Court Of Appeal Upholds Coverage Denial For Intrusion Upon Seclusion

• Published date: 09 September 2022
• Subject Matter: Insurance, Litigation, Mediation & Arbitration, Insurance Laws and Products, Trials & Appeals & Compensation, Personal Injury
• Law Firm: Rogers Partners LLP
• Author: Ms Meryl Rodrigues

In its recent decision of Demme v. Healthcare Insurance Reciprocal of Canada¹, the Court of Appeal addressed the commercial liability insurer's duty to defend actions based on the tort of intrusion upon seclusion against an employee of the insured, ultimately affirming the insurer's denial of coverage under the responding policy.

The plaintiff, Catharina Demme, a former registered nurse, commenced the action against the insurer, the Healthcare Insurance Reciprocal of Canada ("HIROC") after HIROC denied her request for coverage in respect of eight underlying actions advanced against Ms. Demme and her employer, the Brampton Civil Hospital ("the underlying actions"). The underlying actions were commenced as result of Ms. Demme having accessed over 11,000 patients' medical records over the course of 2006 to 2016 in order to wrongfully access an automatic medication dispensing unit to obtain approximately 24,000 Percocet tablets.

With respect to the underlying actions against Ms. Demme, similar, but not identical, allegations were made against her in each action. All pleaded claims for the tort of intrusion upon seclusion, though some included additional causes of action in negligence, breach of statutory provisions, breach of fiduciary duty, and negligent infliction of mental and emotional distress.

In the action against HIROC, Ms. Demme brought a summary judgment motion with respect to her claims for a defence and coverage in the underlying actions under the responding HIROC policy. The motion was dismissed, prompting the appeal to the Court of Appeal.

Summary Judgment Motion

On Ms. Demme's motion for summary judgment in her action against HIROC, HIROC's position grounding its denial of a defence to Ms. Demme in the underlying actions was two-fold.

First, HIROC contended that the allegations in the underlying actions did not amount to an "occurrence" under the policy, which was defined in the policy as an "...accident, including continuous or repeated exposure to substantially the same general conditions, which result in bodily injury or property damage neither expected nor intended from the standpoint of the Insured." HIROC's rationale was that the bodily injury arising from Ms. Demme's conduct was "expected or intended" by her.

Alternatively, HIROC contended that the allegations in the underlying actions fell within an intentional act exclusion in the policy.

Second, HIROC contended that the allegations against Ms. Demme in the underlying actions amounted...