From Flame to Claim
The plaintiff’s home was damaged in a fire on February 26, 2021. He was insured under a policy with Bay of Quinte Mutual Insurance Co. (“BOQ”). BOQ paid the plaintiff the $220,000.00 policy limit for the dwelling but only paid $60,000.00 for its contents. The plaintiff commenced an action arguing his contents were of higher value than $60,000.00.
Of note, the plaintiff did not submit a sworn Proof of Loss form at any time during his claim. However, he did submit an unsigned Proof of Loss to BOQ in 2011, and later provided an additional 17-page Schedule of Loss. In 2013, BOQ conducted an Examination under Oath of the plaintiff, which provided an opportunity to inquire further about the contents claimed.
At trial, the plaintiff retained an experienced NFA adjuster, David LeBlanc, to testify as an expert witness. Leblanc reviewed 335 items and applied depreciation rates ranging from 15 to 40 percent. LeBlanc calculated the ACV of Lynch’s contents claimed at $134,053.00 instead of the $158,350.85 ACV submitted in 2013. His opinion was based on evidence given by the plaintiff and Ms. Gilbert, an estimator at NFA. The plaintiff provided the list of contents in the Schedule of Loss and Ms. Gilbert conducted an online search to determine the replacement cost of the items listed. Leblanc also reviewed NFA’s file, photographs taken of the house after the fire, and the insurance policy.
BOQ retained an auctioneer, Boyd Sullivan, in response. Sullivan valued the plaintiff’s contents between $20,000.00 to $25,000.00 based solely on his experience as an auctioneer. On cross-examination, Sullivan acknowledged that he was not familiar with the term ACV, or the value of some items claimed by the plaintiff. Sullivan never reviewed the definition of ACV in the insurance policy, and he was never asked to give an opinion about ACV in a legal matter.
Originally, the Superior Court of Justice granted the plaintiff an additional $51,000.00 for the contents damaged in the fire. The Court ultimately accepted Leblanc’s evidence, and established the ACV of the contents was $134,053.23.
Extinguishing the Dispute
The BOQ appealed on three grounds. First, the BOQ argued that the trial judge erred in allowing the claim despite the lack of a sworn Proof of Loss.
The Court of Appeal disagreed, and indicated that the unsigned Proof of Loss, 17-page Schedule of Loss, and Examination under Oath provided BOQ sufficient information and opportunity to assess the claim. As such, BOQ waived strict compliance with the sworn Proof of Loss requirement as permitted under section 131 of the Insurance Act (“Act”).
The Court of Appeal also agreed that the plaintiff was entitled to relief from forfeiture for any imperfect compliance under section 129 of the Act as there “… was no evidence that [the plaintiff’s] failure to submit a sworn Proof of Loss prejudiced BOQ in any way, or that the omission had any impact on BOQ’s approach to the litigation.”
Second, BOQ argued that the trial judge should have ordered an appraisal under section 128 of the Act.
The Court of Appeal, after interpreting section 128(5) of the Act, determined that a judge has the discretion to decline to appoint an appraiser. As the trial judge already had all the information necessary to assess the value of the plaintiff’s lost property, an appraisal was not ordered as it would not save any money or time. The Court of Appeal held there was no basis to interfere with the trial judge’s decision for this reason.
Lastly, BOQ alleged that the trial judge erred in assessing the ACV of the plaintiff’s personal property lost in the fire, as there was no reliable evidence for the trial judge to determine the ACV.
The Court of Appeal disagreed, on the basis that there is no single or right way to calculate the ACV under an insurance policy. The Court held the trial judge was entitled to accept the evidence given by LeBlanc over that of Sullivan’s. LeBlanc’s opinion was based on information from the plaintiff and Ms. Gilbert that was deemed credible and reliable whereas Sullivan’s opinion was solely based on his experience as an auctioneer. The Court also accepted that LeBlanc’s depreciation factors were reasonable.
Key Takeaways
This case emphasizes flexible Proof of Loss requirements, judicial discretion in ordering appraisals, and some guidance in determining the actual cash value (“ACV”) of damaged property.
A sworn Proof of Loss is not required if an insurer obtained, or had the opportunity to obtain, sufficient information to assess a property damage claim. An insurer waives its right to insist on compliance with providing a sworn Proof of Loss if it did not require same while adjusting the claim.
Section 128(5) of the Insurance Act, a judge is not required to appoint an appraiser where there is enough evidence adduced to determine the value of damaged property. It also flows that there is no single rule for calculating the ACV, and accepting the value given by one expert over another is acceptable at trial.
See Stewart v. Bay of Quinte Mutual Insurance Co., 2024 ONCA 730 (CanLII), <https://canlii.ca/t/k74p0>.
See STEWART et al v Bay of Quinte Mutual Insurance et al, 2023 ONSC 3855 (CanLII), <https://canlii.ca/t/jxwd2>.
