ].

Insurance - Topic 6606.4

Multi-peril property insurance - Exclusions - Settling, expansion, contraction, etc. - [See Contracts - Topic 2126 ].

Cases Noticed:

Ryl and Ryl v. Wawanesa Mutual Insurance Co. (1988), 91 A.R. 163; 60 Alta. L.R.(2d) 281 (Q.B.), refd to. [para. 10].

Kravetsky v. Dominion of Canada General Insurance Co. (1994), 96 Man.R.(2d) 224; 25 C.C.L.I.(2d) 238 (Q.B.), affd. (1995), 100 Man.R.(2d) 46; 91 W.A.C. 46 (C.A.), refd to. [para. 10].

Leahy v. Canadian Northern Shield Insurance Co. (2000), 140 B.C.A.C. 302; 229 W.A.C. 302; 2000 BCCA 408, refd to. [para. 10].

Rivard v. General Accident Assurance Co. of Canada (2002), 166 Man.R.(2d) 39; 278 W.A.C. 39; 2002 MBCA 70, affd. (2001), 159 Man.R.(2d) 234; 2001 MBQB 293, refd to. [para. 10].

Jordon v. CGU Insurance Co. of Canada et al., [2004] B.C.T.C. 402; 10 C.C.L.I.(4th) 149; 2004 BCSC 402, refd to. [para. 10].

Strata Plan NW2580, Owners v. Canadian Northern Shield Insurance Co., [2006] B.C.T.C. 330; 55 B.C.L.R.(4th) 176; 2006 BCSC 330, not folld. [para. 10].

Shepherd v. Wawanesa Mutual Insurance Co. et al. (1998), 236 A.R. 28; 1998 ABQB 1040, revd. in part (2000), 266 A.R. 259; 228 W.A.C. 259; 2000 ABCA 287, leave to appeal refused (2001), 271 N.R. 397; 286 A.R. 199; 253 W.A.C. 199 (S.C.C.), refd to. [para. 10].

Tomko v. Wawanesa Mutual Insurance Co. et al. (2007), 212 Man.R.(2d) 155; 389 W.A.C. 155; 2007 MBCA 8, refd to. [para. 10].

Buchanan et al. v. Wawanesa Mutual Insurance Co., [2009] B.C.T.C. Uned. 470; 2009 BCSC 470, refd to. [para. 10].

Kane v. St. Paul Fire and Marine Insurance Co. (1963), 214 F. Supp. 178 (W.D. Tex.), refd to. [para. 11].

Souza v. Corvick (1970), 441 F.2d 1013 (D.C. Cir.), refd to. [para. 11].

Ariston Airline and Catering Supply Co. v. Forbes (1986), 511 A.2d 1278 (N.J. Sup. Ct.), refd to. [para. 11].

Winters v. Charter Oak Fire Insurance (1998), 4 F. Supp.2d 1288 (D.N.M.), refd to. [para. 11].

Nationwide Mutual Insurance Co. v. Bates (2003), 840 So.2d 349 (Fla. Ct. App. 1st Dist.), refd to. [para. 11].

242-44 East 77th Street, LLC v. Greater New York Mutual Insurance Co. (2006), 815 N.Y.S.2d 507 (1st Dept.), refd to. [para. 11].

Brissette v. Westbury Life Insurance Co., [1992] 3 S.C.R. 87; 142 N.R. 104; 58 O.A.C. 10; 96 D.L.R.(4th) 609, refd to. [para. 16].

Reid Crowther & Partners Ltd. v. Simcoe & Erie General Insurance Co., [1993] 1 S.C.R. 252; 147 N.R. 44; 83 Man.R.(2d) 81; 36 W.A.C. 81; 99 D.L.R.(4th) 741, refd to. [para. 16].

Authors and Works Noticed:

Brown, Craig, and Donnelly, Thomas, Insurance Law in Canada (2002 Looseleaf), p. 20-43 [para. 12].

Counsel:

J.F. McGinnis, for the respondent;

M. Mohamed and P. Vetsch, for the appellant.

This appeal was heard on June 3, 2009, by Hunt, Ritter and Martin, JJ.A., of the Alberta Court of Appeal. Martin, J.A., delivered the following decision for the court on January 18, 2010.