The common law does not necessarily preclude an independent claim for funds paid by the insurer, even when the insured has resolved his or her claim in an earlier lawsuit.

A successful application by the Plaintiff to amend the pleadings to assert that a third party, an insurer who had indemnified them, was advancing a claim against the remaining defendant insurers on a subrogated basis. The Defendants made an unsuccessful cross-application for summary dismissal on the basis that because the Plaintiff had been indemnified the action was spent.

Cameco Corp. v. Insurance Co. of the State of Pennsylvania [2008] S.J. No. 731 Saskatchewan Court of Queen’s Bench McMurtry J November 18, 2008.

Following a loss the Plaintiff brought an action against its insurers who had denied coverage. Subsequently, one of the Defendant insurers, Global, indemnified the Plaintiff. Global then sought contribution from the remaining defendant insurers. The Plaintiff sought to amend the Statement of Claim to assert that Global was advancing the Plaintiff’s claim on a subrogated basis. The Defendants sought a summary dismissal and took the position that because the Plaintiff had been fully indemnified, the action was spent.  In their view, to permit the amendments would be to allow the Plaintiffs to reinvent the Statement of Claim.  The Defendants were also of the view that the dispute was now solely between the insurers and could not be continued on a subrogated basis. It was argued that a previous application brought by the Plaintiff to amend the pleadings foreclosed them from pursuing a subrogated claim because of the doctrine of issue estoppel.

The application to amend the Statement of Claim was granted and the application for summary dismissal was denied. The Court held that the previous application to amend the pleadings centred around whether such amendments were appropriate because of a limitations issue. The Court’s discussion about the subrogated nature of the claim in that application was collateral to its decision. The circumstances of this application did not meet the elements of res judicata enunciated by the Supreme Court of Canada in R. v. Mahalingan, 2008 SCC 63.

The Court also held that the common law does not necessarily preclude a subrogated claim when the insured has been fully indemnified. The amendments requested are necessary to determine the issues in dispute and can be permitted without injustice to the other side. In obiter the Court held that a Plaintiff cannot be over-compensated; anything that is realized over and above what the Plaintiff is entitled to must be held in trust for global.

This case was originally summarized by kyee@harpergrey.com and originally edited by dpilley@harpergrey.com

 

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Vakuutus - March 13, 2009 1:13 AM

The common law does not necessarily preclude an independent claim for funds paid by the insurer, even when the insured has resolved his or her claim in an ... even if the insured has resolved his or her claim in an earlier lawsuit

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