No coverage for assault with a knife during psychotic break

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

Butterfield v. Intact Insurance Co., [2023] O.J. No. 1518, 2023 ONCA 246, Ontario Court of Appeal, April 6, 2023, J.M. Fairburn A.C.J.O., J.C. MacPherson and B. Miller JJ.A.

The insured had a psychotic episode at a firearms store and stabbed the store owner under an honest but deluded belief that he was defending himself and his family. The victim sued the insured in negligence. The claim alleged that although the insured, who had a history of mental illness, was not symptomatic at the time of the attack, it was reasonably foreseeable that the insured may have injured or killed someone in the course of purchasing or possessing a firearm. Coverage was denied by the insurer.

The insured brought an application for a declaration that there was a duty to defend. The motion judge dismissed the application on the basis that the knife attack was both an intentional and criminal act, and therefore coverage was excluded. The insured appealed.

On appeal, the court found no error in the conclusion that the negligence claim was derivative of the intentional tort of assault. In other words, although negligence was plead, there was no causal link between the alleged negligence and the damages without the intentional tort of assault. Assault was therefore the true nature of the claim. The court further found no error in the conclusion that the assault was still intentional notwithstanding that the insured did not appreciate it was morally wrong at the time given his psychotic episode. As a result, the claim was excluded from coverage and the appeal was dismissed.

This case was digested by Michael J. Robinson, 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 Michael J. Robinson at [email protected].

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