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Ontario Appeal Court upholds duty to defend where work horeseplay injury is “unintentional” (November 25, 2008)


November 25, 2008   by Canadian Underwriter


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The Ontario Court of Appeal has upheld an insurer’s duty to defend in a commercial liability case in which a No Frills grocery store employee was injured while engaged in horseplay at work.
Dan Mitsios and Kevin Walters both worked at a No Frills grocery store. Mitsios sprayed Walters with water while he was cleaning the store and Walters put Mitsios in a headlock, forcing Mitsios to lose his balance and fall on his knee.
Mitsios claimed serious permanent orthopaedic injuries and sued Walters under the grocery store’s commercial liability policy.
Aviva Canada argued it was not obliged to defend the case because of a policy exclusion for “bodily injury or property damage caused intentionally by or at the direction of the insured.”
The insurer noted case law in which Ontario’s lower courts have ruled that unintentional negligence “is subsumed in the intentional act of engaging in a struggle” in the first place.
But in ruling against Aviva, the Ontario Superior Court relied on Canadian Indemnity Company v. Walkmen Machinery & Equipment Ltd., in which the judge noted an insurance policy cannot be called “comprehensive” if it does not cover liability due to negligence [i.e. an unintentional act].
In a short endorsement, the Ontario Court of Appeal upheld the lower court ruling.
“There is no allegation in the statement of claim of an intent to injure,” the Ontario Court of Appeal found. “As was held in Non-Marine Underwriters, Lloyds of London v. Scalera…for the exclusion clause to apply there must be an intent to injure. On the basis of the statement of claim, this is not a case where the pleaded activity was inherently harmful. Accordingly, exclusion clause 1(e) did not apply.”


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