Bills don’t add up in business claim against RSA, court rules

The Ontario Superior Court has dismissed two claims filed by a clothing store operator against RSA for a total of $127,000 in inventory lost due to water damage, as the retailer could not prove the value lost goods.

In the store owner’s first claim, despite repeated emails from the insurance company, Royal & Sun Alliance Insurance (now owned by Intact Insurance) and its adjuster, Crawford and Company (Canada), the store owner never provided the insurer with credible documents proving the value of the lost claim. The court found that the one-year statute of limitations to sue the insurer had expired.

Tahir Qureshi operated a retail clothing store, ATQ Fashion, in Oshawa, Ontario. He took out a commercial insurance policy with RSA for one year of coverage from March 27, 2014.

In October 2014, the roof of his building leaked and clothes stored in boxes on the second floor suffered water damage. Qureshi notified RSA of the loss and submitted a claim for $53,488. RSA rejected the claim because Qureshi failed to prove the amount of this first loss.

Qureshi suffered another water loss when the roof leaked again in February 2015. He submitted a second proof of loss document, this time for $74,486. Since he submitted the second proof of loss using the same claim number as the first loss, RSA did not process the second claim as it was unaware that a proof of loss relating to the second claim had been submitted.

Nevertheless, the court also rejected the second request.

Qureshi argued in court that Crawford appointed AAA Appraisals to inventory damaged items in its first claim. He maintained that the AAA ratings correctly rated the damaged items. But the court found that Qureshi did not fully understand AAA’s role in the process.

“[Crawford adjuster Linda] Fitzgerald retained AAA Appraisal to compile an inventory list of damaged property,” the Ontario Superior Court ruled. “It was not AAA’s role to establish the value of the claim. Ms Fitzgerald testified that in commercial loss cases, the insurer looks to the owner to provide invoices to support the claim.

“AAA was tasked with compiling an inventory list and providing wholesale prices for the goods, then, with the help of Mr. Qureshi and his invoices, cross-checking everything on the list.”

Qureshi’s insurance policy with the RSA states that the insured must “deliver as soon as possible to the insurer proof of loss verified by statutory declaration giving a full inventory of the property lost or damaged and detailing the quantities , costs, actual cash value and details of the damage claimed; [and]if necessary and possible, produce accounts, warehouse receipts, inventory lists, invoices and other relevant documents, verified by statutory declaration, and any relevant contracts or agreements with others. »

But invoices provided by Qureshi to verify the value of his losses raised red flags for Crawford’s claims adjuster and RSA, according to the court’s decision, released August 31.

“The bills seemed strange to Mrs. Fitzgerald [Crawford’s adjuster]“, we read in the court decision. “They contained spelling mistakes. Notably, one contained a business address on ‘Young’ Street in Toronto, rather than ‘Yonge’ Street. Ms. Fitzgerald explained that this was unusual as a business would take care of provide a correct address on her invoice, so that she can receive payment.

“She further noted that all product costs were in rounded numbers, which based on her vast experience in the industry seemed odd. She noted that the fonts on the invoices were the same. She researched the addresses online and learned that the address of a clothing supplier named “U&U” was the address of a UHaul store, and the address of a clothing supplier named “Linx” was the location of a Linx cell phone distributor During her research, she could not verify the existence of any of the companies listed on the invoices.

“She sent the documents to Daniel Hébert, examiner at the RSA. The RSA advised her to stand down and she did nothing further to investigate the first loss.

RSA rejected the first request. The same issues plagued the invoices Qureshi submitted to prove losses in the second claim, the court observed.

For example, the adjuster sent a photo of Lacoste shirts found in inventory to RSA. The labels on the clothes in the photographs indicated that they had been made in “Morocco”. Lacoste products are made in “Morocco”.

Qureshi said he does not have bills for some of his possessions as he normally pays for them in cash. But the court ruling says he failed to keep “records of large cash withdrawals he should have made to pay these suppliers”. Moreover, the court added, “he did not testify that he had tens of thousands of dollars on hand.”

Ultimately, the court found that Qureshi had produced no evidence at trial to authenticate the bills.

“He did not call any witnesses from his alleged suppliers to verify their invoices,” the court heard. “He has not produced any document proving that the invoices have been paid. The “invoices” are full of irregularities.

“On the totality of the evidence, I am satisfied that the invoices are not genuine and were created for the purpose of supporting Mr Qureshi’s insurance claim.”

Photo courtesy of iStock.com/FTiare

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