Could auto liability cover negligent parenting lawsuit?

If you allow your child to ride in a vehicle allegedly driven by an impaired driver, and your child sues you for negligent parenting, does the vehicle liability policy cover you?

Not as it stands. But the question could be put to the Supreme Court of Canada, which announced Friday that Bradley Hunt is applying for leave to appeal a Court of Appeal for Ontario ruling released this past August in a coverage dispute in favour of Peel Mutual Insurance company.

In July, 2014, Hunt and his daughter were passengers in a vehicle that crossed the centre line and got into an accident. Hunt was a passenger and was not driving. The driver of the vehicle (insured by Peel) was alleged to be under the influence of alcohol. Hunt is being sued by his daughter. She alleges Hunt was negligent in allowing the daughter to ride in a vehicle driven by an impaired daughter. Allegations against Hunt have not been proven.

Hunt argued Peel should defend him in his lawsuit from his daughter.

Not so, ruled Justice Patrick Flynn of the Ontario Superior Court of Justice in Bradley Clayton Hunt v. Peel Mutual Insurance Company released Jan. 7, 2019. That ruling was upheld by the Court of Appeal for Ontario.

The fact that Hunt has applied for leave to appeal does not necessarily mean the Supreme Court of Canada will hear an appeal. Normally a leave application is decided by a three-judge panel within six weeks.

Whether an incident arises from “use and operation” of a motor vehicle is often debated in court. For example, in Dittmann v. Aviva Insurance Company of Canada, the Court of Appeal for Ontario ruled in 2018 that a women who suffered serious burns after buying coffee at a drive-through is entitled to accident benefits.

The issue in Hunt is the wording of Section 239 (1) of the Ontario Insurance Act, which provides liability coverage “airing from the ownership or directly or indirectly from the use or operation” of the vehicle. Both Justice Flynn and the appeal court ruled that Hunt’s liability is for allegedly negligent parenting – and not from anything he did connected to the use or operation of an automobile. The fact that Hunt was also an occupant of the vehicle in which his daughter was riding was fortuitous, the appeal court found.

Justice Flynn cited Citadel General Assurance Co. v. Vytlingam, released in 2007 by the Supreme Court of Canada.

Mississauga, Ont. resident Michael Vytlingam and father Dennis were driving on a highway through North Carolina in March, 1999, returning from a Florida vacation. A boulder dropped from an overpass struck the Vytlingams’ vehicle, causing catastrophic injury to Michael. The boulders had been deliberately dropped onto the highway by Todd Farmer and Anthony Raynor. The boulders were taken to the site in Farmer’s vehicle. The Vytlingams sued Farmer.

In a separate criminal proceeding in the United States, Farmer and Raynor went to prison for assault with a deadly weapon.

Farmer only had US$25,000 in liability coverage, the minimum required by North Carolina law. Damages to Vytlingam exceeded $900,000. So the Vytlingams made a claim under their OPCF 44R Family Protection Coverage endorsement with The Citadel General Insurance Company, which provides coverage for clients who sue underinsured drivers.

Initially, an Ontario court ruled that Citatel must provide coverage. The ruling was upheld, in a 2-1 ruling, by the Court of Appeal for Ontario but overturned by the Supreme Court of Canada.

Farmer and Raynor did use a car to transport themselves and the materials needed to commit the crime to the scene of the crime.

But dropping the boulder on to the highway was unconnected to the car, wrote Justice Russell Juriansz of the Court of Appeal for Ontario in a dissenting ruling. The use of a car by Farmer and Raynor was merely incidental.

The Supreme Court of Canada agreed.

While the use of Farmer’s car helped Farmer and Raynor commit the act that injured Vytlingam, this does not mean Farmer committed the tort in his capacity as an at-fault motorist, within the meaning of Ontario’s family protection endorsement, Justice Ian Binnie wrote for the top court in 2007.

Dropping the rocks from the overpass was “severable” from the use and operation of the Farmer vehicle, Justice Binnie wrote at the time, quoting Stevenson v. Reliance Petroleum Limited / Reliance Petroleum Limited v. Canadian General Insurance Company, a 1956 Supreme Court of Canada ruling.

Reliance ultimately arose from a major fire at a gas station in 1951. A driver for a London, Ont. gas delivery firm was pumping gas into underground tanks at a station. The driver was supposed to remain at the faucet. But instead, the driver placed a stick to keep the spring mechanism of the faucet open, and left the truck. The underground tanks overflowed and the fire started. The delivery company was sued and sought coverage under both its auto and commercial general liability policies, the latter of which excluded liability for arising from use of an automobile.

The end result was Reliance could claim under an auto policy written by Lloyd’s but not a general public liability policy written by Canadian General Insurance Company.

A key question, Justice Ivan Rand wrote in the 1956 ruling, was whether the negligent activity for which the defendant is being sued is “severable” from the use and operation of the vehicle.