February 2019

Home Sweet Home

What Constitutes "Living in the Same Household" in a Home Insurance Policy

In the recent decision in Ferro v. Weiner ("Ferro"),¹ the Court of Appeal for Ontario provided clarity as to what constitutes "living in the same household" in a home insurance policy.

Background

Enid Weiner owned a house on Lake Eugenia, which was used as a cottage until the late 1980's when it became Enid's sole residence (the "Property"). When Weiner moved to a nursing home around 2008, her three adult children and their families used the Property as their vacation home.

The Property was covered by an Intact Insurance Company ("Intact") insurance policy in which Weiner was listed as the sole owner of the Property (the "Intact Policy"). The Intact Policy provided coverage for all of Weiner's relatives "while living in the same household" as her. This coverage included liability protection from "unintentional bodily injury or property damage" and extended coverage to "not only the insured's primary residence but also the insured's seasonal and other residences".²

In May 2010, a young man tragically drowned while attending a high school graduation party at the Property. At the time of the death, Weiner's adult son Scott, and Scott's daughter were present. Weiner's estate, Scott, his wife, and their daughter were subsequently named as defendants in an action brought by the family of the drowning victim. The plaintiffs' claim was later settled by Scott's insurer, TD Insurance Company ("TD").

The Summary Judgment Motion

TD moved for summary judgment for a declaration that Intact was bound to indemnify and defend the defendants against the claims brought by the plaintiffs. The motion judge granted the motion, and a declaration was provided that Scott and his family were insured under the Intact Policy. Intact was also ordered to indemnify TD for 50% of the value of the settlement with the plaintiffs.

In her analysis, the motion judge found that Scott and his family were part of Weiner's household since they occupied the Property at will, cared for it, and later took an ownership interest in the Property.

Intact appealed.

The Court of Appeal

On appeal, Justice Miller's analysis first turned to the interpretation of the word "household". At the summary judgement motion, the motion judge's consideration of Scott's use of the Property only went to whether he was "living in" the Property. In the context of insurance law, "household" constitutes a type of community, which is evidenced by the "extent to which its members share the intimacy, stability, and common purpose characteristic of a functioning family unit".³ What is pertinent is not how a household is structured, but rather "the degree to which the choices and actions of all members of the household are motivated by ‘an interest in the life of all that gives it a unity'".⁴

The Court of Appeal noted that such intimacy, unity, and permanence demand more from household members than just co-residency. For example, where an insured had been living with his brother indefinitely but had a "separate identity of life" from his brother, the Supreme Court has found that he was not a part of the household.⁵ Similarly, a daughter visiting her parents for two-and-a-half weeks was also found not to be a member of the household since staying in a home during a visit does not make one a "member of the household", even if the owners are one's parents.⁶

However, the member's settled intentions do matter. For example, a university student away at school who intends to return to live in the family home is still a member of their parent's household.⁷ The same holds true for parents who are away from home for extended periods due to work commitments,⁸ or estranged spouses that intend to return and reconcile.⁹

After establishing the threshold for household membership, Justice Miller turned to first-principles. He addressed the argument that coverage clauses should be interpreted broadly in favour of the insured,¹⁰ and that since the term "household" in the Intact Policy was located in the coverage clause (as opposed to an exclusion clause), it followed that the Intact Policy should be interpreted broadly to include coverage to Scott and his family. Justice Miller disagreed. He found that, in borderline cases, deference is shown towards the insured when interpreting insurance policies, but that this did not apply to the case at hand based on the facts on the ground.

Justice Miller also addressed the submission that an adult can belong to more than one household at a time and that Scott and his family, therefore, should be understood as part of both their household in the city and their second home at Weiner's Property. Justice Miller also disagreed with this point, because although it may be possible for one person to belong to two households, "the categories recognized to date are few, relating only to minor children". Furthermore, the evidentiary record before him did not show that Scott and his family had shared a life with Weiner. Indeed, even before Enid had entered the nursing home, she lived with Scott's brother rather than Scott.

The appeal was therefore allowed and the order for summary judgment in favour of TD was vacated.

Conclusion and Implications

Ferro provides important insight to liability coverage under home insurance policies for both insurers and insureds. This decision provides an overview of Canadian jurisprudence as it applies to the contractual term "living in the same household" in a home insurance policy. In light of this decision, parties can rest assured — for better or for worse — that a Court's assessment of household members will be holistic and based on the entirety of the parties' relationship and intentions towards each other.

It turns out, "mi casa" is not always "su casa".

1. 2019 ONCA 55 [Ferro].
2. Ibid, at para 3.
3. Ferro, supra note 1, at para 17.
4. Ibid.
5. The Wawanesa Mutual Insurance Company v. Bell, [1957] S.C.R. 581, at p. 584.
6. Tannahill v. Lanark Mutual Insurance Co., 2011 ONCA 123, at para 49.
7. Canadian Universities' Reciprocal Insurance v. Halwell Mutual Insurance Company, [2002] OJ No 3306 [Canadian Universities].
8. Campbell v. Royal Insurance Co. of Canada (1991), 1991 CanLII 4458 (NB CA), at para 8.
9. Boasley v. British America Insurance Co. (1976), 1976 CanLII 563 (ON SC).
10. Canadian Universities, supra note 8, at paras 21 and 30.

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