CITATION: Algarvio v. Allstate Insurance Company of Canada, 2010 ONCA 790

DATE: 20101122

DOCKET: C50351

COURT OF APPEAL FOR ONTARIO

O’Connor A.C.J.O., Simmons and Watt JJ.A.

BETWEEN

Ana Algarvio and Matthew Sponagle by his Litigation Guardian, Ana Algarvio

Plaintiffs (Respondents)

and

Allstate Insurance Company of Canada

Defendant (Appellant)

Sheldon A. Gilbert, Q.C. and Mila Robin, for the appellant

Derek L. Smith, for the respondent, Algarvio David Smagata and Benjamin Lee, for the intervener, Liberty Mutual

Heard and released orally:  November 8, 2010 On appeal from the judgment of Justice H. Spiegel of the Superior Court of Justice, sitting with a jury, dated April 3, 2009.

ENDORSEMENT

[1]               This appeal concerns the duty of an insured to disclose a material change in risk to an insurer.  Allstate appeals the judgment of Spiegel J., based on a jury verdict, granting the respondent’s[1] claim for coverage under an Allstate policy for automobile insurance. 

[2]               The first question posed by the trial judge to the jury was “Has the defendant satisfied you that the use of the motor vehicle by Matthew Sponagle, the respondent’s son, constituted a material change of risk”?  The trial judge instructed the jury that a material change of risk was a change that a reasonable insurance company would consider to be material.  The jury answered question number one in the affirmative. 

[3]               The second question put to the jury was as follows:  “If your answer to Question No. 1 is YES, did Ana Algarvio satisfy the obligation of promptly notifying Allstate or its agent of the material change in the risk?”  The trial judge told the jury there were two parts to question two.  Reading his charge as a whole, we are satisfied that the jury would have understood question two to involve both parts referred to by the trial judge. 

[4]               As to the first part of question two, the trial judge told the jury that the law only imposes an obligation to notify an insurer of a material change in risk if a reasonable person would have known that the insurance company would regard as a material change the use of a motor vehicle by a driver under 25 holding a G2 licence.  He told the jury that if they were not satisfied that a reasonable person in the respondent’s circumstances would have understood the need to notify to maintain coverage, then there was no duty to notify and the answer to question two was “yes”. 

[5]               The trial judge told the jury that the second part of question two only came into play if they concluded that there was a duty to notify.  If the jury found a duty to notify, then they should decide whether the respondent had satisfied the jury that she complied with that duty.  There was no objection to the charge and, according to the trial judge, counsel asked him to put the questions in the manner we have described above.  The jury answered question two in the affirmative.

[6]               Allstate argues that there was no evidence on which the jury could have answered question two in the affirmative.  In particular, Allstate contends that the respondent had an obligation to notify it or its agent that she allowed her 16-year-old son to drive the vehicle after his motor vehicle licence changed from G1 to G2.  Allstate submits there was no evidence that the respondent did so. 

[7]               We do not accept these arguments.  In our view, there was evidence to support the jury’s answer to question two.  The respondent testified that in December 2002, she informed an Allstate agent that her son had received a G1 driver’s licence.  She faxed the licence information to the agent.  The agent told her to call when her son received his G2 licence.  There was no evidence, however, that the agent told the respondent that her son would not be covered as a G2 driver until she notified them of the change.  Sometime after her discussion with the Allstate agent, the respondent received a notice of increased premium for the year April 2003 to April 2004.  She testified that she assumed this increase occurred because her son had been added to the policy.  In fact, the increase occurred because of speeding tickets. 

[8]               The respondent testified that when her son received his G2 licence in the fall of 2003, she attempted to call the Allstate agent three or four times without success.  She often got a busy signal. 

[9]               At trial, Allstate disputed much of the respondent’s evidence.  However, the jury was entitled to accept her evidence in its entirety and the jury’s findings are entitled to deference in this court. 

[10]          In our view, on the basis of the respondent’s evidence, it was open to the jury to answer question two in the affirmative. 

[11]          It was open to the jury to conclude that a reasonable person in the circumstances described by the respondent would not have known that Allstate would regard the change in Matthew’s licence status from G1 to G2 as a material change in the risk requiring notification to maintain coverage.  If the jury reached that conclusion, then, as the trial judge instructed, they were to answer question two in the affirmative.  As the trial judge put it, “[i]f you find a reasonable person wouldn’t know, then you are going to answer that question [question two], “yes”, she satisfied the obligation because there was no obligation”. 

[12]          Allstate also complains that the trial judge unduly intervened in the examination-in-chief of an Allstate witness.  We would not give effect to this argument.  Allstate was represented by very experienced counsel who did not object to the questioning, nor did he ask that the jury be excused in order to raise the matter.  Indeed, at one point during the examination-in-chief, the jury was out of the courtroom and counsel did not raise the matter in the jury’s absence. 

[13]          On appeal, Allstate has not demonstrated any prejudice arising from the trial judge’s intervention either generally or on the basis that Allstate did not have an opportunity to put its case fully before the jury. 

[14]          Allstate did not pursue its other grounds of appeal in oral argument.  We would not give effect to them. 

[15]          In the result, the appeal is dismissed.  Costs are awarded on a partial indemnity scale in favour of the respondent, fixed in the amount of $18,442.93, inclusive of disbursements and applicable taxes. 

“Dennis O’Connor A.C.J.O.”

“J. Simmons J.A.”

“David Watt J.A.”