Eastway Tank lodges $14.4 million lawsuit in opposition to insurer

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Eastway Tank, Pump and Meter is suing its insurance coverage dealer for $14.4 million, alleging “negligence and breach of contract” that left the corporate “underinsured” on the time of the explosion that killed six folks on Jan. 13, 2022.

Legal professionals for Eastway filed the lawsuit on Jan. 11 in opposition to native insurer Gifford Carr Insurance coverage Brokers, claiming the tanker truck producer has incurred $12.9 million in enterprise revenue underinsurance losses within the two years because the explosion.

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The blast killed six workers in one of many worst office incidents within the province within the final 50 years.

Eastway and its president, Neil Greene, are set to face trial in March on expenses laid underneath Ontario’s Occupational Well being and Security Act, alleging the corporate did not take sufficient precautions throughout the testing of vans at its Merivale Street facility.

In response to Eastway’s civil lawsuit, Gifford Carr acted as Eastway’s insurance coverage dealer for greater than 20 years and the corporate had been engaged in annual coverage renewal discussions with an agent within the months previous to the explosion.

Greene met with the agent, Kevin O’Donoghue, in December 2021, however the course of was not accomplished by the annual renewal date of Dec. 25, 2021, court docket paperwork state.

In response to the lawsuit, the coverage renewal paperwork solely arrived by e mail on Jan. 14, 2022 — the day after the explosion.

“This course of was late and delayed resulting from a scarcity of consideration and diligence on the a part of (the agent) who supplied assurances to Eastway that he would attend to its insurance coverage wants and that the coverage could be renewed,” the lawsuit alleges.

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No assertion of defence has been filed on behalf of Gifford Carr or O’Donoghue and the allegations contained within the lawsuit haven’t been examined in court docket.

“We don’t have any remark or assertion right now and can respect the continued authorized proceedings,” mentioned firm president Matthew Carr in a press release this week.

“I too haven’t any remark,” O’Donoghue wrote in an e mail.

In response to the lawsuit, the Jan. 14 e mail and the connected cowl letter, which confirmed the coverage renewal and outlined premium prices, was “not well timed or of any utility to Eastway, as a result of it was not delivered in an inexpensive timeframe earlier than renewal.

“In actual fact, the letter was delivered by e mail on the day after the (explosion), at a time when the buildings on the Eastway yard had been broken past restore and in want of rebuilding and substitute.”

The lawsuit additional claims that the chance had already handed for Gifford to warn Eastway in regards to the “pervasive and significant issue” of underinsurance for industrial properties. It additionally alleges that O’Donoghue “knew that underinsurance is a pervasive and significant issue for industrial property homeowners, leaving them weak to soak up massive financial losses,” and made no effort to warn Eastway till after the explosion.

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The assertion of declare was lodged almost two years after the explosion that killed six staff: Matthew Kearney, 36, a service supervisor and calibration technician; electrician and airplane engineer Etienne Mabiala, 59; welder Kayla Ferguson, 26; electrician Danny Beale, 29; mechanic and welder Rick Bastien, 57; and Russel McLellan, 43, Eastway’s plant supervisor. A seventh employee pulled from the hearth by coworkers suffered critical burns.

The Ministry of Labour filed expenses close to the one-year anniversary of the blast, alleging Eastway Tank and Greene did not take affordable precautions within the office throughout the “moist testing” of tanker vans.

The moist take a look at of a gas tanker is used to find out the amount of liquid it may carry and is usually carried out earlier than a tanker is put into service.

The ministry alleges Eastway and Greene did not take affordable precautions by, amongst different issues, guaranteeing that the diesel gas for use within the moist take a look at was not contaminated with gasoline or another flammable substance. It additionally alleges Greene and the corporate failed to make sure the truck tank was freed from gasoline or another flammable substances, and that flammable vapours within the tank weren’t uncovered to a possible supply of ignition.

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The ministry additional alleges Eastway and Greene failed to supply sufficient instruction and supervision to staff on secure gas storage, and secure gas dealing with throughout the moist testing of vans.

The judge-alone trial is ready for March 4 and is scheduled to sit down till mid-June.

“Because the matter continues to be earlier than the court docket, it will be inappropriate for the ministry to supply additional remark,” the ministry acknowledged this week.

-With recordsdata from Andrew Duffy. 

ahelmer@postmedia.com

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