The recent Supreme Court of British Columbia case of Co-operators General Insurance Company v. Kane, 2017 BCSC 1720 confirms the broad manner in which British Columbia courts interpret the duty to defend, and the extent to which that duty can be established by carefully crafted pleadings containing both covered and uncovered claims.
The court considered whether Co-operators owed a duty to defend professional NHL hockey player Evander Kane against a lawsuit brought against him in New York State. Co-operators insured Mr. Kane under a standard Home Insurance Policy which provided liability coverage for “your personal actions anywhere in the word”.
The complaint alleged, among other things, that Mr. Kane: (1) “inflicted a battery” upon the female plaintiff; (2) had “intent to cause … severe emotional distress”; (3) “engaged in conduct unreasonably endangering” her physical safety; and (4) “negligently caused serious, permanent and painful personal injuries”. Co-operators relied upon the intentional acts and sexual, physical, psychological, emotional abuse exclusions in denying a duty to defend or indemnify Mr. Kane, arguing that all allegations were derivative of an intentional act.
While the court found that the intentional act pleaded in the first cause of action was excluded from coverage, the court held that second, third and fourth causes of action were separate and distinct, and that the fourth cause of action sounded in negligence, triggering the duty to defend. The court confirmed that unless all occurrences which potentially caused or contributed to the loss or damage are clearly and unambiguously excluded, coverage for the duty to defend will not be ousted.
While the court struggled somewhat to interpret the pleadings of a foreign jurisdiction, it noted that the absence of any intentional words and terms such as “abuse”, “sexual assault” or “sexual abuse” removed the pleadings from the intentional act and sexual abuse exclusions. The court ordered Co-operators to defend Mr. Kane, with legal counsel of his choosing, and denied Co-operators any right to control the defence.
The case confirms that careful (or artful) pleadings which contain “mixed claims” with covered and uncovered allegations will be subject to the duty to defend.