Bonaccorso v. Optimum Insurance Company Inc.

[Indexed as: Bonaccorso v. Optimum Insurance Co. Inc.]

Ontario Reports

Court of Appeal for Ontario,

Cronk, Tulloch and van Rensburg JJ.A.

January 14, 2016

129 O.R. (3d) 544 | 2016 ONCA 34

Case Summary

Limitations — Insurance — Insurer informing insured in February 2010 that her income replacement benefits were being discontinued — Letter describing process of disputing refusal and containing bolded warning of two-year limitation period — Insured returning to work but stopping work in February 2011 because of injuries sustained in original accident — Insured requesting reinstatement of benefits in July 2012 — Insurer properly denying request on basis that limitation period had expired — Insurer's February 2010 letter constituting valid refusal of benefits which started running of limitation period — Section 11 of Statutory Accident Benefits Schedule not applying — Refusal not premature — Statutory Accident Benefits Schedule — Accidents on or after November 1, 1996, O. Reg. 403/96, s. 11.

The appellant was injured in a motor vehicle accident and received income replacement benefits from the respondent until June 28, 2009, when she returned to work. On February 8, 2010, the respondent advised the appellant by letter that her income replacement benefits were being discontinued effective June 28, 2009. The letter was accompanied by an explanation of benefits. It contained a description of the process to dispute the refusal and a bolded warning that there was a two-year limit from the time of the refusal to arbitrate or commence a lawsuit. The appellant stopped working in February 2011, allegedly because of the injuries sustained in the original accident, and requested a reinstatement of income replacement benefits on July 13, 2012. The respondent denied the request on the basis that the limitation period had expired. The [page545] appellant commenced an action for income replacement benefits. The action was dismissed on a motion by the respondent for summary judgment. The appellant appealed.

Held, the appeal should be dismissed.

The motion judge correctly held that the respondent's letter of February 8, 2010 was a refusal of a benefit sufficient to commence the running of the two-year limitation period. The respondent's refusal was not premature. Despite the appellant's return to work, one single claim arose from the accident. Section 11 of the Statutory Accident Benefits Schedule -- Accidents on or after November 1, 1996, which provides for a temporary return to work without affecting the right to resume receiving income replacement benefits, did not prevail over the limitation period in the circumstances of this case.

Haldenby v. Dominion of Canada General Insurance Co. (2001), 2001 16603 (ON CA), 55 O.R. (3d) 470, [2001] O.J. No. 3317, 204 D.L.R. (4th) 721, 149 O.A.C. 172, 32 C.C.L.I. (3d) 1, 107 A.C.W.S. (3d) 482 (C.A.); Ladhar v. Economical Mutual Insurance Co., [2012] O.F.S.C.D. No. 60, 2012 CarswellOnt 5805; Wadhwani v. State Farm Mutual Automobile Insurance Co., [2013] O.J. No. 4972, 2013 ONCA 662, 52 M.V.R. (6th) 1, 26 C.C.L.I. (5th) 173, 235 A.C.W.S. (3d) 417, consd

Other cases referred to

Hryniak v. Mauldin, [2014] 1 S.C.R. 87, [2014] S.C.J. No. 7, 2014 SCC 7, 314 O.A.C. 1, 453 N.R. 51, 2014EXP-319, J.E. 2014-162, EYB 2014-231951, 95 E.T.R. (3d) 1, 12 C.C.E.L. (4th) 1, 27 C.L.R. (4th) 1, 21 B.L.R. (5th) 248, 46 C.P.C. (7th) 217, 37 R.P.R. (5th) 1, 366 D.L.R. (4th) 641, 2014EXP-319, J.E. 2014-162; Smith v. Co-operators General Insurance Co., [2002] 2 S.C.R. 129, [2002] S.C.J. No. 34, 2002 SCC 30, 210 D.L.R. (4th) 443, 286 N.R. 178, J.E. 2002-663, 158 O.A.C. 1, 36 C.C.L.I. (3d) 1, [2002] I.L.R. I-4071, 112 A.C.W.S. (3d) 950

Statutes referred to

Insurance Act, R.S.O. 1990, c. I.8, s. 281.1(1)

Rules and regulations referred to

Rules of Civil Procedure,R.R.O. 1990, Reg. 194, rule 20.04

Statutory Accident Benefits Schedule — Accidents on or after November 1, 1996, O. Reg. 403/96, ss. 11, 37(2) (d), 51(1)

APPEAL from the order of Arrell J., [2015] O.J. No. 2093, 2015 ONSC 2633 (S.C.J.) dismissing an action.

Daniel Roncari, for appellant.

Amanda M. Lennox and Rebecca J. Brown, for respondent.

[1] Endorsement BY THE COURT: -- The appellant appeals the order of the motion judge on a summary judgment motion dismissing her claim for income replacement benefits.

[2] On February 4, 2008, the appellant was injured in a motor vehicle accident. She received income replacement benefits from the respondent until June 28, 2009, when she returned to work. [page546]

[3] The respondent sent a letter to the appellant on June 22, 2009, advising that no further benefits would be payable once she began full-time work.

[4] On February 8, 2010, the respondent further advised the appellant by letter that her income replacement benefits were being discontinued effective June 28, 2009. This February 8, 2010 letter was accompanied by an explanation of benefits. It contained a description of the step-by-step process to dispute the refusal and a bolded warning that there was a two-year time limit from the date of the insurer's refusal, to arbitrate or commence a lawsuit in court.

[5] The appellant continued to work until February 15, 2011, when she ceased her employment allegedly because of her injuries sustained in the accident.

[6] The appellant requested a reinstatement of income replacement benefits on July 13, 2012. The respondent denied this request on July 20, 2012 on the basis that the limitation period to dispute the stoppage had expired. The appellant filed for mediation on October 9, 2012, and commenced her action claiming income replacement and other benefits on November 8, 2013.

[7] The motion judge concluded that the appellant's claim for further income replacement benefits was statute-barred and granted the respondent's motion for summary judgment in respect of this claim. He found that the respondent's letter of February 8, 2010 and the accompanying explanation of benefits constituted a valid refusal of benefits. The two-year limitation period provided in s. 281.1(1) of the Insurance Act, R.S.O. 1990, c. I.8 and s. 51(1) of the Statutory Accident Benefits Schedule -- Accidents on or after November 1, 1996, O. Reg. 403/96 (the "SABS") expired on February 8, 2012.

[8] The appellant submits that the motion judge erred in finding that her claim for income replacement benefits was statute-barred. We disagree.

[9] The motion judge was correct in determining that this was an appropriate case for summary judgment. In finding that there was no genuine issue requiring a trial with respect to the income replacement benefits claim, he outlined rule 20.04 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, and applied the principles in Hryniak v. Mauldin, [2014] 1 S.C.R. 87, [2014] S.C.J. No. 7, 2014 SCC 7. There were no facts in dispute. The motion judge had sufficient material before him to make a decision on the merits of the claim, and in particular on the defence that the claim was statute-barred. [page547]

[10] The appellant argues that the refusal was not effective to start the running of the limitation period because it was premature.

[11] In our view, the motion judge was correct to hold that the respondent's letter of February 8, 2010, advising that income replacement benefits were being discontinued, was a refusal of a benefit sufficient to commence the running of the relevant two-year limitation period. In reaching this conclusion, the motion judge applied, as he was obliged to do, the governing principles regarding such a refusal, as set out by the Supreme Court of Canada in Smith v. Co-operators General Insurance Co., [2002] 2 S.C.R. 129, [2002] S.C.J. No. 34, 2002 SCC 30.

[12] The motion judge reviewed and quoted from the refusal letter and accompanying materials. The respondent clearly discontinued the appellant's income replacement benefits, explained the process to dispute the discontinuance, and set out the two-year time limit in which the appellant could contest the decision. The respondent referred to s. 37(2) (d) of the SABS, and enclosed a copy. That provision permits the discontinuance of payment of a specified benefit (including income replacement benefits) if "the insured person has resumed his or her pre-accident employment duties". The February 8, 2010 refusal therefore complied with Smith.

[13] The insurer's refusal was not premature. The appellant received income replacement benefits from the respondent after her accident. A claim had been made and benefits were received. Despite the return to work, one single claim arose from the accident, as explained by the Appeal Division of the Financial Services Commission of Ontario in Ladhar v. Economical Mutual Insurance Co., [2012] O.F.S.C.D. No. 60, 2012 CarswellOnt 5805, at para. 20. The insurer's letter of February 8, 2010 was a valid termination of benefits and the two-year limitation period began to run on this date.

[14] The appellant argues that the motion judge erred in not considering the impact of s. 11 of the SABS. Section 11 provides for a temporary return to work without affecting the right to resume receiving income replacement benefits if, as a result of the accident, the insured is unable to continue in the employment. Therefore, the appellant argues, her claim for these benefits only crystallized when she stopped working in February 2011. Section 11 of the SABS states:

11. A person receiving an income replacement benefit may return to or start an employment at any time during the 104 weeks following the onset of the disability in respect of which the benefit is paid without affecting his [page548] or her entitlement to resume receiving benefits under this Part if, as a result of the accident, he or she is unable to continue in the employment.

[15] The motion judge was alive to this issue. Though he did not explicitly analyze the effect of s. 11, he found that this court's decisions in Haldenby v. Dominion of Canada General Insurance Co. (2001), 2001 16603 (ON CA), 55 O.R. (3d) 470, [2001] O.J. No. 3317 (C.A.) and Wadhwani v. State Farm Mutual Automobile Insurance Co., [2013] O.J. No. 4972, 2013 ONCA 662 provide a complete answer to the appellant's limitations argument. We agree.

[16] Haldenby and Wadhwani dealt with income replacement benefits claims asserted after a temporary return to work. In both cases, an insured who had received income replacement benefits that were terminated claimed the resumption of such benefits after an attempted return to work. This court held that the limitation period ran from the insurer's refusal to pay benefits, notwithstanding that the insured had suffered no actual loss in the interim period.

[17] Part of the court's analysis in Haldenby depended on the wording of the relevant SABS provisions, which have since changed: see paras. 21-27 and 29-33. But the court also observed that the insured's argument based on the return to work provision (which is also made here) would extend a claimant's entitlement to benefits for an indeterminate period of time, and would be inconsistent with the need for finality, certainty and the principle of diligence underlying limitation periods: see paras. 35 and 36.

[18] This reasoning was followed in Ladhar, which analyzed the differences in the SABS wording. And both Haldenby and Ladhar were approved and followed by this court in Wadhwani.

[19] Accordingly, the applicable limitation period did not begin to run only when the respondent refused to pay the further income replacement benefits claimed by the appellant. Rather, the two-year limitation period commenced in February 2010, when the insurer exercised its rights to terminate such benefits and provided a valid refusal of benefits. Simply put, the temporary return to work provision does not prevail over the limitation period: Haldenby, at para. 36; Ladhar, at para. 24.

[20] For these reasons, the appeal is dismissed. Costs to the respondent, as agreed between the parties, in the sum of $5,500, inclusive of disbursements and all applicable taxes.

Appeal dismissed.

[page549]

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