Rodriguez-Vergara v. Lamoureux, 2025 ONCA 620
The recent Court of Appeal decision in Rodriguez-Vergara v. Lamoureux, 2025 ONCA 620, confirms that after the Defendant’s primary auto insurance policy limits are exhausted, any underinsured Ontario Policy Change Form (OPCF) 44R policy will take priority to personal umbrella liability policies that may be available to defendants in a motor vehicle injury action.
Background
In 2017, the plaintiff Rodriguez-Vergara, was injured as a result of being struck by the defendant vehicle, which was owned by defendant D’Souza and driven by her daughter, defendant Lamoureux. Rodriguez-Vergara commenced a claim for damages.
The defendant’s vehicle was insured by Certas, with liability limits of just $300,000. Certas also insured defendant D’Souza under a personal umbrella liability policy (PLUP) that had limits of $1,000,000. Additionally, RSA insured the plaintiff with a standard auto policy with $1,000,000 limits, which included OPCF 44R underinsured coverage. The assessment of damages exceeded the limits of defendant D’Souza’s auto policy, and thus, both Lamoureux and D’Souza were inadequately insured motorists.
RSA and Certas disagreed about whether the plaintiff’s OPCF 44R coverage or the defendant’s PLUP would respond after the primary $300,000 third-party liability coverage was exhausted. Certas brought a motion to determine priority, while RSA brought a cross-motion seeking leave to commence a third-party claim against Certas and seeking a declaration that RSA could subrogate against Certas for any amounts it had to pay to the plaintiff.
The motion judge determined that the plaintiff’s OPCF 44R underinsured coverage would respond first, after the defendant’s third-party liability coverage of $300,000 was exhausted, up to the underinsured coverage limit of that policy (excess of $700,000), following which the defendant’s PLUP would respond. Further, the motion judge found RSA had no right of subrogation, it could not deduct any amounts available from the defendant’s PLUP, nor could RSA issue a third-party claim against Certas.
Analysis
On appeal, RSA alleged the motion judge erred in finding the OPCF 44R policy stands in priority to the PLUP, erred in finding RSA could not deduct the PLUP limits from payments made under the OPCF 44R, erred in finding RSA could not issue a third-party claim against Certas and erred in finding that RSA could not subrogate against Certas. As the issues were questions of law, the standard of review was correctness.
The court confirmed the motion judge’s conclusions, stating that the issues to be determined “must be assessed in the context of the nature of the automobile insurance legislation in Ontario”, which is “highly regulated” and includes minimum third-party liability limits and mandatory accident benefits coverage as well as OPCF 44R underinsured coverage. On the other hand, the court noted a PLUP is a different kind of insurance policy: it is not a first loss policy nor is it a motor vehicle insurance policy rather it provides coverage over and above the limits of certain underlying insurance policies.
An OPCF 44R policy defines the amount payable per eligible claimant under section 7. The court found the language of section 7 makes it clear that amounts available to a claimant from “insurers of the inadequately insured motorist” mean amounts from the “total motor vehicle liability insurance or funds in lieu of insurance, not any and all types of insurance such as a PLUP.”
The court also noted the interpretation was consistent with section 4 of the OPCF 44R, which makes reference to the maximum liability of an insurer pursuant to a family protection endorsement having regard to “the total of all limits of motor vehicle liability insurance” available to respond to the claims of an inadequately insured motorist, and that it would “make no sense” that the maximum coverage under section 4 would “include only motor vehicle policies, while the priority of the OPCF 44R under section 7 would rank behind any insurance policy available to respond to a loss.” A PLUP therefore would respond only after the limits of the motor vehicle liability policy had been exhausted, or if the underlying policy did not provide coverage for the loss.
Conclusion
The Court of Appeal dismissed the appeal, finding the motion judge correctly interpreted the OPCF 44R policy to take priority over the defendant’s PLUP. The court further confirmed that RSA could not deduct its limits from the defendant’s PLUP, that RSA had no right to issue a third-party claim against Certas, and had only a conditional right of subrogation against Certas. In paragraph 22, the court concluded that, “[t]he OPCF 44R can subrogate against the at-fault party D’Souza, who was inadequately insured, for its payout to Vergara, to the extent that their liability to Vergara exceeds the defendant’s $300,000 limit and the PLUP’s liability limit.”