Reinbrecht v. Reinbrecht et al.

Reinbrecht et al. v. Allstate Insurance Co. of Canada Reinbrecht et al. v. John Doe et al. [Indexed as: Reinbrecht v. Reinbrecht]

89 O.R. (3d) 561

Court of Appeal for Ontario,

Lang, MacFarland and LaForme JJ.A.

March 18, 2008

Limitations -- Insurance -- Insured suing uninsured at-fault driver within limitation period and then suing her own insurer more than two years after accident -- Insurer moving for summary judgment dismissing action as statute-barred -- Motion judge properly dismissing motion -- Insured not legally entitled to recover non-pecuniary damages until she discovered or ought to have discovered that those damages met threshold -- Trial required because of conflicting evidence on threshold issue -- Limitation period not tolling against both pecuniary and non-pecuniary claims from date of discovery of pecuniary damages -- Motion judge also not erring in finding that special circumstances existed that justified extension of limitation period.

The insured was involved in a motor vehicle accident in June 1998. She sued the uninsured at-fault driver in June 2000, within the two-year limitation period. She sued her own insurer in June 2001. The insurer brought a motion for summary judgment on the basis that the insured's claim against it was barred by the expiration of the limitation period. The motion was dismissed. The insurer appealed.

Held, the appeal should be dismissed.

Section 8(3) of O. Reg. 676 under the Insurance Act, R.S.O. 1990, c. I.8 provides that an action against an insurer in respect of bodily injury shall be commenced within two years after the cause of action arises. The motion judge determined that the insured was not legally entitled to recover at least non-pecuniary damages until she discovered, or ought to have discovered by reasonable diligence, that her non-pecuniary damages met the threshold. Since the determination of the question of when this occurred depended on conflicting evidence, the motion judge correctly concluded that a trial was required. The limitation period did not toll for both pecuniary and non-pecuniary damages from the time when the insured knew about her pecuniary damages.

The motion judge also found that there were special circumstances justifying the extension of the limitation period to the date the insured sued the at-fault motorist. Even if the insurer were to succeed in having the action against it dismissed at this stage, the insured could still proceed to judgment with her action against the uninsured driver and then seek payment of the judgment pursuant to the Uninsured Automobile Coverage section of the policy. The insurer would not be prejudiced by the extension of the limitation period, as it was put on notice of the claim in June 2000, and had conducted independent medical-legal examinations of the insured, examined her for discovery and been provided with her medical records.

APPEAL from the order of Crane J., [2007] O.J. No. 1943, 49 C.C.L.I. (4th) 321 (S.C.J.), dismissing a motion for summary judgment.

Cases referred to Chenderovitch v. John Doe, [2004] O.J. No. 681, 183 O.A.C. 284, 8 C.C.L.I. (4th) 1, 44 C.P.C. (5th) 243, 48 M.V.R. (4th) 190, 129 A.C.W.S. (3d) 596 (C.A.), folld [page562] Other cases referred to Johnson v. Wunderlich (1986), 57 O.R. (2d) 600, [1986] O.J. No. 1251, 34 D.L.R. (4th) 120, 18 O.A.C. 89, 21 C.C.L.I. 248, [1987] I.L.R. 8335, 45 M.V.R. 184, 2 A.C.W.S. (3d) 179 (C.A.); Onishenko Estate v. Quinlan, [1972] S.C.R. 380, [1971] S.C.J. No. 118, 24 D.L.R. (3d) 720, [1972] 1 W.W.R. 303 Rules and regulations referred to Uninsured Automobile Coverage, R.R.O. 1990, Reg. 676 (under the Insurance Act, R.S.O. 1990, c. I.8), s. 8(3) [as am.]

John P. Pavoni and Sylvia Lee, for appellant Allstate. Paul Sweeny, for respondent Reinbrecht.

[1] Endorsement by THE COURT: -- This appeal concerns the limitation period applicable to a June 1998 motor vehicle accident. The respondent, Jeanette Reinbrecht, sued the uninsured at-fault driver in June 2000, within the two-year limitation period. One year later, in June 2001, she sued her insurer, Allstate Insurance Companies of Canada, the appellant in this proceeding. Allstate moved for summary judgment on the basis that the respondent's claim against it was barred by the expiration of the two-year limitation period. The motion judge, Crane J., dismissed Allstate's motion. Allstate appeals.

[2] Allstate raises two issues. First, did the motion judge err in concluding that the limitation period tolls based on the discoverability principle in the respondent's direct action #M1206518. Second, did the motion judge err in extending the limitation period on the basis that the facts in this case give rise to "special circumstances" within the meaning of Onishenko Estate v. Quinlan, [1972] S.C.R. 380, [1971] S.C.J. No. 118. Commencement of the limitation period

[3] Section 8(3) of O. Reg. 676, Insurance Act, R.S.O. 1990, c. I.8 provides in its relevant part that an action against an insurer in respect of bodily injury shall be commenced within two years after the cause of action arises. The issue in this case involves the second element necessary to establish a cause of action, which is whether the appellant was a person "legally entitled to recover damages".

[4] Allstate argued that the respondent was "legally entitled to recover damages" against it at the time of the accident because, at that time, the respondent knew that she suffered [page563] both pecuniary and non-pecuniary damages, both of which she claimed in her 2001 Statement of Claim.

[5] The motion judge determined that the respondent was not legally entitled to recover at least non-pecuniary damages until she discovered, or ought to have discovered by reasonable diligence, that those damages met the threshold.

[6] The respondent alleged that this did not occur until April 27, 2000, when the respondent received a medical opinion about the extent of her injuries. The appellant alleged it occurred earlier. Since the determination of this question depended on conflicting evidence, in our view, the motion judge correctly concluded that a trial was required.

[7] The appellant argues that, irrespective of when the respondent learned about the extent of her physical injuries, she knew about her pecuniary damages immediately after the accident and that the at-fault driver was uninsured and, accordingly, the limitation period tolled for both pecuniary and non-pecuniary damages at that time. This argument is wholly met by this court's decision in Chenderovitch v. John Doe, [2004] O.J. No. 681, 183 O.A.C. 284 (C.A.). In that case, Moldaver J.A. rejected the "single cause of action" paradigm on the basis set out in para. 22 of his reasons that "the legislature did not intend to lay a limitation trap to prevent accident victims, with pecuniary losses, from pursuing significant non-pecuniary damages claims." He concluded at para. 33 that "the legislature saw fit to draw a distinction that the common law does not recognize -- the creation of two separate causes of action for different heads of damages arising out of the same negligent act."

[8] Applying Chenderovitch to the non-pecuniary damages claim in this case, the motion judge did not err in concluding that the matter could not be determined on a motion for summary judgment -- a trial would be necessary to resolve the question of when the respondent was aware that the extent of her injuries arguably met the threshold. Extension of Limitation Period -- Special Circumstances

[9] The respondent argues that even if she was out of time regarding pecuniary losses, this court should extend the time for her claim because to do so would not prejudice the appellant and because there are special circumstances.

[10] This brings us to the second issue on this appeal: whether the motion judge erred in extending the limitation period to the date the respondent sued the at-fault motorist in June [2000]. The parties agree that the two-fold test for extending a limitation period depends on an absence of prejudice and a demonstration [page564] of special circumstances. Prejudice was not an issue before the motion judge or on appeal.

[11] The motion judge found special circumstances based on the peculiar three-fold nature of the respondent's potential claims against the appellant. He described these in para. 27 of his reasons:

(1) The insured may sue only the tort feasor. Then, after obtaining judgment, demand payment from the insurer under the uninsured cover of the contract of insurance, then should there be refusal to pay, an action may be commenced for breach of contract. No limitation period would be involved prior to the date of judgment against the tort feasor. (2) The insured may bring an action naming only his or her uninsured motorist insurer. (3) The insured may join both the insurer and the tort feasor as parties defendant in the same action; Johnson v. Wunderlich, supra.

[12] In the circumstances of this case, even if the appellant were to succeed in having this particular action dismissed at this stage, it would remain open to the respondent to proceed to judgment with her action against the at-fault uninsured driver and thereafter seek payment of that judgment pursuant to the Uninsured Automobile Coverage section of the Allstate policy -- this action revisited at a later point in time.

[13] The motion judge determined that this was a case where special circumstances existed and where it would be appropriate for the court to exercise its discretion to extend the limitation period. We agree.

[14] First, the appellant does not argue that it suffered prejudice. The appellant was put on notice of this claim in June 2000 when the respondent commenced his proceeding against the at-fault uninsured motorist. The appellant has had independent medical legal examinations of the respondent, has examined her for discovery and been provided with her medical records. In addition, the appellant failed to bring its motion for summary judgment until April 2007, almost six years after the commencement of the action which is the subject of its motion.

[15] The comments of the court in Johnson v. Wunderlich (1986), 57 O.R. (2d) 600, [1986] O.J. No. 1251 (C.A.), at para. 28, are apposite here:

If the respondent is removed from the action at this time it will not be bound by a judgment obtained against the alleged tortfeasors -- because the action against them is uncontested. Accordingly, the whole matter of liability and damages might have to be relitigated in a subsequent action against the respondent on the judgment. This multiplicity of proceedings would be completely unnecessary. The respondent has defended this action to the point of trial. It has had discoveries of the plaintiffs. I cannot see any disadvantage to it of which it can justly complain in continuing this action so that it will be bound by the findings respecting liability and [page565] damages in the form of a declaratory judgment. This course simply has the effect of avoiding the unnecessary duplication of proceedings on these two issues.

[16] On this basis, we see no error in the motion judge's finding of special circumstances and his discretionary decision to extend the limitation period.

[17] For these reasons the appeal is dismissed. Costs to the respondent on a partial indemnity scale fixed in the sum of $10,860.10 inclusive of disbursements and GST.

Appeal dismissed.