An insurer is not responsible to protect the interests of parties independent to the contract of insurance.
The motion by the Lawyers Professional Indemnity Company ("LawPro") for an order striking the fourth party claim of a law clerk ("Rosso") was allowed where the Court held that Rosso had no cause of action against LawPro as he had no contractual relationship with Lawpro and LawPro did not owe him a duty of care.
1013952 Ontario Inc. (c.o.b. Silverado Restaurant and Nightclub) v. Sakinofsky, [2009] O.J. No. 4158, October 8, 2009, Ontario Superior Court of Justice, H.M. Pierce J.
Sakinofsky, a lawyer, was sued for professional negligence after an action commenced by one of his clients was dismissed for delay. Sakinofsky took the position that his former law clerk, Rosso, was responsible for the loss because Rosso failed to meet the necessary deadlines to keep the action active. Sakinofsky commenced third party proceedings against Rosso on this basis. Rosso commenced a fourth party claim against LawPro claiming contribution and indemnity for any liability found against him in the claim commenced by Sakinofsky. LawPro brought a motion seeking an order striking Rosso's fourth party claim on the basis that it disclosed no cause of action against it.
The Court held that there was no genuine issue for trial arising from either Rosso's claim for contribution and indemnity from LawPro under Sakinofsky's policy of insurance or from his allegations of misrepresentation. Rosso conceded he was not a named insured under the policy issued to Sakinofsky and that he never understood LawPro would be liable to him directly as there was no contractual relationship between them. The policy specifically excluded coverage for law clerks. Any right of coverage for the errors of Sakinofsky's staff belonged to Sakinofsky who was the sole insured under the policy. Rosso did not establish that he relied on representations by either Sakinofsky or LawPro to the effect that he would be covered under the policy.
The Court held that there was no genuine issue with respect to Rosso's direct claim of negligence against LawPro as LawPro did not owe Rosso a duty of care. The Court noted that an insurer is not obliged to minimize the liability of a party adverse in interest or to protect his interest, relying upon Overload Tractor Services Ltd. v. British Columbia (Insurance Corp. of British Columbia, [1988] B.C.J. No. 94 (BCSC). In this case, LawPro owed Rosso no duty of care and, consequently was not obligated to take into account his interest.
In the result, LawPro was granted summary judgment dismissing Rosso's claim against it.
This case was originally summarized by Jonathan D. Meadows and originally edited by David W. Pilley.
