Fitzpatrick v. Red River Valley Mutual Insurance Co. [2004] S.J. No. 453 Saskatchewan Court of Queen's Bench

Fitzpatrick was in the business of collecting and selling urine from pregnant mares. His operation was insured under a commercial general liability policy with a livestock floater attached. Damage to the mare’s fetuses, which did not affect the mares but caused a financial loss to Fitzpatrick due to his inability to sell their urine, was insured under the livestock floater of his CGL policy.

Fitzpatrick was in the business of collecting and selling urine from pregnant mares, commonly known as PMU farming. Fitzpatrick was insured under a commercial general liability policy with a livestock floater, and farm earnings floater attached. A significant number of the pregnant mares owned and insured by Fitzpatrick aborted their fetuses. Fitzpatrick was unable to sell urine from the non-pregnant mares. Subsequent investigation revealed that faulty electrical grounds in Fitzpatrick’s barn caused the mares to receive low voltage shocks, which caused the mares to abort their fetuses. Fitzpatrick was advised by his insurance company, Red River Valley Mutual Insurance Co. ("Red River"), that his policy did not cover any losses for the aborted fetuses and the consequential loss of revenue from his inability to sell urine from the non-pregnant mares. The livestock floater in Fitzpatrick’s policy insured against perils to livestock for "death or destruction" resulting from or made necessary by artificial electricity.

Fitzpatrick commenced an action against Red River for recovery of his losses arising from his inability to sell urine from the non-pregnant mares. Red River submitted that an equine fetus is not the subject of insurance in the policy, and that to recover under the policy, the insured must show a direct loss or damage resulting in death or destruction to the mare itself. Using a human analogy, Red River argued that the livestock floater was analogous to a life insurance policy as opposed to a disability policy. Fitzpatrick’s counsel submitted that coverage under the policy extended to any horse related to the Plaintiff’s PMU operation, which would include both colts and unborn foals; and that the rendering of the PMU mares useless for their intended purpose, even temporarily, constituted their "destruction" within the terms of the policy. Ball J. noted that the insured peril was for death or damage, not for death alone. In order to give full meaning to the word damage, Ball J. determined that the policy must cover more than the mere death of the insured livestock. Ball J. ruled that the loss of the unborn foals, and Fitzpatrick’s subsequent inability to sell the mare’s urine, was an insurable loss under the policy.

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