Policy exclusion for intentional or criminal act applies even when insured found not criminally responsible for aggravated assault

Insurance law – Homeowner’s insurance – Duty to defend – Exclusions – Intentional acts – Duties and liabilities of insurer

Butterfield v. Intact Insurance Co., [2022] O.J. No. 3143, 2022 ONSC 4060, Ontario Superior Court of Justice, July 13, 2022, C.D. Braid J.

The insured stabbed a store owner but was found not criminally responsible (“NCR”) for aggravated assault on the basis that, due to a mental condition, he was incapable of knowing the act was wrong. The store owner sued the insured in negligence. The insurer denied coverage based on an exclusion in the policy for claims arising from bodily injury or property damage caused by an intentional or criminal act by the insured. The insured sought a declaration that the insurer owed a duty to defend the action.

The insured argued that the exclusion did not apply because the store owner made his claim in negligence, not an intentional tort, and that there was no mention of intentional or criminal acts in the pleadings. The Court disagreed and found that the plaintiff’s damages flowed from the stabbing, making the negligence claim derivative of an intentional tort, which was the true nature of the claim.

In determining whether the exclusion applied given the finding that the insured was NCR, the Court considered whether the insured’s actions were criminal and/or intentional. The Court found that the stabbing was criminal as it was in breach of the Criminal Code, and the exclusion applies even without intention to cause injury; a criminal conviction is not required. The Court further found that, even though the insured did not appreciate that stabbing the store owner was morally wrong, his actions were intended to harm the store owner and that was enough for the exclusion to apply. The Court held the stabbing was both an intentional and a criminal act, the exclusionary clause applied, and the insurer did not owe the insured a duty to defend or indemnify against the store owner’s claims.

This case was digested by Alicia Catalano, 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 Alicia Catalano at [email protected].

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