Court of Appeal for Ontario

Date: 2024-01-24 Docket: COA-23-CV-0536

Before: Hourigan, Zarnett and Monahan JJ.A.

Between:

Lynn Schroeder Plaintiff (Respondent)

and

Co-operators General Insurance Company and Coseco Insurance Company Defendants (Appellant)

Counsel: Tina Jian and Angus Chalmers, for the appellant W. Colin Empke and Kathleen Lefebvre, for the respondent

Heard and released orally: January 23, 2024

On appeal from the order of Justice Stephen T. Bale of the Superior Court of Justice, dated March 24, 2023.

Reasons for Decision

[1] On December 12, 2014, the respondent was injured in a motor vehicle accident in Seattle, Washington. Kelly Yoshida, the driver who rear-ended the respondent, was insured under a policy with Progressive Insurance Company with a third-party liability limit of $25,000. The respondent was insured by Coseco through her wife’s policy, which included underinsured motorist protection pursuant to a standard form endorsement.

[2] Progressive offered to settle for the full policy limit of $25,000. Between June 18, 2015 and March 2, 2016, the respondent’s counsel reached out to Coseco’s adjuster on three occasions, seeking Coseco’s consent to the respondent’s acceptance of Progressive’s offer and indicating the respondent’s intention to proceed with an underinsured motorist claim.

[3] On April 15, 2016, Tammy Sitko, a Coseco claims representative, acknowledged via email that the respondent would be accepting Progressive’s offer and proceeding with an underinsured motorist claim with Coseco.

[4] According to Ms. Sitko, in December 2016 she left two voicemail messages for the respondent’s counsel. In the first, she requested supporting documents for the respondent’s underinsured motorist claim and advised of the limitation period for issuing a statement of claim. In the second, she inquired as to the status of the statement of claim and whether there was an intention to issue one. The respondent’s then counsel gave evidence indicating that he had no recollection or record of these messages.

[5] On February 13, 2019, the respondent’s counsel submitted to Coseco a request for indemnification on the underinsured motorist policy, including full particulars of her claim. This letter included an offer to settle for $1,921,220.21 plus special damages and costs. On February 10, 2020, following many unsuccessful attempts to settle, the respondent issued her statement of claim.

[6] Coseco sought summary judgment dismissing the action on the basis of the Limitations Act, 2002. The motion judge relied on Schmitz v. Lombard General Insurance Company of Canada, 2014 ONCA 88, for the proposition that an underinsured motorist claim is a demand obligation and that a loss caused by the insurer’s failure to satisfy a claim is suffered the day after the demand for indemnification is made.

[7] Coseco argued that by April 15, 2016 a demand for indemnification had been made. The motion judge disagreed – noting that no money was requested, and finding there was no legally valid claim for Coseco to respond to. Instead, the motion judge found that the February 13, 2019 request for indemnification was the first demand for payment of compensatory damages, with the result that the limitation period did not begin to run until February 14, 2019 (the date from which Coseco failed to honour its obligation under the contract by failing to indemnify the respondent). On this basis, the motion for summary judgment was denied.

[8] We see no basis to interfere with the motion judge’s decision. It was fully supported by his factual findings regarding the nature of the communications between the parties. Those finding were well rooted in the evidence. Further, the motion judge properly applied this court’s decision in Schmitz. Therefore, the appeal is dismissed.

[9] On agreement of the parties, the appellant will pay the respondent’s costs of the appeal in the all-inclusive sum of $10,000.

“C.W. Hourigan J.A.”

“B. Zarnett J.A.”

“P.J. Monahan J.A.”