Spadafora v. The Dominion of Canada General Insurance Company

[Indexed as: Spadafora v. Dominion of Canada General Insurance Co.]

Ontario Reports

Ontario Superior Court of Justice,

Reilly J.

January 17, 2013

113 O.R. (3d) 782 | 2013 ONSC 182

Case Summary

Insurance — Actions against insurer — Insured bringing action against insurer for damages for breach of contract after insurer denied insured's claim for non-earner benefits — Insurer's motion for summary judgment dismissing claims for damages for intentional infliction of mental distress and bad faith and for aggravated, punitive and exemplary damages granted — Contract not having object of securing psychological benefit that would bring distress upon breach within the [page783] reasonable contemplation of parties — Degree of mental suffering caused by any breach not of sufficient degree to warrant compensation — Insurer not acting in bad faith and not engaging in conduct that would warrant aggravated, punitive or exemplary damages even if it was wrong in denying claim.

Insurance — Automobile insurance — Statutory accident benefits — Insurer informing insured that he was not eligible for non-earner benefits but not providing written explanation as to basis for denial or written notice of plaintiff's right to dispute denial — Genuine issue requiring trial existing with respect to whether insurer complied with s. 32 of Statutory Accident Benefits Schedule — Accidents on or after November 1, 1996, O. Reg. 403/96, s. 32 and triggered limitation period — Insurer's motion for summary judgment dismissing action for breach of contract as statute-barred dismissed.

The plaintiff submitted an OCF-1 Application for Accident Benefits in 2003. On February 25, 2004, the defendant insurer informed the plaintiff that he was not eligible for non-earner benefits. In May 2010, the plaintiff notified the defendant that he intended to pursue a claim for non-earner benefits. After mediation with respect to those benefits failed, the plaintiff commenced an action for damages for breach of contract, wrongful infliction of mental distress and bad faith. He also sought aggravated, punitive and exemplary damages. The defendant brought a motion for summary judgment dismissing the action, arguing that there was no genuine issue requiring a trial with respect to whether the plaintiff was barred from bringing the claim by operation of the applicable limitation periods and no genuine issue requiring a trial with respect to whether the defendant engaged in such conduct that the plaintiff would be entitled to damages for wrongful infliction of mental distress or bad faith or aggravated or punitive damages.

Held, the motion should be granted in part.

The OCF-9 form of February 25, 2004 purporting to deny the plaintiff's entitlement to non-earner benefits failed to include a written explanation as to the basis for the denial of the benefits or written notice of the plaintiff's right to dispute the denial. There was a genuine issue requiring a trial with respect to whether the defendant complied with the requirements of s. 32 of the Statutory Accident Benefits Schedule, thereby triggering the limitation period. As well, a trial was required to determine whether the plaintiff in fact qualified for non-earner benefits.

An object of the insurance contract in question was not to secure a psychological benefit that would bring distress upon breach within the reasonable contemplation of the parties, and the degree of mental suffering caused by any breach in this case was not of sufficient degree to warrant compensation. The defendant was entitled to summary judgment dismissing the claim for damages for mental distress. The claim based on bad faith should also be dismissed; there was no suggestion of bad faith on the part of the defendant in denying the claim. Finally, even if an award of damages for breach of contract was ultimately found to be appropriate, the defendant's conduct was far from the high-handed, malicious, arbitrary or highly reprehensible conduct that would justify an award for aggravated, punitive or exemplary damages. That claim should be dismissed.

(Motion by the defendant for summary judgment.)

Andrew Rudder, for plaintiff/responding party.

Lisa C. Pool, for respondent/moving party.

Reasons for Decision

[1] REILLY J.: — By this motion, the defendant, The Dominion of Canada General Insurance Company, seeks an order granting summary judgment in whole or in part pursuant to Rule 20 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 with respect to the plaintiff/respondent's statement of claim seeking damages for breach of a contract of insurance, damages for wrongful infliction of mental distress, damages for bad faith on the part of the defendant insurance company and aggravated punitive and exemplary damages in the amount of $1 million. The claim for damages was originally triggered by a motor vehicle accident, which took place on December 1, 2003.

[2] In that accident, the plaintiff was the driver of a motor vehicle that was rear-ended by another motor vehicle. At the time, he was insured under a policy of motor vehicle liability insurance issued by the defendant, The Dominion of Canada General Insurance Company ("Dominion"). The policy provided for statutory accident benefits as set out in O. Reg. 403/96, Statutory Accident Benefits Schedule -- Accidents on or after November 1, 1996 (the "Schedule").

[3] On December 1, 2003, Dominion sent a letter to the plaintiff explaining accident benefits to which he was entitled and enclosing various OCF forms and other material that explained the various benefits available. He was asked to return all the forms, including the Application for Accident Benefits, OCF-1 and Disability Certificate, OCF-3.

[4] The plaintiff returned the OCF-1 Application for Accident Benefits signed on December 16, 2003. On this form, he stated that he was, at the time of the accident, employed and working, that he was not a student, that he had not just completed school, that his injuries did not prevent him from working and that he was able to return to work after the accident. He did not complete a caregiver section. When the plaintiff returned the OCF-1 to Dominion, he sent with it an undated letter which Dominion apparently received on January 30, 2004.

[5] On February 25, 2004, after receiving the application for accident benefits, Dominion sent to the plaintiff an Explanation of Benefits, OCF-9 informing him that he was not eligible for income replacement benefits, non-earner benefits or caregiver benefits. That mailing also included a second request for a completed OCF-3 Disability Certificate. [page786]

[6] Following the accident, the plaintiff continued working at his job in sales at Premier Fitness. He subsequently obtained a different job at Thermal Ceramics in July of 2004, and then in December of 2004, he obtained new employment at Dofasco. There may be some dispute as to medical complaints or problems experienced by the plaintiff during 2004, which need not be addressed for purposes of this motion. It is clear that throughout 2004, Dominion did agree to pay for some medical and rehabilitation benefits, specifically treatment plans for chiropractic treatment and massage therapy. There were no claims by the plaintiff for treatment or benefits in 2005.

[7] On April 8, 2008 and December 29, 2008, Dr. Ernest Hajcser, the plaintiff's physician, completed disability certificates in which he indicated the plaintiff met the disability test for income replacement benefits but did not meet the test for non-earner benefits. He also stated the plaintiff did not suffer from inability to perform his housekeeping and home maintenance activities.

[8] Some 6 years after the original accident (May 25, 2010), the plaintiff notified Dominion that he intended to pursue a claim for non-earner benefits. He applied for mediation with FSCO with respect to these non-earner benefits. At that mediation on May 5, 2011, the issues between the plaintiff and Dominion were not resolved. The plaintiff then issued a statement of claim on August 8, 2011 claiming in part non-earner benefits. The defendant, Dominion, takes the position that there is no medical evidence that as a result of and within 104 weeks after the accident, the plaintiff suffered a "complete inability to carry on a normal life", which Dominion states is the test required to obtain non-earner benefits.

[9] The defendant/moving party takes the position that there is no genuine issue requiring a trial with respect to whether the plaintiff is barred from bringing this claim by operation of the appropriate limitation periods. Further, the defendant/moving party states that there is no genuine issue requiring a trial as to whether the plaintiff could claim or receive non-earner benefits. Finally, the defendant/moving party states that there is no genuine issue requiring a trial as to whether the defendant engaged in such conduct that the plaintiff would be entitled to damages for wrongful infliction of mental distress, damages for bad faith, for unreasonable conduct in the claims process or for aggravated punitive or exemplary damages. [page787]

(…continues verbatim through paragraph [54]…)

[54] In the result, I dismiss the defendant's claim for relief as it relates to para. 1(a) of the statement of claim. I grant the defendant relief with respect to paras. 1(b), (c) and (d) of the statement of claim. These claims are summarily dismissed. If the parties cannot agree on costs of this motion, they may make brief written submissions to me at chambers in Kitchener within 60 days of publication of this judgment. I thank counsel for their assistance on this motion and commend them for their preparation.

Motion granted in part.

End of Document