I do a lot of work in the insurance industry. Recently, I came across a court case which I thik is a cautionary tale for estate planners and executors.

In Gregson v. CAA Insurance., 2021 ONSC 3041, Ms. Gregson was a property owner and name insured on March 17,2017 when her property sustained water damage. A plumber determined that the pipes servicing a bathroom sink had a crack in the water pipe.

Ms. Gregson was not living in the property at the time of the loss. As a result of various infirmities, including cognitive impairment, she had left the property on the Fall of 2016, and was taken to hospital. She was subsequently transferred to a retirement home. She was again admitted to hospital in early 2017 for respiratory issues, and subsequently because of a fractured hip.

At the time of the property damage, Ms. Gregson was deemed incapable of personal care, and incapable of managing her property, a social worker. By Continuing Power of Attorney for Property dated in early 2016, Gregson had appointed her lawyer Mr. G. as her primary attorney.

Her lawyer transitioned Ms. Gregson into another retirement home after surgery on her fractured hip. She resided there on a restrictive wing for individuals with dementia.
Mr. G. acknowledged that he attended the property on Ms. Gregson’s behalf to check the mail, and heat. His visitation schedule was inconsistent, and only completed every couple of weeks. Nobody was spending nights at the property, and nobody else had access to the property.

Mr. G. did not notify CAA that Ms. Gregson would be away from the property for an extended period. He did not shut off the main water supply when Gregson entered hospital.

Ms. Gregson passed away in the late summer of 2019. Repairs to the damage caused by the water loss at the property had not been undertaken.

An insurance claim was submitted by Mr. G who became the trustee of the Estate for reimbursement of damages incurred. CAA denied the claim, due to the vacancy exclusion, found incidentally in most home insurance policies. It was CAA’s contention that it did not insure loss or damage occurring after the dwelling has (to the knowledge of the insured) been vacant for more than 30 consecutive days. Under the policy definitions, “vacant” refers to the circumstances where, regardless of the presence of furnishings, “all occupants have moved out with no intention of returning, and no new occupant has taken up residence.”

CAA sought an Order to dismiss the claim on this basis.

Mr. G contended, when Gregson moved out of her home, her treating physicians only suspected that she had symptoms of early dementia, and she had not been found to lack capacity. Upon her discharge from the hospital, her medical team recommended three potential destinations- two of which involved returning to her home with varying amounts of support. With input from Mr. G, she chose the retirement home as a trial, with the intention of revisiting the three potential destinations at the end of the trial. As the trial stay neared its conclusion on March 31,2017, her condition was deteriorating but she still only required companionship for four hours, five days a week. Subsequently, Mr. G. contends, she rapidly declined. She lost capacity, developed aggressive behaviours, and required supervision 24 hours per day. However, Mr. G. contends, those circumstances had not yet crystallized at the time of the loss. When those circumstances crystallized, after the time of the loss, she could be considered to have moved out of the property with no intention of returning.

Mr. G. contended that at the time of the water loss in 2017, Ms. Gregson had not moved out with no intention of returning and, without the power of attorney having been triggered, Mr. G. could not make that decision for her.

The Court had difficulty with Mr. G’s submissions. Mr G. admitted he had concerns about the Ms. Gregson’s capacity in November 2016, as he confirmed during his examination for discovery. In November 2016, a capacity assessment was recommended through the Public Guardian’s office. Gregson refused to participate. Gregson was once again admitted to hospital in early 2017 for respiratory issues. Diagnoses at that time also included dementia with psychosis and depressive symptoms.

Just prior to the date of loss, Mr. G. attempted again to determine Ms. Gregson’s capacity under the Substitute Decisions Act. He telephoned the social worker to request a capacity assessment. Mr. Gregson was deemed incapable of personal care, and incapable of managing her property at the end of March, approximately 10 days after the date of loss.

The Court concluded nevertheless, there was insufficient evidence of planning for an objective intention to return. No support services to support Ms. Gregson in her home were hired. There was no plan for live-in or daily assistance. There was no concrete discharge plan from her residence at the long-term care facility. There is no evidence that a Personal Support Worker or Social Worker were arranged for.

Moreover, in this case the medical evidence suggests that Ms. Gregson was incapable of forming intention at the material time. Even though her capacity was only officially determined ten days after the loss was discovered, it was likely that Gregson had lost her ability to form intention after leaving the property in the Fall of 2016. Her care issues in that interim were being managed by Mr. G., and her medical and social work team. The Court did not accept Mr. G’s submission that the circumstances only crystallized ten days after the loss.

The Court found that, even though Ms. Gregson might very well have had a desire to return home and was unhappy to continue to reside in the long-term care facility, and there may have been transitory discussion of various proposals, no plan was ever made to accomplish this, and it was unrealistic in the circumstances given her physical condition and her lack of capacity. Mr. G’s actions and acknowledgments are consistent with the intention that she would not be returning to the property, and instead would be living in a retirement home on a permanent basis.

The Order to dismiss the claim was granted.

I found there is a lot to unpack with this story, but the biggest message to me was the reminder that estate planning needs to be as comprehensive possible and requires diligence in both the planning and execution.
Happy Reading and stay safe.