Wigle Estate et al. v. Lawyers' Professional Indemnity Co., 2014 ONCA 492

• Judge: Gillese, van Rensburg and Hourigan, JJ.A.
• Court: Court of Appeal (Ontario)
• Case Date: May 05, 2014
• Jurisdiction: Ontario
• Citations: 2014 ONCA 492;(2014), 320 O.A.C. 187 (CA)

Wigle Estate v. Lawyers Prof. Indemnity (2014), 320 O.A.C. 187 (CA)

MLB headnote and full text

Temp. Cite: [2014] O.A.C. TBEd. JL.003

Simpson Wigle Law LLP, Mary Catherine Wigle, as Estate Trustee of the Estate of Francis Wigle, deceased, and Paul Milne (applicants/appellants) v. Lawyers' Professional Indemnity Company (respondent/respondent)

(C58202; 2014 ONCA 492)

Indexed As: Wigle Estate et al. v. Lawyers' Professional Indemnity Co.

Ontario Court of Appeal

Gillese, van Rensburg and Hourigan, JJ.A.

June 25, 2014.

Summary:

A law firm was insured under a professional indemnity policy that had a limit of liability of $1 million per claim, with a $2 million aggregate limit. The appellants applied for a declaration that the allegations in an underlying action against them constituted two separate claims under the policy, rather than a single claim. The application judge found that the allegations in the statement of claim were "related" and that, as a result, they constituted one claim for the purposes of the policy. The appellants appealed.

The Ontario Court of Appeal allowed the appeal and made the requested declaration. The claims were not "related".

Damages - Topic 1447

Special damages - Legal fees - A law firm et al. applied for a declaration that the allegations in an underlying action against them constituted two separate claims under their professional indemnity insurance policy, rather than a single claim - The application judge found that the allegations were "related" and, as a result, they constituted one claim for the purposes of the policy - The appellants appealed - The Ontario Court of Appeal held, as a preliminary matter, that an exclusion in the policy was intended to exclude from coverage legal fees an insured received qua legal fees; in other words, as payment for his or her work as a lawyer - Here, it was not the return of legal (and other) fees that the plaintiff estate trustees in the underlying action sought in the relevant clauses of paragraph 19 of their statement of claim - Rather, they sought damages for those fees which they alleged were needlessly paid from the estate because of the wrongful appointment of a firm lawyer and the CIBC as committees for the deceased - Thus, the application judge erred in considering only the negligence claims respecting the sales of his real property (i.e., paragraphs 19(d) and (e) and 23(b) of the statement of claim) when deciding whether the statement of claim disclosed one or more claims - See paragraphs 45 to 50.

Insurance - Topic 1851

The insurance contract - Interpretation of contract - General - The Ontario Court of Appeal referred to the general principles of insurance policy interpretation as recently set out in Progressive Homes Ltd. v. Lombard General Insurance Co. of Canada (2010 S.C.C.) - See paragraph 54.

Insurance - Topic 1856

The insurance contract - Interpretation of contract - Exclusions - [See Damages - Topic 1447 ].

Insurance - Topic 1863

The insurance contract - Interpretation of contract - Extrinsic aids - At issue was the interpretation of a provision in a lawyer's professional indemnity insurance policy - It provided that: "All CLAIMS ... which arise from a single or related error(s), omission(s), or negligent act(s), shall be considered a single CLAIM regardless of the number of INSUREDS or the number of persons or organizations making a CLAIM or the time or times the error(s), omission(s) or negligent act(s) took place." - On appeal, the Ontario Court of Appeal discussed the meaning of the word "related" as found in the provision - The court concluded that "in determining whether the two claims in the Statement of Claim arise from 'related' errors, omissions or negligent acts, the court should be informed by the dictionary meaning of the word 'related': two or more errors, omissions or negligent acts are 'related' when there is a sufficient association or connection between them, reading the Policy as a whole and bearing in mind its objective. In determining whether there is a sufficient association or connection, the court must consider the similarities and differences between the nature and kind of the alleged misconduct which underlies each claim, and the kind and character of the losses for which recovery is sought in each claim." - While it had done so in a different case, the court did not include differences in timing between the two sets of allegations in this case where the wording of the provision specifically provided "regardless of ... the time or times the error(s), omission(s) or negligent act(s) took place." - See paragraphs 59 to 70.

Insurance - Topic 7623

Professional liability insurance - Scope of coverage - Occurrence defined - [See Insurance - Topic 1863 ].

Insurance - Topic 7623

Professional liability insurance - Scope of coverage - Occurrence defined - Angelo died in 2000 - A law firm (Simpson Wigle) et al. applied for a declaration that the allegations in an underlying action against them by Angelo's estate constituted two separate claims under their professional indemnity insurance policy - The application judge found that the allegations were "related" and, as a result, constituted one claim for the purposes of the policy - On appeal, the Ontario Court of Appeal made the requested declaration - "The Committee claim is based on Simpson Wigle's instrumentality, in 1993, in the allegedly improper appointment of Mr. Wigle and the CIBC as committees of Angelo's person and estate. The specific misconduct is their failure to disclose the appropriate information to the court during the Committee Application. The Real Property claim, on the other hand, arises from the allegedly improvident or unnecessary sales of six parcels of [Angelo's] land in 1996 and 1997. The alleged errors, omissions or negligent acts include the failure to take the opportunity to increase the value of two of those properties through inclusion in a designated Waterdown urban expansion area. Instead of an error of omission or negligence (failure to include the requisite information in the court documentation), the Real Property claim is based on allegations of active mismanagement (selling at improvident values and unnecessarily) and the failure to take steps outside of a court process, namely, to have the designation of two properties changed. It is clear that the allegations underlying the two claims are different in nature and kind. So, too, is the nature of the alleged losses for which recovery is sought in the two claims. The Committee claim seeks recovery for losses representing the costs, fees and expenses arising from the allegedly wrongful appointment of Mr. Wigle and the CIBC as Angelo's committees. The Real Property claim seeks recovery for the diminution of Angelo's estate due to the improvident or unnecessary sales of properties in which he had an interest. The two types of recovery are different in kind and character. Moreover, from a legal perspective, there is an insufficient association or connection between the two claims because they stand independently of one another. Regardless of the propriety of the appointment of Mr. Wigle and the CIBC as Angelo's committees in 1993, it may be that one or more of the parcels of land was improvidently sold. The court could find that the committees were wrongfully appointed but that the sales of the real property did not amount to negligent administration of Angelo's estate. Conversely, the court could find that the committees were properly appointed but that one or more of the sales was negligently performed." - See paragraphs 76 to 82.

Words and Phrases

Related - The Ontario Court of Appeal considered the meaning of the word "related" as found in a law firm's professional liability insurance policy - See paragraphs 59 to 70.

Cases Noticed:

Progressive Homes Ltd. v. Lombard General Insurance Co. of Canada, [2010] 2 S.C.R. 245; 406 N.R. 182; 293 B.C.A.C. 1; 496 W.A.C. 1; 2010 SCC 33, refd to. [para. 54].

Simpson (Receiver of) v. Lloyd's Underwriters - see Quilling v. Smith.

Quilling v. Smith, [2008] O.T.C. Uned. L02; 92 O.R.(3d) 551 (Sup. Ct), affd. [2009] O.A.C. Uned. 212; 2009 ONCA 327, refd to. [para. 59].

Elfstrom, Smith & Co. v. Kansa Gen. Ins. Co. (1988), 29 B.C.L.R.(2d) 41 (S.C.), refd to. [para. 59].

Dunn v. Chubb Insurance Co. of Canada et al. (2009), 266 O.A.C. 1; 97 O.R.(3d) 701; 2009 ONCA 538, refd to. [para. 59].

Counsel:

Alan J. Lenczner and Elizabeth Bowker, for the appellants;

J. Stephen Cavanagh, for the respondent.

This appeal was heard on May 5, 2014, by Gillese, van Rensburg and Hourigan, JJ.A., of the Ontario Court of Appeal. Gillese, J.A., released the following decision for the court on June 25, 2014.