2018 QCCQ 6089, 2018 QCCQ 6089

Discoumacos c. Di Girolamo 2018 QCCQ 6089 COURT OF QUEBEC Small Claims Division CANADA PROVINCE OF QUEBEC DISTRICT OF MONTRÉAL TOWN OF MONTRÉAL Civil Division No: 500-32-157933-187 DATE: July 27, 2018 ______________________________________________________________________ BY THE HONOURABLE MAGALI LEWIS J.C.Q. ______________________________________________________________________ ANGELOS DISCOUMACOS and ANGELA SAREEN Plaintiffs v.

ANTONIETTA DI GIROLAMO and MATHIEU LEMIEUX-FORTIN Defendants and SECURITY NATIONAL INSURANCE COMPANY Intervenor ______________________________________________________________________ JUDGMENT ON DEFENDANTS’ REQUEST TO DISMISS AND ON PLAINTIFF’S OPPOSITION TO SECURITY NATIONAL INSURANCE COMPANY’S VOLONTARY INTERVENTION ______________________________________________________________________ [ 1 ] Alleging that Plaintiffs’ claim against them is unfounded in law, Defendants Antonietta Di Girolamo and Mathieu Lemieux- Fortin, respectively senior legal counsel — corporate secretary and former claim adjuster for Security National Insurance company (Security National), ask that Plaintiffs claim against them be dismissed. [ 2 ] Subsidiarily, Defendants ask that Security National, the insurance company with which Plaintiffs contracted property insurance, intervene to the case. [ 3 ] Security National filed a voluntary intervention, to which Plaintiffs vigorously oppose.

They also contest Defendants’ request for dismissal.

CONTEXT [ 4 ] The facts in support of Plaintiffs claim are the following. [ 5 ] Through TD Insurance Meloche Monnex (TD Insurance), Plaintiffs contracted property insurance with Security National: Platinum Solution policy 87432159 dated July 28, 2009, and Gold Solution policy no 88926605 dated November 26, 2014. [ 6 ] The definition of “loss or damage” in each policy is the same: Loss of damage means the result of a sudden and accidental event causing loss or damage […] [ 7 ] On June 17, 2017, the City of Montréal enacted a By-law concerning the use of drinking water [1] (the By-law). [ 8 ]

Section 23 of the By-law provides that an air-conditioning, refrigeration, cooling or heating apparatus that uses water from the aqueduct installed prior to the coming into force of the By-law must to be replaced before January 1, 2018, by an apparatus that does not use water from the aqueduct. [ 9 ] When the By-law came into force, Plaintiffs owned the property located at […] in Kirkland which was equipped with a water- cooled air-conditioning system that needed to be replaced in accordance with the By-law.

[ 10 ] On or around July 20, 2017, Plaintiffs filed a claim with TD Insurance for the loss of their air-conditioning system. [ 11 ] On July 28, 2017, TD Insurance declined coverage of the claim based on the definition of loss or damage and the exclusions provided for in the policy regarding gradual deterioration of a good. In its letter, TD Insurance reminded Plaintiffs that: Every action or proceeding against the Insurer under this policy shall be commenced within three (3) ears from the date the right of action has arisen.

If we can assist you in any way, please contact Mathieu Lemieux-Fortin, […] [ 12 ] The letter is not signed and its author not identified. [ 13 ] Plaintiffs sold their house in November 2017 for $585,000, $10,000 less than the listed price of $595,000. They conceded the price reduction to buyers in consideration of the price they would have to pay to have the air-conditioning system replaced by one that respects the By-law.

Plaintiffs also contend that by conceding the price reduction they sold their house below market value. [ 14 ] Alleging that TD Insurance and/or their underwriters Security National wrongfully denied their claim for the loss of their water- cooled air-conditioning system, Plaintiffs claim $10,000 in damages from the Defendants, that is the amount they have lost on the sale of their house and/or the cost of a new air-conditioning system. [ 15 ] Contending that Plaintiffs’ claim is wrongfully directed to them rather than being directed to Security National, Defendants ask that the claim against them be dismissed.

Subsidiairily, Defendants request the intervention of Security National. [ 16 ] Security National filed an intervention to Plaintiffs’ Application.

It alleges that it is based on the home insurance policy 87432159 originally issued on May 30, 2002, renewed since and that a change to the municipal by-laws does not constitute a loss or damage as defined in the insurance policy. [ 17 ] In their Application, Plaintiffs write: We are seeking ten thousand dollars ($10,000) in damages from: our insurance broker Meloche Monnex and/or their underwriters, Security National Insurance Compan y […] (Emphasis added) [ 18 ] In their opposition they write that: […] [they] will prove through a recorded/verbal account of a sales expert of Meloche Monnex, that the said insurance policy (Platinum home Insurance) covers [their] initial claim and supports [their] arguments that [their] claim is justified. [ 19 ] Although they write that they are claiming compensation from the insurance broker and/or the insurance company, Plaintiffs direct their claim towards an officer and a former employee of Security National.

To justify themselves, they provide the following explanations. [ 20 ] They confirm not having had any dealings with Defendant Di Girolamo regarding their claim for the “loss” of their air- conditioning system prior to taking legal action against her; they found her name on the État des renseignements d’une personne morale at the Québec business registrar.

Plaintiffs consider that as officer of the company she and not the insurance company should be liable to compensate them. [ 21 ] They are suing Defendant Lemieux-Fortin because his name was given to them by TD Insurance as the person to contact should they have questions regarding the insurance company’s refusal of their claim regarding the “loss” of their air-conditioning system.

When they contacted him to convey their complete disagreement with the insurer’s position on their claim, he refused to reverse the decision and award them compensation. [ 22 ] Plaintiffs vehemently oppose both Defendants request for dismissal of their Application and Security National’s intervention on no other ground than the fact that the Defendants are representatives of the insurance company.

They don’t dispute the fact that the amount of the indemnity for replacement of their air-conditioning system would have been paid by Security National had it accepted their claim for compensation. [ 23 ] In their view however a “person” must compensate them for their inconvenience. ANALYSIS [ 24 ] Defendants’ request for dismissal of the Application and Security National’s intervention are founded on

section 168 and sections 185 and 186 of the Code of Civil Procedure [2] that read as follows: 168. A party may ask that an application or a defence be dismissed if […] The party may also ask that an application or a defence be dismissed if it is unfounded in law even if the facts alleged are true . Such an exception may pertain to only part of the application or defence. […] 185. Voluntary intervention is termed aggressive when the third person seeks to be acknowledged as having, against the parties or one of

them, a right which is in dispute. It is termed conservatory when the third person wishes to be substituted for one of the parties in order to represent it, or to be joined with one of the parties in order to assist it or support its claims. […]. A third person who intervenes for aggressive or conservatory purposes becomes a party to the proceeding. 186.

A third person who wishes to intervene for conservatory or aggressive purposes notifies a declaration of intervention to the parties, setting out the person’s interest in the case and claims, the conclusions sought and the facts justifying such conclusions. […]. […].

If opposition is notified, the third person presents the declaration of intervention before the court in order to obtain a ruling on the person’s interest and the intervention procedure. [ 25 ] The answer to the matter the Court has to decide is found in the following articles of law: Business Corporations Act [3] 116. al. 2 [ … ] The officers are mandataries of the corporation. [ … ] Civil Code of Québec [4] 312. A legal person is represented by its senior officers, who bind it to the extent of the powers vested in them by law, the constituting act or the by-laws. 1458.

Every person has a duty to honour his contractual undertakings. Where he fails in this duty, he is liable for any bodily, moral or material injury he causes to the other contracting party and is bound to make reparation for the injury; neither he nor the other party may in such a case avoid the rules governing contractual liability by opting for rules that would be more favourable to them. 1463. The principal is bound to make reparation for injury caused by the fault of his subordinates in the performance of their duties; nevertheless, he retains his remedies against them. 2 152.

The mandator is bound to discharge the mandatary from the obligations he has contracted towards third persons within the limits of the mandate. The mandator is not liable to the mandatary for any act which exceeds the limits of the mandate. He is fully liable, however, if he ratifies such act or if the mandatary, at the time he acted, was unaware that the mandate had terminated. 2157. A mandatary who binds himself, within the limits of his mandate, in the name and on behalf of the mandator, is not personally liable to the third person with whom he contracts.

The mandatary is liable to the third person if he acts in his own name, subject to any rights the third person may have against the mandator. 2160. A mandator is liable to third persons for the acts performed by the mandatary in the performance and within the limits of his mandate unless, under the agreement or by virtue of usage, the mandatary alone is liable. The mandator is also liable for any acts which exceeded the limits of the mandate, if he has ratified them. 2164.

A mandator is liable for any injury caused by the fault of the mandatary in the performance of his mandate unless he proves, where the mandatary was not his subordinate, that he could not have prevented the injury. [ 26 ] The contract in virtue of which Plaintiffs contend that they are entitled to be compensated for the loss of their water-cooled air- conditioning system was entered into with Security National through the representations of the insurance broker TD Insurance. [ 27 ] Defendants Di Girolamo and Lemieux-Fortin, as an officer and former employee of Security National have personally contracted no obligation in favour of Plaintiffs:

a) As for Defendant Di Girolamo, she was not involved at all in deciding Plaintiffs’ claim;

b) As claim adjuster, Defendant Lemieux-Fortin’s role is to investigate insurance claims by interviewing the claimants and inspecting the property damaged to determine the extent of the company’s liability. Acting for the insurance company, he acts as its mandatary. [ 28 ] The insurance company alone has the obligation to honour its contractual undertakings, as

article 1458 of the Civil Code of Québec so provides. [ 29 ] Although Plaintiffs do not agree with TD Insurance that the loss for which they filed a claim is not covered by the property insurance they contracted, they have not alleged any fault that would have been committed by either Defendant that would justify that they be condemned personally to compensate them for their loss. [ 30 ] Not only is the contractual obligation to pay for the loss of the property that of Security National as she so admits in her Intervention under reserve that the contract covers Plaintiffs’ claim, but even if Defendants Di Girolamo and Lemieux-Fortin had committed a fault in refusing Plaintiffs’ claim, which Plaintiffs do not allege, their recourse would only be against Security National, as provided by the Companies Act and the Civil Code of Québec . [ 31 ] In light of the aforementioned, Defendants request for dismissal of Plaintiffs’ Application against them is well founded as well

as Security National’s intervention. Legal Costs [ 32 ]

Article 340 of the Code of Civil Procedure provides that the losing party is entitled to legal costs which, in the present case, are constituted of the court fees the Defendants have paid to file their contestation (art. 339).

WHEREFORE, THE COURT: [ 33 ] DISMISSES Plaintiffs’ claim against Defendants Antonietta Di Girolamo and Mathieu Lemieux-Fortin; [ 34 ] CONDEMNS Plaintiffs to pay $187 to Defendants Antonietta Di Girolamo and Mathieu Lemieux-Fortin as legal costs; [ 35 ] DECLARES that Security National Insurance Company has interest to intervene in the present case; [ 36 ] ALLOWS Security National Insurance Company’s intervention. __________________________________ MAGALI LEWIS, J.C.Q. Date of hearing: July 16, 2018