Executive Summary: Key Legal and Evidentiary Issues

• Dispute centered on whether the insured was entitled to $100,000 under two water-related coverages or only $50,000 due to a policy’s 168-hour clause.

• Policy interpretation hinged on the Enhanced Water Damage Package (EWDP), which included coverage limits for overland flooding and sewer backup.

• The 168-hour limitation clause was deemed unambiguous and enforced, treating both damages as one occurrence due to their timing.

• Plaintiffs failed to raise timely procedural motions or provide advance notice of their expanded summary judgment claims against co-defendant Guild.

• Court emphasized that contra proferentem does not apply where policy terms are clear and limitations are explicitly stated.

• Summary judgment was granted in part to Intact Insurance; trial to proceed on remaining tort claims, including allegations against Guild.

Factual background

Scott Bradley, the personal plaintiff, owned the corporate plaintiff, Friendly Neighbourhood Comic Shop Inc. On September 20, 2019, his residence (“Fox Place”) experienced water damage from both overland flooding and sewer backup. The basement—used to store comic books—was insured under a homeowner’s policy with Intact Insurance, which included the Enhanced Water Damage Package (EWDP) offering $50,000 for each of the two types of water damage. However, the policy contained a 168-hour clause, under which events occurring within a 168-hour period were deemed a single occurrence.

Bradley submitted a claim for $100,000, arguing the damage arose from both covered perils. Intact paid $50,000 (waiving the deductible) based on its interpretation of the 168-hour clause. The plaintiffs sued Intact and Guild/HMS Insurance Group Inc., the alleged insurance broker, claiming negligence and policy misrepresentation.

Policy terms and interpretation

The court found the 168-hour clause to be unambiguous and enforceable. Bradley admitted in both his affidavit and cross-examination that all water entered within a 24-hour window. The Statement of Claim also stated both types of water damage occurred on the same day. Thus, only one claim of $50,000 was permissible under the policy terms.

The plaintiffs attempted to argue the clause should be ignored or was unfair, but the court found no statutory or common law support for that approach. The Insurance Act did not require insurers to unilaterally provide full policy copies, and limitations not listed in summaries remained enforceable.

Procedural conduct

Throughout multiple pretrial conferences, Intact made its intent to seek summary judgment clear. The plaintiffs later filed a surprise cross-motion seeking summary judgment against both defendants, including Guild, which had not been prepared for such a motion. The court criticized this as "ambush litigation." No viva voce evidence was allowed at the hearing.

Decision

Summary judgment was granted in part:

• For Intact: The court ruled that the 168-hour rule clearly applied, limiting recovery to $50,000. The plaintiffs were not entitled to an additional $50,000.

• For Guild: The court deferred all negligence and agency claims involving Guild to trial, as those raised factual disputes unsuitable for summary determination.

Intact was awarded standard costs. Guild, improperly drawn into the April 8 hearing, was awarded $625 in costs.