Torchia v. Royal & SunAlliance Insurance Co. of Canada [2004] O.J. No. 2316 Ontario Court of Appeal

The Court of Appeal upheld a trial decision holding that an insurer ("Royal") was entitled to rely on an exclusion clause denying coverage for "loss or damage resulting from the intentional or criminal acts of … any person insured by this policy" where the insured homeowner’s ("Torchia’s") husband committed arson in destroying Torchia’s home. The court rejected the argument that the wording of the exclusion clause was ambiguous and could be interpreted to only exclude losses suffered by the person committing the act.

Here is a link to the decision.

Torchia and her husband lived in Rockwood, Ontario in a house which was destroyed by fire on February 28, 1997. Torchia was the sole owner of the house. As a result of the fire, Torchia’s husband was convicted of arson with intent to defraud the insurer. No evidence was put forward to suggest that Torchia had anything to do with her husband’s actions. Torchia made a claim under her homeowner policy which was denied by Royal. Royal denied coverage on the basis of an exclusion clause in the property damage section of the policy and this denial was upheld at trial. Torchia appealed the decision.

The Court of Appeal reviewed the relevant policy wording. The definition of "you and your" included the "insured on the coverage summary page and, while living in the same household … his or her wife or husband". The relevant exclusion clause in the property damage section of the policy read as follows:

We do not insure loss or damage:

3. resulting from the intentional or criminal acts of, or the failure to act by,

a) any person insured by this policy …

Torchia argued that there was an ambiguity in the exclusion clause as it could be read to exclude either the loss of any insured resulting from the intentional or criminal act of a person insured by the policy or only a loss suffered by the person who committed the act. In making this argument, Torchia relied upon the ruling in Snaak (Litigation Guardian of) v. Dominion of Canada General Insurance Co. (2002), 61 O.R. (3d) 230 (C.A.). The Court of Appeal distinguished the decision in Snaak noting that in that case, the policy at issue had a "separate coverage" provision providing that coverage applied separately to each person who was an insured. The Royal policy wording at issue in the case at bar contained no separate coverage provision and there was no ambiguity in the wording of the exclusion clause itself. As the exclusion clause was clear and unambiguous, the Court of Appeal held that it must be given effect and the appeal was dismissed.

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