An Insurance Law Update
by David Risling and Amanda Kostek Following the Supreme Court of Canada’s recent landmark decisions on insurance coverage arising out the “use and operation” of a motor vehicle, the Alberta Court of Appeal has released a similar decision in Arruda (Estate) v. Allstate Insurance Company, 2007 ABCA 419 on December 20, 2007. The issue in this case was whether Arruda, the driver of a GMC Jimmy, was entitled to Section B coverage under the Alberta Standard Automobile Policy for an assault he sustained after a collision. At approximately 4:00 a.m., Arruda’s vehicle was side-swiped one or more times. A bullet was ultimately fired smashing the rear window of his vehicle. The assailants left the scene, and Arruda called 911 and was advised to wait for the police to arrive. Arruda was observed standing behind his vehicle with a baseball bat at some point between the collision and the arrival of the police. Between that time and the arrival of the police, the assailants returned to the scene with two butcher knives and a meat cleaver and stabbed Arruda to death.
The GMC Jimmy was insured and Arruda’s dependents brought an action against the insurer for payment of accident benefits under the insurance policy. Section B of the policy provided that the insurer would pay accident benefits to each insured person who “sustains bodily injury or death directly and independently of all other causes by an accident arising out of the use or operation of an automobile”.
The insurer denied coverage on the basis that Arruda was not an insured person, that his death did not arise out of an automobile accident, and that his death did not arise “directly and independently of all other causes by an accident arising out of the use or operation of an automobile”. The Chambers Judge concluded that the causal relationship between Arruda’s injuries and the use and operation of the vehicle were not made out, and therefore, Section B benefits were not available. Arruda’s dependants appealed.
The Alberta Court of Appeal examined the phrase “arising out of”, and affirmed that this phrase should be given a narrow interpretation as a result of the qualification that the injury be caused “directly and independently of all other causes”. The Court concludes that the use of a vehicle must be the direct, and proximate cause of an injury to trigger Section B of the insurance policy. In this case, there was a break in the causal link between Arruda’s use and operation of the vehicle, and his death. The Court concluded that Arruda’s death was caused by the subsequent assault which was an independent intervening event. Therefore, recovery under Section B was precluded.
The trend of limiting motor vehicle insurers’ exposure under “use and operation” continues.
This alert is a general overview of the subject matter and cannot be regarded as legal advice. Please contact Don Dear at ddear@mross.com or Dave Risling at drisling@mross.com or any other member of our Insurance Practice Group for further advice on this or any other Insurance Law matter. |
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