Executive Summary: Key Legal and Evidentiary Issues

• Northbridge sought recovery from Échelon in subrogation after indemnifying its insured for damage caused when Kenny Panadis seized and crashed an ambulance on September 12, 2021.
• Central to the dispute was whether Panadis's taking of the ambulance constituted "theft" under the F.P.Q. No. 1 policy and the Automobile Insurance Act (LAAQ), which incorporates the criminal definition of theft under section 322 of the Criminal Code.
• Because the LAAQ's definition of theft expressly references section 322 of the Criminal Code, both the physical act (actus reus) and the criminal intent (mens rea) had to be established for the exclusion to apply.
• Panadis had been found not criminally responsible by reason of mental disorder on all charges arising from the same incident, which the court treated as a strong presumption that he could not have formed the requisite criminal intent for theft.
• Échelon's alternative argument — that Panadis's conduct amounted to an intentional fault under article 2464 of the Civil Code of Québec — failed because the evidence did not establish that he was aware of the inevitability of the damage.
• Liability was nonetheless established against Panadis under the general civil fault standard in article 1457 C.c.Q., as he failed to rebut the presumption that he was endowed with reason.

Facts of the case

On September 12, 2021, Kenny Panadis struck one of two paramedics who were responding to an emergency call and fled in their ambulance while one of the paramedics was still inside the vehicle. A high-speed police pursuit followed. Panadis lost control of the ambulance, which rolled over and ended up in a ditch, causing damage to the vehicle and to equipment inside it — specifically a Stryker Stair-Pro evacuation chair (no. 090340536), a Stryker Power-Pro 6500 stretcher (no. 110939170), and a defibrillator. Northbridge, the insurer of the ambulance owner under policy no. CBC 0730648 08, indemnified its insured in the amount of $34,990.41 and then brought a subrogation claim against both Panadis and Échelon Assurance, the insurer that had issued Panadis an automobile liability policy (F.P.Q. No. 1, policy no. X32166182-2) covering a 2019 Volkswagen Jetta, valid from April 26, 2021 to April 26, 2022. According to the criminal record, Panadis was charged with assault, armed assault or bodily harm, forcible confinement, flight from police, dangerous driving causing bodily harm, and assault of a peace officer. He was found not criminally responsible by reason of mental disorder on all counts. He was not charged with theft. Panadis did not respond to the summons and did not testify at the hearing.

Policy terms and contractual clauses at issue

The F.P.Q. No. 1, the standard Quebec automobile insurance policy form, defines the persons insured under Chapter A (civil liability) to include any person driving or using an insured vehicle, but expressly provides: "La personne qui vole un véhicule assuré ou qui est complice du vol n'est pas assurée" — that is, a person who steals an insured vehicle or is an accomplice to the theft is not covered. The policy's definition of an "insured vehicle" extends coverage to vehicles not owned by the named insured, subject to conditions. Read together, these provisions mean that a driver operating a vehicle other than his own is covered under his own policy unless he stole that vehicle. Échelon relied on this theft exclusion to deny coverage. The LAAQ independently addresses theft under article 121, which provides that where a vehicle is involved in an accident while driven by a person who seized it by theft or who knew it had been stolen, the insurer is relieved of all obligations toward that person. Northbridge countered that article 119 of the LAAQ — which bars an insurer from raising any nullity, forfeiture, or exception against a third party up to the mandatory minimum liability amount — prevented Échelon from relying on the theft exclusion against it as a subrogated third-party claimant.

Court's reasoning and analysis

The court first addressed whether a theft had occurred within the meaning of the F.P.Q. No. 1 and the LAAQ. Because the LAAQ defines "theft" by direct reference to section 322 of the Criminal Code, the court held that both elements of the criminal offence — the physical act and the criminal intent — must be proven before the exclusion can be invoked. The court found the physical element easily satisfied: Panadis took the ambulance and drove it away. The moral element, however, presented a difficulty. The court reasoned that because Panadis had been found not criminally responsible on all charges connected to the same episode — a finding equivalent to an acquittal — there was a strong, precise, and concordant presumption of fact that he could not have formed the specific criminal intent required for theft under section 322. The court rejected Échelon's argument that, because the LAAQ is governed by civil law, a mens rea analysis was unnecessary, holding that the legislature's deliberate incorporation of the Criminal Code provision could not be read to strip away the mental element. Since theft was not established, neither the policy exclusion nor article 121 of the LAAQ assisted Échelon. The court also disposed of Échelon's alternative argument under article 119, confirming that, in the absence of a valid theft, the insurance coverage was triggered and article 119 rendered any remaining exception inapplicable to the subrogated claimant. On the intentional fault argument under article 2464 C.c.Q., the court noted that intentional fault requires that the insured have willed the damage or been conscious of its inevitability — a higher standard than gross or even criminal fault. The evidence showed erratic and reckless conduct but not that Panadis was aware the damage would inevitably occur; accordingly, Échelon failed to prove intentional fault.

Turning to Panadis's personal liability, the court applied article 1457 C.c.Q., which requires that a person be "endowed with reason" to be held liable for civil fault. The court acknowledged the apparent paradox that a person found incapable of forming criminal intent might still be considered endowed with reason for civil purposes, but followed settled Quebec jurisprudence to that effect, noting that a finding of not criminally responsible does not automatically preclude civil fault. Because Panadis bore the burden of proving his lack of discernment and presented no evidence whatsoever, the court concluded he was endowed with reason. His conduct — seizing the ambulance and driving it so recklessly that he lost control — fell below the standard of the reasonable person and constituted civil fault.

Ruling and overall outcome

The court partially granted Northbridge's claim and ordered Panadis and Échelon to pay Northbridge the sum of $29,741.85 jointly and severally, with legal interest and the additional indemnity under article 1619 C.c.Q. running from September 11, 2022 (being the expiry of the ten-day period set out in the mise en demeure of September 1, 2022), plus costs including expert fees where applicable. The admitted quantum of $29,741.85 reflected a 15% depreciation applied to Northbridge's original claim of $34,990.41 — the amount it had paid to indemnify its insured. Northbridge, as the subrogated insurer, was the successful party.