2012 QCCQ 2722, 2012 QCCQ 2722

Côte St-Luc (City of) c. Aon Parizeau inc. 2012 QCCQ 2722 COURT OF QUEBEC (Practice division) CANADA PROVINCE OF QUEBEC DISTRICT OF MONTREAL Civil Division No: 500-22-189681-128 DATE: April 10, 2012 ______________________________________________________________________ PRESIDED BY THE HONOURABLE DAVID L. CAMERON, J.C.Q. ______________________________________________________________________ CITY OF CÔTE SAINT-LUC Plaintiff vs.

AON PARIZEAU INC. -and- DJL CONSTRUCTION INC. -and- INDEMNIPRO -and- ROYAL & SUNALLIANCE INSURANCE COMPANY OF CANADA Defendants ______________________________________________________________________ INTERLOCUTORY JUDGMENT ON AN EXCEPTION TO DISMISS ACTION PURSUANT TO ART. 165(4) C.C.P.

AND A MOTION FOR PARTICULARS ______________________________________________________________________ [ 1 ] The Defendants seek the dismissal of the action in respect of two of the Defendants, Aon Parizeau inc. ("Aon") and Indemnipro, by way of preliminary exception. [ 2 ] In its action, the Ville de Côte Saint-Luc (the "City") seeks a condemnation for $13,986.34 representing the alleged costs of repair resulting from damage caused to a water conduit, on October 5, 2011, during roadwork being carried out by the Defendant, DJL Construction Inc. ("DJL"), pursuant to a contract with the City. [ 3 ] The City alleges that, while performing operations involving the removal of a large rock in the middle of a street, DJL cracked the Plaintiff's water main pipe resulting in the necessity of carrying out urgent repairs for which the City paid the amount claimed. [ 4 ] The Defendant, Royal & Sunalliance Insurance Company of Canada ("Royal & Sunalliance"), is sued as the liability insurer of DJL under a policy referred to in a document entitled "Attestation d'assurances" issued by Aon (P-16). [ 5 ] The Attestation names DJL as "assureur désigné" (named insured) and Ville de Côte Saint-Luc as "assuré additionnel" (additional named insurer). [ 6 ] The insurer for the civil liability portion of the policy is stated to be Royal & Sunalliance. [ 7 ] The Introductory motion alleges that when the incident occurred, the City sent a demand letter to Aon as broker, as well as a copy to the Defendant DJL. [ 8 ] There are further allegations that the City provided documents concerning the loss and threatened legal proceedings failing receipt of payment. [ 9 ] There is an allegation that the Defendant, Indemnipro, investigating on behalf of Royal & Sunalliance sent a denial letter to the City.

[ 10 ] The condemnation sought, drafted in the conclusions erroneously as an order, seeks the solidary liability of all the Defendants for the costs the City paid to a third party to repair the damages as well as interest, additional indemnity and costs [ 11 ] After the notification of the exception to dismiss, the City amended its proceedings to add more specific allegations with respect to the Defendants Aon and Indemnipro, which read as follows:

b) In reference to Defendant's request for particulars dated February 15 th , 2012, (paragraphs

b) and c):) Defendant AON Parizeau Inc., being the broker for the Defendant DJL Construction Inc. it is their responsibility to take the initiative to resolve any matters dealing with their client, Defendant AON Parizeau Inc. upon hearing of this matter simply did not respond to the issue in conformity with their mandate and/or follow up. Moreover this further exacerbates the costs of this trial, thus increasing the damages;

c) In reference to Defendant's request for particulars dated February 15 th , 2012, (paragraphs 3) and f)): Defendant Indemnipro being the claims adjuster for the Defendant Royal & Sunalliance Insurance Company of Canada, it is their responsibility to take the initiative to resolve any matters. Upon hearing of this matter they simply did not respond to the issue in conformity with their mandate and/or follow up.

Moreover this further exacerbates the costs of this trial, thus increasing the damages; [ 12 ] In their motion, the Defendants assert on behalf of Aon, as broker and Indemnipro, as claims adjuster that: 1. There is no causality between the allegations made against these Defendants and the damages flowing from the broken water main; 2. These alleged faults are subsequent to the damages, and therefore of no relevance; 3. The Plaintiff has no "lien de droit" with Aon and Indemnipro and no legal interest to make any claim with respect to any fault on their

part in the execution of their mandates with respect to DJL and Royal & Sunalliance respectively. QUESTION IN ISSUE [ 13 ] Although the motion is indicated as being based on articles 220, 54.1, 159 and 168.7 C.C.P. (the Defendants join in the same motion requests for particulars and production of documents) the motion is really an exception to dismiss the action pursuant to 165(4) C.C.P. on the ground that the suit is unfounded in law with respect to the two Defendants concerned, even if the facts alleged are taken to be true.

ANALYSIS [ 14 ] The Court is of the view that the action should be dismissed with respect to these two Defendants on the basis of article 165(4), and not articles 54.1. [ 15 ] When a Plaintiff sues a party allegedly responsible for causing prejudice and that party's liability insurers, there is normally no reason to include among the Defendants the insured party's insurance broker whose role is that of an intermediary. [ 16 ] The City points out that in this case, Aon was a broker acting in a contract for professional services with the City and it wishes to prove that the services it obtained in the management of the claim were insufficient. [ 17 ] Indemnipro, a claims adjuster hired on behalf of the insurer faces similar criticism in that it did not act appropriately in the manner in which it investigated the claim. [ 18 ] Assuming, at this stage, that the broker and the claims adjuster are at fault, either contractually or extra-contractually towards the City because of the manner in which they acted after the claim was notified, there is no prejudice asserted with respect to this fault nor any causal relationship to the costs of the repairs. [ 19 ] If the Plaintiff is successful in its action, it will recover these costs from DJL as well as from Royal & Sunalliance. [ 20 ] The manner in which the broker and the claims adjuster acted has no impact, at least none that is alleged, that would relate to the damages, in whole or in part. [ 21 ] In answer to this argument, the City maintains that its entitlement to taxable costs, interest and additional indemnity result from the fact that the case was not settled in a prompt manner which led to the necessity to institute legal proceedings and to a delay in payment. [ 22 ] With respect, the Court disagrees.

Moratory damages for the late payment of a debt consist in interest to which the Court can add the additional indemnity which it routinely does except perhaps in where a case where the Plaintiff's own conduct has resulted in the proceedings being delayed. [ 23 ] The judicial costs of legal proceedings are borne by the losing party, taxed according to the tariff. [ 24 ] If the broker or the claims adjuster had any impact on the decision of DJL and its insurers not to settle the loss promptly, as the City suggests, this does not make them solidary in the amount of the claim and its accessories, such as interest and additional indemnity and judicial costs. [ 25 ] The idea of adding the broker and the claims adjuster as Defendants, so that they can succumb to costs, interest and indemnity, without being liable for the claim itself, is erroneous.

[ 26 ] If these Defendants are not responsible for the loss, there is no cause of action against them and, therefore, they cannot be solidary in an obligation to bear the costs of the proceedings or pay interest. [ 27 ] Sometimes actions are brought against brokers and other intermediaries and professionals in the insurance industry simply as an added means of pressure.

Usually such claims are simply a nuisance on the insurer. [ 28 ] There may be circumstances where an insurance broker or claims adjuster active in a claim file commits a fault resulting in prejudice, so there may be certain exceptional cases where such parties may be added as additional Defendants, or named in another suit. [ 29 ] This is not one of those extraordinary cases and there is no reason, at least none alleged, that could lead to these Defendants being liable, solidarily or in solidum with the contractor and its liability insurer, for the damages allegedly flowing from the unfortunate incident.

Motion for particulars and production of documents [ 30 ] There was one request in the motion for particulars and production of documents relating to the monetary claim of $13,986.34, which was made on behalf of all of the Defendants. [ 31 ] The Court is satisfied on hearing arguments from the parties and examining the documentation provided by the City that the City is not an appropriate source for the materials the Defendants are seeking which are quantum documents in the possession of Simon Management Inc. or its subcontractors to which the City is not privy, having contracted on the basis of fixed price. [ 32 ] While the Defendants could not have access to these documents through an examination on discovery because of the monetary threshold of $25,000 imposed by

article 396.1 C.C.P., this is the will of the legislator and the documents will presumably be compelled by subpoena for production at trial; if the case goes that far. FOR THESE REASONS, THE COURT: DISMISSES the action in respect only of the Defendants, Aon Parizeau Inc. and Indemnipro, with costs; DISMISSES the Motion for particulars and documents, with costs to follow. __________________________________ DAVID L. CAMERON, J.C.Q. Me Jonathan Schecter Attorney for the Plaintiff Ms Isabelle Collette (Articled student) PASQUIN, VIENS s.e.n.c. Attorneys for the Defendants Date of hearing: March 22, 2012