writes BEPPI CROSARIOL at http://www.theglobeandmail.com
Wednesday, June 15, 2005
The impact left the 18-year-old catastrophically disabled for life and the case ended with lengthy prison sentences for both
assailants. But whom did the victim's family successfully sue for almost $1-million in
damages? Their own auto insurance company.
In another tragedy that same year, Ontario hunter Fred Wolfe spotted what he thought was a white-tailed deer flashing in his pickup truck's
headlights. Stepping down and away from the truck, he took aim and blasted into the
darkness. The "deer" turned out to be fellow hunter Harold Herbison, struck in the thigh and permanently
disabled.Whom did Mr. Herbison's family successfully sue for $832,000 in
damages? The company that insured Mr. Wolfe's pickup.
In a shocking double whammy for the auto insurance industry and its defence
litigators, the Court of Appeal for Ontario last week sided with the victims in both cases, upholding lower court decisions that effectively defined the incidents as motor vehicle
accidents.
The decisions, handed down on the same day, are sending tremors through the insurance
industry, with some veteran defence litigators arguing they could open the floodgates to a sort of drive-by litigation -- inciting indiscriminate lawsuits that implicate auto insurers in all manner of assaults and accidents that don't directly involve automobiles.
"These two cases are definitely out on the edge," said Randy Bundus, vice-president and general counsel for the Insurance Bureau of Canada. "I would bet that a lot of auto policy holders would be equally surprised to think that their policy would go so far as to cover them for this sort of
thing."
Mr. Bundus and several defence lawyers who regularly work for the insurance industry expect one or both cases will make their way to the Supreme Court of Canada, a prospect they say has been made more likely by the fact both appeal cases involved two-to-one split
decisions. The vast majority of appeal court rulings are unanimous.
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In each, the decisions turned on whether the bodily injury arose -- in the prevailing language of insurance contracts --
"directly or indirectly from the use or operation of an automobile."
"They are pretty startling decisions," said personal injury defence lawyer Lee Samis of Toronto-based Samis & Co.
"Both of the cases represent a reasonably significant extension in the factual applications
that are being considered as automobile insurance claims."
What made the Vytlingam boulder-dropping case particularly bizarre was that it
turned, not on the fact Michael Vytlingam was injured while riding in the Ford Explorer, but on the role played by the car of Todd Farmer, one of the North Carolina
assailants, which had been left with its engine running on the overpass while the rocks were
dropped.
Citadel General Assurance Co., the Vytlingams' insurer, had already paid out about $1.5-million to the family for care and other expenses because their policy covered injuries sustained as a result of travelling in a
car. But fortunately for the Vytlingams, the Citadel policy also contained a common
"family protection coverage endorsement" enabling them to recoup up to an additional $1-million against any shortfall not covered by
"an inadequately insured motorist" who causes the injuries.
Because Mr. Farmer carried only the minimum $25,000 (U.S.) in third-party liability coverage required by North
Carolina, the Vytlingams made an additional claim against Citadel. But the insurer objected to making a
"family protection coverage" payout on the grounds the boulder attack did not result from the use or operation of a
vehicle. So, the Vytlingams sued.
Mr. Bundus said that if one were to follow the appeal court decisions to their logical limit, a wounded teller in a bank
heist, say, might be able to claim damages from his or her own car insurance policy because the shooter's getaway car did not carry adequate liability
coverage. "That may be an extreme, but that's where this kind of case could seem to lead
us."
Geoffrey Adair, a prominent insurance-defence lawyer with Toronto litigation boutique Adair Morse
LLP, who appealed the Vytlingam case on behalf Citadel, declined to comment on whether Citadel would seek leave to
appeal. Mark Charron, of Ottawa firm Williams McEnery, which appealed on behalf of Lumbermens Mutual Casualty Co. in the hunting case, also declined
comment.
Not all personal injury lawyers agree the recent cases are highly unusual,
however.
Roger Oatley of Oatley Vigmond, a prominent plaintiffs personal injury lawyer based in
Barrie, Ont., says judges have grappled with the phrase "use or operation of a motor
vehicle" since before he started practising more than 30 years ago. "The courts have been making difficult decisions like this for decades."
bcrosariol@globeandmail.ca
© Copyright 2005 Bell Globemedia Publishing Inc. All Rights Reserved.
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