Minnesota Car Insurance limits inadequate in Canadian context - Hartley v. Security National

October 05, 2017, Kitchener, Ontario

Posted by: Robert Deutschmann, Personal Injury Lawyer

Hartley V. Security National (ONCA 2017)

Date of Decision: June 21, 2017

Mr. Hartley was in a car accident while riding his motorcycle in Minnesota. He was hit by truck owned, operated and insured by the State of Minnesota. Mr. Hartley sued the State for damages was bus limited by their $500,000 cap.

Mr. Hartley settled for the $500,000 although his injuries warranted more. The settlement he received was inclusive of all legal fees and disbursements. After costs, Mr. Hartley was left with a settlement of $386,500. He then turned to sue his own auto insurer Security National under his OPCF 44R which provides $1 million in coverage for underinsured drivers.

Security National denied the claim on the basis that:

1. Minnesota was not an inadequately insured motorist within the meaning of OPCF 44R, and that the shortfall was the result of statutory immunity
2. The insurer claimed that the American legal fees were not recoverable under the OPCF 44R

The motion judge ordered in favour of Mr. Hartley on both issues.

Upon review of the facts the Court of Appeal of Ontario agreed with the motion judge that Minnesota was an “inadequately insured motorist”, however, they disagreed that the legal fees were recoverable. The Court of Appeal pointed to the language in the OPCF 44R:

“the identified owner or identified driver of an automobile for which the total motor vehicle liability insurance or bonds, cash deposits or other financial guarantees as required by law in lieu of insurance obtained by the owner or driver is less than the limit of family protection coverage…”

The Court took the position that the “other financial guarantees as required by law in lieu of insurance’ includes a legislated obligation by an uninsured state to indemnify its employees. The shortfall in damages and the limits on damages provided by the State of Minnesota triggers indemnity under OPCF 44R. The Court found that special damages could not provide compensation for costs incurred in securing compensatory damages as that would undermine the contractual agreement between parties.

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Deutschmann Law serves South-Western Ontario with offices in Kitchener-Waterloo, Cambridge, Woodstock, Brantford, Stratford and Ayr. The law practice of Robert Deutschmann focuses almost exclusively in personal injury and disability insurance matters. For more information, please visit www.deutschmannlaw.com or call us at 1-519-742-7774.

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