Aviva Insurance Company of Canada v. Pizza Pizza Limited

Aviva Insurance Company of Canada v. Pizza Pizza Limited Collection Decisions of the Court of Appeal Date 2008-07-04 Neutral citation 2008 ONCA 535 Docket numbers C48030 Judges Feldman, Kathryn N.; MacPherson, James C.; Cronk, Eleanore Ann Subject Civil Decision Content CITATION: Aviva Insurance Company of Canada v. Pizza Pizza Limited, 2008 ONCA 535 DATE: 20080704 DOCKET: C48030 COURT OF APPEAL FOR ONTARIO FELDMAN, MACPHERSON and CRONK JJ.A. BETWEEN: AVIVA INSURANCE COMPANY OF CANADA Applicant in Application by Aviva and Respondent in Application by Pizza Pizza (Appellant) and PIZZA PIZZA LIMITED Respondent in Application by Aviva and Applicant in Application by Pizza Pizza (Respondent) Steven Stieber for the appellant Michael Burgar for the respondent Heard and released orally: June 30, 2008 On appeal from the judgment of Justice Beth Allen of the Superior Court of Justice dated October 29, 2007. BY THE COURT: [1] The appellant Aviva Insurance Company of Canada appeals from the judgment of Allen J. dated 29 October 2007 declaring that Aviva has a duty to defend Pizza Pizza Limited under its Commercial General Liability Policy with respect to some aspects of an action brought against Pizza Pizza by a pedestrian seriously injured when she was struck by a Pizza Pizza delivery vehicle. [2] The plaintiff in the underlying action, Ursula Prince, alleges that Pizza Pizza’s negligence encompasses (1) its business practice of providing food free if delivered more than 30 minutes after it is ordered (this allegedly encourages its drivers to drive fast since they risk paying late fees themselves), (2) its failure to have safe driving policies in place, and (3) its failure to test or investigate the driving history of the driver who caused the collision for his propensity for speed. [3] The insurance policy on which Pizza Pizza relies contains this exclusion: 2. Exclusions e.1) ‘Bodily injury’ or ‘property damage’ arising out of the ownership, use or operation by or on behalf of any insured of: a) Any ‘automobile’ [4] The application judge found that the exclusion did not catch the ‘non-automobile’ claims asserted against Pizza Pizza and that Aviva had a duty to defend those claims. She reasoned: On the facts before me, I accept Pizza Pizza’s view there is a non-automobile related concurrent claim in relation to injury caused by Pizza Pizza’s corporate policy. While it is the case that the Plaintiff’s injuries were caused by the driver’s negligent driving, I find the pleadings do give rise to the possibility that the Plaintiff’s injuries were caused by Pizza Pizza’s delivery policy and failure to screen drivers’ driving records. I find that the claim is independent of the claim that involves the use or operation of an automobile, and for that reason, falls outside the scope of the exclusion in Aviva’s CGL policy. [5] The appellant contends that this conclusion is in error. It submits that the alleged ‘non-automobile’ components of Pizza Pizza’s negligence in the underlying action are in fact derivative of the essential core or substance of the plaintiff’s claim – she was injured as a result of the negligent operation of a motor vehicle driven “on behalf of” Pizza Pizza. The fact that the motor vehicle was driven “on behalf of” Pizza Pizza is confirmed by paragraph 11 of the statement of claim which reads: “The Plaintiff says that the Defendant employed Kadir or contracted his services.” [6] We agree with this submission. The proper basis for determining whether a duty to defend exists in any given situation requires an assessment of the pleadings to ascertain the substance and true nature of the claims: see Monenco v. Commonwealth Insurance Co., [2001] 2 S.C.R. 699 at para. 35. Similarly, in Non-marine Underwriters, Lloyd’s of London v. Scalera, [2000] 1 S.C.R. 551 at para. 50, the court stated that in a duty to defend analysis, “a court must look beyond the choice of labels, and examine the substance of the allegations contained in the pleadings.” [7] Applying this test, in our view the alleged ‘non-automobile’ claims in the underlying action are in fact caught by the exclusion in Aviva’s policy. The precipitating and most important cause of the plaintiff’s injuries was the delivery driver’s alleged negligence, not the negligence of Pizza Pizza in its corporate policies. The “30 minutes or free” policy exists and is not actionable by the world at large unless there is negligent driving by a delivery driver causing personal injury or property damage. In other words, the alleged non-automobile claims are derived from, not independent of, the automobile claim. As expressed by Doherty J.A. in a case very similar to this appeal, Unger v. Unger (2003), 68 O.R. (3d) 257 at para. 20: The mere description of some of the acts of negligence as ‘negligent business practices’ does not create a separate and discrete cause of action. Those allegations could assist the Ungers in establishing their claim only to the extent that they helped them demonstrate that the vehicle was being used or operated in a negligent fashion when the accident in which the Ungers were injured occurred. [8] The appeal is allowed. The appellant is entitled to its costs of the application and the appeal on a partial indemnity scale which we fix at $5000 and $7500 respectively, inclusive of disbursements and G.S.T. RELEASED: July 4, 2008 (“K.F.”) “K. Feldman J.A.” “J.C. MacPherson J.A.” “E.A. Cronk J.A.”