Compton v. State Farm Insurance Company of Canada, 2014 ONSC 2260

CITATION: Compton v. State Farm Insurance Company of Canada, 2014 ONSC 2260

DIVISIONAL COURT FILE NO.: 13-1960

DATE: 2014/04/10

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

C. MCKINNON, WHITTEN AND B. THOMAS JJ.

BETWEEN:

Allan Compton

Plaintiff (Respondent)

– and –

State Farm Insurance Company of Canada

Defendant (Appellant)

John M. Farant, for Allan Compton

Joseph W.L. Griffiths, for State Farm Insurance Company of Canada

HEARD: April 8, 2014

B. THOMAS J.

THE APPEAL

1On May 31, 2013 Scott J. dismissed a motion for summary judgment brought by the Defendant, State Farm Automobile Insurance Company (State Farm). Leave to appeal was granted by Hackland, R.S.J. on September 17, 2013.

ISSUES

2The original motion for summary judgment sought a determination that the Plaintiff’s claim for an income replacement benefit was statutorily barred by the limitation period contained in s. 281.1 of the Insurance Act, RSO 1990 c.1.8.

3Specifically, this was due to the fact that the Statement of Claim was issued more than two years after the insurer first communicated its clear denial of the claim.

4The issues on this appeal are the following:

(a) Did Justice Scott err in law when he concluded that he lacked a full appreciation of the matter because of his concerns about an “error” in the September 14, 2010 OCF-9 sent by State Farm to the Plaintiff?

(b) In the alternative, did Justice Scott err in law by finding that the possibility of a “fresh medical finding” might have some impact on the determination of the motion?

(c) Should the court in these circumstances have granted summary judgment and dismissed the Plaintiff’s claim?

BACKGROUND

5The Plaintiff was involved in a motor vehicle accident on September 30, 2003. He applied for Statutory Accident Benefits on or about October 16, 2003

6At the time of the accident, the Plaintiff was working for Cancoil Thermal Corporation as a factory worker.

7According to the Employer’s Confirmation of Income Form (OCF-2) submitted by the Plaintiff’s employer on November 20, 2003, the Plaintiff returned to work on or about November 17, 2003.

8It appears that the Plaintiff remained employed on a full-time and continuous basis from November 2003 until January 6, 2006. Consequently, the Plaintiff did not qualify for an income replacement benefit during that period.

9On or about January 26, 2006, the Plaintiff tendered a second OCF-2 in which it was noted that the Plaintiff had stopped working on or about January 6, 2006.

10On or about January 29, 2007, the Plaintiff was advised by State Farm that he was entitled to receive an income replacement benefit from January 1, 2006 to January 29, 2007 inclusive and a payment was issued to him with interest for that period.

11On August 27, 2007, the Plaintiff underwent a physiatry assessment conducted by Dr. Gavin Shanks. According to Dr. Shanks, the Plaintiff no longer suffered a substantial inability to perform his pre-accident employment.

12Based on Dr. Shanks’ report, State Farm wrote to the Plaintiff on September 13, 2007 and confirmed that he was no longer entitled to an income replacement benefit effective September 20, 2007.

13In response to State Farm’s denial of his benefits, the Plaintiff caused an Application for Mediation to be filed with the Financial Services Commission of Ontario on or about October 3, 2007.

14A Report of Mediator was issued on February 28, 2008.

15No further steps appear to have been taken in response to State Farm’s denial of the income replacement benefit following mediation in February 2008.

16On or about August 20, 2010, the Plaintiff submitted a Disability Certificate to State Farm. The Disability Certificate was completed by Dr. Anna Grant at the Maple Clinic and refers to the Plaintiff as having a substantial inability to perform the essential tasks of his employment.

17In response to receipt of the Disability Certificate, State Farm sent the Plaintiff an Explanation of Benefits Payable (OCF-9) form on or about September 14, 2010. In it, State Farm reminded the Plaintiff that his entitlement to an income replacement benefit had previously been reviewed by a physiatrist (Dr. Shanks) and that he had been found not to suffer a substantial inability to perform his pre-accident employment.

18The OCF-9 inadvertently refers to Dr. Shanks’ report as having been authored on August 27, 2010 instead of August 27, 2007.

19On or about February 22, 2011, the Plaintiff submitted an Application for Mediation to the Financial Services Commission of Ontario.

20A Report of Mediator was issued on April 24, 2012. The report notes that one of the issues remaining in dispute was the Plaintiff’s entitlement to an income replacement benefit from September 14, 2010. It is clear that State Farm raised, as a preliminary issue, the limitation period.

21Following receipt of the Report of Mediator, the Plaintiff issued a Statement of Claim on May 4, 2012.

THE LEGAL FRAMEWORK

22The disposition of a motion for Summary Judgement is determined by the test enumerated in Rule 20.04(2), and (2.1) of the Rules of Civil Procedure, R.R.O. 1990, Regulation 194 set out below:

20.04 (1) [Repealed O. Reg. 438/08, s. 13(1)]

(2) The court shall grant summary judgment if,

(a) the court is satisfied that there is no genuine issue requiring a trial with respect to a claim or defence; or

(b) the parties agree to have all or part of the claim determined by a summary judgment and the court is satisfied that it is appropriate to grant summary judgment.

Powers

(2.1) In determining under clause (2) (a) whether there is a genuine issue requiring a trial, the court shall consider the evidence submitted by the parties and, if the determination is being made by a judge, the judge may exercise any of the following powers for the purpose, unless it is in the interest of justice for such powers to be exercised only at a trial:

1. Weighing the evidence.

2. Evaluating the credibility of a deponent.

3. Drawing any reasonable inference from the evidence. O. Reg. 438/08, s. 13 (3).

23The application of the Rule related to summary judgments has been considered by the Court of Appeal in Combined Air Mechanical Services Inc. v. Flesch, ONCA 764, 2011 ONCA 764, 108 O.R. (3d) 1, and refined by the Supreme Court of Canada in Hryniak v. Mauldin, 2014 SCC 7, 2014 S.C.C. 7 (Hryniak). For the purposes of this appeal the test to be applied was so defined by the court at para. 66 of Hryniak:

1. The judge should first determine if there is a genuine issue requiring trial based only on the evidence before her, without using the new fact-findings powers.

(d) There will be no genuine issue requiring trial if the summary judgment process provides her with the evidence required to fairly and justly adjudicate the dispute and is a timely, affordable and proportionate procedure.

THE DECISION OF THE MOTION JUDGE

24The relevant portion of the decision of Scott J. is contained in para. 12 of his reasons and is set out below:

12Section 281.1 of the Insurance Act is clear that the insured must commence his/her action within two years after the refusal by the insurer. In this case, based on the OCF-9 refusal date of September 13, 2007, the action was commenced some four and one-half years after such refusal. Generally speaking, I agree that the limitation period would have commenced on September 13, 2007. However, I have concerns notably about the errors contained in the second OCF-9 dated September 14, 2010, which have not satisfied me as to the date of the limitation commenced in the unique situation. Also, I have concerns as to whether the fresh medical finding is in issue, given that the insurer need only rely on its initial denial in order to preclude further or additional income replacement payments (I was advised by counsel that the insurer has paid 96 of the required 104 payments).

25It is clear that the motion judge felt he did not have an appreciation of the necessary facts and relevant legal principles to resolve the issues raised in the motion.

26The focus of this appeal amounts to the purely legal question of when the relevant limitation period commenced. There are no disputed findings of fact and as such the standard review here is one of correctness. (Hryniak at para. 84; Houson v. Nikolaisen, 2002 SCC 33, 2002 S.C.C. 33, para.9).

ANALYSIS

27At the outset of the argument of the appeal, counsel for the Plaintiff conceded that there was clearly only one physiatrist’s report and that the State Farm OCF-9 form of September 14, 2010 meant to refer to the report of August 27, 2007 and erroneously referred to a report dated August 27, 2010.

28He further conceded that if not for the Disability Certificate of August 20, 2010, the Plaintiff’s claim for benefits would have expired two years from State Farm’s denial of benefits of September 13, 2007.

29Counsel for State Farm relies upon the Court of Appeal decisions of Sietzma v. Economical Mutual Insurance Company, 2014 ONCA 111, and Turner v. State Farm Automobile Insurance Company Co., 2013 ONCA 5013, standing for the principle that clear and unequivocal notice by the insurer is sufficient to trigger the limitation period.

30Further, the court was referred to Wadhwani v. State Farm Mutual Insurance Company, 2013 ONCA 662, (Wadhwani) released after the decision of the motions judge. Wadhwani confirms that if an insured after the initial 104 week period becomes entirely unable to work because of an accident-related injury, he or she cannot reactivate the limitation period by making a fresh claim for further benefits. In this way the Court of Appeal has clearly removed the ability to import the “discoverability” concept into the analysis of the S. 281.1 limitation period.

31The cases cited above resolve the issues on this appeal. There are no unique or novel circumstances that this Court need consider. The error as to the date contained in the second OCF-9 that concerned the motions judge is of no consequence. This issue was effectively conceded by the Plaintiff’s counsel.

32The second concern of the motions judge related to the “fresh medical findings” contained in the Disability Certificate is resolved by the decision in Wadhwani.

33The issue raised by the Plaintiff’s counsel regarding the confusing effect of State Farm’s delivery of the fresh OCF-9 of September 14, 2010, appears to have been raised for the first time on this appeal. Leaving aside the appropriateness of raising this fresh argument, it does not further the position of the Plaintiff. The form denies the benefit and refers the insured back to the Physiatrist’s report of 2007 and implicitly the earlier denial. To suggest that State Farm’s use of the OCF-9 form in response to the new claim somehow renews the limitation period is contrary to the principle of finality embraced by the Court of Appeal in Wadhwani.

CONCLUSION

34For the reasons above, I conclude that the motion judge was wrong when he determined that he could not have a full appreciation of the issues related to the limitation period on the record before him. There was no genuine issue requiring a trial and in concluding otherwise he made an error in law.

35The appeal is allowed, the order of Scott J. is set aside, and summary judgment is granted dismissing the Plaintiff’s claim.

36The parties are confident that they can resolve the issue of costs. If they are wrong, the Court will receive written submissions delivered within 30 days (of no more than 5 pages each) failing which there will be no order as to costs.

B. Thomas J.

I agree _________________________________

C. McKinnon J.

I agree ________________________________

A. Whitten A. J.