THUNDER BAY — A judge has ruled the City of Thunder Bay's insurance company must defend the city against multiple lawsuits pertaining to pinhole leaks in water pipes.
In a February 2024 judgment, Justice T.J. Nieckarz ruled that GAIC must defend the city's pinhole leak actions. ii. Claim or suit by or on behalf of any person, entity, or governmental authority for damages or any other relief or remedy because of testing for, monitoring, cleaning up, removing, containing, treating, detoxifying, or neutralizing, or in any way responding to or assessing the effects of lead in any form.
As an example of the outcome of the city's interpretation, Judge Nieckarz suggested GAIC could use the exclusion clause to decline to defend or settle a claim brought by someone who had to remove lead paint from a city-owned facility, if the city failed to do so, or by someone who had to monitor or treat their water or lead because the city failed to do so.
Because of the ambiguity of the exclusion, the court found it necessary to resort to contract interpretation principles, specifically the parties' reasonable expectations. "I am satisfied," Judge Nieckarz said, "based on the brief evidence provided by the City, that damage to copper pipes is not an inherent lead-related risk, but rather is a water-related risk. The City provides examples of municipalities that experience pinhole leak issues.
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