Amount to be split pro rata among 25 direct and derivative claimants in accident case
The Ontario Superior Court of Justice has ruled that the total amount the plaintiffs could divide proportionally was the aggregate limit of $2.3 million in a case involving a vehicular accident that killed one child and injured several others.
In Hugo v. McNorgan, 2025 ONSC 4739, the first defendant was driving a vehicle owned by the second defendant on Riverside Drive in London, Ontario, on Nov. 30, 2021. These two were the private defendants in this case.
The driver failed to stop at a red light, drove through an intersection and over a curb, and struck multiple members of the London 120th Brownies.
This accident led to eight companion actions, with 25 total plaintiffs making direct and derivative claims. These plaintiffs included family members who brought actions under s. 61 of Ontario’s Family Law Act, 1990.
The plaintiffs were insured under the insurance company defendants’ automobile insurance policies in the form of the standard Ontario automobile policy (OAP 1), including OPCF 44R family protection coverage endorsements, which provided standard underinsured automobile coverage.
The private defendants were insured under Desjardins Insurance’s OAP 1 and Desjardins’ personal liability umbrella policy (PLUP), an excess liability policy only available upon the exhaustion of the first loss insurance limit. The PLUP had a standard excess policy form (SPF 7), which provided excess third-party liability coverage beyond the auto insurance’s limits.
Specifically, SPF 7 said the excess insurer would indemnify the insured under the first loss motor vehicle insurance against liability legally imposed on the insured for amounts exceeding the limits of the motor vehicle insurance and excess insurance for loss or damage arising from owning, using, or operating the covered automobiles, resulting from bodily injury, death, or property damage.
The parties agreed that the total available coverage for the vehicular accident was $2.3 million because the auto insurance’s underlying limit was $300,000, while the PLUP added $2 million.
The parties asked the court to determine the following legal questions before the trial under r. 21.01(1)(a) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194:
- whether the PLUP was a motor vehicle liability policy
- whether the private defendants were underinsured under the OPCF 44R family protection coverage endorsement
The court said the answers to these questions would impact:
- whether the plaintiffs would share pro rata in the private defendants’ PLUP liability limit, leading to higher insurance limits available to the plaintiffs
- whether, if the court would find in the defendant insurers’ favour, it would dismiss the claims against them and continue the actions solely against the private defendants
The court noted that, in connection with the PLUP, the parties filed no undertaking with the Financial Services Regulatory Authority of Ontario’s chief executive officer under s. 226.1 of Ontario’s Insurance Act, 1990.
Defendants underinsured
The Ontario Superior Court of Justice determined that the PLUP was not a motor vehicle liability policy under s. 1 of the Insurance Act or s. 4 of the OPCF 44R family protection coverage endorsement.
Thus, the court confirmed a $300,000 limit for the motor vehicle liability insurance of the private defendants, whom the court deemed inadequately insured motorists under s. 1.5 of the OPCF 44R.
According to the court, under s. 7 of the endorsement, the amount an insurer should pay each eligible claimant was an excess to the amount the claimant received from “any source” and the amounts available from nine specific sources, including the insufficiently insured motorist’s insurers, as well as bonds, cash deposits, or other financial guarantees given on the motorist’s behalf.
The court explained that “any source” under s. 7 of the endorsement included the PLUP.
Therefore, the court held that the total amount the plaintiffs could split pro rata among themselves was the aggregate limit of $2.3 million. The court added that the amount each eligible claimant could recover would be the difference between the shortfall of their damages, minus their proportionate share of the aggregate limit, and their OPCF 44R policy limit.
Lastly, the court ordered the OPCF 44R defendant insurers to pay the plaintiffs $10,000 as a fair and reasonable amount for costs.
