Lafont v. Alberta Motor Association Insurance Co. et al., 2011 ABQB 305

• Judge: Manderscheid, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: February 23, 2011
• Citations: 2011 ABQB 305;(2011), 525 A.R. 187 (QB)

Lafont v. Alta. Motor Assoc. Ins. (2011), 525 A.R. 187 (QB)

MLB headnote and full text

Temp. Cite: [2011] A.R. TBEd. MY.061

Teresa Lafont and Richard Lafont (plaintiffs) v. Alberta Motor Association Insurance Company, A.M.A. Insurance Agency Ltd. and AMA Insurance (defendants)

(0703 07119; 2011 ABQB 305)

Indexed As: Lafont v. Alberta Motor Association Insurance Co. et al.

Alberta Court of Queen's Bench

Judicial District of Edmonton

Manderscheid, J.

May 3, 2011.

Summary:

The plaintiffs' mobile home was destroyed by fire. The defendant insurer denied coverage under the policy on the basis that the policy had not been renewed and was no longer valid and in force at the date of the loss. The plaintiffs sued the defendants alleging that they had denied coverage without justification and in breach of the terms of the policy or, alternatively, were liable in negligence for improper termination of the policy.

The Alberta Court of Queen's Bench allowed the action and awarded the plaintiff damages of $78,712.19.

Damages - Topic 1305.1

Exemplary or punitive damages - Insurance claim denial - The plaintiffs' mobile home was destroyed by fire after the insurance policy allegedly lapsed - The defendant insurer denied coverage under the policy on the basis that the policy had not been renewed and was no longer valid and in force at the date of the loss - It also alleged that it was a term or condition of the policy that membership by the plaintiffs in the Alberta Motor Association (AMA) be current at the time for the policy's renewal - The plaintiffs sued the defendants alleging that the defendants had denied coverage without justification and in breach of the terms of the policy or, alternatively, were liable in negligence for improper termination of the policy - The Alberta Court of Queen's Bench allowed the action - It was not a term or condition of the policy that the plaintiffs' membership in the AMA be current at the time for renewal of the policy - Alternatively, their membership was valid as of the date of the loss - The policy was to be automatically renewed every year, without the need for any further action by the plaintiffs - The plaintiffs reasonably expected that the policy would be renewed again - The defendants had a duty to notify the plaintiffs of non-renewal, and they failed to do so - The defendants were liable for a negligent breach of their duty - The court declined to award punitive damages - Although the defendants' conduct had not been business-like, it was not malicious and outrageous.

Evidence - Topic 2403

Presumptions - Specific presumptions - Inference from failure to call or adduce available evidence - The plaintiffs sued an insurer and others (the defendants) alleging that they had denied coverage without justification and in breach of the terms of the policy or, alternatively, were liable in negligence for improper termination of the policy - The plaintiffs argued that an adverse inference should be drawn against the defendants because they failed to call the agent (Stankovic) who initially dealt with them when the policy was obtained - The Alberta Court of Queen's Bench was not persuaded that the defendants' failure to call Stankovic as a witness was intended to shield themselves from the harmful effects of the disclosure of evidence which might have been adverse to their position - Another witness testified that she did not believe that Stankovich was still employed by one of the defendants - Further, it was questionable whether Stankovic could have provided any definitive answer about the conversation between herself and one of the plaintiffs which occurred four years ago - See paragraphs 14 to 17.

Insurance - Topic 1404

The insurance contract - Termination - General - By lapse - Duty of insurer - [See Damages - Topic 1305.1 ].

Insurance - Topic 1542

The insurance contract - Renewal - What constitutes - [See Damages - Topic 1305.1 ].

Insurance - Topic 1544

The insurance contract - Renewal - Validity of - [See Damages - Topic 1305.1 ].

Insurance - Topic 1686

The insurance contract - Duty of insured - Respecting coverage - Contributory negligence - The plaintiffs' mobile home was destroyed by fire after the insurance policy allegedly lapsed - The insurer denied coverage under the policy on the basis that the policy had not been renewed and was no longer valid and in force at the date of the loss - The insurer had sent the plaintiffs a registered letter respecting the renewal but it was not received because the plaintiffs were having difficulties with their mail delivery - The plaintiffs sued the defendants alleging that the defendants had denied coverage without justification, or, alternatively, the defendants were liable in negligence for improper termination of the policy - The defendants argued that the plaintiffs were contributorily negligent because they knew they had problems with their mail delivery, and did not take any steps to try and rectify the problem - The Alberta Court of Queen's Bench rejected the argument - The length of time between the policy lapse and the date of loss (16 days) was insufficient to trigger a finding of contributory negligence - The plaintiffs could not have reasonably been expected to know about the lapse and could not have been expected to have already taken corrective action - There was no evidence that the mail delivery problems were within the plaintiffs' control - Further, the defendants had ample opportunity to contact the plaintiffs by phoning them, but failed to do so - See paragraphs 57 to 62.

Torts - Topic 6628

Defences - Contributory negligence - Particular cases - Failure to take preventative or remedial action - [See Insurance - Topic 1686 ].

Cases Noticed:

F.H. v. McDougall, [2008] 3 S.C.R. 41; 380 N.R. 82; 260 B.C.A.C. 74; 439 W.A.C. 74; 2008 SCC 53, refd to. [para. 10].

Mallet v. Administrator, Motor Vehicle Accident Claims Act (Alta.) - see Foley v. Administrator, Motor Vehicle Accident Claims Act (Alta.) et al.

Foley v. Administrator, Motor Vehicle Accident Claims Act (Alta.) et al. (2002), 330 A.R. 1; 299 W.A.C. 1; 2002 ABCA 297, refd to. [para. 15].

Allied Signal Inc. v. Dome Petroleum Ltd. - see Canada Southern Petroleum Ltd. et al. v. Amoco Canada Petroleum Co. et al.

Canada Southern Petroleum Ltd. et al. v. Amoco Canada Petroleum Co. et al. (1996), 195 A.R. 1; 8 C.P.C.(4th) 328 (Q.B.), refd to. [para. 15].

R. v. Jolivet (D.), [2000] 1 S.C.R. 751; 254 N.R. 1; 2000 SCC 29, refd to. [para. 15].

R. v. Onigbinde (O.) (2010), 258 O.A.C. 127; 2010 ONCA 56, 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. 22].

Saint John Tugboat Co. v. Irving Refinery Ltd., [1964] S.C.R. 614, refd to. [para. 23].

Carman Construction Ltd. v. Canadian Pacific Railway Co. and C.P. Rail, [1982] 1 S.C.R. 958; 42 N.R. 147, refd to. [para. 24].

Heilbut Symons & Co. v. Buckleton, [1913] A.C. 30 (H.L.), refd to. [para. 24].

Hawrish v. Bank of Montreal, [1969] S.C.R. 515, refd to. [para. 25].

Saskatchewan Co-op Wheat Producers Ltd. v. Luciuk, [1931] 2 D.L.R. 981 (Sask. C.A.), refd to. [para. 27].

Sylvan Lake Golf & Tennis Club Ltd. v. Performance Industries Ltd. and O'Connor (No. 2), [2002] 1 S.C.R. 678; 283 N.R. 233; 299 A.R. 201; 266 W.A.C. 201; 2002 SCC 19, refd to. [para. 42].

Engle Estate v. Aviva Insurance Co. of Canada (2010), 469 A.R. 342; 470 W.A.C. 342; 2010 ABCA 18, refd to. [para. 48].

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. 48].

Morash v. Lockhart & Ritchie Ltd. (1978), 24 N.B.R.(2d) 180; 48 A.P.R. 180 (C.A.), refd to. [para. 53].

Lewis v. C.M. & M. Insurance Services Ltd., Redwood Insurance Services Ltd. and Dennis Taylor Insurance Ltd. (1983), 51 N.B.R.(2d) 433; 134 A.P.R. 433 (T.D.), refd to. [para. 54].

CIA Inspection Inc. v. Lawrie (Dan) Insurance Brokers, [2010] O.T.C. Uned. 3639; 2010 ONSC 3639, refd to. [para. 54].

Banadera v. Co-operators General Insurance Co. et al. (2004), 366 A.R. 286; 2004 ABPC 122, refd to. [para. 55].

Keays v. Honda Canada Inc., [2008] 2 S.C.R. 362; 376 N.R. 196; 239 O.A.C. 299; 2008 SCC 39, refd to. [para. 64].

Counsel:

Scott J. Hammel and Robyn Meara (Miller Thomson LLP), for the plaintiffs;

Kenneth B. Blake (Alberta Motor Association Legal Department), for the defendants.

This action was heard on February 23, 2011, by Manderscheid, J., of the Alberta Court of Queen's Bench, Judicial District of Edmonton, who delivered the following reasons for judgment on May 3, 2011.