Canadian Underwriter

Home insurer goes after ventilation unit manufacturers in subrogated fire claim

March 10, 2021   by Greg Meckbach

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A subrogated claim arising from a Hamilton area home fire is raising the question of which equipment manufacturer, if any, is liable.

In 2013, a fire caused extensive damage to the Ancaster, Ont., home of Mary Arlene and Rudolf Dosen. Their home contained a heat recovery ventilation unit, which is designed to bring fresh outside air inside a building while expelling stale indoor air.

That heat recovery ventilation unit contains a motor, manufactured by Fasco Motors Limited, that powers the blower assembly.

The Dosens allege the 2013 fire originated in their heat recovery ventilation unit, manufactured by Venmar Ventilation ULC. Allegations against Venmar and motor maker Fasco have not been proven in court.

Several lawsuits — including a subrogated claim by Security National Insurance Company — ensued from the fire. Defendants included Venmar and Fasco.

A trial was originally scheduled in 2019, but Venmar asked the Ontario Superior Court of Justice to quash defence pleadings filed by Fasco.

Venmar is seeking contribution and indemnity from Fasco, which filed a counter-claim.

Fasco argues that if the fire originated in a motor it manufactured, the fire was still the fault of Venmar as the ventilation unit manufacturer.

In a 2019 decision, Justice Kim Carpenter-Gunn struck down Fasco’s defence pleadings.

But that ruling was overturned in Dosen v. Meloche Monnex Financial Services Inc. (Security National Insurance Company), released March 5, 2021 by the Court of Appeal for Ontario.

Under Ontario’s rules of civil procedure, a court can quash a lawsuit party’s pleadings if the judge is convinced that the pleading is “frivolous or vexatious or is otherwise an abuse of the process of the court.”

Justice Carpenter-Gunn sided with Venmar, ruling that Fasco’s defence should be struck. Venmar argued that the issues Fasco want to raise in the Ontario case involving the 2013 Ancaster home fire had already been decided by a Quebec court, in a separate lawsuit relating to a 2007 home fire in Quebec City. A Quebec court ruled in 2014 that the Quebec City fire originated from the motor manufactured by Fasco.

So in Ontario, Justice Carpenter-Gunn ruled in 2019 that Fasco should not be allowed to re-litigate findings of fact and issues of mixed fact and law that already had been determined in Quebec.

But in 2021, the Court of Appeal for Ontario ruled that in the Dosens’ claim, an Ontario court still needs to hear issues concerning Venmar’s potential liability for failure to warn or alleged negligence in assembly or testing of its heat recovery ventilation unit, in relation to the Dosens and Security National’s claims.

Fasco is arguing that a contract it has to supply motors to Venmar requires Venmar to indemnify Fasco in the event of litigation.