Promutuel Insurance Portneuf-Champlain v. Lombard General Insurance Company of Canada
(Quebec) (Civil) (By Leave)
Insurance - Property insurance, Interpretation - Insurance law - Property insurance - Exclusion clauses - Interpretation - Vehicles stolen from parking lot of park and fly hotel - Action in warranty against hotel’s insurer - Whether trial judge made patently unreasonable error in analysis of facts by stating that hotel did not have real power of protection, preservation, direction and physical control over its customers’ cars - Whether trial judge erred in law in interpreting “care, custody and control” exclusion clause in respondent’s insurance policy - Whether trial judge made error of mixed fact and law in interpreting insurer’s obligations toward insured given information obtained by respondent about hotel’s activities. .
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The appellant Éconolodge hotel (“Éconolodge”), which was located near the Pierre Elliot Trudeau airport, offered its customers a park and fly service, that is, a modestly priced room plus free parking for the duration of their travel out of the country. In the winter, customers had to leave the keys to their vehicles with Éconolodge to facilitate snow removal. On two occasions, customers’ vehicles were stolen while parked at Éconolodge.
In this case, the appellant Promutuel Portneuf-Champlain, société mutuelle d’assurance générale (“Promutuel”) compensated its insured, a customer of Éconolodge whose vehicle had been stolen. In return, Promutuel brought an action in subrogation against Éconolodge’s insurance company, the respondent Lombard General Insurance Company of Canada (“Lombard”). Lombard denied the insurance coverage, relying on the exclusion clause for movable property that was in the hotel’s custody or that the hotel had the power to control or manage.
The trial judge therefore held Éconolodge liable for the stolen vehicles. However, she refused to apply the [TRANSLATION] “custody, control or management” exclusion clause because Éconolodge did not acquire a “real power of protection, preservation, direction and physical control” over its customers’ cars. The trial judge therefore ordered Lombard to compensate Promutuel, which was subrogated to the rights of its insured.
Lombard’s appeal on the applicability of the exclusion clause was allowed. The Court of Appeal held that the handing over of vehicle keys gave Éconolodge a real power of protection, preservation, direction and physical control over its customers’ cars while its customers were travelling.
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