Stewart v. TD General Insurance Company, 2013 ONSC 1412 (CanLII)
CITATION: Stewart v. TD General Insurance Company, 2013 ONSC 1412
COURT FILE NO.: 10-20819SR
12-35817SR
DATE: 20130307
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Darren Stewart and Vanessa Miller, plaintiffs
AND: TD General Insurance Company, defendant
BEFORE: Mr Justice Ramsay
COUNSEL: Mr Keith R. Millikin for the plaintiffs
Mr Dwain C. Burns for the defendant
HEARD: 2013-03-06 at Hamilton
ENDORSEMENT
[1] The defendant moves under Rule 21 for the determination of a question of law raised by the pleadings. The plaintiffs move for summary judgment on liability, leaving only quantum of damages for trial, and for an order striking those portions of the defence that dispute liability. The case involves interpretation of a written insurance policy. The parties agree that I can interpret the insurance policy in order to decide the defendant’s motion.
[2] The plaintiffs insured the contents of their residence under a policy with the defendants. The plaintiff Mr Stewart (hereinafter “the plaintiff”) has licences to possess and cultivate marijuana issued under the Marihuana Medical Access Regulations, SOR 2001-227, as amended. On September 22, 2009 six marijuana plants growing in the plaintiff’s back yard were stolen. The plaintiff made a claim under the policy. On November 14, 2009 the defendant paid him $6,000. On June 21, 2010 the plaintiffs filed an action claiming about $26,000 for the value of the stolen plants, and a further $180,000 for breach of contract, mental stress and physical pain, breach of fiduciary duty and infliction of mental and physical suffering.
[3] On September 29, 2011 another five plants were stolen from the back yard. The plaintiff made a claim under the insurance policy. The defendants paid him $5,000. On July 12, 2012 the plaintiffs filed an action claiming about $19,000 for the value of the plants and a further $180,000 on the same basis as in the 2010 action.
[4] The portions of the policy relied upon by the parties are as follows.
COVERAGE
Coverage B – Personal Property (contents)
1. We insure the contents of your dwelling and other personal property you own, wear or use while on your premises which is usual to the ownership or maintenance of a dwelling.
EXTENSIONS OF COVERAGE
15. Trees, shrubs and plants
Trees shrubs and plants being part of your landscaping on your premises. We will pay up to 5% of the limit of insurance applicable to your dwelling, subject to a maximum of $1,000 for any one tree, shrub or plant including debris removal. You are insured against loss cause (sic) by fire, lightning, explosion, impact by aircraft or land vehicle, riot, vandalism or malicious acts, theft or attempted theft.
PERILS EXCLUDED
We do not insure loss or damage:
8.Grow-op
arising directly or indirectly from the growing, manufacturing processing or storing by anyone of any drug, narcotic or illegal substances or items of any kind the possession of which constitutes a criminal offence. This includes any alteration of the premises to facilitate such activity whether you have any knowledge of such activity.
[5] The bold print is contained in the original. Aside from the headings, the words in bold print are terms defined in the policy. For our purposes, the essential definition of “dwelling” is the insured building, while “premises” means the land that the building is on. The policy also provides for coverage of the contents of certain types of outbuilding, but these provisions are not relevant for our purposes.
[6] The defendant argues that the only provision of the policy that provides for compensation for the lost plants is paragraph 15 of “Extended coverage”, which limits compensation to $1,000 a plant. The plaintiff argues that the plants are covered by paragraph 1 of “Coverage – B” in that they constitute personal property owned or used while on the premises which is usual to the ownership or maintenance of a dwelling; furthermore, the limitation in paragraph 15 of “Extended coverage” does not apply because the plants were not part of the landscaping. According to the plaintiff, “landscaping” involves laying out plants (or other items) for aesthetic purposes, not for the purpose of growing medicine.
[7] The essential principles to be applied in interpreting the policy are summarized in two excerpts from the case law. First, in Consolidated Bathurst v. Mutual Boiler and Machinery Insurance Co., 1979 CanLII 10 (SCC), [1980] 1 SCR 888, Estey J. said:
Even apart from the doctrine of contra proferentem as it may be applied in the construction of contracts, the normal rules of construction lead a court to search for an interpretation which, from the whole of the contract, would appear to promote or advance the true intent of the parties at the time of entry into the contract. Consequently, literal meaning should not be applied where to do so would bring about an unrealistic result or a result which would not be contemplated in the commercial atmosphere in which the insurance was contracted. Where words may bear two constructions, the more reasonable one, that which produces a fair result, must certainly be taken as the interpretation which would promote the intention of the parties. Similarly, an interpretation which defeats the intentions of the parties and their objective in entering into the commercial transaction in the first place should be discarded in favour of an interpretation of the policy which promotes a sensible commercial result. It is trite to observe that an interpretation of an ambiguous contractual provision which would render the endeavour on the part of the insured to obtain insurance protection nugatory should be avoided. Said another way, the courts should be loath to support a construction which would either enable the insurer to pocket the premium without risk or the insured to achieve a recovery which could neither be sensibly sought nor anticipated at the time of the contract.
[8] In Solway v. Lloyds Underwriters (2006), 2006 CanLII 17254 (ON CA), 80 OR (3d) 401 (CA), Moldaver J.A. said at ¶43:
I begin my analysis with the observation that an insurance contract, like any other contract, should be construed in a manner that attempts to harmonize and make sense out of the various provisions contained in it, and does not strain them. Ambiguities are to be resolved in favour of the insured. But ambiguity does not exist whenever the policy contains wording that could be open to two or more reasonable interpretations. Before resorting to the contra proferentem principle, an effort should be made to interpret the policy in a commercially reasonable fashion and in a way that gives effect to the reasonable expectations of the parties.
[9] As to paragraph 1 of “Coverage – B” it strikes me as a stretch to say that this provision, which falls under the heading “Contents,” and which by its terms seems to be principally concerned with contents, by itself covers items that are not contained in the dwelling.
[10] The scheme of the policy as a whole seems to be to provide in general for coverage, and then in “Extended coverage” to provide specifically for items that are not contained in the general provisions for coverage. The general provisions for coverage are divided into three categories – A the dwelling building, B personal property (contents) and C additional living expenses or fair market rental. Another part sets out special limits to several categories of item, such as jewellery and securities. In the part entitled “Extensions of coverage”, provision is made for items such as a reward for information leading to the conviction of a person for arson, compensation for fraud and forgery, mortgage rate protection, moving expenses, and trees, shrubs and plants. The provision for trees, shrubs and plants, then, was put into the part of the policy that provides coverage for items that are not contents of the dwelling.
[11] The context of the policy as a whole, especially paragraph 15 of “Extended coverage”, makes the plaintiff’s interpretation of paragraph 1 of “Coverage – B” even less likely. Whether or not owning or using these plants to produce prescribed medicine is usual to the owning or maintenance of a dwelling, they are still plants and they were not in the dwelling. Paragraph 15 speaks directly to their loss. In my view, to ignore the provision that deals specifically with these items and to follow instead a general provision of doubtful application would strain the meaning of the policy.
[12] Finally, I do not accept the plaintiff’s restrictive definition of “landscaping.” The dictionary definition of landscaping does not necessarily exclude plants that were laid out for reasons other than aesthetic. More important, I do not think it reasonable to infer that the parties had in mind that every time a claim is made for a plant growing in the yard the parties would have to determine the purpose for which it was planted. To me, what they must have been getting at was that if it is a tree, shrub or plant in the yard, it is covered to the maximum allowed, even though it is not contents of the dwelling.
[13] Moreover, in my view, if paragraph 15 of “Extended coverage” does not cover the lost plants, neither does anything else in the policy.
[14] The defendant also submits that paragraph 8 of “Excluded perils” limits recovery. I do not agree. That paragraph deals with damage caused by the growing or production of drugs, not with the loss of the drugs themselves.
[15] In sum, in my view the maximum recovery permitted by the policy is $1,000 a plant. That amount has been paid. The additional claims are based on the failure to pay more. In these circumstances, the motion is granted and the actions are dismissed. The plaintiff’s cross motions are dismissed as moot.
[16] The parties may make written submissions to costs within 30 days.
J.A. Ramsay J.
Date: 2013-03-07