Insurance & Reinsurance
On 30 June 2022, the Ontario Court of Appeal released its decision in Demme v. Healthcare Insurance Reciprocal of Canada (HIROC) 2022 ONCA 503, which considered whether the tort of intrusion upon seclusion requires intentionality. The Court found that the tort of intrusion upon seclusion is an intentional tort, and therefore, not an “accident” or an “occurrence” as defined in a liability policy.
This tort of intrusion upon seclusion was alleged in eight civil actions against a former registered nurse employed by the Brampton Civic Hospital (the “Hospital”). The actions alleged the nurse wrongfully accessed patient records. When accessing the records, she would update them to show patients as having received an “as needed” pain medication (Percocet) but would keep the tablets dispensed from an automatic dispensing unit for herself. Between 2006 and 2016, the nurse accessed 11,358 patient records and obtained 23,932 Percocet tablets.
The nurse sought coverage for the actions under a liability policy issued to the Hospital by HIROC (the “Policy”). The Policy afforded coverage to the Hospital and its employees in the course of their employment.
HIROC denied it had a duty to defend the nurse in the actions on the basis that the injuries alleged did not arise out of an “occurrence” under the insuring agreement, which read as follows:
1. COVERAGE A – BODILY INJURY
To pay on behalf of the Insured all sums which the Insured shall become legally obligated to pay as damages because of bodily injury, sickness or disease, including death at any time resulting therefrom, by any person or persons and arising from an occurrence during the POLICY PERIOD.
“Bodily injury” was defined as: :
Except with respect to advertising, broadcasting or telecasting by or in the interest of the Insured (unless specifically indicated on a Certificate of Insurance issued under this Master Policy), the term “bodily injury” means bodily injury, sickness or disease, including death and shall also include injury arising out of:
(c) Invasion or violation of the right of privacy, wrongful eviction or wrongful entry;
… [A]n 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. [Emphasis added.]
In essence, the injuries were not unexpected or unintended, and therefore did not fall within the insuring agreement.
The Policy defined “occurrence” to mean: “an accident, including continuous or repeated exposure to substantially the same general conditions, which results in bodily injury or property damage neither expected nor intended from the standpoint of the insured”.
HIROC also denied coverage based on the application of certain exclusions, including an exclusion removing coverage for injury “expected or intended from the standpoint of the insured”.
The nurse commenced an action against HIROC seeking coverage under the Policy. She then filed a summary judgment motion seeking a declaration that HIROC owed a duty to defend and sought reimbursement for defence costs incurred in the underlying actions.
After the motion judge dismissed the motion, the nurse appealed.
On appeal, the nurse argued the motion judge misapplied the pleadings rule and erred in his consideration of intentionality by interpreting the meaning of "occurrence” in the Policy's insuring agreement and the intentional act exclusion.
The Court of Appeal found the motion judge correctly applied the pleadings rule and agreed that the true nature of the claims against the nurse was the intentional tort of intrusion upon seclusion. The Court also acknowledged that the analysis on a duty to defend application may consider all pleadings, including admissions in a defence pleading, to determine the nature of the claims. However, the most weight should be given to the pleadings against the insured.
The nurse also argued that the motion judge erred in his treatment of intentionality in determining whether there was an "occurrence" as defined in the Policy and the application of the intentional act exclusion.
In rejecting the nurse's argument that the tort of intrusion upon seclusion could include “intentional or reckless” behavior (such that there was a mere possibility of unintentional conduct), the Court of Appeal held that a reckless act within the tort of intrusion upon seclusion does not support a finding of unintentional conduct. Further, the nurse's “contention that reckless conduct possibly could amount to unintentional conduct runs counter to the thrust of Canadian insurance jurisprudence” (para 62). Reckless conduct was found to stand very close to the intentional end of the conduct spectrum.
The nurse also argued that the intrusions into patient records were not the result of any intention on her part to injure the patients and instead, was an unintended consequence of her intentional conduct to obtain pills which satisfied the definition of "occurrence".
The Court of Appeal found that the relevant intention for the tort of intrusion upon seclusion is the defendant's intention to access private patient records. If that is demonstrated, the intention to access the records amounts to an intention to cause injury. On this basis, the Court of Appeal agreed with the motion judge’s finding that the pleading of intrusion upon seclusion outside the definition of "occurrence" and within the scope of the intentional acts exclusion.