No Negligence Found in Case of Failed Emergency Brake

erik-magrakenErik Magraken: BC Injury Law and ICBC Claims Blog:

This Blog is authored by British Columbia ICBC injury claims lawyer Erik Magraken. Erik is a partner with the British Columbia personal injury law-firm MacIsaac & Company. He restricts his practice exclusively to plaintiff-only personal injury claims with a particular emphasis on ICBC injury claims involving orthopaedic injuries and complex soft tissue injuries. Please visit often for the latest developments in matters concerning BC personal injury claims and ICBC claims.  Erik Magraken does not work for and is not affiliated in any way with the Insurance Corporation of British Columbia (ICBC). Please note that this blog is for information only and is not claim-specific legal advice.  Erik can only provide legal advice to clients.

Reasons for judgement were released last week by the BC Supreme Court, Nanaimo Registry, finding a motorist was not negligent for having a faulty emergency brake which led to a pedestrian collision.

In the recent case (Little v. Einarsen) the Plaintiff pedestrian was struck by an unoccupied vehicle which “rolled downhill from where it had been parked“.

He sued the vehicle owner alleging negligence.  The Court dismissed the lawsuit finding that the vehicle likely rolled because its emergency brake failed and the owner did not know, nor ought to have known, that the defect existed.  In dismissing the claim Mr. Justice Smith provided the following reasons:

[18]        The uncontradicted evidence is that Ms. Einarsen’s car rolled downhill from where it was parked while its emergency brake was engaged. The fact that the emergency brake failed to perform its principle function leads to the obvious inference that it was in some way defective. The inference is further supported by admissible business records from the repair shop that indicate the emergency brake was repaired or adjusted within days or, at most, a few weeks after the accident.

[19]        In the absence of any direct or circumstantial evidence pointing to any other cause, it must be concluded that the accident would not likely have occurred if the emergency brake had been functioning properly. Putting it in slightly different terms, the accident, on the balance of probabilities, would not have occurred but for the failure of the emergency brake to perform its intended function.

[20]        Whether Ms. Einarsen can be held at fault for that failure depends on whether it was foreseeable—whether she knew or ought to have known about a defect or inadequacy that might cause the emergency brake to fail.

[21]        An owner of a vehicle owes a duty not to use it or permit it to be used if he or she knows or ought to have known that it is defective in any way that might cause an accident. The court will find that an owner ought to have known about a defect that would have been detected by the exercise of ordinary care, caution, and skill: Dyk v. Protec Automotive Repairs Ltd., 1998 CarswellBC 3834 (S.C.) at para. 81.

[22]        In Newell v. Towns, 2008 NSSC 174, the court said at para. 175:

[175]    ….However, an owner is not liable for all consequences that may flow from an accident that happens as a result of a mechanical defect in a vehicle. Liability only occurs for those defects that went uncorrected, when either the owner knew, or should have known by the exercise of reasonable care, of their existence.

[23]        There is no evidence that the emergency brake had failed in the past or of any defect of which Ms. Einarsen knew or should have known. Arguably, the age of the car heightened Ms. Einarsen’s duty to be satisfied that all components were in good working order. I find that, by having the vehicle inspected only two months before the accident, she had done what was reasonable to comply with that duty.

[24]        There is no evidence that the mechanics who performed that inspection failed to notice or repair a problem with the emergency brake or that Ms. Einarsen had any reason to believe they had. There is no evidence of any problem with the emergency brake that became apparent between the dates of the inspection and the accident.

[25]        In short, while Mr. Little clearly suffered injuries, he has failed to meet the burden of proving that they were caused by anything Ms. Einarsen did or failed to do or by any mechanical defect she could have detected with ordinary care, caution, or skill. In view of that failure to prove liability and a resulting entitlement to damages, it is not necessary to comment upon or attempt to resolve the many issues about the nature and extent of Mr. Little’s injuries.

[26]        The action must be dismissed with costs.

Texas lawyer faces charges over accusations he faked BP oil spill claims

A Texas lawyer faces criminal charges after he was accused of submitting thousands of false claims for damages from the 2010 Gulf of Mexico oil spill.

Robert McDuff, a lawyer for San Antonio attorney Mikal Watts, confirmed October 21, 2015 that Watts was indicted in Mississippi and will appear in court Oct. 29 in Gulfport.

“I look forward to a speedy trial and the opportunity to prove to a jury that I am not guilty of any crimes,” Watts said in a statement.

McDuff said the indictment is sealed and he wouldn’t discuss the specific charges against Watts. He said they are related to allegations that Watts committed fraud or forgery when he claimed to represent 44,000 clients in litigation against BP PLC.

McDuff said others have been indicted, but declined to name them.

Federal prosecutors didn’t immediately respond to a phone call and an email seeking comment. The indictment was first reported by the San Antonio Express-News.

The British oil giant sued Watts in 2013, alleging that more than half the clients were “phantoms,” people whom Watts never properly signed up, people who weren’t commercial fishermen or people who were dead. BP said claims officials could verify the Social Security numbers of only 42 per cent of Watts’ claimants, and even found someone who had never hired Watts included twice.

When BP sued Watts, it said he had filed only 648 compensation claims, and only eight of those had been ruled eligible for payment, with 17 others then pending.

McDuff said Watts believed the names and information he had been given were “real people who had suffered real injuries.”

“Although it later turned out that Mr. Watts had been provided with inaccurate information, and that some of these people had never authorized him to represent them, Mr. Watts was not aware of that when he filed these lawsuits against BP in order to protect the interests of the fishermen of the Gulf,” McDuff said.

BP said the large pool of clients caused it to offer an inflated $2.3 billion to pay off commercial fishing claims. It tried to persuade U.S. District Judge Carl Barbier in New Orleans to suspend payments from that fund after $1 billion was disbursed in a first round of settlements. Barbier refused, saying the questionable claims would be owed a small percentage of the remaining money. Other lawyers have said that BP should pursue fraud claims rather than stop payments.

Watts won a seat on the committee of lawyers who negotiated the multibillion-dollar settlement with BP in 2012, a group in line to reap more than $1 billion in payments. Watts resigned from the steering committee last year amid the federal investigation.

 

More trouble for Volkswagen: Software in 2016 diesels could help exhaust systems test cleaner

U.S. regulators say they have a lot more questions for Volkswagen, triggered by the company’s recent disclosure of additional suspect software in 2016 diesel models that potentially would help exhaust systems run cleaner during government tests.

That’s more bad news for VW dealers looking for new cars to replace the ones they can no longer sell because of the worldwide cheating scandal already engulfing the world’s largest automaker. And, depending on what the Environmental Protection Agency eventually finds, it raises the possibility of even more severe punishment.

Volkswagen confirmed to The Associated Press on Tuesday that the “auxiliary emissions control device” at issue operates differently from the “defeat” device software included in the company’s 2009 to 2015 models disclosed last month.

The new software was first revealed to Environmental Protection Agency and California regulators on Sept. 29, prompting the company last week to withdraw applications for approval to sell the 2016 cars in the U.S.

“We have a long list of questions for VW about this,” said Janet McCabe, acting assistant EPA administrator for air quality. “We’re getting some answers from them, but we do not have all the answers yet.”

The delay means that thousands of 2016 Beetles, Golfs and Jettas will remain quarantined in U.S. ports until a fix can be developed, approved and implemented. Diesel versions of the Passat sedan manufactured at the company’s plant in Chattanooga, Tennessee, also are on hold.

Volkswagen already faces a criminal investigation and billions of dollars in fines for violating the Clean Air Act for its earlier emissions cheat, as well as a raft of state investigations and class-action lawsuits filed on behalf of customers.

If EPA rules the new software is a second defeat device specifically aimed at gaming government emissions tests, it would call into question repeated assertions by top VW executives that responsibility for the cheating scheme lay with a handful of rogue software developers who wrote the illegal code installed in prior generations of its four-cylinder diesel engines.

That a separate device was included in the redesigned 2016 cars could suggest a multi-year effort by the company to influence U.S. emissions tests that continued even after regulators began pressing the company last year about irregularities with the emissions produced by the older cars.

The software at issue makes a pollution-control catalyst heat up faster, improving performance of the device that separates smog-causing nitrogen oxide into harmless nitrogen and oxygen gases.

“This has the function of a warmup strategy which is subject to approval by the agencies,” said Jeannine Ginivan, a VW spokeswoman. “The agencies are currently evaluating this and Volkswagen is submitting additional information.”

Automakers routinely place auxiliary emissions control devices on passenger vehicles, though they are required by law to disclose them as part of the process to receive the emissions certifications that are required to sell the cars.

EPA’s McCabe wouldn’t say if VW’s failure to disclose the software in its 2016 applications was illegal. “I don’t want to speak to any potential subjects of an enforcement activity,” she said.

If VW was cheating a second time, that would probably mean higher fines against the company, said Kelley Blue Book Senior Analyst Karl Brauer.

Regulators are “going to be even more angry than they already are,” Brauer said. “The punitive actions from the EPA are only going to get more aggressive.”

The German automaker already faces up to $18 billion in potential fines over the nearly half-million vehicles sold with the initial emissions-rigging software.

AP first reported Oct. 7 that the EPA and California Air Resources Board were investigating “the nature and purpose” of additional software on the new VW models, but at the time both the company and regulators declined to provide details about what the device does or how it works.

Volkswagen of America CEO Michael Horn said in congressional testimony last week that the German automaker had withdrawn applications seeking certification of its 2016 diesels because of on-board software that hadn’t been disclosed to regulators. However, Horn’s statement left unclear whether the issue with the 2016 models was the same as that in the earlier models, or whether it potentially constituted a new violation.

A congressional staffer briefed on the issue told AP that VW probably didn’t need the additional software to meet government emissions standards, but that the device appears intended to ensure the 2016 cars would pass inspection by wider margins. The staffer spoke on condition of anonymity because he was not authorized to talk publicly about the ongoing investigation.

VW is now working with regulators to continue the certification process needed to sell its 2016 diesel cars.

 

Canada: Duty To Defend And Concurrent Causes Of Damages

Article by Ephraim Fung | insurancelawblog.ahbl.ca

In Precision Plating Ltd. v. Axa Pacific Insurance Company, 2015 BCCA 277, the British Columbia Court of Appeal interpreted a pollution exclusion clause in a Commercial General Liability (“CGL”) insurance policy. The Court of Appeal held that the insurer had no duty to defend the insured for claims alleging property loss arising from the escape of toxic chemicals.

The insured leased a space within a multi-tenanted commercial strata building and stored vats filled with toxic chemicals in the course of its electroplating business. In 2011, a fire broke out on the insured’s premises, causing the sprinkler system to activate. The water caused the toxic chemicals to overflow and seep into neighbouring units. Four separate Supreme Court actions were commenced by tenants within the strata complex (the “Third Party” actions).

The insured applied for a declaration that the insurer had a duty to defend these claims. At issue was the interpretation of the pollution exclusion clause in the CGL policy:

4. This insurance does not apply to:

(b)(i) Bodily Injury, Personal Injury or Property Damage caused by, contributed to by or arising out of the actual, alleged or threatened discharge, emission, dispersal, seepage, leakage, migration, release or escape at any time of Pollutants.

Applying the principles in Zurich Insurance Co. v. 686234 Ontario Ltd., (2002) 62 OR (3d) 447 (ON CA), the trial judge determined that a literal interpretation of the pollution exclusion clause lead to a result that was inconsistent with the insured’s reasonable expectations of coverage and the main purpose of the insurance coverage: to indemnify against liability for property loss caused by fire damage. The insurer therefore had a duty to defend the insured against the Third Party actions.

This decision was appealed and reversed by the British Columbia Court of Appeal. Writing for the unanimous court, The Honourable Madam Justice Garson reviewed the principles respecting pollution exclusion clauses in CGL policies:

(a) An insurer has a duty to defend its insured where the facts alleged in pleadings, if proven to be true, would require the insurer to indemnify the insured for the claim. The duty to defend arises when there is a “mere possibility” of coverage under the insurance policy. This principle was stated by the Supreme Court of Canada in Progressive Homes Ltd. v. Lombard General Insurance Co. of Canada, 2010 SCC 33, where the issue was whether there was a duty to defend an insured general contractor for property damage caused by water leaking into a building.

(b) A pollution exclusion clause is to be interpreted by examining the context of the clause when the literal interpretation of the clause leads to a result that is inconsistent with the insured’s reasonable expectations or the main purpose of the insurance coverage. Factors to be considered include the history of the exclusion clause, the environmental context, the purpose of the CGL policy, and the objectively reasonable expectations of the parties. This approach was adopted by the Ontario Court of Appeal in Zurich to determine whether a pollution exclusion clause barred coverage for damage caused by the escape of carbon monoxide.

(c) There is no duty to defend where two distinct perils are alleged in pleadings to have caused the loss but the policy excludes coverage for any liability “contributed to by” an excluded cause. This “concurrent causes” principle was stated by the Supreme Court of Canada in Derksen v. 539938 Ontario Ltd., 2001 SCC 72, where the issue was whether an exclusion clause that only excluded one of the two concurrent sources of liability barred coverage for damage alleged to have been caused by the negligent clean-up of a work site and the negligent use and operation of a motor vehicle.

The Court of Appeal held that there was no duty to defend because the pollution exclusion clause utilized the recommended language in Derksen and excluded property damage “caused by, contributed to by or arising out of the…release or escape at any time of Pollutants”. The Third Party pleadings alleged that one of the sources of liability was the escape of toxic chemicals. Coverage for property damage contributed to by the escape of toxic chemicals is clearly excluded by the pollution exclusion clause.

The Court of Appeal further held that the trial judge erred in applying the contextual approach used in Zurichbecause his analysis was based on whether the pollution exclusion clause barred coverage for the original or proximate cause of the property damage: a fire. A literal interpretation of the CGL policy excludes coverage for liability arising out the escape of toxic chemicals. This interpretation was not inconsistent with the insured’s reasonable expectations because the insured could have no reasonable expectation that it would be indemnified against liability for the escape of toxic chemicals.

This decision clarifies the approach to be used when considering whether there is a duty to defend when pleadings allege concurrent causes of damage. The question to be asked is whether the pollution exclusion clause bars coverage for the alleged source of liability in the pleadings, not the true cause of the damage. If there is a “mere possibility” that the insurer will be obligated to indemnify the insured for the sources of liability alleged in the pleadings, there is a duty to defend.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Source: Mondaq

 

Bare Assertion of Contemplated Litigation Does Not “Cloak Investigation” In Privilege

Reasons for judgement were released today by the BC Supreme Court, New Westminster Registry, assessing the merits of a claim for litigation privilege.

In today’s case (Buettner v. Gatto) the Plaintiff was injured in a collision and advanced a claim for damages.  The Plaintiff retained counsel.  Liability was initially admitted and then denied by ICBC.  The Plaintiff brought an application for production of various relevant documents and ICBC refused disclosure on the grounds that litigation was reasonably contemplated once Plaintiff counsel was assigned.

The Court rejected this finding this position was based on little more than a bare assertion.  In ordering production of the requested documents Master Caldwell provided the following reasons:

[31]         If this argument is correct, all that any or all adjusters must do in any or all motor vehicle cases is determine, at the instant that the incident is reported, that he or she is going to deny liability and/or the presence of damages without the need to show any basis or accountability for such decision. Having done so, that will virtually ensure that litigation will be required to resolve any claim for loss. Thereafter, having created the virtual certainty of litigation, the defence will be able to reasonably argue that any and all investigations done from the instant that the incident is reported is for the dominant purpose of the conduct of the litigation which they ensured by the arbitrary denial of fault or damage.

[32]         In my respectful view this circular argument runs counter to the letter and spirit of the Hamalainen case, the numerous cases which were cited in and followed by Hamalainen and the numerous cases which have cited and have followed Hamalainen. It runs counter to the stated object of our Supreme Court Civil Rules, B.C. Reg. 168/2009, the securing of the just, speedy and inexpensive determination of every proceeding on its merits. It runs counter to the Supreme Court of Canada decision in Blank v. Canada (Minister of Justice), 2006 SCC 39 and its findings at paras. 60 and 61 where it comments in affirming the dominant purpose test and the role of litigation privilege, that:

The dominant purpose test is more compatible with the contemporary trend favouring increased disclosure.

And,

The modern trend is in the direction of complete discovery and there is no apparent reason to inhibit that trend so long as counsel is left with sufficient flexibility to adequately serve the litigation client

And finally,

While the solicitor-client privilege has been strengthened, reaffirmed and elevated in recent years, the litigation privilege has had, on the contrary, to weather the trend toward mutual and reciprocal disclosure which is the hallmark of the judicial process.

[33]         Inherent in the reasonable prospect/dominant purpose test must be the expectation or requirement that there be at least some evidence of bona fides, due diligence or accountability on the part of the party seeking to rely on the prospect of litigation, which was created by their own actions, to support their claim of litigation privilege. Absent such requirement the test itself becomes meaningless. This is particularly of concern where, as here, the same insurer provides coverage for both parties and, presumably, owes each a duty of some form of meaningful investigation and determination of facts before reaching a decision on an issue as important as fault or liability for a motor vehicle accident.

[34]         I find that there is no evidentiary basis provided to support the decision of Ms. Hilliam to deny liability. Her unsupported decision cannot be used as justification for her to conduct a proper investigation into the facts of this motor vehicle accident while cloaking that investigation in a claim of litigation privilege. The time line and analysis of the court in Hamalainen is applicable to this case and to the evidence here, save as to the assertions of Ms. Hilliam which I reject. As in Hamalainen, the claim of litigation privilege regarding documents 4.7 to 4.12 inclusive, which documents were created prior to the June 17, 2013 form letter communicating the denial of liability, fails and all such documents are ordered produced forthwith and unredacted.

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