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Case summaries originally distributed in OTLA February 29, 2016 newsletter.
Batoor v. State Farm Mutual Automobile Insurance Company, FSCO A13-007600
On July 11, 2011, Hiwad was catastrophically injured after losing control while operating a motorcycle in the parking lot behind his apartment building. Various interesting evidentiary issues arose during the hearing, a detailed analysis of which can be found in the decision and will not be repeated here. There was a significant dispute as to whether Hiwad purchased the motorcycle, but Arbitrator Kelly found that Hiwad did not. The ultimate issue was whether Hiwad knew or ought to have known that the motorcycle was uninsured when he operated it.
Hiwad had no memory of the day of the accident because he sustained a brain injury. In brief, the evidence of Hiwad’s witnesses provided the following: Hiwad’s cousin, Pameer, decided to purchase a motorcycle and asked Hiwad to come along to pick it up from the vendor. Pameer was unable to provide full payment so the vendor refused to transfer ownership but was willing to transfer possession. Hiwad gave Pameer permission to store the motorcycle at Hiwad’s parking garage. The vendor drove the motorcycle, following Pameer’s vehicle, to Hiwad’s apartment and then removed the plates. Just before Pameer and the vendor left the premises, Hiwad requested and received consent from Pameer to take the motorcycle for a spin in the building parking lot. He had never driven a motorcycle before.
Arbitrator Kelly stated that State Farm had the onus of proving, on a balance of probabilities, that when Hiwad operated the motorcycle, he knew or ought reasonably to have known that the motorcycle was not insured. Where there is no direct evidence of the knowledge of Hiwad as to the insurance coverage on the vehicle, the test in section 31(1)(a)(i) becomes an objective one. One must assess what an ordinary rational person, of the age, education and background of Hiwad, in the circumstances he encountered that day, ought reasonably to have known about the insurance coverage on the motorcycle. Arbitrator Kelly concluded that the language of the provision does not require the insured to find out or investigate the insurance coverage. Arbitrator Kelly observed that there was no evidence that Hiwad intended to drive the motorcycle prior to arriving at the parking lot. There was also no evidence of any discussion of insurance with the vendor. Additionally, any normal rational person would expect or assume that there was coverage on the motorcycle after observing the vendor drive it on the street. Arbitrator Kelly found that State Farm had not proven on a balance or probabilities that an ordinary rational person in Hiwad’s position that day ought reasonably to have known that the motorcycle was uninsured.