Insurance company fighting back against Ferrari in court

The tables seem to have turned in a $500,000 civil suit launched by a numbered company that lists maligned real estate developer Italo Ferrari as president.  

Court documents reveal the defendant, United States Liability Insurance Company, has filed a motion for summary judgment — a tool used to resolve a claim without going to trial — after launching a counterclaim against 2749978 Ontario Ltd. last year. 

At the heart of the legal back-and-forth is a denied insurance claim that was filed following a September 2022 fire that levelled a portion of the former St. Veronica elementary school in the city’s west end. 

In a statement of claim, lawyers for the numbered company allege that USLI breached its contractual obligations by denying the plaintiff’s insurance claim.  

The plaintiff is now seeking $500,000 in damages — including the cost of remediation, clean up, interest and legal costs. 

The company’s insurance provider, on the other hand, has denied all allegations. 

In its statement of defence, USLI acknowledged that it issued a commercial package insurance policy to the plaintiff, which included both commercial property and commercial general liability for the East Balfour Street property.  

The package was in effect from October 2021 to October 2022. 

USLI claimed the policy was endorsed with a vacant building protection warranty, which required the numbered company to keep all windows, doors and passageways “fully secured and protected from unauthorized entry.” 

The insurance provider alleges the former school had not been fully secured before the fire, which it claimed constituted a breach of the insurance policy.

Ferrari, however, contended in a sworn affidavit that the vacant building was secured by a locked front door, protective construction fencing and regular security inspections. 

“I do not believe that the insured has breached the insurance policy in any manner, and I believe that we should be entitled to judgment on our claim for the insurance proceeds,” Ferrari said in his affidavit. 

USLI is now seeking declarations from 2749978 Ontario Ltd. that it “has no legal obligation to indemnify the plaintiff,” and that any amounts paid or made payable to the insurance provider as a result of the fire are subject to repayment by the numbered company.  

None of the allegations made by the two parties have been tested in court. A spokesperson for USLI declined to comment. Ferrari did not respond to a request for comment made by SooToday.

Ferrari is well known for his dealings in the Sault.

He also happens to be the general manager of Leisure Meadows Community Living Inc., which purchased the old hospital site, along with 1667271 Ontario Inc., back in 2019 with plans to redevelop the waterfront property into condominiums and a long-term-care facility.

City council voted unanimously to buy three properties that comprised the old hospital site from both companies for $4.75 million in November of last year.

Later that month, the city agreed to sell the former General Hospital building on Queen Street East to Green Infrastructure Partners (GIP) and an adjacent waterfront lot at 10 Lucy Terrace for $1 each, with conditions. 

That deal, however, has yet to be finalized.  

The ongoing civil matter between 2749978 Ontario Ltd. and USLI was heard earlier this week in Ontario Superior Court, but has been adjourned until Sept. 5 to allow the parties to compile further documentation.

– with files from David Helwig and Kenneth Armstrong