Executive Summary: Key Legal and Evidentiary Issues

• Priority dispute between the plaintiff’s Family Protection Endorsement (OPCF 44R) and the defendant’s Personal Umbrella Liability Policy (PLUP) after exhaustion of the primary automobile policy.

• Interpretation of Section 7(a) of the OPCF 44R concerning whether “insurers” includes non-motor vehicle insurance policies.

• Determination of whether RSA, as OPCF 44R insurer, can deduct the PLUP policy limit from its payment obligations.

• Consideration of RSA’s right to subrogate or issue a third-party claim against Certas for payments made under the OPCF 44R.

• Application of Ontario’s statutory automobile insurance regime to the priority and coverage dispute.

• Review of the motion judge’s interpretation and application of insurance policy terms and statutory provisions.

Facts and outcome of the case

Background and facts

On February 3, 2017, the plaintiff Manuel Rene Rodriguez-Vergara was struck by a vehicle owned by Maria D’Souza and driven by her daughter, Rachelle Lamoureux. As a result, Rodriguez-Vergara suffered injuries and commenced a lawsuit seeking damages. The D’Souza vehicle was insured by Certas under a standard automobile policy with liability limits of $300,000. Certas also insured D’Souza under a personal umbrella liability policy (PLUP) with limits of $1 million. Royal & Sun Alliance Insurance Company of Canada (RSA) insured Rodriguez-Vergara under a standard automobile policy with liability limits of $1 million. Attached to Rodriguez-Vergara’s policy was a Family Protection Endorsement, OPCF 44R, which provides coverage if the insured is involved in an accident with an underinsured motorist.

There was no dispute that the damages assessment exceeded the limits of the D’Souza policy, making Lamoureux and D’Souza inadequately insured motorists. The parties agreed that the D’Souza automobile policy’s third-party liability limits of $300,000 would respond first to the plaintiff’s claims. The disagreement was whether D’Souza’s PLUP or Rodriguez-Vergara’s OPCF 44R should respond next in priority to the plaintiff’s claims.

Certas brought a motion seeking a declaration that Rodriguez-Vergara’s OPCF 44R stood in priority to the PLUP. RSA brought a cross-motion seeking leave to commence a third-party claim against Certas and a declaration that RSA could subrogate against Certas for any amounts it had to pay to Rodriguez-Vergara.

The motion judge determined that after payment of D’Souza’s third-party liability limits of $300,000, Rodriguez-Vergara’s OPCF 44R was to respond next up to $700,000, followed by D’Souza’s PLUP. The motion judge also determined that OPCF 44R could not deduct from its damages payment any amounts available from D’Souza’s PLUP nor could it subrogate against the at-fault defendants D’Souza and Lamoureux for the payments made to Rodriguez-Vergara. Finally, the motion judge determined that RSA could not issue a third-party claim against Certas.

Policy terms and legal arguments

The main issue was the interpretation of Section 7(a) of the OPCF 44R. RSA argued that “insurers” in this section should include all insurers, including those providing PLUP coverage, and thus the PLUP should respond before the OPCF 44R. The motion judge found that “insurers” in this context referred only to motor vehicle liability insurers, not to non-motor vehicle policies such as a PLUP. The appellate court agreed with the motion judge’s interpretation, finding it consistent with the language of the OPCF 44R and Ontario’s regulated automobile insurance regime. The court cited prior cases, including Smith v. Taylor and Benson v. Walt, to support the conclusion that only motor vehicle liability policies are relevant for determining priority under the OPCF 44R.

Appellate decision and outcome

The Court of Appeal for Ontario dismissed the appeal, finding no error in the motion judge’s interpretation of the OPCF 44R or the application of the statutory insurance regime. The court confirmed that RSA could not deduct the PLUP policy limit from its payment under the OPCF 44R, nor could it subrogate against Certas or issue a third-party claim. The court awarded costs to Lamoureux and D’Souza in the agreed-upon sum of $7,500. No exact damages amount payable to the plaintiff was determined in this decision, as the focus was on the priority and interpretation of insurance policies and related procedural rights.