Overview:
This case involves a dispute between an insured and his insurer. The
insured owned a truck which was damaged. The issue is whether the
insurance policy that was issued by the Defendant to the Plaintiff
covers the damage.
Facts:
The facts are not really in dispute.
The Plaintiff owned a 1994 International truck which was capable of
carrying firewood. In March 2000, the Plaintiff delivered a load of
firewood to the farm of Robert Martz. As the Plaintiff was backing
the truck into the area where Mr. Martz wanted the firewood placed,
the truck sank into soft ground. When the Plaintiff tried to move
the truck, he was unable to do so. After making one unsuccessful
attempt to be pulled out by a neighbour's tractor, the Plaintiff
decided to leave his truck where it was until the next evening. When
the Plaintiff left for home that evening, the truck was not movable
and there was not any noise coming from the rear axle.
The Plaintiff left the keys in the truck. He did not give any
instructions to Mr. Martz or authorize him to do anything with the
truck. The Plaintiff told Mr. Martz that he would be back the next
evening to try to remove his truck from the soft ground.
The next day, in the absence of the Plaintiff and Mr. Martz, a
cement truck driver (without any request or authorization by the
Plaintiff) came into the Martz yard and pulled the Plaintiff's truck
out. Prior to the cement truck becoming involved, the operator of a
feed truck had tried unsuccessfully to pull the Plaintiff's truck
out.
When the Plaintiff arrived at the farm of Mr. Martz the next
evening, he found his truck unstuck and sitting in the driveway
approximately 75 or 100 feet from where it had been stuck. The
Plaintiff climbed into the truck and started it. At that time he
heard a clicking noise coming from the hub in the middle of the rear
axle of the truck. As the Plaintiff drove his truck out of the Martz
yard, he heard more clicking.
Mr. Richard Hoover, a licensed automotive and truck technician,
repaired the Plaintiff's truck. Mr. Hoover testified that the
differential was completely damaged. Mr. Hoover stated that normal
driving would not cause this type of damage. It was Mr. Hoover's
opinion that the damage was caused by the truck being rocked back
and forth numerous times when it was stuck.
The Plaintiff submitted a claim to the Defendant under his
automobile policy to cover the amount of the repairs to the truck.
The Plaintiff's insurance coverage on the truck included "Specified
Perils," "Comprehensive" and "Collision or Upset." In denying the
Plaintiff's claim, the Defendant stated in part [ see Exhibit 3 ]:
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It is our understanding
that your vehicle has sustained damage to the rear
differential and clutch mechanism as a result of becoming
stuck.
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The damage suffered are
as a result of a mechanical failure or breakdown of the
vehicle and are specifically excluded under Section 7.2.1 of
the Ontario Automobile Policy. |
Section 7.2.1 of the Plaintiff's
Automobile Policy which was issued by the Defendant states in part:
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We will not cover the
following losses unless they result from a peril for which
you are covered or they are caused by fire, theft or
vandalism and your policy covers these perils:
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consisting of, or caused
by mechanical fracture or breakdown of any part of the
automobile; |
The Plaintiff had insurance coverage
for theft, attempted theft, comprehensive including vandalism, and
collision or upset, as described in Section 7.1.2 of his Insurance
Policy.
Section 6 of the same policy states in part:
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6.1 Introduction -
This Section of your policy covers damage to [your]
automobile … caused by another person's use or operation of
an automobile….
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This coverage under this
Section applies only if the accident takes place in Ontario
and at least one other automobile involved is insured under
a motor vehicle liability policy….
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6.2 What We Will Cover
- We will pay the cost of damage to [your] automobile …
arising from an accident for which another person would have
been legally responsible …. |
Mr. Ken Cox, the Manager of the
Defendant, testified that while "vandalism" is not defined in the
Automobile Insurance Policy, he believed that the vandalism factor
was eliminated here because everyone was trying to help the
Plaintiff become unstuck. According to Mr. Cox, a "mechanical
breakdown or failure" is something derived from internal harm that
is not caused by an external factor. He also stated that Section 6
of the Policy was not applicable because there was no impact between
the Plaintiff's truck and another vehicle.
Position of the Plaintiff:
The Plaintiff's position can be summarized as follows:
| 1. |
The damage to the
Plaintiff's truck is covered under the insurance policy. |
| 2. |
The insurance policy is not
clear; hence, any ambiguity must be resolved in favour of
the insured. |
| 3. |
There was not a "mechanical
fracture or breakdown" of any part of the truck, because it
was something external that caused the damage. |
| 4. |
This was a case of "theft"
because the truck was used without the owner's consent, and
hence the loss is covered under the Policy. |
| 5. |
This was a case of
"vandalism," and hence the loss is covered under the Policy. |
| 6. |
Section 6 of the
Insurance Policy applies because the truck was being towed
at the time the damage was caused. |
Position of the Defendant:
The Defendant's position can be summarized as follows:
| 1. |
The damage to the
Plaintiff's truck is not covered under the insurance policy. |
| 2. |
The insurance policy is
clear; there is no ambiguity. |
| 3. |
There was a "mechanical
fracture or breakdown" of part of the truck; Thus, the loss
was excluded because of Section 7.2.1 of the Policy. |
| 4. |
This was a not a case of
"theft;" the people who tried to assist were not guilty of
trying to steal the Plaintiff's truck. |
| 5. |
This was not a case of
"vandalism;" one only needs to look at the common usage of
the word and compare it to the facts of this case. |
| 6. |
Section 6 of the Insurance
Policy is not applicable, because it does not cover towing
or mechanical breakdown. |
Law:
When the wording of an insurance contract is unambiguous, courts
should not give it a meaning different from that which is expressed
by its clear terms, unless the contract is unreasonable or has an
effect contrary to the intention of the parties. See Scott v.
Wawanesa Mutual Insurance Co., [1989] 1 S.C.R. 1445.
On the other hand, if a term in an insurance contract is ambiguous,
it must be construed in the manner most favourable to the insured.
See Wawanesa Mutual Insurance Co. v. Bell, [1957] S.C.R. 581.
Analysis:
Was this a case involving vandalism ? The Concise Oxford
Dictionary defines a "vandal" as a "wilful or ignorant destroyer
of works of art, etc.". The New American Webster Dictionary
defines "vandalism" as "wanton destruction." I do not believe that
anyone who heard the evidence in this case would conclude that there
was vandalism. Neither was there a theft involved. The people who
came along were merely trying to assist the Plaintiff in removing
his truck from the soft ground.
I also do not believe that Section 6 of the Insurance Policy is
applicable to this case. There was no accident involving another
motor vehicle.
That leaves us to consider whether the damage was caused by a
"mechanical fracture or breakdown." Neither Counsel was able to find
a case which dealt with our precise fact situation. Counsel for the
Plaintiff referred to Wytinck v. Manitoba Public Insurance Corp.,
[1989] M.J. No. 186. But that was not a case involving the breakdown
of a mechanical part of the truck. Instead, it involved a bent frame
and a bent hoist, both of which were caused by the uneven
distribution of the load in the truck.
Mr. Cox, the Manager of the Defendant interprets "mechanical
fracture or breakdown" (as that phrase is used in the insurance
policy) as something derived from internal harm that is not caused
by an external factor. Counsel for the Plaintiff agrees with that
interpretation. It is clear from the evidence that it was the rear
differential of the truck which was damaged. Was this damage caused
by something external ? The unchallenged evidence of Mr. Hoover was
that the damage was caused by the truck being rocked back and forth
numerous times when it was stuck.
The Plaintiff denied that he rocked the truck back and forth at any
time. Someone else, without the authorization of the Plaintiff, may
have been behind the steering wheel when the truck was rocked back
and forth. I find that it does not matter who was sitting in the cab
of the truck when it was being rocked back and forth. The rocking of
the truck back and forth involved the use of the truck's clutch. The
clutch, while connected indirectly to the rear differential, would
still be considered an internal part of the truck, as would the
drive shaft, the breaking mechanism and the axles. I do not see
anything ambiguous about that.
I find that the damage to the rear differential was caused by an
internal factor making it a "mechanical fracture or breakdown."
Therefore, the damage would not be covered under the Plaintiff's
Policy of Insurance because of the exclusion of referred to in
Section 7.2.1 of the said Insurance Policy.
Damages:
The special damages are agreed upon at $ 4,360.66, being the amount
it cost to repair the truck less the Plaintiff's deductible of $
500.00. The Plaintiff asked for punitive damages in his Claim.
However, during his Submissions, Mr. Cornish wisely conceded that
the Plaintiff was not really stressing such a claim.
Conclusion:
While I assess the Plaintiff's damages at $ 4,360.66, I am
dismissing the Plaintiff's Claim because I do not find the Defendant
liable for those damages.
Costs:
If the parties are unable to agree on the costs within 21 days, they
may make arrangements with the Court Clerk for either a telephone
conference call or a court date at which time I will hear
submissions on the issue of costs.
Dated at Goderich, Ontario - January 7, 2002.
______________________________________
Norman B. Pickell, Deputy Judge
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Arbitration Decisions - Norman Pickell -
Redmond v. West Wawanosh Insurance
