No reversible error found in motion judge’s refusal to dismiss bad faith claim against insurer on summary judgment application

Insurance law – Bad faith – Rights and duties of insurer – Practice – Summary judgment – Settlement

3746292 Manitoba Ltd. v. Intact Insurance Co., [2018] M.J. No. 128, 2018 MBCA 59, Manitoba Court of Appeal, May 17, 2018, B.M. Hamilton, C.J. Mainella and J.A. Pfuetzner JJ.A.

The Manitoba Court of Appeal heard an appeal from an insurer’s unsuccessful move for summary judgment to dismiss a claim brought by its insured.

The insured owned a mixed-use property in downtown Winnipeg consisting of residential apartments and commercial space. In 2010, an accidental fire caused significant damage. A dispute arose over the cost of repairs and the amount of a co-insurance penalty. The parties negotiated a payout and the insured executed a release in favour of the insurer. The insured subsequently brought an action against the insurer alleging it made lowball settlement offers in breach of its duty of good faith. The insurer brought a summary judgment motion seeking to dismiss the action. The motion judge held the allegation of bad faith could not be resolved without a trial and the insurer appealed.

The Court of Appeal could not identify any error arising from the motion judge’s refusal to grant summary judgment. The court was not persuaded the motion judge misdirected himself or came to a conclusion that was so clearly wrong as to amount to an injustice by deciding that it was necessary to hear viva voce evidence at a trial as to the motivations and intentions of the insurer and its agents regarding whether the insurer acted even-handedly in the claims-handling process or, alternatively, that there was an attempt to unreasonably leverage its bargaining position to settle the claim by lowballing the cost of repairs during the lengthy claims process.

This case was digested by Cameron B. Elder, and first published in the LexisNexis® Harper Grey Insurance Law Netletter and the Harper Grey Insurance Law Newsletter. If you would like to discuss this case further, please contact Cameron B. Elder at [email protected].

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