409 Collision Centre brought an application to prevent Intact Insurance from moving accident damaged vehicles to a storage free location. 409 Collision took possession of Bonnie Brennan's motor vehicle, following a motor vehicle accident. Ms. Brennan reported the motor vehicle accident to her insurer, Intact Insurance. Intact Insurance sent an appraiser to inspect the vehicle and it was determined uneconomical to repair, in other words a "total loss". Ms. Brennan and Intact Insurance entered negotiations to settle the claim for the loss of her vehicle.
During negotiations, Bonnie Brennan authorized Intact Insurance to move her vehicle to a storage free location to mitigate storage fees. Bonnie Brennan also instructed 409 Collision to release her total loss vehicle to Intact Insurance. There was nothing more Bonnie Brennan could do, but yet 409 Collision refused to release her total loss vehicle and continued to charge daily storage fees at $85/day until she settled the total loss claim with her insurer.
Intact Insurance initiated proceedings under section 24 of the Repair and storage Liens Act to move Ms. Brennan's total loss vehicle to a storage free location. But 409 Collision still refused to release the vehicle. 409 Collision responded with an Application in Superior Court to prevent insurance companies from moving vehicles to storage free locations until settlement is finalized between the insurer and insured person.
There are many cases where an insured person, such as Ms. Brennan, may be in the hospital after an accident or out of town on business or many other reasons that may delay settlement of a total loss claim for a short period or longer periods of time. 409 Collision attempted to force payment of ongoing storage fees during these delays. This could potentially put an insured person at risk of being responsible for storage fees, if they cause any delays.
Intact Insurance and Bonnie Brennan were represented by Lisa M. Carr. Section 278 of the Insurance Act permits insurers to mitigate storage fees by assuming liability under the insurance contract for storage fees. Liability is assumed by payment of money into court under section 24 of the Repair and storage Liens Act The insurer is subrogated to the rights of the insured person to challenge excessive storage fees. 409 Collision no longer has any right in law to withhold the vehicle.
Justice Bloom followed Ms. Carr's arguments and denied the Application. Justice Bloom also commented that he felt his decision was in the best interests of all parties as follows:
1) Ms. Brennan is protected because the storage fees will be paid by her insurer;
2) The rights of the insurer is protected because it can dispute excessive fees; and
3) The body shop is protected because there is security in court for the storage fees.
For the complete decision of Justice Bloom click here: https://www.canlii.org/en/on/onsc/doc/2016/2016onsc7711/2016onsc7711.html?autocompleteStr=2237446&autocompletePos=1
The decision of Justice Bloom follows an earlier trial decision in 2015 involving the same Toronto body shop. 409 Collision lost its claim seeking daily storage fees at $85/day. Intact Insurance, represented by Lisa Carr, successfully defended the case to reduce the fees to a reasonable daily rate of $22.30 per day for a reduced number of days. This decision is currently under judicial review. For the complete decision, click here: 1439957 Ontario Inc. (c.o.b. 409 Collision Centre) v. Benkoe,  O.J. No. 5229