A Case Comment on Ryan v. Canadian Farm Insurance, 2014 MBQB 178

In the recent case of Ryan v. Canadian Farm Insurance¹ [“Ryan”], the Manitoba Court of Queen’s Bench, on a motion for summary judgment, considered when someone under 21, and living in the same “household” as a named insured, may be “in their care” for coverage purposes. Ryan is relevant for its interpretation and analysis of what is meant by living in the same “household” and “in the care” of another, and contains an interesting and thorough analysis of the issues to consider in making such a determination. The case will provide guidance to lawyers asked to provide coverage opinions, and insurers who are faced with making coverage decisions, in similar circumstances.

The plaintiff’s motion for summary judgment was first brought before the Master.² The claim itself related to a fire that destroyed the plaintiff’s farm home. The home was insured by the defendant. The plaintiff’s 19 year old girlfriend, who had been living with him, set the home on fire. She was later convicted of arson. The defendant refused coverage to the plaintiff on the basis that his girlfriend was insured under the policy and there was no coverage where loss or damage to the property was caused by an intentional or criminal act of an insured.

The facts are that the plaintiff had immigrated to Canada from Ireland with his ex-wife and had purchased the farm property. In 2007, his wife moved back to Ireland and the plaintiff met his girlfriend, Rebecca Lianne Yvon (“Yvon”). He was 42, and she was 18. Yvon moved into the plaintiff’s house in July, 2008. The plaintiff travelled for work and he left the house in August, 2008. Yvon stayed in his house. On September 13, 2008, Yvon contacted the plaintiff telling him that his home had been broken into and vandalized. Later that day, Yvon and a friend attended the home and Yvon started the first fire. The local fire department attended the home and extinguished the fire. On September 16, 2008, the house was again in flames and the contents totally destroyed.

The plaintiff submitted his proof of loss in October, 2009. In November, 2009, Yvon was charged with arson with respect to the fire. In early 2010, the defendant notified the plaintiff that his claim was being denied on the basis that the September, 2013, fire was set intentionally by an unnamed insured under the policy. The defendant took the position that Yvon was “a person under 21 in the care” of the plaintiff. The defendant relied on the definition of “you” and “your” in the policy and the exclusion excluding coverage for intentional or criminal acts by an insured under the policy.

Whenever used in this policy:
1. “You” and “Your” means the person(s) named in the Declarations and while living in the same household, his or her spouse, the relative of either or any person under 21 in their care. … Spouse includes two people who are living together as husband and wife and have so lived together continuously for a period of 3 years or, if a child was born of their union, for a period of one year. …

The plaintiff moved for summary judgment declaring that the defendant was legally liable to indemnify the plaintiff for loss and damage to his property.

The plaintiff’s first argument was that Yvon was not an unnamed insured under the policy because she did not live in the same “household” as the plaintiff. The plaintiff argued that living in the same household does not simply mean living in the same building or physical structure.  The term “household” must have been intended to mean something more than that. Many authorities were cited by the plaintiff and considered by the Court.

In the case of Wade v. Canadian Northern Shield Insurance Company,³ McEachern C.J.S.C. commented that “one can be a resident in a house … without being a resident in or of a household”. He held that “household” was a very common word denoting a unit of persons, usually a family, who live together. The Chief Justice accepted that there must be an element of intimacy or community in the relationships of a household. However, he noted that friendly or even loving relations are not strictly relevant to the consideration.

In a 2006 decision in Eichmanis v. Wawanesa Mutual Insurance Co.,⁴ Justice Pierce canvassed numerous authorities which revealed that courts have required, in addition to the individual physically residing in the premises, that a necessary bond of intimacy or collective interest between the individual in question and the homeowner exist. Thus, a tenant was held, in Wright v. Canadian Group Underwriters Insurance Co.,⁵ not to be in or of the “household” for the purposes of insurance coverage even though the tenant lived in a room in the premises and had use of the facilities.

In Tannahill v. Lanark Mutual Insurance Co.,⁶ the issue was whether a young woman who was accidentally injured at her parents’ home was “living in the same household” as her parents, the insureds. She had left the home nine years before at age 15 and had lived independently since. She had returned to the family home to visit her brother two and a half weeks before the accident. In concluding that the daughter was not living in the same household, the Court commented that living in a household is not the same as staying with people in their home during a visit, even if those people are your parents. The visitor does not have an interest in the policy or a reasonable expectation of property coverage.

Relying on the above cases, the plaintiff argued that Yvon was more akin to a visitor rather than someone with whom the plaintiff shared an emotional or collective interest. He argued that he and Yvon were only together in the home for a minimal period of time (she moved into the home in mid-July and he went out of town in August). Conversely, the defendant argued that there was an emotional connection between the plaintiff and Yvon and Yvon depended on the plaintiff, which qualified her as member of his “household”. On examination for discovery, the plaintiff had admitted that he and Yvon lived together in a personal relationship and that she was a member of his family with unrestricted use of the house and its contents. He admitted that he cared for Yvon, that he provided her with emotional support, and that he provided some financial support.

On those facts, the Master concluded that there was a reasonable possibility that a court would conclude that Yvon was living in the plaintiff’s household.

The second argument advanced by the plaintiff, and the one upon which the Master ultimately granted summary judgment, was that Yvon did not qualify as an unnamed insured under the policy because she was not under 21 and “in his care”. The plaintiff submitted that the phrase “under 21 in their care” refered to relationships involving authority or responsibility in the nature of a parent-child, guardian-ward, foster parent-foster child, and not to live-in romantic relationships involving a partner who happens to be under 21.

In Condominium Corp. No. 7921945 v. Cochrane,⁷ a claim by a condo corporation and the owner of a unit for fire damage caused by a cigarette carelessly discarded by the boyfriend of the owner of the unit who lived with her in the unit, the question was whether the boyfriend was an unnamed insured under the plaintiff’s property insurance policy. The policy specifically defined “Insured” in very similar terms as the defendant’s policy defined “You” and “Your”. The Court found that the boyfriend was not an unnamed insured under the policy because he was neither married, nor “officially engaged” to the unit owner, and they had not lived together for two years or more. As such, they did not meet the definition of “Husband and Wife”. Of note is the fact that the Court considered the relationship between the owner and her boyfriend in the context of the definition of “spouse”, rather than considering whether the boyfriend was “in the care” of the owner.

In Eichmanis, supra, the Court had to determine whether a youth was in the care of his mother and/or his aunt and uncle when he accidentally shot a playmate while playing with a gun after breaking into his father’s home with that friend. The youth’s mother had legal custody, but he had temporarily moved in with his uncle and aunt. In considering whether the youth was “in the care” of either his aunt and uncle or his mother, the Court said the following:

What constitutes care of a child will vary from family to family and child to child. However, it may involve guidance, discipline, companionship, affection, provision of necessaries such as shelter, food and clothing, attention to health and education, protection and nurture. Care requires some degree of meaningful contact between care-giver and child. Care also requires some pattern of consistency. Random acts of kindness do not constitute care. Care is an arrangement of attention for the benefit of a child

In Riordan v. Lombard Insurance Co.,⁸ a thirteen-year-old foster-child of the named insureds set fire to their home. In determining that the foster child was “in their care”, the Court recited at length the nature of the relationship between the child and the foster parents, which included provision for his physical needs, discipline, enforcement of house rules and provision of funds for personal use.

Perhaps the most instructive case considered by the Master was the American case of Henderson v. State Farm Fire and Casualty Company.⁹ In that case the Michigan Court of Appeals considered the meaning of “in the care of” in the case of an 18-year-old girl living with her boyfriend’s mother. The Court of Appeals provided guidance on the meaning of “in the care of”. It held that the following factors are relevant to consider in answering when someone is “in the care of” someone else:

(1) is there a legal responsibility to care for the person;
(2) is there some form of dependency;
(3) is there a supervisory or disciplinary responsibility;
(4) is the person providing the care providing substantial essential financial support;
(5) is the living arrangement temporary or permanent, including how long it has been in existence and is expected to continue;
(6) what is the age of the person alleged to be “in the care of” another (generally, the younger a person the more likely they are to be “in the care” of another);
(7) what is the physical or mental health status of the person alleged to be “in the care of” another (a person with health problems is more likely to be “in the care” of another); and
(8) is the person allegedly “in the care of” another gainfully employed (a person so employed is less likely to be truly dependent on another)

On examination for discovery, the plaintiff admitted that he “was providing care for” Yvon at the time of the fire, was providing rent-free accommodation and some of her food, and that she had unrestricted use of the house. He further admitted that he cared about her well-being and that if she had required anything else he would have helped her out. Notwithstanding those admissions, the Master found that the facts demonstrated nothing more than a typical live-in romantic relationship. The Master concluded that the exclusion clause was not intended to exclude live-in romantic relationships such as the one between the plaintiff and Yvon, and granted summary judgment in favour of the plaintiff.

The Master’s decision was appealed to a judge. Although the hearing before the judge was a hearing de novo, the judge confirmed the Master’s decision in all material respects and granted summary judgment to the plaintiff.

In summary, in order for the above exclusion to apply, an individual must be under 21, a member of the insured’s “household”, and “in the care” of the insured. To be a member of a household, individuals must have both an emotional and geographic connection and live communally. So, a border or tenant, even if a family member, is not part of an insured’s household. Nor is a visitor, house sitter, or a family member temporarily staying with the insured. To be “in the care” of another, I submit, involves a consideration of a number of factors, including guidance, encouragement, supervision, discipline, assumption of responsibility and support, dependency, and an obligation to provide a physically and emotionally safe environment.

While it would appear, based on the decision in Ryan, that live-in romantic relationships will not generally qualify as relationships where one person is “in the care” of another, one can certainly imagine situations falling outside of a typical live-in romantic relationship, a parent child relationship, or that of a mere visitor or boarder, where the principles and analysis contained in this decision will be relevant and important to insurers (and to lawyers providing coverage opinions) when making decisions on coverage.

1. 2014 MBQB 178.
2. Reported at 2013 MBQB 271.
3. [1986] B.C.J. No. 3004 (S.C.).
4. (2006), 80 O.R. (3d) 114 (Ont. S.C.); rev’d on other grounds, 2007 ONCA 92. 2002
5. BCCA 254.
6. 2010 ONSC 3623.
7. 2004 ABPC 4.
8. 2003 BCCA 267.
9. 596 N.W. 2d 190, 1999 (Mich.).