Legal determination that an at-fault motorist is underinsured is required before a plaintiff’s OPCF 44R coverage is triggered

In Maccaroni v. Kelly (2011 ONCA 441), the Ontario Court of Appeal set aside an order dismissing an insured's action against her insurer, ING, for damages claimed pursuant to an OPCF 44R underinsured motorist endorsement. In this particular case, both the tortfeasor's insurance policy and the appellant's OPCF 44R endorsement had coverage limits of $1,000,000.00.

In the original action arising from the motor vehicle accident at issue, Co-operators General Insurance Company added itself as a statutory third party pursuant to s. 285 of the Insurance Act, R.S.O. 1990 c. I.8.

Co-operators took the position that its insured (the tortfeasor) was in breach of the statutory conditions of his policy and that, as a result, the insured's policy limits were reduced to $200,000.00 pursuant to s. 258(11) of the Insurance Act.

Given this position, the appellant settled her action with the tortfeasor and Co-operators in exchange for the statutory minimum limits of $200,000.00. A full and final release was also signed, releasing the tortfeasor and Co-operators from any and all claims arising out of the motor vehicle accident. ING neither consented to the settlement nor to the dismissal of the action.

Subsequent to the settlement, the appellant sought to recover the additional money to which she claimed entitlement from ING pursuant to the OPCF 44R endorsement. ING brought a motion for summary judgment to dismiss the action as against it on the grounds that the appellant's damages would not have exceeded $200,000.00 and that there had never been a legal determination that the tortfeasor's policy limits were reduced to the statutory minimums. As such, ING argued there was no genuine issue for trial because the appellant could not prove that her OPCF 44R endorsement was triggered. The motion judge accepted ING's position and dismissed the action against ING.

The Ontario Court of Appeal agreed that the appellant's OPCF 44R coverage would only be available after a legal determination proved that the tortfeasor's policy limits were reduced. However, the Court of Appeal held that this was a genuine issue for trial, as there had not yet been any kind of determination, other than Co-operators' unproven allegations, that the tortfeasor had breached the statutory conditions of his policy. The Court of Appeal therefore set aside the dismissal and held that the appellant could continue her action against ING, but that the appellant (as opposed to Co-operators, who had been let out of the action as a result of the settlement) would bear the onus of proving Co-operators' off-coverage position. The appellant could call the tortfeasor and representatives of Co-operators as non-party witnesses to prove Co-operator's off-coverage position.

This case confirms that OPCF 44R coverage is excess insurance and only available after a determination that a torfeasor's policy limits are insufficient to cover the claim. This determination must be legal as opposed to alleged, even if the plaintiff settles with the tortfeasor for the reduced policy limits.

Legal determination that an at-fault motorist is underinsured is required before a plaintiff's OPCF 44R coverage is triggered