Papapetrou v. 1054422 Ontario Ltd. et al., 2012 ONCA 506

• Judge: Laskin, Simmons and Cronk, JJ.A.
• Court: Court of Appeal (Ontario)
• Case Date: April 10, 2012
• Jurisdiction: Ontario
• Citations: 2012 ONCA 506;(2012), 294 O.A.C. 221 (CA)

Papapetrou v. 1054422 Ont. (2012), 294 O.A.C. 221 (CA)

MLB headnote and full text

Temp. Cite: [2012] O.A.C. TBEd. JL.050

Maria Papapetrou (plaintiff) v. 1054422 Ontario Limited, The Cora Group Inc. and Collingwood Landscape Inc. (defendants/respondents/ appellant )

(C54259; 2012 ONCA 506)

Indexed As: Papapetrou v. 1054422 Ontario Ltd. et al.

Ontario Court of Appeal

Laskin, Simmons and Cronk, JJ.A.

July 23, 2012.

Summary:

The plaintiff claimed she was injured when she slipped and fell on black ice on stairs of The Galleria, a building owned by 1054422 Ontario Ltd. and managed by The Cora Group Inc. (collectively, "The Cora Group"). Collingwood Landscape Inc. contracted with The Cora Group to provide winter maintenance and snow removal services for The Galleria. In its service contract, Collingwood promised to name The Cora Group as an additional insured on Collingwood's commercial general liability insurance policy; however, Collingwood breached its obligation to do so. As well, under the terms of its service contract, Collingwood agreed to indemnify "the Owner" and its agents "against all claims, losses, liabilities, demands, suits and expenses ... arising out of the performance or non-performance of the contract." The plaintiff made several allegations of negligence against Collingwood and The Cora Group. The Cora Group moved for summary judgment asking, inter alia, that Collingwood assume The Cora Group's defence of the plaintiff's claims against them.

The Ontario Superior Court, in a decision reported at [2011] O.T.C. Uned. 473, ordered Collingwood to assume The Cora Group's defence in the plaintiff's action and to indemnify The Cora Group for any damages awarded in the action. Collingwood appealed. The Cora Group conceded that the order to indemnify was premature and should therefore be set aside. Accordingly, the main issue on appeal was whether the motion judge erred in ordering Collingwood to assume the defence of The Cora Group.

The Ontario Court of Appeal allowed the appeal and set aside the motion judge's order. The court substituted an order requiring that Collingwood pay for The Cora Group's defence of the third party's action, save for any costs incurred exclusively to defend claims that did not arise from Collingwood's performance or non-performance of the service contract.

Barristers and Solicitors - Topic 1619

Relationship with client - Conflict of interest - Situations resulting in a conflict - [See Damages - Topic 7069 ].

Contracts - Topic 2108

Terms - Express Terms - Indemnity clauses - The plaintiff claimed she was injured when she slipped and fell on black ice on stairs of The Galleria, a building owned and managed by "The Cora Group" - Collingwood Landscape Inc. contracted with The Cora Group to provide winter maintenance and snow removal services for The Galleria - Under the terms of its service contract, Collingwood agreed to indemnify "the Owner" and its agents "against all claims, losses, liabilities, demands, suits and expenses ... arising out of the performance or non-performance of the contract" - The plaintiff made several allegations of negligence against Collingwood and The Cora Group - On a motion for summary judgment, the motion judge ordered Collingwood to indemnify The Cora Group for any damages awarded in the action - On appeal, The Cora Group conceded that the order to indemnify was premature and should be set aside - The Ontario Court of Appeal agreed - "To make an order that Collingwood must indemnify The Cora Group, a court will first have to determine whether Collingwood's contractual obligation to indemnify has been triggered. As no evidence concerning the issues of liability or damages was led on the motion, this cannot yet be determined"- See paragraphs 24 to 28.

Damages - Topic 7069

Contracts - Contacts for services - Breach of contractual obligation regarding insurance - The plaintiff claimed she was injured when she slipped and fell on black ice on stairs of The Galleria, a building owned and managed by "The Cora Group" - Collingwood Landscape Inc. contracted with The Cora Group to provide winter maintenance and snow removal services for The Galleria - In its service contract, Collingwood promised to name The Cora Group as an additional insured on Collingwood's commercial general liability insurance policy; however, Collingwood breached its obligation to do so - The plaintiff made several allegations of negligence against Collingwood and The Cora Group - On a motion for summary judgment, the motion judge ordered Collingwood to assume The Cora Group's defence in the plaintiff's action - The Ontario Court of Appeal held that the motion judge erred in ordering Collingwood to assume The Cora Group's defence - However, the court held that Collingwood was liable in damages to The Cora Group for the cost of The Cora Group's defence of the Papapetrou action, save for any costs incurred exclusively to defend claims that did not arise from Collingwood's performance or non-performance of the service contract - The court rejected Collingwood's argument that it was sufficient that its insurer was, in effect, already defending The Cora Group by defending Collingwood against the claims arising from its performance of the service contract - The court stated that "it would not be appropriate for Collingwood to assume The Cora Group's defence, nor is it sufficient for Collingwood to simply defend the primary allegations of negligence for which both Collingwood and The Cora Group may be found liable; rather, the proper remedy is in damages, and Collingwood must pay The Cora Group a quantum of damages equivalent to the cost of The Cora Group's defence in the manner I have explained. In any event, where, as here, distinct claims are made against a service provider and a property owner, the ability of a single counsel to defend both claims is hampered by an inherent conflict. In this case, the conflict is accentuated by the fact that both Collingwood and The Cora Group have cross-claimed against each other" - See paragraphs 29 to 58.

Cases Noticed:

Riocan Real Estate Investment Trust v. Lombard General Insurance Co., [2008] O.T.C. Uned. 741; 91 O.R.(3d) 63 (Sup. Ct.), refd to. [para. 21].

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

Scalera v. Lloyd's of London, [2000] 1 S.C.R. 551; 253 N.R. 1; 135 B.C.A.C. 161; 221 W.A.C. 161; 2000 SCC 24, refd to. [para. 41].

Nichols v. American Home Assurance Co. et al., [1990] 1 S.C.R. 801; 107 N.R. 321; 39 O.A.C. 63, refd to. [para. 41].

Monenco Ltd. et al. v. Commonwealth Insurance Co. et al., [2001] 2 S.C.R. 699; 274 N.R. 84; 155 B.C.A.C. 161; 254 W.A.C. 161; 2001 SCC 49, refd to. [para. 44].

Unger v. Unger et al. (2003), 179 O.A.C. 108; 68 O.R.(3d) 257 (C.A.), refd to. [para. 46].

Atlific Hotels and Resorts Ltd. et al. v. Aviva Insurance Co., [2009] O.T.C. Uned. B33; 97 O.R.(3d) 233 (Sup. Ct.), refd to. [para. 46].

Hanis v. University of Western Ontario et al. (2008), 241 O.A.C. 303; 92 O.R.(3d) 594; 2008 ONCA 678, leave to appeal refused (2009), 396 N.R. 386; 260 O.A.C. 397 (S.C.C.), refd to. [para. 51, footnote 1].

Brockton (Municipality) v. Cowan (Frank) Co. et al. (2002), 154 O.A.C. 125; 57 O.R.(3d) 447 (C.A.), refd to. [para. 56].

Appin Realty Corp. v. Economical Mutual Insurance Co. (2008), 233 O.A.C. 191; 89 O.R.(3d) 654; 2008 ONCA 95, leave to appeal refused (2008), 389 N.R. 399; 255 O.A.C. 397 (S.C.C.), refd to. [para. 56].

Counsel:

Andrew A. Evangelista and David W. Powrie, for the appellant;

Nancy Crespo, for the respondents.

This appeal was heard on April 10, 2012, before Laskin, Simmons and Cronk, JJ.A., of the Ontario Court of Appeal. The following judgment of the Court of Appeal was delivered by Simmons, J.A., and was released on July 23, 2012.