Supreme Court rules with insurers after meth lab fire

Supreme Court rules with insurers after meth lab fire | Insurance Business

Supreme Court rules with insurers after meth lab fire
The British Columbia Supreme Court has ruled in favor of insurance companies in a case involving a “clandestine methamphetamine/ecstasy laboratory” operated by a Vancouver condominium owner’s tenant.
Plaintiff Angela Louie rented out her downtown suite to Darcy Andrew Tweedly in a lease that spanned from January 1, 2004 to December 31, 2004 and then month-to-month thereafter, according to the Court’s Reasons for Judgment. Tweedly’s illicit drug operations caused a fire to the unit on April 17, 2008, causing extensive damage to the condo itself and possibly to some ductwork that resided in communal areas.  
Louie attempted to recover a $50,000 deductible from the building’s strata to compensate for remediation, since her personal home insurance policy with XL precluded losses caused by the “processing [or] manufacture” of marijuana and other illegal substances.
She then turned her attention to the strata’s insurance companies, Aviva Insurance Company of Canada, Axa Pacific Insurance Company and St. Paul Fire & Marine Insurance Company. Justice Bruce Geryell, however, ruled against her, arguing that the damage was caused by “the unlawful conduct of a tenant” and was almost entirely relegated to her apartment regardless.
Instead, he ordered Louie to pay the deductible, as well as $4,300 to the strata for supplemental investigation and remediation costs.
Finally, Louie sought $125,000 to compensate for her loss of rental income for the time period between 2009 and 2015. Again, Justice Geryell ruled against the plaintiff, deciding she was not entitled to any losses since she did not take sufficient action to mitigate loses.
In particular, he points to the fact that instead of quickly undergoing remediation, paying the deductible to strata or filing for the court to determine who is responsible for the matter, Louie left the apartment in disrepair and “adopted the position the loss was that of the Strata and/or covered by the Strata insurance.”
Although Justice Geryell rejected the strata’s counterclaim for indemnification against any additional expenses related to the fire, the case is still considered to be a significant victory for insurers.