February 06, 2019, Kitchener, Ontario
Posted by: Robert Deutschmann, Personal Injury Lawyer
Demetriou v. AIG Insurance Co. of Canada, 2019 ONSC 627 (CanLII)
Date of Decision: January 24, 2019
Heard Before: Justice Gray
DID FRAUD OCCUR: applicant provides all information regarding claim that he can; defendant refuses to pay insured amount for stolen item; insurer does not rely on fraud in its refusal; applicant has taken all reasonable steps to prove loss; applicant cooperated
Mr. Demetriou claims that while he was on holiday in the Dominican Republic his extremely valuable ring was stolen from him. He had inherited the family heirloom but did not tell his wife about it. He claims the value of the ring to be $550,000.00
AIG defend the claim on two grounds
- The plaintiff has not proven theft occurred
- The plaintiff has not cooperated in the investigation of the claim
Justice gray examined the evidence and the law and granted summary judgment in favour of the plaintiff.
Mr. Demetriou was the Director of Security for IBM Canada Limited. He is married to a police officer with Peel Regional Police. On or about May 15, 2015, Mr. Demetriou’s parents gave him an heirloom ring that had formerly been owned by Mr. Demetriou’s maternal grandmother. Mr. Demetriou had the ring appraised in the amount of $550,000. On or about July 15, 2015, the ring was added to one of his insurance policies with AIG on an all-risk basis. Coverage was provided consistent with the appraisal, plus HST, in a total amount of $581,951. The annual premium for this coverage was $10,011.
Mr. Demetriou deposes that in late July 2015, he went on vacation with his wife, his three children, his wife’s cousin, and his parents to Punta Cana in the Dominican Republic. His parents had told him that they wanted to memorialize the gift of the ring with a modest ceremony in the Dominican Republic. On August 1, 2015 he met with his parents in the hotel lobby where they affirmed the cultural significance of the gift of the ring. Following the ceremony, he went for a walk on the beach near the hotel when he was approached by a knife wielding assailant demanding the gold chain with the ring on it which Mr. Demetriou was wearing. He returned to the hotel and reported the matter to the hotel receptionist, and attempted to report it to the local police without success. He says the hotel receptionist wrote down an email address on a piece of paper and told him to send a report of the incident to the email address which would then be forwarded to the hotel security.
Mr. Demetriou and his family returned on their scheduled flight to Toronto where he reported the theft to a police officer at the airport and to a representative of the tour operator, but they were of no assistance. Upon returning home, Mr. Demetriou reported the incident to York Regional Police and to the Canadian Consulate in the Dominican Republic. He also reported the incident to Foreign Affairs, Trade and Development Canada on August 4, 2015. On August 5, 2015, he reported the incident via email to officials at the Bahia Principe Resort. He also spoke to a lawyer in the Dominican Republic and engaged an investigator in Canada to coordinate with the Dominican Republic authorities in order to confirm that a police report with respect to the theft existed.
On August 4, 2015, Mr. Demetriou reported the theft of the ring to AIG through his insurance broker, Mark Steer. Mr. Demetriou met with the adjuster and investigator retained by AIG and agreed, in writing, that the investigators had Mr. Demetriou’s consent to obtain information that would otherwise be confidential, and that all information obtained would be recorded and retained in an insurance file.
Subsequent to the meeting on August 20, 2015, Mr. Demetriou provided further particulars and documents as requested by AIG. A further interview was held on September 2, 2015 with Mr. Demetriou’s father, Leo Demetriou, at Leo Demetriou’s home in London, Ontario.
On September 23, 2015, AIG reported the status of the claim to CGI Insurance Services, a collector and supplier of information to the insurance industry. AIG advised that nothing was owing on the claim, and that the claim file was closed. This was not communicated to Mr. Demetriou.
Mr. Demetriou was asked to participate in an examination under oath by AIG on November 2, 2015, to which he agreed. On December 21, 2015, Mr. Demetriou’s wife provided a sworn affidavit in which she deposed as to her complete and total lack of knowledge with respect to the robbery. AIG nevertheless requested an opportunity to examine Ms. Demetriou under oath. She submitted to an examination under oath on January 15, 2016.
Formal proofs of loss were provided to AIG on January 4, 2016 and January 22, 2016. On April 15, 2016, a formal proof of loss was provided in relation to the gold chain that was stolen along with the ring. The amount of $10,000 was estimated as the value. On December 29, 2015, Leo Demetriou provided a sworn affidavit to AIG outlining the circumstances of the gift of the ring. AIG wished to conduct a further examination of Leo Demetriou under oath and did so on February 12, 2016.
On February 22, 2016, AIG formally denied the claim on the basis that it had insufficient information to substantiate the claim. On February 24, 2016, AIG advised that it would not renew its insurance policies with Mr. Demetriou. Mr. Demetriou then requested particulars and whether AIG was taking the position he committed fraud. Justice Gray heard the motion for particulars given that Mr. Demetriou’s position was they were required given AIG’s position that fraud had occurred.
The plaintiff requested particulars, and specifically wanted to know whether AIG was taking the position that there was fraud on the part of the plaintiff. On September 1, 2016, a motion for particulars was heard by me. One of the grounds for the motion was based on the plaintiff’s position that to the extent that fraud was being relied on, directly or indirectly, particulars were required.
Justice Gray determined that hidden within the statement of defence is an inchoate allegation of fraud. To the extent that the policy or policies contain exclusions for deliberate acts or fraud, plaintiff is entitled to know whether defendant is relying them, and if so, is entitled to particulars. He also determined that a number of other paragraphs in the statement of defence contained bald allegations with no material facts pleaded, and ordered particulars of those.
AIG’s representative was examined for discovery on behalf of AIG on September 12, 2017. He made the following admissions:
- That AIG has no objections to the proofs of loss delivered by Mr. Demetriou and that they comply with the terms of the insurance policies and the Insurance Act;
- That Mr. Demetriou provided a statement to AIG with respect to the loss;
- That Mr. Demetriou reported the theft to the hotel after it occurred;
- That Mr. Demetriou attempted to report the theft to local police authorities and to a police officer at the local airport;
- That upon his return home, Mr. Demetriou wrote an email to the hotel where he stayed to report the theft;
- That Mr. Demetriou retained a security risk company to investigate the matter;
- That police reports were prepared by the local police in the Dominican Republic and by the York Regional Police and that he reported the theft to the Canadian Consulate in the Dominican Republic;
- That AIG is satisfied that Mr. Demetriou took steps to report this theft to police authorities as soon as possible as per the requirements of both the Insurance Act and the applicable insurance policies;
- That, in providing all of the documentation that Mr. Demetriou provided to AIG following this loss, he was cooperating with AIG in their investigation into the claim;
- That AIG accepted the ring as an object to be covered under the collections policy for the amount listed in the appraisal provided to AIG for the ring;
- That AIG accepted the risk of insuring the ring at the value provided by Mr. Demetriou and his broker and that AIG charged a premium for it based on that valuation; and
- That Mr. Demetriou’s wife and father both attended examinations under oath at the request of AIG and that both of them tendered affidavits in relation to the claim.
AIG’s representative confirmed that AIG denied Mr. Demetriou’s claim based on the fact that insufficient information was provided to substantiate the claim. When asked what more Mr. Demetriou could have done to substantiate the claim, Mr. D’Ambrosio testified that there were many questions that Mr. Demetriou refused to answer during his examination under oath, and that if Mr. Demetriou were away on vacation and lost something or was held up at gun point then maybe he would have advised his spouse. He suggested that telling his spouse proves that something possibly did happen. AIG’s counsel confirmed that AIG was not relying upon the exclusions for intentional acts or dishonest acts “at that point.” Counsel also confirmed that AIG was not, “at that time”, attempting to prove fraud.
Justice Gray noted that at no time subsequent to the examination for discovery has AIG sought to rely on the exclusions or plead fraud.
Justice Gray reviewed all of the evidence and affidavits and determined that for the most part, the interviewees and deponents were as cooperative as possible and provided as much information as they could regarding the events in question, and is not convinced that the refusal to answer certain questions, even if they could be considered to be relevant, are sufficient to constitute a lack of cooperation such that it can be relied on to deny the claim. The suspicious circumstances raised in the affidavit material would certainly be relevant to whether or not the claim is fraudulent, if fraud were being relied upon.
The only remaining question is whether the plaintiff has failed to sufficiently cooperate or provide sufficient information and documentation. Based on the entire record, Justice Gray is persuaded that Mr. Demetriou has complied with his obligations.