Barker v. Zurich Insurance Company

Barker v. Zurich Insurance Company Collection Decisions of the Court of Appeal Date 2001-02-07 Docket numbers C30786 Judges Carthy, James Joseph; Charron, Louise Vivianne; Sharpe, Robert J. Subject Civil Decision Content DATE: 20010207 DOCKET: C30786 COURT OF APPEAL FOR ONTARIO CARTHY, CHARRON and SHARPE JJ.A. BETWEEN: ) ) W. T. McGrenere MIKE BARKER, carrying on business ) and D. Cheifetz, as MIKE BARKER AUTO SALES ) for the appellant ) Plaintiff ) (Respondent) ) ) - and - ) Joel B. Kerr, ) for the respondent ZURICH INSURANCE COMPANY ) ) Defendant ) (Appellant) ) ) Heard: December 18, 2000 ) On appeal from the judgment of Justice David Crane, sitting with a jury, dated September 30, 1998 CHARRON J.A.: I. Overview [1] This action arose out of an insurance claim made against Zurich Insurance Company (“Zurich”) with respect to the theft of a vehicle owned by the insured Mike Barker. Barker was in the business of purchasing and reselling vehicles. In August 1994, he purchased a 1989 Chevrolet Pick-up truck from an automobile wrecker. The vehicle was repaired by his friend Harold David Stewart and then put on Barker’s business premises for sale. On January 10, 1995, the vehicle was stolen. Barker claimed for the loss under his automobile insurance policy issued by Zurich. Zurich commenced an investigation into the claim. On April 5, 1995, before the theft claim was settled, the vehicle was discovered submerged in water. Barker arranged for Stewart to recover the vehicle and authorized him to effect whatever repairs were necessary to prevent further damage from occurring to the vehicle and to make it saleable again. Stewart immediately disassembled the vehicle to protect the vehicle from water damage. Following further investigation, Zurich denied the claim on the basis that, by having the vehicle disassembled, Barker had denied Zurich a reasonable opportunity of inspecting the vehicle and had thereby breached a statutory condition of the policy. Barker commenced this action. [2] Following a trial before judge and jury, the jury found that Zurich had wrongfully refused to pay Barker’s claim, and that its conduct merited the imposition of punitive damages. The jury awarded $7,528 in compensatory damages and $250,000 in punitive damages. Barker, who had claimed only $200,000 in punitive damages in his pleadings, sought leave to amend his Statement of Claim to accord with the jury verdict. The trial judge dismissed his motion and rendered judgment in accordance with the jury verdict to the extent of the amount claimed in the pleadings. Zurich appeals from the award of punitive damages and costs and Barker cross-appeals from the dismissal of his motion to amend his Statement of Claim. [3] Zurich, without admitting liability, has paid to Barker the compensatory damages portion of the judgment. The only portions of the judgment that Zurich asks this court to set aside are the awards of punitive damages and costs. However, in considering the validity of the awards of punitive damages and costs, Zurich invites this court to consider the validity of all the findings of fact made by the jury. Zurich takes the position that the evidence does not support the jury’s findings that, in effect, it wrongfully refused to pay the claim. Zurich further contends that, even if the evidence did support such a conclusion, it certainly is incapable of supporting the jury’s finding that the impugned conduct was deserving of condemnation and punishment as reflected in the award of $250,000 in punitive damages. [4] I agree with Zurich’s position. In my view, the evidence does not support the jury’s verdict. Consequently, I would set aside the award of punitive damages and costs. II. The Evidence [5] Before summarizing the evidence, it may be useful to set out the findings of the jury as reflected by the answers given to the questions that were provided to them: 1. Did Mr. Stewart provide a reasonable opportunity to the representatives of the insurance company to inspect the vehicle? ANSWER: Yes 2. Did Mr. Stewart remove physical evidence of the loss or damage of the vehicle? ANSWER: No 3. If your answer to Question 2 is “Yes” did Mr. Stewart give the insurer reasonable time to make an inspection of the vehicle before physical evidence of the loss or damage was removed? ANSWER: 4. Did the work done by Mr. Stewart on the vehicle in the reasonable time for the defendant’s inspection of the vehicle go beyond protection of the vehicle from further loss or damage? ANSWER: No 5. What was the damage to the vehicle in consequence of the theft? ANSWER: $7,528.00 6. Did the defendant through its employees and agents treat the plaintiff reprehensibly, scandalously and outrageously with regard to this claim? ANSWER: Yes 7. If the answer to Question 6 is “Yes”, state the conduct founding your answer to Question 6. 1) The claim was not responded to in a timely fashion. The Zurich Ins. Co. did not instruct Mr. Barker properly as to the reasons why the claim was unnecessarily delayed. 2) An agent of Zurich being Mr. Crocker trespassed on Stewart’s property. 3) Mr. Penner dealings with Mr. Barker where [sic] not professional and in bad faith. 4) Mr. Barker and associates’ reputation have been damaged as a result of the actions and investigation of the Zurich Insurance Company and its agents. 8. If the answer to Question 6 is “Yes”, what award of punitive damages do you award? ANSWER: $250,000 [6] In August 1994, Barker purchased the vehicle in question, a 1989 Chevrolet pick-up truck, from an automobile wrecker. The vehicle had been damaged in some sort of incident to the extent that it had been declared a “total loss” by the vehicle insurer (not the appellant). The purchase was made for Barker by Stewart. Stewart, a good friend of Barker’s, is an experienced, albeit unlicensed, mechanic, who frequently did work in association with Barker. Barker’s purpose in purchasing the vehicle was to repair it and sell it. [7] Barker hired Stewart to repair the truck. The repairs seem to have been completed in or about the month of December 1994 at a billed cost to Barker of $7,490 inclusive of taxes. An invoice dated December 14, 1994 was filed at trial. It did not itemize the work done or parts supplied. Although the invoice had a handwritten note on it dated October 29, 1994 showing a $6,000 payment with a balance owing of $1,490, there was conflicting evidence at trial on whether the repairs had been paid. Barker testified that he had not paid Stewart for the repairs either at the time he was invoiced or thereafter. Stewart testified that Barker paid a portion of the bill and there was an agreement to pay the balance of $1,400 when the vehicle was sold. [8] After the repairs were completed, the vehicle was taken to Barker’s used car lot. It was listed for sale at $12,450. Barker testified that he closed shop on Friday, January 7, 1995, between 5:00 and 6:00 p.m. The vehicle was still on the lot at that time. When he returned on the morning of Monday, January 10, 1995, the vehicle was gone. Later the same day at 12:05 p.m., Barker registered the ownership of the vehicle in his name. At 1:15 p.m., he reported the theft of the vehicle to the police and some time later the same day, Barker reported the theft to his insurance broker. [9] The claim was assigned to John Stephen Penner, an adjuster employed by Zurich. Penner contacted Barker and made an appointment to see him. Within a week, Penner interviewed Barker. Penner testified that he believed that he gave Barker a blank “proof of loss” form at that time. In his examination-in-chief, Barker stated that he was not given the form on the first interview but, in cross-examination, he conceded that it was possible that he had received it and subsequently lost it. More will be said with respect to the proof of loss later in these reasons. [10] This was the third auto theft claim made by Barker in the previous year and a half under the policy. The previous claims, the first for $400 and the second for $1,500, had been paid. Given this claims history and the history of the vehicle, Penner was concerned about the claim. He asked the Insurance Crime Prevention Bureau (“ICPB”) to investigate the matter. The ICPB is a separate entity which investigates insurance claims at the request of insurance companies. Penner testified that the ICPB has a discretion on whether or not to investigate any matter that is referred to it. In this case, the ICPB agreed to do the investigation. [11] In the weeks that followed, Barker inquired from time to time on the status of his claim. He was advised that the matter was under investigation. He was not told that the matter had been referred to the ICPB. Around mid-March, Penner provided to Barker another blank proof of loss form. [12] The ICPB investigator assigned to investigate this matter was John Crooker. John Crooker also worked for the Canadian Auto Theft Bureau. In view of the proximity of the registration of the vehicle with the Ministry of Transport at 12:05 p.m. and the reporting of the vehicle stolen at 1:15 p.m., Crooker was concerned that the situation might involve a “phantom vehicle” insurance fraud. He therefore contacted Detective Wayne Gary McClure of the Auto Theft Squad of the Hamilton-Wentworth Regional Police on March 28, 1995 to request police assistance. McClure was also concerned about the authenticity of the vehicle since it had been “written-off” in 1994 when it was the subject of an insurance pay-out and it was now the subject of a theft claim within an hour and ten minutes of Barker having transferred and registered the vehicle ownership. McClure decided to investigate the matter further. [13] On March 31, 1995, McClure and Crooker attended at the Stewart property to discuss this vehicle and another vehicle on the Stewart property which was the subject of an unrelated investigation. Stewart operated a garage on his property as well as residing there. McClure and Crooker looked about the property with Stewart’s permission. They were invited in the house. Stewart showed them receipts related to the purchase and repair of the vehicle. Stewart agreed to provide, at a later date, a receipt in relation to the other vehicle under investigation. [14] Stewart’s wife, Marjorie Stewart, gave evidence of another visit to their property by a person who, when confronted by her, identified himself as an insurance investigator and asked to see her husband. Upon being told that Stewart was not home, the investigator waited for about a half hour in his car and then left. No further evidence was called as to the identity of this person or the purpose of his visit. It cannot be determined on the basis of Mrs. Stewart’s testimony whether this incident is in any way related to this claim. Stewart conceded in his cross-examination that it was not. [15] On April 7, 1995, Barker was advised by the Ontario Provincial Police that the vehicle was discovered submerged in water at the Six Nations Reserve near Oshwegan and that it was at Martin’s Towing located on the Reserve. Barker telephoned Penner to advise him of this. In that conversation, Penner advised Barker that Penner would be sending out a tow-truck that day to get the vehicle so that it could be inspected. Barker said nothing to Penner that would suggest that he disagreed with this. [16] Penner subsequently spoke to McClure. McClure wanted to have the vehicle inspected at the police station. Penner agreed to have the vehicle towed at Zurich’s expense to the Hamilton-Wentworth central police station for inspection. [17] After speaking to Penner, notwithstanding that he knew that Penner was planning to get the vehicle and without telling Penner, Barker arranged for Stewart to hire a tow-truck to pick up the vehicle and bring it to Stewart’s garage. When asked at trial why he had made those arrangements, Barker stated that the insurance company had already had three months to pay the claim. [18] When Stewart and his tow-truck arrived at the Martin’s yard, the tow-truck hired by Penner was already there and the driver was in the process of hooking it up to the vehicle. Stewart reimbursed the driver for the amount he had paid to Martin’s to obtain the release of the vehicle and convinced him to allow Stewart to take the vehicle instead. Stewart towed the vehicle to his place, arriving sometime before 4:50 p.m. on the afternoon of April 7. Neither Barker nor Stewart advised Penner of the vehicle’s location. [19] At about 4:50 p.m. on April 7, McClure attended the Stewart property to get the receipt relating to the other vehicle under investigation which Stewart had promised on March 31 to give to him. Stewart and McClure discussed various matters including some speculation on Stewart’s part as to the circumstances surrounding the theft of the vehicle in question in this case. However, Stewart did not tell McClure that the vehicle was on his property. Stewart’s explanation at trial for not telling this to McClure was that McClure never asked. McClure, on his part, had no reason to ask because he believed the vehicle was being towed to the police station. [20] The vehicle was covered with mud and dirt as a result of being under water and had water in some components. After McClure’s departure on April 7, Stewart substantially dismantled the vehicle. Over the next two days, he cleaned and did further work on the vehicle parts. Stewart’s explanation for this work was that it was necessary in his opinion to prevent further damage to the truck from freezing. Stewart had been authorized by Barker to do what Stewart considered necessary for that purpose and to make the vehicle saleable again. Over the weekend, several of the components of the vehicle were taken off the premises to be cleaned and were then kept off-site, some of them stored in the basement of the residence of Stewart’s son. [21] On the evening of Friday, April 7, Penner was advised by the tow-truck company he had hired that the vehicle had been taken by someone on behalf of Barker. Penner assumed that the vehicle had been taken to Barker’s vehicle lot. Penner phoned Barker on the following Monday morning, April 10, and was advised that the vehicle was at Stewart’s place. Barker did not advise Penner that the vehicle had been dismantled. Penner made arrangements with Barker to go see the vehicle at Stewart’s on the following Wednesday or Thursday. [22] McClure found out on Monday, April 10 that the vehicle was not at the police station. He therefore called Penner and was advised of the vehicle’s location. McClure attended at Stewart’s residence and discovered that the vehicle had been completely dismantled. McClure then went to Barker’s lot, spoke to Barker, and told him that there would be further investigation by the police and the ICPB. [23] On April 12 or 13, Penner, another insurance adjuster by the name of Whitmore, McClure and another police officer, driving a separate police vehicle, went to the Stewart property. The other police officer never entered onto the Stewart property but stayed in his vehicle which was parked on the road at the entrance to the property. McClure had arranged for the additional officer against the possibility that it became necessary to arrest Stewart for possession of stolen automobile parts, in which case the other officer would have transported Stewart to the police station. McClure also wanted to guard against possible trouble as Stewart had become upset when discussing the insurance claim when McClure had spoken to him about it earlier in the week. [24] Stewart showed Penner, Whitmore and McClure the various components. Several were still missing. In particular, McClure noticed that the frame he had seen the previous Monday was no longer there. Stewart would not say where the frame was other than to say that it was gone to be sandblasted. He did not reveal the location of the missing components beyond saying that some parts were at his son’s residence. Stewart could not recall if he was asked to give his son’s address but testified that he would not have given it in any event. There is some controversy over exactly what was said during this encounter. However, it would appear that McClure advised Stewart that there would be “a problem” with all this and that at one point Penner may have lost his patience with Stewart. Stewart testified that Penner was “very rude” to him but provided no further particulars. He stated that Whitmore was “just business like”. His main complaint was with the police putting on “a big enough show coming in with three cruisers with lights and everything on, and a plain cruiser” making him “look like a real idiot”. Later in cross-examination, he denied having ever said that the cruisers’ lights were on. His evidence that there were three cruisers and a plain police car is not corroborated by any other witness. Penner, Whitmore and McClure left after about 30 to 45 minutes. [25] The police had no further involvement. No charges were laid. Barker sold the vehicle to one of Stewart’s sons for $2,000. In mid-May, he submitted to Zurich a proof of loss dated April 27, 1995. By letter dated June 14, 1995, written by Penner, Zurich denied the claim on the basis of breach of statutory conditions, in particular, that the disassembly of the vehicle had denied Zurich a reasonable opportunity of inspecting the vehicle. III. Analysis [26] This court reiterated the principles governing appellate review of the verdict of a jury in Deshane v. Deere & Co. (1993), 15 O.R. (3d) 225 at 231-32 in the following succinct excerpt: The principles governing appellate review of the verdict of a jury have been laid down by the Supreme Court of Canada in McLean v. McCannell, [1937] S.C.R. 341 at p. 343, [1937] 2 D.L.R. 639, so that “the verdict of a jury will not be set aside as against the weight of evidence unless it is so plainly unreasonable and unjust as to satisfy the Court that no jury reviewing the evidence as a whole and acting judicially could have reached it”. The principle has been re-affirmed in Vancouver-Fraser Park District v. Olmstead, [1975] 2 S.C.R. 831 at p. 839, 51 D.L.R. (3d) 416, where de Grandpré J., delivering the judgment of the court, stated: All of the relevant cases make it abundantly clear that jury verdicts must be treated with considerable respect and must be accorded great weight. This does not mean however that they should be regarded with awe. It was in that case also that the court, at p. 836, rejected the suggestion that a verdict should be “perverse”, implying moral turpitude, before it could be set aside. Instead, the court adopted a test that examines whether the evidence so preponderates against the verdict as to show that it was unreasonable and unjust. There is a further principle enunciated by Laskin C.J.C. delivering the majority judgment in Cameron v. Excelsior Life Insurance Co., [1981] 1 S.C.R. 138 at p. 142, 119 D.L.R. (3d) 257, and it is that jury’s findings are “entitled to rational appreciation and to be regarded in as favourable a light as the evidence supporting it”. [27] The first issue to be determined by the jury was whether Zurich was liable under the insurance contract to compensate Barker for the loss of his vehicle. This issue turned on whether Barker breached any of the statutory conditions of the contract. The relevant statutory conditions are prescribed by Reg. 773/93 made under the Insurance Act, R.S.O. 1990, c. I.8, s. 234(1): 6.(3) No repairs, other than those that are immediately necessary for the protection of the automobile from further loss or damage, shall be undertaken and no physical evidence of the loss or damage shall be removed, (a) without the written consent of the insurer; or (b) until the insurer has had a reasonable time to make the examination for which provision is made in statutory condition 8. 8. The insured shall permit the insurer at all reasonable times to inspect the automobile and its equipment. [28] The jury was properly instructed that Zurich had a right to inspect the vehicle so as to verify the genuineness of the claim, appraise the damage and determine the value of the claim. The jury was further instructed that, if an insured denies this right of the insurer, he loses his right to be paid under the policy. The first four questions related to this issue of liability and the jury was told that, with respect to those questions, the onus was on Zurich to satisfy them that Barker was not entitled to any payment. [29] As set out above, the jury found that Stewart did provide a reasonable opportunity to the representatives of the insurance company to inspect the vehicle; that he had not removed physical evidence of the loss or damage of the vehicle; and that the work done by him in the reasonable time for Zurich’s inspection did not go beyond protecting the vehicle from further loss or damage. [30] A lot of time was spent at trial on whether the disassembling of the vehicle and the repairs to the parts were necessary to prevent further loss or damage to the vehicle. Stewart was firm in his testimony that all work done on the vehicle was necessary. His evidence conflicted in many respects with the evidence of Zurich’s expert on this issue. Nonetheless, it is my view that it was within the jury’s purview to accept Stewart’s evidence and to find that the repairs made to the vehicle, late on Friday, April 7 and over the course of the next couple of days, were no more than necessary to protect the vehicle from further damage being caused by freezing water. [31] However, it is indisputable, on the evidence and as a matter of common sense, that the total disassembling of the vehicle and the work done on its parts forever foreclosed Zurich from inspecting the vehicle to ascertain both the genuineness of the claim and the extent of the loss occasioned by the theft. Hence the jury’s finding, in answer to question No. 2, that Stewart did not remove physical evidence of the loss or damage to the vehicle is entirely unreasonable. On the evidence, the jury could only have answered “yes” to this question and then moved on to determine under question no. 3 whether Stewart gave Zurich a reasonable time to inspect the vehicle before doing so. Indeed, in the circumstances of this case, the question of Zurich’s liability under the insurance contract entirely turned on whether Barker, through Stewart, provided Zurich a reasonable opportunity for inspection. [32] Question no. 1 addressed this issue of reasonable opportunity to inspect. The jury found that such an opportunity was provided. Even considering the evidence in the most favourable light, I am unable to find any evidence in support of this finding. The evidence, rather, is all to the contrary. Barker’s countermanding of Penner’s instructions with respect to the towing of the vehicle and his failure to advise anyone of the vehicle’s location at any time before the vehicle was totally disassembled supports, rather, an intention to defeat Zurich’s right of inspection. [33] Barker made no attempt in his factum to find support in the evidence for the jury’s finding on the issue of reasonable opportunity to inspect. He took the position, rather, that this issue is irrelevant as Zurich, by paying the compensatory damage award, has effectively abandoned the issue of liability under the insurance contract. I do not find this argument convincing. Zurich has paid the compensatory portion of the judgment but it is undisputed that it has done so without prejudice to its appeal against the award of punitive damages. Barker’s position on this issue ignores the fact that without a sustainable verdict on the issue of liability under the insurance contract, the award for punitive damages cannot stand. Hence the issue remains relevant to the award in dispute on this appeal. [34] When questioned by this court on the issue of reasonable opportunity to inspect, counsel for Barker noted that when Penner was made aware in the evening of Friday, April 7 that Barker had retrieved the vehicle himself, he made no efforts to find out where it was or why Barker had retrieved it until the following Monday morning. In my view this fact alone cannot support the jury’s finding. Speculation over what might have happened had Penner called Barker on Friday evening can hardly amount to a reasonable opportunity to inspect in the circumstances of this case where it appears from Stewart’s evidence that the vehicle was totally disassembled within a matter of hours after its retrieval. [35] Hence I can find no basis in the evidence to support a finding of liability. I can only conclude that the jury must have agreed with Barker’s and Stewart’s repeated contention in their evidence at trial that Zurich had had ample time to pay up the claim from the time the vehicle was stolen in January to the time it was discovered in April, and that its failure to pay the theft claim was unacceptable. The jury’s agreement with this contention is apparent from one of their express findings on the issue of punitive damages where they state: “The claim was not responded to in a timely fashion. The Zurich Ins. Co. did not instruct Mr. Barker properly as to the reasons why the claim was unnecessarily delayed.” If this finding meant that Zurich should simply have paid the theft claim and that finding formed the basis of the jury’s verdict on the issue of liability under the contract, it is, of course, without legal foundation. At no time between January 10, when the vehicle disappeared, and April 7, when it was found, did Zurich deny the claim. The matter was under investigation throughout that period. Counsel for Barker concedes that Zurich had valid grounds to investigate the theft claim. Further, Barker himself had not yet filed the necessary documentation to prove his claim. Condition 9(1) of Ont. Reg. 773/93 provides that the insurer shall pay the insurance money for which it is liable under the contract within sixty days after the proof of loss has been received by it. The proof of loss was not received until sometime in May. [36] In any event, regardless of the outcome of the question of liability to pay for the damage to the vehicle, it is my view that the evidence does not support the jury’s award of punitive damages. It may be helpful to set out in what circumstances punitive damages can be awarded. Cory J. discussed these general principles in Hill v. Church of Scientology of Toronto, [1995] 2 S.C.R. 1130 at 1208: Punitive damages may be awarded in situations where the defendant’s misconduct is so malicious, oppressive and high-handed that it offends the court’s sense of decency. Punitive damages bear no relation to what the plaintiff should receive by way of compensation. Their aim is not to compensate the plaintiff, but rather to punish the defendant. It is the means by which the jury or judge expresses its outrage at the egregious conduct of the defendant. They are in the nature of a fine which is meant to act as a deterrent to the defendant and to others from acting in this manner. It is important to emphasize that punitive damages should only be awarded in those circumstances where the combined award of general and aggravated damages would be insufficient to achieve the goal of punishment and deterrence. [37] Laskin J.A., in writing for this court in Whiten v. Pilot Insurance Co. (1999), 42 O.R. (3d) 641 quoted this same passage in Hill and stated as follows at 649-50: For an award of punitive damages to be made, two requirements must be met: first, the defendant must have committed an independent or separate actionable wrong causing damage to the plaintiff; and second, the defendant’s conduct must be sufficiently “harsh, vindictive, reprehensible and malicious” [Vorvis v. Insurance Corp. of British Columbia, [1989] 1 S.C.R. 1085, 58 D.L.R. (4th) 193 at p. 208] or “so malicious, oppressive and high-handed that it offends the court’s sense of decency” [See Hill, at p. 1208]. Pilot submits that neither requirement has been met in this case. The first requirement, that of an independent actionable wrong, emerges from the judgment of the Supreme Court of Canada in Vorvis v. Insurance Corp. of British Columbia, a wrongful dismissal case. In Vorvis, McIntyre J. acknowledged that punitive damages may be awarded in breach of contract cases although he cautioned that such awards would be rare. He wrote (at p. 206 D.L.R.): When then can punitive damages be awarded? It must never be forgotten that when awarded by a judge or a jury, a punishment is imposed upon a person by a court by the operation of the judicial process. What is it that is punished? It surely cannot be merely conduct of which the court disapproves, however strongly the judge may feel. Punishment may not be imposed in a civilized community without a justification in law. The only basis for the imposition of such punishment must be a finding of the commission of an actionable wrong which caused the injury complained of by the plaintiff. The requirement of an independent actionable wrong was affirmed in Wallace v. United Grain Growers Ltd., [1997] 3 S.C.R. 701, 152 D.L.R. (4th) 1, and has been consistently applied by provincial appellate courts since Vorvis. [38] For convenience, I repeat here the particulars provided by the jury in support of their finding that Zurich, through its employees and agents, treated Barker reprehensibly, scandalously and outrageously with regard to this claim: 1) The claim was not responded to in a timely fashion. The Zurich Ins. Co. did not instruct Mr. Barker properly as to the reasons why the claim was unnecessarily delayed. 2) An agent of Zurich being Mr. Crocker trespassed on Stewart’s property. 3) Mr. Penner dealings with Mr. Barker where [sic] not professional and in bad faith. 4) Mr. Barker and associates reputation have been damaged as a result of the actions and investigation of the Zurich Insurance Company and its agents. [39] The jury’s first finding can only be understood as a reference to the manner in which Zurich investigated the claim. I have already commented on the fact that there was no failure on the part of Zurich to comply with any legal time requirement in processing the claim. Quite apart from strict compliance with statutory requirements, Zurich concedes that an insurer’s duty to an insured includes “a duty of fairness and a duty to be prompt in handling, assessing and responding to” the insured’s claim: Labelle v. Guardian Insurance Co. of Canada (1989), 38 C.C.L.I. 274 at 297 per Trainor, J. (Ont. H. J.). [40] Related to the duty of fairness, the jury found that Zurich did not inform Barker of the reasons for delaying the claim. Contrary to this finding, it is clear from the testimony of both Barker and Penner that Barker was told on a number of occasions during the months that followed the theft that the claim was being investigated. Counsel for Barker argues, however, that Barker was never told that Penner suspected that the claim may not be valid and that he had involved the ICPB. While conceding that Zurich had valid grounds to investigate the claim, counsel argues that there was no basis to contact the ICPB. I see no merit to this argument. Zurich was under no obligation to investigate the claim itself. It is rightly conceded that Zurich had valid grounds to investigate the claim and, in my view, those same grounds amply justify referring the matter to the ICPB. [41] Counsel for Barker also relies on the fact that Penner made no effort to contact Stewart to verify what repairs had been done to the vehicle before the theft and to Penner’s testimony where he conceded that he may have been “remiss in [his] job” in failing to do so. Counsel for Barker also submits that Penner never advised Barker of the importance of filing the proof of loss. Even accepting that Penner was somehow negligent in not contacting Stewart himself before involving the ICPB and in failing to stress the importance of the proof of loss, this is hardly the kind of conduct that can attract punitive damages. [42] Also related to the manner in which Zurich handled the claim is the jury’s finding that Penner’s dealings with Barker were “not professional and in bad faith”. It is difficult to identify in the evidence what conduct of Penner’s the jury had in mind other than what has already been referred to. Barker in his testimony, in referring to the fact that his claim was under investigation, stated that he was “treated not like a victim, however probably like, realistically more like a criminal low life.” Barker may well have had those subjective feelings but it does not detract from the fact that Zurich had valid grounds to investigate. Further, Zurich cannot be accountable for any investigation that the police are entitled to commence on their own. [43] The jury also found that an agent of Zurich, Crooker, trespassed on Stewart’s property. This finding can only relate to Mrs. Stewart’s evidence that some person who identified himself as an insurance investigator had come on her property looking for her husband. As I have indicated in my earlier summary of the evidence, there is no indication that this person was connected to Zurich or that his purpose was in any way related to this claim. Indeed Stewart in his evidence conceded that this trespass is irrelevant. Q. So Mr. Croocker had been out to see you on a prior occasion? A. But I wasn’t there. He was just trespassing on my property. Q. Okay, but it was in relation to an investigation of another vehicle, a different vehicle? A. He was just trespassing. He was looking – I think, I never was told that he was hunting for the white truck, but that’s what he was hunting for, I was told afterwards, and he was trespassing on my property. Q. But you said something about a red cab, so was he looking at a red cab? A. That’s right, that’s it exactly. Q. Okay, so that had nothing to do with this particular investigation? A. Nothing at all. [44] In any event, I fail to see how a trespass on Stewart’s property could serve to substantiate an award of punitive damages to Barker. [45] Finally, the jury found that Barker’s reputation and that of his associates was damaged as a result of the investigation carried out by Zurich and its agents. The sole evidence from Barker pertaining to any loss of reputation is found at the conclusion of his examination-in-chief: Q. How has this failure of the insurance company to pay your claim impacted upon your reputation? A. There’s been a lot of hell, it hasn’t been a very good experience at all, it’s been very negative, just I feel so undeserved and unjust. [46] Barker’s answer is unresponsive to the question and provides no evidence of loss of reputation. Stewart, even assuming any wrong to him could found a claim by Barker, made a number of vague allegations about being made to “look like bad people” and “look like criminals” mostly in reference to the police presence on his property on April 12 or 13 but he provided no evidence whatsoever of loss of reputation. [47] In conclusion, I am unable to find any evidence that would support the jury’s award of punitive damages. IV. Disposition [48] For these reasons, I would allow the appeal with costs to the appellant and set aside the award for punitive damages and costs of the trial. In view of my conclusions on the appeal, the cross-appeal is moot. I would dismiss it without costs. (signed) “Louise Charron J.A.” (signed) “I agree J. J. Carthy J.A.” (signed) “I agree Robert J. Sharpe J.A.” RELEASED: February 7, 2001 “JJC”