The Insured (“Hauck”) was successful in obtaining a declaration that the Insurer of his tractor trailer (“Dominion”) was obligated to provide him with third party liability coverage for a motor vehicle accident caused by Hauck when he was towing the trailer with his uninsured truck
Hauck v. Dominion of Canada General Insurance Co.,  A.J. No. 1505, Alberta Court of Queen’s Bench Judicial District of Calgary
Hauck was the owner of a 1991 Freightliner semi-tractor and a 1986 belly dump trailer. Typically, both the trailer and the Freightliner were insured by Dominion. Hauck’s gravel hauling business was seasonal and inactive during the winter and it was his usual practice to discontinue full insurance coverage on the Freightliner during the periods of inactivity. In the spring of 1998, Hauck resumed his trucking operations in the belief that steps had been taken to reinstate full insurance coverage on both the Freightliner and his trailer. As of the date of the accident, June 11, 1998, Hauck had valid insurance coverage with Dominion on the trailer which afforded third party liability coverage. However, it was later determined that Hauck had failed to reinstate coverage for the Freightliner itself.
On June 11, 1998, Hauck was towing the trailer with his uninsured truck and turned left directly into the path of an ongoing passenger van. The passenger van hit the Freightliner truck in the vicinity of its fuel tank and all three occupants of the van, the Boons, were killed. On May 26, 1999, the Boons’ Estate served Hauck with a Statement of Claim seeking damages arising from the accident. They alleged negligence on behalf of Hauck with respect to his Freightliner truck. No mention of the trailer was made in the Statement of Claim. On June 8, 1999, Hauck filed a Statement of Claim against Dominion seeking a declaration that Dominion, as the insurer of the trailer, should indemnify him for the accident. On August 19, 1999, the Boons’ Estate took default judgment against Hauck. Thereafter, the administrator of the Motor Vehicle Accident Claims Act, R.S.A. 2000 c. M-22 (MVACA) appointed a solicitor who was authorized, under the Act, to act on behalf of and in the name of Hauck. On February 2, 2000, a Consent Partial Judgment was signed whereby the Boons’ Estate was awarded $200,000, the maximum amount payable by the administrator under the MVACA.
In the coverage action, Dominion raised a preliminary point that the issue of insurance coverage on the trailer had already been determined, making it res judicata in this action. Dominion based this argument upon (1) the effect of the default judgment in that Hauck failed to raise the insurance coverage issue at that point, and according to Dominion, had abandoned the possibility of raising it at a later date; and (2) arising from the February 2000 Consent Partial Judgment, as Dominion claimed that a finding by the Administrator that Hauck had no insurance coverage for the accident was a necessary prerequisite to agreeing to the Consent Partial Judgment. The court rejected Dominion’s argument noting that the precise issue of the insurance coverage had not been judicially determined, and consequently, was not res judicata.
The court then considered the issue of negligence in tractor/trailer towing accidents. Dominion based its argument upon the decision in Aetna Insurance Co. v. Canadian Surety Co. et. al. (1994) 149 A.R. 321 (C.A.) which Dominion asserted stood for the proposition that trailers were to be considered inanimate appendages with liability following the vehicle that towed the trailer. The court preferred the argument of Hauck which was based upon the Supreme Court of Canada decision in Amos v. Insurance Corporation of British Columbia,  3 S.C.R. 405. Amos provides a two part test for whether an Insurer incurs liability for an accident arising from the ownership, use, or operation of an automobile as follows:
- Did the accident result from the ordinary and well-known activities to which automobiles are put?
- Is there some nexus or causal relationship (not necessarily a direct or approximate causal relationship) between the injuries and the ownership, use, or operation of his vehicle, or is the connection between the injuries and the ownership, use or operation of the vehicle merely incidental or fortuitous?
The court agreed that the Supreme Court of Canada in Amos had retreated from the causal requirement advanced in pre-Amos cases. The court noted that the second part of the test establishes a new area from which coverage arises based on “a direct or approximate causal relationship between the injuries and the ownership, use, or operation of the vehicle”.
In applying the Amos test, the court found that the trailer’s purpose was to haul gravel, which it was doing at the time of the accident, and therefore, the first branch was satisfied. With respect to the second branch, the court found that the accident was caused by driver error by Hauck in that he either did not see the van or made an error in judgment in failing to realize that there was insufficient time to permit the entire unit to complete the turn prior to the van’s approach. Either way, the court found that there was a sufficient nexus between the accident and the trailer to satisfy the second branch of the Amos test. The court recognized the public policy arguments raised by Dominion to the effect that a decision in favour of Hauck would eliminate the incentive for a person to insure vehicles towing a trailer and that the cost of insuring a trailer would necessarily rise drastically. However, the court noted that this problem had been recognized previously and should be cured by the legislature through an amendment to the Insurance Act providing that the policy on the tractor of a tractor-trailer unit, should be considered the first loss policy.
In the result, the court found that Dominion was liable to indemnify Hauck for third party liability coverage.
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