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Hell's Angel Puppet Club The Heretics MC Clubhouse Hit By Arson In Estevan, Sask In 2016 As Of July 2O23 Insurance Hasn't Paid For The Building.
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Greg Carr
Jul 28, 2023, 3:44:50 AM7/28/23
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Saskatchewan Court of Appeal confirms proof of a material change in risk requires strong evidentiary foundation
Blog MT Insurance Law Blog
Miller Thomson LLP
Miller Thomson LLP logo
Canada July 25 2023
Introduction
Wynward Insurance Group v Smith Building and Development Ltd, 2023 SKCA 57 highlights significant considerations for insurers who are considering denying claims on the basis of an insured’s failure to disclose a material change in risk.
Background facts
The plaintiffs, Mr. and Mrs. Smith (the “Smiths”), owned a commercial building in Estevan, Saskatchewan insured with Wynward Insurance Group (“Wynward”). The Smiths leased the building to several tenants, one of which entered into a sub-lease agreement with a motorcycle club the Reapers Riders. The club later became known as the Heretics Motorcycle Club (the “Heretics”).
In April 2016, the building was damaged by a fire that was determined to be the result of arson (the “Fire”). The Smiths submitted a claim to Wynward immediately after the Fire. Mr. Henderson, a senior claims examiner at Wynward, was assigned to investigate the Smiths’ claim. He found that the Heretics were an affiliate of the Hells Angels biker gang, a known criminal organization. He denied the Smiths’ claim on the basis that they had neglected to inform Wynward of the material change in risk posed by the presence of the criminal-affiliated motorcycle club in the building.
Trial decision
The Smiths commenced an action against Wynward, claiming that they were entitled to be indemnified under their policy. Wynward argued that they were not informed of the Reapers Riders transition to the Heretics, and that the presence of this particular “outlaw motorcycle club” with an “unsavoury connection” to the Hells Angels constituted a material change of risk. The Smiths maintained that this so-called transition did not constitute a material change in risk and that, even if it did, they did not possess the requisite knowledge of the connection between the Heretics and the Hells Angels or any other criminal activity which would obligate them to disclose such knowledge to Wynward.
In reviewing the applicable law, the trial judge noted that whether a change constitutes a material change of risk pursuant to a contract of insurance is a question of fact. Additionally, the insurer has the onus of establishing, on a balance of probabilities, that the change at issue is a material change in risk. The court ultimately rejected Wynward’s arguments and found that it had not discharged the burden of proof required to establish that the Heretics’ presence in the building as a sub-tenant constituted a material change in risk.
In his reasons, the trial judge considered the evidence led by Wynward in support of its arguments. First, the court considered the results of an internet search which described the Heretics as a “Hells Angel puppet club.” The accuracy and truth of the contents of the report could not be verified, and as such, carried little weight. In addition to this search result, Wynward sought to rely on the testimony of Cst. Shewchuk, a member of the Estevan Police Service involved in monitoring the Heretics and the Hells Angels. Cst. Shewchuk testified that the Heretics hosted three social events per year which were attended by members of other motorcycle clubs, regular citizens and a few members of the Hells Angels from nearby cities. Hells Angels merchandise was sold at these events. Wynward maintained that the foregoing established a direct link between the Heretics and the Hells Angels. The trial judge disagreed and reasoned that neither the presence of members of the Hells Angels nor the sale of Hells Angels merchandise at the Heretics’ events were indicative of criminality, a connection between the clubs or a material change in risk. Thus, Wynward failed to prove that there had been a material change in risk.
The trial judge noted that even if there had been a material change in risk, the insured would have to be shown to have effectively known of this change. The trial judge found no evidence to suggest that the Smiths were aware of or ought to have been aware of anything “untoward” about the Heretics. Since Wynward failed to establish that a material change in risk had occurred and that the Smiths knew about the change, the trial judge ruled that the Smiths were entitled to indemnity under their policy. Wynward appealed the trial judge’s decision.
On appeal
On appeal, Wynward argued that the trial judge erred in finding no evidence of a material change in risk. The Court of Appeal reviewed the law on material change and disclosure. It cited the doctrine of uberrima fides which describes the relationship of mutual vulnerability and utmost good faith that exists between insurers and an insured. This relationship imposes a duty on the insured to be forthcoming in disclosing information to their insurer that may be relevant to the risk. This duty is not without limitations and extends only to facts which the insured has actual or constructive knowledge of and which are material to the risk being insured.
The Court of Appeal also clarified that a fact material to the risk is one that “if the facts had been truly represented, they would have caused a reasonable insurer to decline the risk or required a higher premium.”[1] The test for materiality requires an objective assessment of what a reasonable insurer would have decided if they were in possession of the relevant facts at the time the parties entered into the policy. The fact that Wynward viewed the club’s transition to an outlaw motorcycle club as material was not determinative of its materiality in objective terms.
The Court found that the trial judge was alert to the applicable law and made no palpable or overriding error. Accordingly, the Court of Appeal upheld the lower court’s judgment that the evidence led by Wynward did not establish a connection between the Heretics and the Hells Angels that resulted in a change of risk that was material to the insurance contract.
Takeaway
The insurer bears the burden of proving that a particular change is material to the risk. In this case, Wynward’s argument that a material change in risk occurred when the Heretics became affiliated with a criminal entity lacked a reliable evidentiary foundation. When considering the issue of an insured’s failure to disclose a material change of risk when assessing a claim, insurers should consider whether they have sufficient evidence in support of their position. It is crucial to demonstrate that the change in question truly qualifies as a material change in risk.
https://www.lexology.com/library/detail.aspx?g=6955c0de-8957-416d-975a-1245efd23c7b
Police closely monitoring Heretics Motorcycle Club expansion into Moose Jaw
Police say group in Estevan is a support club of the Hells Angels
Morgan Modjeski · CBC News · Posted: Apr 27, 2021 3:00 AM PDT | Last Updated: April 27, 2021
Members of the Heretics MC can be seen in this photo posted to a private Facebook group earlier this month detailing the expansion of the club into Moose Jaw with a new chapter. (Facebook.com)
Police are closely monitoring the expansion of the Heretics Motorcycle Club in southern Saskatchewan, warning that it's a support club for the Hells Angels.
"By expanding their support clubs in the province, basically the Hells Angels are attempting to create a stronger network," said Det.-Const. Mischa Shewchuk of the Estevan Police Service's intelligence unit.
The Heretics MC — which made headlines in 2016 after its In Estevan, Sask., clubhouse was damaged by arson — recently announced the creation of a new chapter in Moose Jaw.
Photos of the announcement shared online in a private Facebook group show five members of the new chapter holding "Moose Jaw" patches that appear to be the bottom of the three-patch design that often adorns vests worn by outlaw motorcycle clubs.
Hells Angel Rob Allen sentenced to 12 months in prison after cocaine trafficking conviction https://www.cbc.ca/news/canada/saskatoon/judge-sentence-rob-allen-prison-1.4106630 the H.A. full patch was addicted to oxy and an informers testimony sent him to prison. Another successful informer against H.A. Noel Harder joining a long list of such informers and snitches https://groups.google.com/g/van.general/c/aAAuQlWg4bY/m/AlcuthIfFgAJ
H.A. Allen was paranoid the police were closing in on him but did not clue in that Noel Harder a drug dealer for many years was an informant. https://saskatoon.ctvnews.ca/rob-allen-became-paranoid-of-police-informant-testifies-in-hells-angel-s-trial-1.3192389
Noel Harder was V.P. of the Fallen Saints MC a H.A. puppet club H.A. Rob Allen was spending $1k-2k a month on oxy and fentanyl he got solely from Harder and 2 of his associates.
https://saskatoonfuneralhome.com/tribute/details/4601/Noel-Harder/obituary.html Noel Harder died last year.
https://globalnews.ca/news/7387226/noel-harder-sentenced-after-solitary-confinement/ He spent years in fear that he would be offed and after testifying against Rob Allen he was busted again on gun charges when a citizen called police as he dicked around with a gun in public. He pleaded guilty to possessing the following for a dangerous purpose: the 9-mm handgun, an airsoft pistol, bear spray and a form of pepper spray. He also admitted to possessing a gun while prohibited and doing so while in a vehicle.
'Saskatchewan is a bit safer today': Project Forseti concludes to mixed reviews
A post about the expansion drew some praise from members of the group. Estevan police say it's nothing to celebrate.
"They create these support clubs as a show of force to rival groups," Shewchuk said. "They'll recruit members from these support clubs, and it also allows the Hells Angels to further inflate themselves within their criminal activities."
Don't be fooled by charity events, police say
Hells Angels and support clubs sometimes host charity events or "runs" and portray themselves as motorcycle enthusiasts. But Shewchuk said the club has a long history of crimes ranging from drug trafficking to murder.
Shewchuk said members of the public should not be fooled by their events because they can serve as a chance for the clubs to make money, sell merchandise and meet with other outlaws. The events themselves can serve as a show of force, he said.
"To some citizens that can be very intimidating, and that's the message they want to portray," he said.
Shewchuk called the 2016 arson a "significant" event for Estevan and said some members of the club were the subject of multiple investigations, mainly for assault.
CBC Saskatchewan reached out to the Hells Angels and the Heretics MC for comment on the expansion, but a response was not received by deadline.
'Zero tolerance' for organized crime
Project Forseti, a police investigation executed in Saskatoon in 2018, saw two members of the Hells Angels and four members of the Fallen Saints MC, a Saskatoon-based support group, convicted of drug trafficking and weapons charges.
The investigation was one of the largest in the province's history and resulted in more than $8 million of methamphetamine, fentanyl and cocaine being taken off Saskatchewan streets.
Shewchuk said support club members can also serve as protection for higher-ranking members of the Hells Angels during legal proceedings, as support clubs may be tasked with assisting the club with their illegal activities.
Cocaine dealer Daryl Nagy gets four years as final conviction in Project Forseti
Police informant kicked out of witness protection for using drugs, among other reasons, gov't says
Moose Jaw Police Service Staff Sgt. Taylor Elder said through a statement that police were watching the group closely and have "zero tolerance when it comes to organized crime."
"This isn't the first MC group who has set roots in Moose Jaw," Elder's statement said. "Their actions will dictate our response."
Police in Estevan were monitoring the Heretics MC and were working closely with other police services in Saskatchewan, Shewchuk said.
Members of the public will see an increased level of enforcement as the riding season begins, he said.
https://www.cbc.ca/news/canada/saskatoon/heretics-motorcycle-club-moose-jaw-1.6002345
Blog MT Insurance Law Blog
Miller Thomson LLP
Miller Thomson LLP logo
Canada July 25 2023
Introduction
Wynward Insurance Group v Smith Building and Development Ltd, 2023 SKCA 57 highlights significant considerations for insurers who are considering denying claims on the basis of an insured’s failure to disclose a material change in risk.
Background facts
The plaintiffs, Mr. and Mrs. Smith (the “Smiths”), owned a commercial building in Estevan, Saskatchewan insured with Wynward Insurance Group (“Wynward”). The Smiths leased the building to several tenants, one of which entered into a sub-lease agreement with a motorcycle club the Reapers Riders. The club later became known as the Heretics Motorcycle Club (the “Heretics”).
In April 2016, the building was damaged by a fire that was determined to be the result of arson (the “Fire”). The Smiths submitted a claim to Wynward immediately after the Fire. Mr. Henderson, a senior claims examiner at Wynward, was assigned to investigate the Smiths’ claim. He found that the Heretics were an affiliate of the Hells Angels biker gang, a known criminal organization. He denied the Smiths’ claim on the basis that they had neglected to inform Wynward of the material change in risk posed by the presence of the criminal-affiliated motorcycle club in the building.
Trial decision
The Smiths commenced an action against Wynward, claiming that they were entitled to be indemnified under their policy. Wynward argued that they were not informed of the Reapers Riders transition to the Heretics, and that the presence of this particular “outlaw motorcycle club” with an “unsavoury connection” to the Hells Angels constituted a material change of risk. The Smiths maintained that this so-called transition did not constitute a material change in risk and that, even if it did, they did not possess the requisite knowledge of the connection between the Heretics and the Hells Angels or any other criminal activity which would obligate them to disclose such knowledge to Wynward.
In reviewing the applicable law, the trial judge noted that whether a change constitutes a material change of risk pursuant to a contract of insurance is a question of fact. Additionally, the insurer has the onus of establishing, on a balance of probabilities, that the change at issue is a material change in risk. The court ultimately rejected Wynward’s arguments and found that it had not discharged the burden of proof required to establish that the Heretics’ presence in the building as a sub-tenant constituted a material change in risk.
In his reasons, the trial judge considered the evidence led by Wynward in support of its arguments. First, the court considered the results of an internet search which described the Heretics as a “Hells Angel puppet club.” The accuracy and truth of the contents of the report could not be verified, and as such, carried little weight. In addition to this search result, Wynward sought to rely on the testimony of Cst. Shewchuk, a member of the Estevan Police Service involved in monitoring the Heretics and the Hells Angels. Cst. Shewchuk testified that the Heretics hosted three social events per year which were attended by members of other motorcycle clubs, regular citizens and a few members of the Hells Angels from nearby cities. Hells Angels merchandise was sold at these events. Wynward maintained that the foregoing established a direct link between the Heretics and the Hells Angels. The trial judge disagreed and reasoned that neither the presence of members of the Hells Angels nor the sale of Hells Angels merchandise at the Heretics’ events were indicative of criminality, a connection between the clubs or a material change in risk. Thus, Wynward failed to prove that there had been a material change in risk.
The trial judge noted that even if there had been a material change in risk, the insured would have to be shown to have effectively known of this change. The trial judge found no evidence to suggest that the Smiths were aware of or ought to have been aware of anything “untoward” about the Heretics. Since Wynward failed to establish that a material change in risk had occurred and that the Smiths knew about the change, the trial judge ruled that the Smiths were entitled to indemnity under their policy. Wynward appealed the trial judge’s decision.
On appeal
On appeal, Wynward argued that the trial judge erred in finding no evidence of a material change in risk. The Court of Appeal reviewed the law on material change and disclosure. It cited the doctrine of uberrima fides which describes the relationship of mutual vulnerability and utmost good faith that exists between insurers and an insured. This relationship imposes a duty on the insured to be forthcoming in disclosing information to their insurer that may be relevant to the risk. This duty is not without limitations and extends only to facts which the insured has actual or constructive knowledge of and which are material to the risk being insured.
The Court of Appeal also clarified that a fact material to the risk is one that “if the facts had been truly represented, they would have caused a reasonable insurer to decline the risk or required a higher premium.”[1] The test for materiality requires an objective assessment of what a reasonable insurer would have decided if they were in possession of the relevant facts at the time the parties entered into the policy. The fact that Wynward viewed the club’s transition to an outlaw motorcycle club as material was not determinative of its materiality in objective terms.
The Court found that the trial judge was alert to the applicable law and made no palpable or overriding error. Accordingly, the Court of Appeal upheld the lower court’s judgment that the evidence led by Wynward did not establish a connection between the Heretics and the Hells Angels that resulted in a change of risk that was material to the insurance contract.
Takeaway
The insurer bears the burden of proving that a particular change is material to the risk. In this case, Wynward’s argument that a material change in risk occurred when the Heretics became affiliated with a criminal entity lacked a reliable evidentiary foundation. When considering the issue of an insured’s failure to disclose a material change of risk when assessing a claim, insurers should consider whether they have sufficient evidence in support of their position. It is crucial to demonstrate that the change in question truly qualifies as a material change in risk.
https://www.lexology.com/library/detail.aspx?g=6955c0de-8957-416d-975a-1245efd23c7b
Police closely monitoring Heretics Motorcycle Club expansion into Moose Jaw
Police say group in Estevan is a support club of the Hells Angels
Morgan Modjeski · CBC News · Posted: Apr 27, 2021 3:00 AM PDT | Last Updated: April 27, 2021
Members of the Heretics MC can be seen in this photo posted to a private Facebook group earlier this month detailing the expansion of the club into Moose Jaw with a new chapter. (Facebook.com)
Police are closely monitoring the expansion of the Heretics Motorcycle Club in southern Saskatchewan, warning that it's a support club for the Hells Angels.
"By expanding their support clubs in the province, basically the Hells Angels are attempting to create a stronger network," said Det.-Const. Mischa Shewchuk of the Estevan Police Service's intelligence unit.
The Heretics MC — which made headlines in 2016 after its In Estevan, Sask., clubhouse was damaged by arson — recently announced the creation of a new chapter in Moose Jaw.
Photos of the announcement shared online in a private Facebook group show five members of the new chapter holding "Moose Jaw" patches that appear to be the bottom of the three-patch design that often adorns vests worn by outlaw motorcycle clubs.
Hells Angel Rob Allen sentenced to 12 months in prison after cocaine trafficking conviction https://www.cbc.ca/news/canada/saskatoon/judge-sentence-rob-allen-prison-1.4106630 the H.A. full patch was addicted to oxy and an informers testimony sent him to prison. Another successful informer against H.A. Noel Harder joining a long list of such informers and snitches https://groups.google.com/g/van.general/c/aAAuQlWg4bY/m/AlcuthIfFgAJ
H.A. Allen was paranoid the police were closing in on him but did not clue in that Noel Harder a drug dealer for many years was an informant. https://saskatoon.ctvnews.ca/rob-allen-became-paranoid-of-police-informant-testifies-in-hells-angel-s-trial-1.3192389
Noel Harder was V.P. of the Fallen Saints MC a H.A. puppet club H.A. Rob Allen was spending $1k-2k a month on oxy and fentanyl he got solely from Harder and 2 of his associates.
https://saskatoonfuneralhome.com/tribute/details/4601/Noel-Harder/obituary.html Noel Harder died last year.
https://globalnews.ca/news/7387226/noel-harder-sentenced-after-solitary-confinement/ He spent years in fear that he would be offed and after testifying against Rob Allen he was busted again on gun charges when a citizen called police as he dicked around with a gun in public. He pleaded guilty to possessing the following for a dangerous purpose: the 9-mm handgun, an airsoft pistol, bear spray and a form of pepper spray. He also admitted to possessing a gun while prohibited and doing so while in a vehicle.
'Saskatchewan is a bit safer today': Project Forseti concludes to mixed reviews
A post about the expansion drew some praise from members of the group. Estevan police say it's nothing to celebrate.
"They create these support clubs as a show of force to rival groups," Shewchuk said. "They'll recruit members from these support clubs, and it also allows the Hells Angels to further inflate themselves within their criminal activities."
Don't be fooled by charity events, police say
Hells Angels and support clubs sometimes host charity events or "runs" and portray themselves as motorcycle enthusiasts. But Shewchuk said the club has a long history of crimes ranging from drug trafficking to murder.
Shewchuk said members of the public should not be fooled by their events because they can serve as a chance for the clubs to make money, sell merchandise and meet with other outlaws. The events themselves can serve as a show of force, he said.
"To some citizens that can be very intimidating, and that's the message they want to portray," he said.
Shewchuk called the 2016 arson a "significant" event for Estevan and said some members of the club were the subject of multiple investigations, mainly for assault.
CBC Saskatchewan reached out to the Hells Angels and the Heretics MC for comment on the expansion, but a response was not received by deadline.
'Zero tolerance' for organized crime
Project Forseti, a police investigation executed in Saskatoon in 2018, saw two members of the Hells Angels and four members of the Fallen Saints MC, a Saskatoon-based support group, convicted of drug trafficking and weapons charges.
The investigation was one of the largest in the province's history and resulted in more than $8 million of methamphetamine, fentanyl and cocaine being taken off Saskatchewan streets.
Shewchuk said support club members can also serve as protection for higher-ranking members of the Hells Angels during legal proceedings, as support clubs may be tasked with assisting the club with their illegal activities.
Cocaine dealer Daryl Nagy gets four years as final conviction in Project Forseti
Police informant kicked out of witness protection for using drugs, among other reasons, gov't says
Moose Jaw Police Service Staff Sgt. Taylor Elder said through a statement that police were watching the group closely and have "zero tolerance when it comes to organized crime."
"This isn't the first MC group who has set roots in Moose Jaw," Elder's statement said. "Their actions will dictate our response."
Police in Estevan were monitoring the Heretics MC and were working closely with other police services in Saskatchewan, Shewchuk said.
Members of the public will see an increased level of enforcement as the riding season begins, he said.
https://www.cbc.ca/news/canada/saskatoon/heretics-motorcycle-club-moose-jaw-1.6002345
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