<p>On August 17th, 2009, the Court of appeal rendered its judgment in <em><strong>Promutuel Portneuf-Champlain v. Promutuel L&eacute;visienne-Orl&eacute;ans</strong></em>. The case began with a suit filed by a woman against a twelve year-old boy, because the latter had collided into her while riding a bicycle. At the time, the young boy lived with his mother at his grandfather&rsquo;s house. The grandfather was insured by Promutuel Portneuf-Champlain. The young boy also spent time with his father (every other week-end as well as some vacations.) The young boy&rsquo;s father was insured by Promutuel L&eacute;visienne- Orl&eacute;ans.</p> <p>The action was initially instituted against the child and served to the mother. It was then amended to include Promutuel Portneuf- Champlain. Promutuel Portneuf-Champlain defended the case on behalf of the boy. On the other hand, Promutuel L&eacute;visienne Orl&eacute;ans denied coverage to the boy, arguing that the child could not share two residences. Promutuel L&eacute;visienne-Orl&eacute;ans argued that in cases of separation, a child could only benefit from the insurance policy which covers his permanent resident, which, in this case, was his grandfather&rsquo;s house. Promutuel Portneuf-Champlain therefore called in warranty Promutuel L&eacute;visienne- Orl&eacute;ans. Promutuel Portneuf-Champlain&rsquo;s position was that the boy was also covered by liability insurance in accordance with an insurance policy issued by Promutuel L&eacute;visienne-Orl&eacute;ans to the benefit of the father, and thus, the father&rsquo;s insurer was bound to defend the child.</p> <p>The main action was settled out of court. Promutuel Portneuf-Champlain paid 150,000.00$ to the woman who was struck by the child.</p> <p>Following the settlement, there was a trial in the warranty proceedings. This action in warranty was dismissed by the Superior Court. First, according to the Court, there was absence of a legal relationship between both insurers. Second, as any subrogation, legal or contractual, does not allow a debate between insurers in the main action, an action in warranty does not allow this debate either. The action in warranty was therefore not the appropriate legal procedure.</p> <p>The Superior Court did not discuss the issue regarding the insurance coverage.</p> <p>Promutuel Portneuf-Champlain appealed this decision and the Court of Appeal reversed the decision rendered by the Superior Court. The Court of Appeal first elaborated on the issue regarding plurality of insurance. Article 2496 of the <em>Civil Code of Qu&eacute;bec </em>deal with this issue. This provision protects the insured from disputes between insurers and allows the insured to sue only one of the insurers for the total loss incurred. The indemnity will be apportioned between the insurers in the proportion of their respective share of the total coverage, except in case of first line insurance.</p> <p>The Court of Appeal noted that this article does not apply to situations of liability insurance, since it is part of the section regarding property insurance.</p> <p>Plurality of insurance in liability insurance matters therefore remains a problem in Quebec.</p> <p>The Court of Appeal was of the opinion that the procedure filed by Promutuel Portneuf- Champlain was well founded, because the latter had an interest in suing Promutuel L&eacute;visienne-Orl&eacute;ans in accordance with the <em>in solidum </em>solidarity principle between insurers. By paying the victim for the damages caused by the young boy, Promutuel Portneuf- Champlain was paying a debt for the insured, the same debt to which was also bound Promutuel L&eacute;visienne-Orl&eacute;ans, according to a distinct insurance policy. Promutuel Portneuf-Champlain was therefore subrogated in its insured&rsquo;s rights and could claim from Promutuel L&eacute;visienne- Orl&eacute;ans its contribution.</p> <p>As to the legal procedure, the Court was of the opinion that the action in warranty was appropriate. Indeed, the Court of Appeal noted that the case law had recently broadened the notion of involving third parties ion virtue of article 216 of the <em>Code of Civil Procedure</em>. In fact, it is preferable that all parties to a litigation resulting from the same loss be present, in order to resolve all issues at the same time. The implication of Promutuel L&eacute;visienne-Orl&eacute;ans was therefore necessary in order to insure a complete solution to the dispute and to avoid the multiplicity of legal procedures.</p> <p>The Court of Appeal then had to decide the issue regarding the insurance coverage.</p> <p>The insurance policy issued by Promutuel L&eacute;visienne-Orl&eacute;ans defined the word &ldquo;insured&rdquo; as follows:</p> <p style="margin-left: 40px">&ldquo;<em>The Insured</em></p> <p style="margin-left: 40px"><em>[&hellip;] refers not only to You as the named insured [&hellip;]</em></p> <p style="margin-left: 40px"><em>[&hellip;] to other persons of less than twenty-one years of age who live with you and who are under the care of a person mentioned previously.&rdquo; [Our translation]</em></p> <p>The child was living with his father one week-end out of two during the school year and one week out of two during the summer. At his father&rsquo;s house, the child had his own room, his computer, clothing and toys. The Court concluded that it was not a case of temporary visits, but more recurrent visits which were stable and continuous. In fact, the child was living at the father&rsquo;s house as well as his grandfather&rsquo;s, and was under the care of his father. The child was therefore insured by Promutuel L&eacute;visienne- Orl&eacute;ans. Although the Court recognized that it will always be a question of appreciating facts which are singular to each case, it concluded that <em>&ldquo;parents are responsible for their children, and said children are covered by their parent&rsquo;s liability insurance, whether they live three days at one place or four days at the other&rdquo;. [Our translation]</em></p> <p>Consequently, the Court of Appeal allowed the appeal and ordered Promutuel L&eacute;visienne-Orl&eacute;ans to pay Promutuel Portneuf-Champlain half the indemnity that was paid to the plaintiff in the main action. In fact, both insurance contracts had the same clause regarding plurality of insurance, each with a limit of one million dollars. Each insurer had to pay the settlement in equal portions.</p>