Canadian Underwriter

Does criminal act exclusion apply to a person found not criminally responsible for a house fire?

May 27, 2008   by Canadian Underwriter

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Does a criminal act exclusion contained in a homeowner’s insurance policy apply to a man alleged to be not criminally responsible for burning down his house by reason of suffering a mental disorder?
The question is certainly important enough that the answer should be determined at trial, the Ontario Superior Court of Justice determined in Cipkar v. RBC General Insurance Company. For this reason, the Superior Court dismissed RBC General Insurance Company’s motion for summary judgment to dismiss the claim action.
“The issue raised by this case is both novel and significant,” the Superior Court ruled. “It requires both a consideration of factual issues and an interpretive analysis of the policy. It is for that reason that the Court of Appeal has stated that the determination of such an issue should only be done at trial on a full evidentiary record.”
Using gasoline, Mihal Cipkar set his house on fire in 2004 a fire that ultimately killed him. His wife, Anna Cipkar, made a fire loss claim on their homeowner’s policy.
RBC denied the claim on the ground that the policy specifically excluded the loss from coverage because Mihal Cipkar was a named insured under the policy and started the fire. RBC, the court noted, relied on the section of the policy that excluded “criminal acts” from coverage.
But Anna Cipkar produced experts deposing that even if Mihal Cipkar had survived the fire and been charged criminally, he would not have been found guilty by reason of insanity. Her experts suggested Mihal Cipkar did not appreciate the nature and quality of his act because he had been diagnosed with having paranoid delusions at around that period.
“Notwithstanding that under criminal law a person who is found not criminally responsible on account of a mental disorder has still committed a criminal act, the question remains whether such an act would constitute a criminal act within the meaning of the exclusion in the policy,” Ontario Superior Court Justice Arthur Pattillo wrote. “Neither counsel was able to provide me with any authority on this issue. Nor have I been able to find such authority.”
Pattillo said because there is no apparent legal precedent for the case, the action could not be dismissed by way of RBC’s motion for summary judgment.