ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: C-754-07
DATE: 2013-03-22
BETWEEN:
Avelino Fernandes
Plaintiff
– and –
Penncorp Life Insurance Company /
La Compagnie D’Assurance-Vie Penncorp
Defendant
Daniel J. Fife, for the Plaintiff
Eric J. Schjerning, for the Defendant
HEARD: November 28, 29, 30, 2012
December 3, 4, 5, 20, 2012
February 19, 2013
THE HONOURABLE MR. justice p.b. hambly
reasons for judgment
[1] This is a claim by an insured against an insurance company under a policy of disability insurance for benefits under the policy. The central issue is whether the insured has been injured to the extent that he is unable to work at any occupation for which he is reasonably suited by education, training or experience.
Statement of the Case
[2] Avelino Fernandes (Avelino) claims to be entitled to benefits under a policy of insurance that he has with the Penncorp Insurance Company (Penncorp), as a result of his being disabled from working because of injuries that he has suffered. The policy of insurance entitles him to benefits, if he is unable to work as a result of injuries at his own occupation, for two years. Thereafter, the policy of insurance entitles him to benefits if he is disabled from working at any occupation for which he is reasonably suited by education, training or experience. Penncorp concedes that he is unable to work at his own occupation. It has paid him benefits for two years. It claims that Avelino has failed to establish that he is unable to work at any other occupation for which he is reasonably suited, by education, training or experience. Avelino also claims aggravated and punitive damages against Penncorp for its failure to honour the terms of the policy.
[3] Testifying for Avelino were Avelino, his friend and coworker Fernando Ribeiro (Fernando), his common law wife Tracy Willard (Tracy) and Dr. R. Reid who is a retired orthopedic surgeon and pain management doctor. Testifying for Penncorp were S. Corriero, and K. Robinson, who did a functional assessment evaluation, Jeff Devries, who operates a landscaping company, Janet Mayo who managed the claim for Penncorp, Jennifer Chladny, who did a vocational assessment and Dr. D. McGonigal, who is an orthopedic specialist who did an independent medical evaluation for Penncorp. Reports of surveillance conducted by Penncorp and discs of videos taken during surveillance were filed on consent. Medical reports of doctors who examined and treated Avelino including reports from Doctors Reid and McGonigal were filed on consent.
The Evidence
The Evidence of Avelino and the Insurance Contract With Penncorp
[4] Avelino was born on January 26, 1965. He is 48. He is one of a family of nine children – four girls and five boys. He was born on a farm in Portugal. He went to school between the ages of 7 and 13. He left school after what would be the equivalent of Grade 8 in Canada. He obtained employment as a chef’s helper, on a train which travelled to France. His father in addition to running the farm worked on construction in France. Avelino worked on the farm doing field labour when he was home. He came to Canada at the age of 18. When he came to Canada he could not read, speak or write English. An older brother, who was in Canada, sponsored him. He came with a twin brother and another brother. He came to Kitchener.
[5] He obtained work at Kaufmann Footwear where he worked on an assembly line in 1984 and 1985. Between 1985 and 1989 he worked at Armour Masonry where he learned the brick laying trade. He worked laying bricks in the construction of residential and commercial buildings. He worked as a bricklayer at P.O. Masonry in 1989 and 1990. In 1990 he fell off a scaffold while he was working there and injured his right shoulder. He had surgery on his shoulder. He was off work for about 2 ½ years. He made a claim to Workers Compensation and received a small monthly pension. He worked at Westmount Estates for about six months in 1993. He did mainly landscaping. He also painted and cleaned apartments. From 1994 until 2000 he worked as a machine operator and tow motor operator at Waterloo Furniture.
[6] With another man he started a bricklaying company named Rockway Masonry in 1999. After six months he bought out his partner. He operated this company until he was injured in December 2004. He had a full-time employee and two part-time employees. He had a bookkeeper. The company was successful. For the years ending May 31st its sales in 2003 were $410,215 and its net income was $162,010; in 2004 its sales were $461,976 and its net income was $152,206. Avelino's taxable income in 2002 was $66,558, in 2003 was $87,472 and in 2004 was $66,000. Although he had employees, Avelino was not a manager. He worked full time himself laying bricks. He entered into contracts with builders for the construction of new houses. He quoted a price for the laying of the bricks for a new house depending on the number of bricks that were required as stated by the builder. His bookkeeper sent out invoices for the work that he did. She kept track of his income and expenses. The company ceased operations when Avelino was injured and unable to work. His employees obtained work elsewhere.
[7] Avelino was married. He had a son who was born from his marriage on November 14, 1986. The marriage was a failure. Avelino had custody of his son from the time he was age 1. Avelino raised him alone. He went out on his own at age 17. His son is now 27 and lives in Guelph. Avelino has lived with Tracy since 2002. Avelino purchased a house at 44 Dineen Court in Kitchener. He lives there with Tracy. He also owns a house at 860 Guelph Street in Kitchener. He rents this house. This gives him an income of about $12,000 per year which about equals the expenses. He also owns a condominium in Portugal which stands empty.
[8] Avelino worked as a bricklayer 10 to 12 hours per day for 6 to 7 days per week. The work was very heavy work. It involved erecting and dismantling scaffolding, lifting heavy planks into place on the scaffolding where a bricklayer would stand to lay bricks against a wall. From time to time during a job and at the end of a job the planks would need to be removed and the scaffolding dismantled. The scaffolding would then need to be erected again and planks put in place. It required the mixing of cement, lifting bricks and blocks and driving a fork lift. The work required physical strength and endurance to stand on the planks on the scaffold while laying bricks and blocks against a wall for hours at a time. Avelino loved his work. He was very good at it. He made as much money as he needed. He never felt the need for more money. He and Tracy had a good life. He came from a culture where the man provides. Now that he does not have money, he is dependent on Tracy’s income. He is embarrassed in his relationship with Tracy.
[9] Avelino did not pay into government employment insurance. He also did not pay into the provincial workers’ compensation plan. He, therefore, is not entitled to claim employment insurance or workers’ compensation. A salesperson from Penncorp came to his workplace. To protect himself from being disabled from working, he purchased from her in July 2002 disability insurance with Penncorp. The premiums are $908.50 semi-annually. He has continued to pay the premiums to the present. The policy has no elimination period. It provides for monthly total disability payments of $3,000. Total disability under the policy is defined as follows:
TOTAL DISABILITY, whenever used in this Policy, means that as a result of Injury the Insured is under the Regular and Personal Care of a Physician, and is unable to perform any of the important daily duties pertaining to his occupation or profession and is not gainfully employed in any other occupation or profession. Total disability is deemed to have begun with first medical treatment following Injury. After the Monthly Benefit for such Total Disability has been paid for twenty-four months, then thereafter during the remainder of such Disability, Total Disability means the complete inability of the Insured to engage in any and every occupation or profession for which he is reasonably fitted by reason of education, training or experience. (emphasis added)
On its website below the faces of 3 smiling workers Penncorp states the following:
Invest in your Future
At Penncorp, we recognize that an accident or serious illness, and even death can happen at anytime. If it does, we will be there to help provide financial security for you, your family and your business. Penncorp Life offers peace of mind with coverage that protects you:
• 24 hours a day
• 7 day a week
• On and off the job
• Anywhere in North America
Our Mission
Penncorp provides financial security by specializing in simplified personal disability insurance and financial solutions that fit the unique needs of Canada’s self-employed, skilled tradespeople and other individuals who do not have easy access to traditional insurance and financial products.
[10] In 2010, the Superintendent of Insurance reported that Penncorp collected premiums on policies of insurance of $24,680,000, had total assets of $397,228,000, an excess of assets over liabilities of $102,507 and a net income of $12,330,000.
(continued verbatim)
Justice P. B. Hambly
Released: March 22, 2013
COURT FILE NO.: C-754-07
DATE: 2013-03-22
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Avelino Fernandes
Plaintiff
- and -
Penncorp Life Insurance Company/
La Compagnie D’Assurance-Vie Penncorp
Defendant
REASONS FOR JUDGMENT
Justice P.B. Hambly
Released: March 22, 2013
[1] These findings would seem to support an award of punitive damages.