Curtis Wagner v. Janet Wagner, 2011 SKPC 12

IN THE PROVINCIAL COURT OF SASKATCHEWAN CIVIL DIVISION Citation: 2011 SKPC 012 Date: January 5 th , 2011 File: 82[2010] Location: Saskatoon _____________________________________________________________________________ Between: Curtis Wagner and Janet Wagner - and - Saskatchewan Government Insurance self For the Plaintiffs Jennifer Bailey For the Defendant _____________________________________________________________________________ Judgement Barry Singer , J _____________________________________________________________________________ Introduction [ 1 ] Damages in the amount of $6,623.83 occurred at 242 Maguire Court, on April 6, 2009, due to water entering that home through a basement window.

At the time, the home owners, the plaintiffs, were insured by the defendant insurance company [hereinafter referred to as SGI] under a home-pak policy HM-18. The defendant refuses to cover this loss. Facts

[ 2 ] 242 Maguire Court was purchased by the plaintiffs as a new house in 2005. It is located in a newer subdivision in the City of Saskatoon on a type A lot. This means that the lot is graded so that it slopes from the back to the front and water flows, if unimpeded, in that direction. This house has a proper system in place for the control of surface and run-off water that naturally occurs in Saskatoon during the spring run-off season. This system involves permeable gravel on the surface to allow for drainage into the disturbed soil area around the foundation of the house.

The surface water and run-off collects first in the weeping tile where it is directed to a sump pit inside the house. From there the water is pumped out of the house through a sump pipe to an external pipe that takes the water from the back of the house to the side, near the front, so that the water can flow on to the street and eventually reach the storm sewer system.

The weeping tile, sump pit and sump pipe system is the appropriate way to remove water in this area and is recommended by the city. [ 3 ] In the ordinary course of events, each year prior to the spring of 2009, this system worked to assure that surface water and run-off did no damage to the home. [ 4 ] The Plaintiff testified that in the spring of 2009 he was worried that the extension pipe leading from the sump pipe might freeze up, thus impeding the flow of water from the sump pump.

He therefore habitually removed the extension pipe from the sump pipe, during periods of freezing, at a spot where that sump pipe exited the home and replaced it during periods of melt. Weather records for this period of time indicate that most evenings were below zero and most days were above. [ 5 ] Unfortunately, on the morning of April 6 th , the Plaintiff, Curtis Wagner, accidentally forgot to reconnect the extension pipe. In the early afternoon Janet Wagner noticed that water was streaming in the basement window; the window well was full of water. She called Curtis and his father Glenn.

Curtis Wagner rushed to the home as did Glen Wagner. Glen began bailing water out of the window well. Curtis realized immediately where the water was coming from, the sump pump pipe which was about 15 feet away from the window well on the same side of the house. He immediately reconnected the extension pipe and almost right away his father noticed that the water levels fell in the window well as the water was properly drained away into the weeping tiles below.

Water flowed as it should out the extension pipe to the front of the house, not out the sump pipe into the window well. [ 6 ] Essentially the adjuster agreed with this chain of events. He indicated in his letter to the plaintiffs that Our investigation has revealed that the water entered your basement as a result of pooling water outside of the window well that, when deep enough, began to enter the house through the window well.

The pooling was created by the sump pump evacuating the water to the outside of the house near the foundation wall. [ 7 ] Of course the water evacuated near the foundation because the extension pipe had been removed. There is no other credible cause for the water to go into the window well. [ 8 ] In the course of testifying the adjuster recalled a telephone conversation with Curtis, in which he believed Curtis told him that he had removed the extension pipe in the fall, not in the day or days immediately prior to the incident. This was contrary to what Curtis testified to under oath.

Curtis did, however, testify about moving the end of the extension pipe nearest the street from a gravel area near the house to the driveway itself. The adjuster agreed that it was possible that Curtis was discussing this end of the pipe when he talked about adjustments that were made and that he may have been mistaken about the extension pipe being removed in the fall and not put on until the April 6 th after the incident. [ 9 ] Photo # 5 filed in this case shows that there was ice at the driveway end of the pipe at the time in question. This confirms that the pipe had been attached in the spring of 2009.

Water had been pumped out of the sump pump system to the front of the house. The only way this could have occurred is if the pipe had been attached that spring. [ 10 ] I therefore find that the notes and recollection of the adjuster are inaccurate when they report that Curtis had told him that the extension pipe had been off the sump pipe since the fall.

The extension pipe had been properly connected during the spring run-off period, it was only on this day that he forgot to reconnect it. [ 11 ] The cause of the water damage was the failure, through accidental inadvertence, of the home owner to reconnect the extension pipe.

Position of the Defendant [ 12 ] Even though the adjuster determined that the cause of the damage was water evacuated near the foundation from the sump pipe, SGI denies coverage as they argue that the policy of insurance has several exclusions that apply to this case. [ 13 ] The first and overriding exclusion appears at page 17 of the Easy-Read Home Policy, that is that the loss or damage was not due to a sudden, unexpected event. Three other exemptions were relied upon.

They are as follows: a) [We do not cover loss or damage] ... caused by flood, surface water, waves, overflow of streams or other bodies of water, spray, ice, or waterborne objects whether any of the former are driven by wind or not.... b) [We do not cover loss or damage] ... caused by water below ground level including that which exerts pressure on or flows, seeps or leaks through any opening in a sidewalk, driveway, foundation, wall or floor.. h) [We do not cover loss or damage] ... caused by continuous or repeated seepage, or leakage of water or steam from plumbing, heating, fire sprinkler, or air conditioning system, household appliance, a swimming pool or its attached equipment, or a public

watermain... [14] A experienced manager and underwriter testified on behalf of SGI to explain the reasons for exclusions in home insurancepolicies and the types of exclusions usually found in those policies. While I would not let him testify as to the meaning of the exclusions,as to do so would be to have him give opinions on legal issues, his evidence was expository as to what SGI generally intended theexclusions to cover when the contract of insurance was developed. Whether a given situation was covered by an exclusion is, asadmitted by counsel for SGI, often subject to

interpretation, it is useful in making that

interpretation to determine what the author of thecontract intended. [15] The underwriter testified that even a comprehensive policy of insurance cannot cover every loss as to do so would result inexorbitant premiums. In order to control costs, certain events that would affect all insured at once such as nuclear war have to beexcluded. Damage caused by inevitable occurrences that only require simple preventative measures, for instance, losses by flooding tohouses built on flood plains, are excluded.

Similarly, losses that could be prevented through ordinary maintenance are also generallyexcluded. [16] Many of the exclusions in the home-pak seem to be directed to water loss. An understanding of these exclusions can beacquired partly by looking at some water damage losses that are not excluded. As the underwriter explained, if a toilet tank cracks andcauses damage or if a person inadvertently lets his tub run over and water damage occurs that damage by water is covered by thecomprehensive policy and not excluded by any of the terms of the contract.

It appears that neither occurrence was preventable byordinary maintenance or if it was preventable occurred due to accident and was not inevitable.

Interpretation of the exclusion clauses [17] The concerns which should be addressed when interpreting an insurance policy were considered by McLachlin J. in Reid Crowther & Partners Ltd. v. Simcoe & Erie General Insurance Co.[1] The essential is not the label one places on the policy, but what the policy says. The courts must in each case look to the particularwording of the particular policy, rather than simply attempt to pigeonhole the policy at issue into one category or the other.

Constructionof policies at issue in these kinds of cases depends much more on the specific wording of the policy at issue than on a generalcategorizing of the policy. And at pp. 268-69: In each case the courts must examine the provisions of the particular policy at issue (and the surrounding circumstances) to determine ifthe events in question fall within the terms of coverage of that particular policy. This is not to say that there are no principles governingthis type of analysis. Far from it. In each case, the courts must interpret the provisions of the policy at issue in light of general principlesof

interpretation of insurance policies, including, but not limited to: (1) the contra proferentem rule; (2) the principle that coverage provisions should be construed broadly and exclusion clausesnarrowly; and (3) the desirability, at least where the policy is ambiguous, of giving effect to the reasonable expectations of the parties. [18] The process a court should take in interpreting an insurance contract was recently explained in Lombard Canada Ltd. v. Zurich Insurance Co.[2] The foundation for the relevant principles and process for the

interpretation of an insurance contract is Consolidated Bathurst Export Ltd.v. Mutual Boiler & Machinery Insurance Co., (SCC), [1980] 1 S.C.R. 888. At pp. 899 - 901 of that case, Estey J.,writing for the majority, explains the two phases of the analysis for the

interpretation of any contract, including an insurance contract. The first is the interpretive phase based on the guidelines for construction. Subjective intention is irrelevant at this stage of theprocess, although the words used may be "possibly read in light of the surrounding circumstances which were prevalent at the time”. Ifthe meaning is plain on the face of the contract, it is unnecessary to proceed further: see Non-Marine Underwriters, Lloyd's of London v.Scalera, 2000 SCC 24 , [2000] 1 S.C.R. 551, at para. 71.

However, if the interpretive phase results in two equally reasonableinterpretations, the contract is ambiguous. In those circumstances, the court turns to the second phase of the inquiry. At this phase, thecourt may consider extrinsic evidence: see Eli Lilly, at para. 55. As well, the court may consider the applicability of contra proferentem:see Consolidated Bathurst, at p. 901. In the interpretive phase, the onus is upon the insured to show that the loss is covered by the policy in question.

Once the insuredhas done so, the burden shifts to the insurer to show otherwise, including by reason of the operation of an exclusion or limitation in theinsurance contract: see Continental Insurance Co. v. Dalton Cartage Co., (SCC), [1982] 1 S.C.R. 164; CanadianNational Railway Co. v. Royal and Sun Alliance Insurance Co. of Canada, [2008] 2 S.C.R. 453, at para. 34; Co-Operators LifeInsurance Co. v. Gibbens, 2009 SCC 59 , [2009] 3 S.C.R. 605, at para. 51; Denis Boivin, Insurance Law (Irwin Toronto: IrwinLaw, 2004) at p. 190.

In interpreting a provision, the court will also recognize that coverage provisions are "construed broadly and

exclusion clauses narrowly": see Reid Crowther & Partners Ltd. v. Simcoe & Erie General Insurance Co., (SCC),[1993] 1 S.C.R. 252, at p. 269; Scalera, at para. 70. Analysis [19] To me the meaning of the contract is clear. The policy excludes payment for damage caused by an expected event that wasnot sudden (see para l page 16).

This event was unexpected and was sudden. [20] The event was not excluded under Cover Code C paragraph a) - it was not caused by a flood, surface water, tidal waves oroverflow of a stream, nor was it caused by water below ground as contemplated in paragraph b), nor was it caused by continuous orrepeated seepage or leakage of water from plumbing, or any other fixture or appliance as contemplated in paragraph h). [21] It was caused, as indicated above, by the failure, through accidental inadvertence, of the home owner to reconnect theextension pipe.

This is a comprehensive policy and by definition if a particular loss is not excluded it is included. As the policy states “Ifthe peril that causes loss or damage is not one of the perils shown below, then you are covered.” Conclusion [22] The Plaintiff will have judgement against the Defendant in the amount as agreed $6,123.83 (the amount of the claim less a deductible of $500.00) and prejudgement interest from the date of denial, which I determine to be August 25th, 2009 the date of the letterof denial. The Plaintiffs will also have their costs of $56.00.

Dated at the City of Saskatoon this 5th January , 2011. ____________________________________ Singer, P.C.J. [1] (SCC), [1993] 1 S.C.R. 252 at 261-62: [2]2010 ONCA 292 , [2010] O.J. No. 1645 (Ont. C.A.)