Surveillance particulars must be served even if not relying on it at trial

A recent decision has held that a defendant who obtains surveillance must serve particulars of it, even if not relying on it at trial.

In Arsenault-Armstrong v. Burke, 2013 ONSC 4353 (S.C.J.), the plaintiff sought an undertaking that the defendant provide particulars of future surveillance, including date, time, name of investigator and so forth.  The defendant refused to provide particulars if she was not relying on the surveillance at trial.

Justice Hambly held that the defendant must provide particulars of surveillance even if she does not intend to rely on it at trial.  At paragraph 11, Justice Hambly stated:

[11]           The consequences of the defence not producing the full particulars of surveillance evidence in its possession, even if in the period leading up to the trial the defence is of the view that it will not rely on it at trial are well illustrated in Beland.  The surveillance evidence will assist the plaintiff in evaluating the strength of her case and arriving at her settlement position prior to trial.  Even if the defendant will not be able to use the surveillance evidence for impeachment purposes, as a result of its non-disclosure, the defence will gain knowledge of the plaintiff from the surveillance evidence which it will be able to use to its benefit.  A requirement that the defence produce it even if it does not presently intend to use at trial is consistent with what the Court of Appeal said in Ceci v. Bank (1992), 7 O.R. (3d) 381 quoted above by Justice Howden.  In Beland, after a 17 day trial a jury dismissed the plaintiff’s case.  The trial judge fixed costs against the plaintiff, exclusive of HST at $115,318. This is a devastating result for a plaintiff. Perhaps it could have all been avoided if the disputed surveillance evidence had been produced by the defendant.

The difficulty with this decision for the defence is that the value of surveillance as an impeachment tool may be lost if the plaintiff has knowledge of the particulars.  In addition, if the defence does not intend to rely on it at trial, how can it assist in settlement?  Lastly, the decision does not give guidance on how far in advance of trial the particulars must be disclosed.

More on flood insurance

Following up on my article of the other day which discussed, in part, changes to flood insurance rates, Salon has a comprehensive article on the issue from a national perspective.  (Ignore the click-bait title, which does not reflect the content of the article.)

Waxing philosophical

Talking with my daughter about a school assignment today (writing fortunes for fortune cookies, if you must know) led me to this John Donne poem.  I knew the beginning and the end.  The middle expresses how I feel about property loss from natural disasters.  Whether or not there's ultimately insurance coverage for a building that has been damaged or destroyed by a hurricane, a family losing its home has repercussions throughout  the fabric of our society. 

No man is an island,
Entire of itself,
Every man is a piece of the continent,
A part of the main.
If a clod be washed away by the sea,
Europe is the less.
As well as if a promontory were.
As well as if a manor of thy friend's
Or of thine own were:
Any man's death diminishes me,
Because I am involved in mankind,
And therefore never send to know for whom the bell tolls;
It tolls for thee.       

Along the same lines, the Boston Herald has this article about the effect of FEMA's new flood zone maps on flood insurance in Boston.  I've posted before about the intersection of liability insurance and taxes.  Given that higher flood risks are likely related to climate change, a result of the workings of our society as a whole (see above)  and out of the individual control of longtime homeowners of property near major bodies of water, it seems only right that moderate-income families who can't afford higher insurance rates should receive subsidies.  Assuming that the new maps accurately show the risk, as someone who is adamantly pro-insurance, I do support requiring homeowners in flood zones to have flood insurance; moreover, as I discussed here, I support flood insurance on the value of the entire property, not merely to the extent of the mortgagee's interest as the current regulations require.  It's a fair way to spread the risk and will prevent the even worse economic devastation that would occur if entire neighborhoods are damaged by a hurricane and the homeowners are uninsured.  It can be the difference between a few awful weeks or months and long-term homelessness. 

Timeliness of claims - statute of limitations - don't rely on your OWCP claims examiner

I have recently had several OWCP clients' workers compensation claims erroneously denied as being untimely. The time for filing a traumatic injury claim is within three years of when you knew or should have known you were injured. There are circumstances where you can get around the time limitation. With regard to an occupational injury or disease, there is also a three year time limitation. However, with an occupational injury or disease, the claim is timely so long as it is filed within three years of when you were last exposed to the work factors contributing to your condition. That means if you are subjected to loud noise on the job, and have known for more than three years that that noise has damaged your hearing, you can file your claim up until it has been more than three years since you were last exposed to noise on the job. This type of claim can still be filed even after three years have passed since you were last exposed under certain circumstances. Its not clear why different claims examiners in different OWCP offices are getting this wrong and erroneously denying claims filed far more than three years after the injured worker was aware of their illness, but well within three years of when they were last exposed to the relevant work factors that contribute to the illness. If your claim is denied for any reason, keep in mind that you are entitled to appeal rights for a reason. The reason is that far too many OWCP claims examiners are poorly trained and unfamiliar with basic principles applicable to this system. Those running OWCP spend far too much time lobbying Congress to strip benefits from this program and far too much time working with employing agencies to come up with strategies to deny injured workers benefits that they are entitled to receive. Instead, those running this program should be focusing on providing competent training and mentoring to claims examiners who all too often are assigned so many cases that they are unable to provide quality work. In the end, its much easier to deny a claim and let someone else figure it out, especially in a work environment that values the volume of work completed and places no value on the quality of work completed.

First circuit holds that injury from portable fire pit does not arise out of premises; in dicta asserts the issue is interesting

Judge Selya introduced his decision in Vermont Mut. Ins. Co. v. Zamsky, __ F.3d __, 2013 WL 5543915 (1st Cir. 2013) by proclaiming that the decision addresses "what some might regard as an oxymoron: an interesting insurance coverage question." 

Andrew Zamsky was an insured under three homeowners' policies issued to his parents by Vermont Mutual.  Each of the policies covered a separate parcel of residential real estate they owned. 

The policies provided coverage for claims of bodily injury caused by an occurrence.  They also contained a "UL exclusion," which excluded coverage for injuries "arising out of a premises" owned by an insured but not itself an insured location. 

On November 27, 2008, Zamsky, claimant Renata Ivnitskaya, and several friends drove to a house which was owned by Zamsky's parents but which was not an insured location under any of the policies. 

Zamsky retrieved from a shed on the property a portable fire pit he had purchased earlier that year.  The group tried to start a fire in it.  When the wood would not burn readily, one of the group retrieved a container of gasoline from the garage or the shed and poured its contents on the fire.

In the subsequent conflagration three people were burned.  Ivnitskaya suffered especially severe burns.

Ivnitskaya sued Zamsky.  As Judge Selya wrote, she alleged a "golconda" (presumably meaning a source of great wealth, and not a mystical state of enlightenment where a vampire is no longer subject to the beast [thank you, Google]) of negligent acts and omissions.

Vermont Mutual agreed to defend the claim under a reservation of rights, and then filed a declaratory judgment action. 

In rendering its decision the court relied on Massachusetts Appeals Court cases that interpreted the UL exclusion.  One held that a UL exclusion did not exclude coverage for a dogbite case because, while the bite happened at the uninsured premises, the dog was not a condition of the premises. 

In  a second Appeals Court case the claimant was on uninsured premises "in order to minister to  a dying tree" (perhaps so that it would no longer be subject to the beast?).  He fell from a ladder and was injured.  The Appeals Court held the UL exclusion applied because "where . . . a third person is on the property to repair a condition of the property . . . there is a sufficiently close relationship between the injury and the premises" such that the injury should be understood to have arisen out of the premises.

Taken together, the courts change the UL exclusion to claims "arising out of a condition of premises" owned by the insured that are not an insured location.  Judge Selya held that a portable fire pit stored at the premises was not a condition of the premises, so the exclusion did not apply. 

Vermont Mutual tried to change the debate by focusing not on "the premises" but on "arising out of," a phrase that is construed broadly.  Judge Selya held that the "arising out of" language only comes into play if there is some causal link between the covered occurrence and a condition of the premises.  "Here, there is no such linkage." 

Judge Selya also rejected Vermont Mutual's argument that if the group went to the premises with the intention of lighting a fire, the occurrence arose out of the premises.  "The group's reason for going to Falmouth was not material because that purpose was not related to a condition of the premises." 

Judge Selya added that if Vermont Mutual had wanted to exclude from coverage all injuries occurring at an owned location it did not insure, "it would have been child's play to say so."

I think Judge Selya's decision is correct as a matter of a federal court interpreting Massachusetts law.   He properly relied on Massachusetts Appeals Court cases because there are no SJC cases on point.  Although Judge Selya asserted that he was predicting how the SJC would rule, I'm not so sure it would follow the Appeals Court cases.  The exclusion does not exclude injuries "arising out of conditions of premises" that are not insured locations; it excluded injuries "arising out of premises" that are not insured locations.  I don't see a basis for reading "condition of" into the exclusion.

Moreover, it makes sense to me that an insured buying three separate homeowner's policies for three discrete houses would not expect that an injury occurring at another house he owns to be covered by those policies.  (The Zamsky family most likely had coverage from a different carrier for the house where the fire occurred.  My guess is that this is a fight between carriers concerned about which one of them will pay if Ivnitskaya prevails on liability in her underlying action, not a fight about whether an insurer or the Zamsky family will pay.  Not that that should make any difference in the contract interpretation issues, but it gives the fight a different flavor, right?) 

In this I find myself at surprising odds with Barry Zalma, an insurance fraud specialist whose posts tend to be in favor of limited coverage.  But here he claims that "the stupidity [of Vermont Mutual] arguing no coverage even outweighed the stupidity of throwing gasoline on a fire."

Is the Insurer Always Justified in Denying Coverage On the Basis of a Breach of a Statutory Clause?

Every automobile insurance policy issued in Ontario contains statutory clause 4.1:

 

                The insured shall not drive or operate or permit any other person to drive or operate the automobile unless the insured or other person is authorized by law to drive or operate it.

 

Section 32 of Highway Traffic Act requires an operator of a motor vehicle to hold a valid driver’s licence. In Kozel v.Personal Insurance Co. [2013] ONSC 2670 (S.C.J), the applicant was a 77 woman year old woman who was involved in a motor vehicle accident in Florida. Her insurer denied coverage on the basis that she was in breach of the policy at the time of the accident because her driver’s license had expired. The applicant brought this application for a declaration that the insurer owed a duty to indemnify and defend her in a third party action against her.

 

Approximately five months prior to the accident, the applicant received documentation from the Ministry concerning the renewal of her driver’s licence and vehicle plate sticker. Two weeks prior to the renewal date, the applicant gave the package of documentation to her dealership where she took delivery of a new vehicle. She was unaware that this package contained her licence renewal. Until the accident occurred, she was unaware that her licence had not been renewed. She reported the accident in a timely manner and renewed her license immediately upon discovering it was expired.

 

Justice Wood cited the 2011 Court of Appeal decision Tut v. R.B.C. General Insurance Company [2011] ONCA 644 where it was held that if an offence for breaching the regulation was one of strict liability rather than absolute liability, it was open to the insured to argue that he took all reasonable care in the circumstances to see that he was not in breach of the regulation. Were he able to argue this defence successfully it would follow that he remained authorized to drive within the meaning of statutory condition 4(1).

 

Justice Wood held that since an offence of driving with an expired licence is one of strict liability, an argument that the applicant exercised due diligence was available. Justice Wood found that the applicant took active steps to ensure that she met her duty, although mistakenly, she provided a believable explanation for her lack of perfect diligence and her actions were those of a reasonable person acting upon a genuinely mistaken belief.  As such, the court found that the applicant was entitled to a defence under the policy.

 

This case shows that breaches of the insurance policy are not always clear cut and can involve the consideration by the court of many subjective factors.    

Can a Plaintiff Avoid Discovery Due to Medical Reasons?

Can a plaintiff avoid attending discovery or an independent medical examination due to anxiety or an inability to respond to questions appropriately?

In Lalousis v. Roberts, 2013 ONSC 5897 (S.C.J), the plaintiff sought $4 million in two actions relating to two motor vehicle accidents.  She alleged that she could not participate in oral discovery or an IME  due to medical reasons, including that she was not able to respond to questions, had poor communication and attention, and discovery would increase her anxiety and depression.  She sought to avoid the discovery process or have her husband act as a substitute.

Master Muir dismissed the motion.  A party has a prima facie right to a full and complete discovery of an adverse party, which includes oral examination and may include a medical examination.  The threshold to limit a party's right to discovery is a high one and should be ordered only in the rarest of cases.  In the circumstances, an examination for discovery might be unproductive as she may not provide responsive answer, and it could cause anxiety for the plaintiff; however, there was no evidence that it would cause her permanent damage.

In order to permit the defence to fully respond to the claim against it, it makes sense that the threshold for taking away those rights is very high.