The wrong answer is, technically: Yes. According to this case you are.
The Court of Appeal recently explored the phrase ?authorized by law? (found in section 4(1) of O.Reg 777/93 enacted under the Insurance Act of Ontario) and was asked to decide whether that phrase extended to a personal undertaking given by an insured person to a Justice of the Peace as a condition of being released from custody on an impaired driving charge.
What happened in this case?
The gentleman in this case, Paul, was arrested for impaired driving causing bodily harm following a car accident.? He was released from police custody subject to his undertaking (consider this a formal pledge or promise to do something) given to a Justice of the Peace to abstain from the possession and consumption of any alcoholic beverages.
If an undertaking like this is given and breached ? you can be charged criminally.? This undertaking was given to the Court by Paul in February of 2003.? Ten months later Paul was again drinking and driving and he caused another car accident and this time he unfortunately injured someone.
He was charged with not only impaired driving, but breach of his undertaking given to a peace officer to not drink.? He was convicted of both these charges as well as well as his impaired driving charge from his February 2003 accident.
The Bigger Problem
When Paul was driving, he was insured with a standard automobile insurance policy issued by the Jevco Insurance Company.? He also had a valid Ontario driver?s license that did not have any restrictions attached to it.
The lady injured in the second accident, a Ms. Deabreu, sued Paul for damages and losses occasioned by the accident.? For several years Jevco defended Paul in this lawsuit as would normally be the case.? This is why you have car insurance.
However, after Jevco learned of Paul?s breach of his undertaking given to a Justice of the Peace, to abstain from alcohol, it notified Paul that it would no longer fund his defence or indemnify him with respect to any damages that might be awarded against him in Ms. Deabreu?s personal injury lawsuit.
Jevco took the position that Paul?s breach of his undertaking to not drink constituted a breach of a certain condition of his insurance policy, resulting in the unfortunate forfeiture of his car insurance coverage under the policy. ?In other words, if you breach certain elements of your insurance contract ? your insurance company can deny you coverage.
The condition for the policy that Paul allegedly breached stated that ?the insured shall not drive or operate or permit any other person to drive or operate the automobile unless the insured or other person is authorized by law to drive or operate it?.
What did the Court say about this?
The Court of Appeal decided that Paul was entitled to be defended by Jevco and was entitled to indemnification from Jevco in respect of the personal injury action.? In other words, despite his drinking and driving and subsequent promise to abstain from alcohol, the Court decided that he should be insured.
Reasons
The Court of Appeal noted that there was considerable case law for the support of the proposition that the phrase ?authorized by law? as used in the insurance policy is concerned with the validity and terms of an insured licensed to drive at the time of the relevant car accident.? The case law, as the Court noted, suggested that the legal authority to drive at any time, depends on that existence of a valid license issued by the responsible regulatory authority in compliance with the conditions attached to the license.
Paul 1) had an appropriate license issued by the Ministry of Transportation of Ontario at the time of the accident and; 2) there were no conditions attached to it.
Jevco?s argument regarding consuming alcohol was that it was governed by provincial law (the Highway Traffic Act) and Federal Law (Criminal Code).? Therefore submitted that the driving conditions imposed under either body of law come into the intended scope of the phrase ?authorized by law? in condition 4 of the policy ? i.e. if you break provincial and federal laws, and if you breach a promise to the Court ? why should you be insured?
The Court of Appeal did not agree with this.? They noted that if Jevco?s urged interpretation of Condition 4 of the insurance policy was to be accepted, then the breach of any driving related prohibitions or restrictions imposed under any law, including criminal law because the breach would result I the forfeiture of automobile insurance coverage and would render the insured unauthorized to drive or operate a vehicle within the meaning of the Conditions.? What does this mean? Well, for example, they would open the floodgates to coverage denial in the event of minimal and technical breaches of provincial and federal laws.? For example, if a driver being imposed a curfew by our courts as a result of recognizance (released on bail), and if that driver breached the terms of the curfew this could trigger the laws of the insured automobile insurance.? This was simply a sweeping argument that could not stand.
Also, the Court of Appeal noted that Jevco?s argument was inconsistent with Sec. 118 of the Insurance Act.? That section, as applicable to motor vehicle insurance policies, provides that unless the relevant insurance contract otherwise stipulates, the commission of a criminal offence ?by fact alone? does not render unenforceable, except where they are committed with the intention to bring about specific exclusions for losses occasioned by criminal acts ? i.e. if you get in your motor vehicle and do something intentionally to break the law then why should your insurance company insure you?
?What is S.118 of the Insurance Act and why is it important?
Section 118 of the insurance act requires an insured to 1) contravene a law and 2) intend to bring about loss or damage for a claim for indemnity to be unenforceable.
The section reads as follows:
118.??Unless the contract otherwise provides, a contravention of any criminal or other law in force in Ontario or elsewhere does not, by that fact alone, render unenforceable a claim for indemnity under a contract of insurance except where the contravention is committed by the insured, or by another person with the consent of the insured, with intent to bring about loss or damage, but in the case of a contract of life insurance this section applies only to insurance undertaken as part of the contract whereby the insurer undertakes to pay insurance money or to provide other benefits in the event that the person whose life is insured becomes disabled as a result of bodily injury or disease. R.S.O. 1990, c.?I.8, s.?118; 2002, c.?18, Sched.?H, s.?4?(13).
In the Court of Appeal?s view, this section signals a clear legislative intent to allow for the possibility of compensation for innocent tort victims beyond the statutory minimums provided for under the uninsured policy, notwithstanding that it may have been brought about by a tortfeasor?s criminal wrongdoing.
What does this mean?
Ask the question why should an injured victim not be compensated if he/she is severely injured did something criminally that was unintentional? I don?t condone drinking and driving one bit, and I am a supporter and volunteer with MADD.? I am a supporter of the harsh drinking and driving penalties. But ? technically because someone drinks and drives it does mean that they intentionally meant to run over John Doe that was crossing the intersection.
In essence, section 118 is designed to provide insurance protection for negligent tortfeasors who simply do not intent to cause harm by their wrong.? This is in contrast to older versions of Ontario insurance policies with expressly prohibited the use of an automobile by an insured while incapable of the proper control of the automobile by reasons of the influence of intoxicating liquor or drugs by enacting section 118 of the Insurance Act.? Our government must be taken as having elected to protect the potential of tort compensation for innocent victims of drinking and driving
Essentially, Paul
1)????? held a valid Ontario driver?s license;
2)????? He was in compliance with the terms of the license;
3)????? the license contained no alcohol related condition or prohibitions; and
4)????? his license was in good standing.
He was legally, authorized by law to drive, and Jevco was ordered to defend and indemnify him against the personal injury claim of the lady that he injured while drinking and driving.? His drinking and driving or his breached promise to abstain from alcohol did not void his insurance policy. ?He did not intend to bring about loss or damage.
If you are injured by a negligent driver that was drinking and driving or impaired at the time he/she caused the accident, you may still have recourse against that impaired driver and his or her own insurance policy.
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