Hartley et al. v. Security National Insurance Company
[Indexed as: Hartley v. Security National Insurance Co.]
2017 ONCA 715
Court of Appeal for Ontario, G.J. Epstein, Hourigan and Paciocco JJ.A.
September 14, 2017
Insurance — Automobile insurance — Underinsured motorist
endorsement — Plaintiff seriously injured in collision in Minnesota
involving state-owned truck operated by state employee — Plaintiff
suing in Minnesota and obtaining maximum payable under Minnesota
law of US$500,000 inclusive of legal fees — Plaintiff’s Canadian automobile insurer refusing to pay difference between net recovery and underinsured motorist coverage ceiling — Motion judge not erring in finding
that Minnesota was “inadequately insured motorist” within meaning of
OPCF 44R — Motion judge erring in finding that plaintiff could claim
U.S. legal fees as special damages against his insurer.
The plaintiff was seriously injured in Minnesota when his motorcycle was
struck by a State of Minnesota-owned truck operated by a state employee. He
sued in Minnesota for damages. Under the Tort Claims Act, Minn. St. §3.736,
there is a $500,000 cap on the amount that can be claimed by an individual and a
$1,500,000 cap on the total that is payable to multiple claimants for claims arising out of a single occurrence. As a result, and despite the fact that his injuries
warranted damages in excess of US$500,000, the plaintiff entered into a settlement for that amount, inclusive of legal fees. After legal costs were accounted for,
he was left with approximately CAD$386,500. He looked to the defendant, his
Canadian automobile insurer, for the difference between his recovery and
the CAD$1,000,000 underinsured motorist coverage ceiling provided for in the
OPCF 44R Family Protection Coverage endorsement. The defendant refused to
pay, and the plaintiff sued. On a motion under rule 20.01 of the Rules of Civil
Procedure, R.R.O. 1990, Reg. 194, the motion judge held that Minnesota was an
“inadequately insured motorist” within the meaning of OPCF 44R and that the
plaintiff could claim his U.S. legal fees as special damages against the defendant.
The defendant appealed.
Held, the appeal should be allowed in part.
The motion judge did not err in finding that Minnesota was an “inadequately
insured motorist”. The fact that Minnesota chooses to self-insure is not inconsistent with it being an “inadequately insured motorist”. The claim was not
defeated by statutory immunity. The Tort Claims Act did not remove Minnesota’s
liability, but rather limited the damages that could be collected from Minnesota.
The cap on damages produced a shortfall between what the plaintiff was “legally
entitled to recover” in damages, and what he was entitled to receive, thereby
triggering a right of indemnity under OPCF 44R. The defendant’s argument that
the “total of all limits” payable by Minnesota was the US$150,000,000 single
occurrence cap was a contrivance, as the plaintiff, as a single individual, had no
right to that amount. The phrase “the total of all limits of motor vehicle liability
insurance, or bonds, or cash deposits, or other financial guarantee as required by
law in lieu of insurance, of the inadequately insured motorist” in OPCF 44R refer
to the funds available to the claimant bringing the claim.
The motion judge erred in permitting the plaintiff to claim his U.S. legal
fees. He correctly found that the U.S. fees were not recoverable as an insurance