Executive Summary: Key Legal and Evidentiary Issues

• Dispute focused on whether further cleaning or full reconstruction was required to remediate wildfire-related contamination in the Harris family’s home.

• Multiple expert reports were submitted, with most recommending cleaning as sufficient, while one expert (Akron) suggested more extensive replacement.

• The Umpire accepted Co-Operators’ position that cleaning was adequate and set remediation costs at $95,087.40.

• The Harris family alleged the Umpire’s decision was unreasonable due to factual errors and a misunderstanding of his authority under s. 519(7) of the Insurance Act.

• The Court found that any factual errors by the Umpire did not amount to fundamental flaws affecting the reasonableness of the decision.

• Judicial review was dismissed, upholding the Umpire’s decision in favor of Co-Operators General Insurance Company.

Facts of the case

The Harris family, residents of Fort McMurray, Alberta, were affected by the May 2016 wildfire. Their home and outbuildings survived but sustained heat and smoke damage. Despite over $790,000 paid by Co-Operators General Insurance Company for remediation, the Harris family believed their home remained contaminated and uninhabitable, leading them to move out eight months after returning in September 2016. No medical evidence was submitted to support their belief that the home was making them ill.

Expert reports and remediation efforts

Between 2016 and 2022, various consultants and cleaning companies were engaged. Stratford Contracting Ltd. performed initial repairs and cleaning but did not conduct pre- or post-cleaning testing. DST Consulting Engineering Inc. found antimony and carpet contamination in May 2017 and recommended cleaning and carpet replacement. Pinchin West Ltd. reported no evidence of combustion products. Western Site Technologies Inc. detected char and recommended attic insulation replacement and cleaning. Chatman Restoration Ltd. began further cleaning in November 2017, but the Harris family stopped the work before completion. DF Technical & Consulting Services Ltd. tested the home’s contents and recommended HVAC cleaning. Geosyntec Consultants did not find hazardous levels of contaminants and disagreed with DST’s conclusions. Akron Engineering Consultants Group Ltd. recommended replacing insulation and drywall based on DST’s findings but did not conduct independent testing. Alberta Safety & Environmental Services Ltd. detected low levels of char and PAH in 2021 but recommended regular cleaning and maintenance.

The umpire’s decision and policy terms

The dispute was referred to an Umpire under ss. 519 and 540 of the Alberta Insurance Act. The Umpire, Steven Fries, reviewed the expert reports and determined that cleaning was sufficient to remediate the home and its contents. He found Co-Operators’ estimates most reasonable, awarding $87,064.41 for structures and $8,022.99 for contents, totaling $95,087.40. The Umpire rejected the Harris family’s higher estimates for full replacement ($1,313,951.25 for the home and $1,403,821.02 for contents) as unreasonably high. The Umpire interpreted s. 519(7) of the Insurance Act as requiring him to choose between the parties’ positions, not to formulate an independent alternative.

Judicial review and alleged errors

The Harris family sought judicial review, arguing the Umpire misunderstood the timing of attic insulation replacement and the scope of DF’s testing, and that he unfairly discounted Akron’s opinion. The Court found that while the Umpire misunderstood the timing of attic insulation replacement, this did not constitute a fundamental flaw, as subsequent reports did not recommend further replacement. The Court also found that the Umpire’s treatment of Akron’s opinion was reasonable, as Akron’s recommendations were based on inferences rather than independent testing.

Ruling and outcome

Justice N.E. Devlin of the Court of King’s Bench of Alberta dismissed the application for judicial review, finding the Umpire’s decision reasonable and statutorily compliant. The Court upheld the Umpire’s determination that further cleaning, not reconstruction, was sufficient, and that Co-Operators General Insurance Company’s remediation cost estimates were appropriate. The successful party was Co-Operators General Insurance Company, with the amount set at $95,087.40. Costs may be addressed if not agreed upon.