Gardner v. The Maritime Life Assurance Company et al., 2013 ONSC 919

Gardner v. The Maritime Life Assurance Company et al.

[Indexed as: Gardner v. Maritime Life Assurance Co.]

Ontario Reports

Ontario Superior Court of Justice,

Ray J.

February 7, 2013

114 O.R. (3d) 386 | 2013 ONSC 919

Case Summary

Insurance — Interpretation and construction — Policy providing for indemnity for loss of foot where loss was attributable to military service — Policy excluding coverage where loss was caused "wholly or partly, directly or indirectly, by . . . medical or surgical treatment" — Insured injuring his knee while exiting armoured personnel carrier in course of his employment with Canadian Armed Forces — Insured seeking surgical treatment because of concern about how his knee limitations would affect his military career — Transection of main artery and vein in leg during surgery leading to loss of leg from above knee — Loss "attributable to military service" and not falling within exclusion.

The applicant, a corporal in the Canadian Armed Forces, injured his knee while exiting an armoured personnel carrier in the course of his employment. He sought surgical treatment. During surgery, a transection of the main artery and vein in the leg led to a loss of the leg above the knee. The applicant was insured under an accidental dismemberment policy issued by the respondents. The policy provided for an indemnity of $125,000 for the loss of one foot where the loss is "Attributable to Military Service" and where the loss occurred by accidental, external and violent means. An exclusion provided that no accidental dismemberment benefit is payable for any loss caused wholly or partly, directly or indirectly, by medical or surgical treatment. The respondents denied coverage under the policy. The applicant brought an application for a declaration that he was entitled to the $125,000 dismemberment benefit.

Held, the application should be granted.

In the circumstances, the surgery arose out of the applicant's military service. While he was not ordered to undergo the surgery, he did so because of his concern about the effect of his knee limitations on his military career. Both the knee injury and the transected artery during surgery were "accidental". The applicant lost his leg directly as a result of the transected artery and vein. He had brought himself within the coverage provided by the dismemberment policy. The language of the exclusion required the respondents to establish that the injury was caused by the medical or surgical treatment. The evidence was very unclear as to whether the transection of the artery and vein was inadvertent or whether it was part of the surgical treatment that was done poorly. It was not possible to say [page387] that the respondents had met the onus of showing beyond a reasonable doubt that the injury was caused by the medical or surgical treatment. The exclusion did not apply.

Cases referred to

Bradley v. Canada (Attorney General), [2011] F.C.J. No. 389, 2011 FC 309, 386 F.T.R. 92; Consolidated Bathurst Export Ltd. v. Mutual Boiler and Machinery Insurance Co., 1979 10 (SCC), [1980] 1 S.C.R. 888, [1979] S.C.J. No. 133, 112 D.L.R. (3d) 49, 32 N.R. 488, [1980] I.L.R. Â1-1176 at 595, 1979 CarswellQue 157, 1 A.C.W.S. (2d) 169; Fournier v. Canada (Attorney General), [2005] F.C.J. No. 573, 2005 FC 453, 272 F.T.R. 92, 138 A.C.W.S. (3d) 745; Frye v. Canada (Attorney General), [2004] F.C.J. No. 1208, 2004 FC 986, 256 F.T.R. 285; Kinnear v. Canadian Recreational Excellence (Vernon) Corp., [2012] B.C.J. No. 1337, 2012 BCCA 291, 325 B.C.A.C. 50, [2012] 11 W.W.R. 423, 35 B.C.L.R. (5th) 142, 352 D.L.R. (4th) 57, 11 C.C.L.I. (5th) 1; Lumbermens Mutual Casualty Co. v. Herbison, [2007] S.C.J. No. 47, 2007 SCC 47, 286 D.L.R. (4th) 592, 368 N.R. 292, J.E. 2007-1975, 230 O.A.C. 386, 53 C.C.L.I. (4th) 31, [2007] I.L.R. I-4651, 52 M.V.R. (5th) 35, 160 A.C.W.S. (2d) 1057, EYB 2007-124882; Martin v. American International Assurance Life Co., [2003] 1 S.C.R. 158, [2003] S.C.J. No. 14, 2003 SCC 16, 223 D.L.R. (4th) 1, 301 N.R. 127, [2003] 6 W.W.R. 1, J.E. 2003-600, 12 B.C.L.R. (4th) 201, 48 C.C.L.I. (3d) 1, [2003] I.L.R. I-4171, 120 A.C.W.S. (3d) 869; O'Connor v. Canada, [1995] F.C.J. No. 531, 94 F.T.R. 93, 8 C.C.P.B. 295, 54 A.C.W.S. (3d) 896 (T.D.); Voison v. Royal Insurance Co. of Canada (1988), 1988 4736 (ON CA), 66 O.R. (2d) 45, [1988] O.J. No. 3115, 53 D.L.R. (4th) 299, 29 O.A.C. 227, 33 C.C.L.I. 1, [1988] I.L.R. Â1-2358 at 9112, 11 A.C.W.S. (3d) 394 (C.A.)

APPLICATION for a declaration of entitlement to a dismemberment benefit.

William Walker, for applicant.

Gordon Jermane, for respondents.

RAY J.: —

Introduction

1The applicant, a 32-year-old corporal in the Canadian Armed Forces, seeks a declaration that he is entitled to a $125,000 dismemberment benefit under an accidental dismemberment policy of insurance issued to members of the Canadian Armed Forces by the respondents, by reason of the loss of his left leg from above the knee.

2The respondents admit that the applicant lost his foot but deny that the applicant's loss falls within the language of the policy and, alternatively, says it falls within a policy exclusion.

3The policy provides for an indemnity of $125,000 for the loss of one foot where the loss is "Attributable to Military Service", as defined in the policy, and where the loss occurred by way of accidental, external and violent means, and provided that the loss occurs within 90 days of the injury and results directly and solely from the injury and independently of all other causes. [page388] An exclusion provides that no accidental dismemberment benefit is payable for any loss caused wholly or partly, directly or indirectly, by disease, or bodily or mental infirmity, or medical or surgical treatment thereof.

Background

4In March 2006, the applicant sustained a meniscal tear to his left knee while exiting a Coyote armoured personnel carrier, in the course of his employment with the Canadian Armed Forces. Over the following three and a half years, he underwent four arthroscopic procedures to his left knee; and October 27, 2010, he underwent the osteotomy surgical procedure. During that surgery, the main artery and vein in the left leg of the applicant was accidentally transected. This led to the loss of his leg from above the knee four days later, on October 31, 2010. The surgery on October 27, 2010 was described by Dr. Renee Logan in her attending physician statement as "elective lateral osteotomy". The applicant made his claim November 12, 2010.

5November 23, 2010, Manulife advised the applicant that his claim was denied. Following an appeal and further medical evidence, Manulife took the position that if the elective surgery of October 27, 2010 had not occurred, the amputation would not have been necessary. It maintained its denial. It takes the position that the surgery and loss of the leg, October 27-31, 2010, did not "arise out of military service" and therefore fell outside the policy. It further relies on an exclusion in the policy related to medical treatment.

6The applicant's position is that the surgery of October 27, 2010 was the injury and the loss of leg October 31, 2010 was within 90 days of the injury.

Analysis

7The policy provides that in order for the loss to fall within its terms and for the claimant to be entitled to coverage he must establish on a balance of probabilities the following:

(a) the loss must have arisen out of or been directly connected with military service;

(b) the loss must have occurred by way of accidental, external and violent means;

(c) the loss must have occurred within 90 days of the injury; and

(d) the loss must have resulted directly and solely from the injury and independently of all other causes. [page389]

8If a loss is found to come within the terms of the policy, then it may nevertheless be excluded because it was caused wholly or partly, directly or indirectly, by disease or bodily infirmity, or medical or surgical treatment thereof.

9The interpretation of insurance policies requires that ambiguities be resolved in favour of the claimant, and where there is more than one interpretation, then the more reasonable interpretation with a fair result should be adopted.¹ Exclusions, as opposed to coverage issues, are placed in policies for the benefit only of the insurer and are to be strictly interpreted against the insurer. Furthermore, the onus is on an insurer to establish any exclusion on a balance of probabilities.

Arising out of military service

10The term "arising out of" has been held to require "a link in an unbroken chain",² and "a connection that is more than merely incidental or fortuitous".³

11Initially, the respondent took the position that the applicant was required to show an unbroken connection from the meniscal tear in 2006 through to the surgery October 27, 2010. In argument, however, it took the position that the surgery that the applicant undertook was neither ordered nor a part of his duties, and that therefore it did not arise out of military service. The respondent points to a number of Federal Court authorities as the basis for his position.⁴ All of these cases dealt with judicial review of military entitlements to pension or accident benefits arising from legislation that provided social benefits to members or former members of the armed forces. In general, they show a liberal interpretation of coverage issues. More importantly, each case was decided on its own facts with an analysis of the connection between the activity in question and [page390] military service. The respondent notes for example that there was no evidence that the applicant had been ordered to undergo the surgery. "Performance of service" which would include service as ordered by a superior, as a definition, was in fact rejected as being narrower than "arising from service".⁵ Similarly, the test applying "military duty" and its connection to control by superiors was rejected as being too restrictive.⁶ The requirement that the service be ordered by a superior appears to be inconsistent with the broad definition of arising "from military service".

12The applicant's evidence is that he was referred to a surgeon in private practice by a military staff surgeon because the applicant was concerned about how his left knee limitations would affect his military career in the dragoons. He was not ordered to do so. Unquestionably, the applicant had an interest in seeking a medical solution for the purpose of dealing with his military career. It was not necessary that his superiors have played an active role in his course of action. I am satisfied on the basis of the applicant's evidence that the surgery of October 27, 2010 arose out of his military service.

Accident, external and violent means

13An accidental injury is one which is unforeseen, unexpected and not likely to flow from a voluntary act.⁷ Or to paraphrase, "whether a reasonable person in the position of the (applicant) would have expected" to lose his leg.⁸

14The respondent's contention that since the applicant consented to the surgery then it cannot have been unexpected is questionable logic. Factually, it was not the surgery that was the accident, it was the transected artery during the surgery that was the accident, and which led to the loss of leg four days later. The applicant's meniscal tear in March 2006 was also an accident. Neither events were expected. Clearly both events were accidents. It cannot be said that the applicant expected to lose his leg as a result of the surgery or the meniscal tear. I am satisfied that this provision has been met. [page391]

Loss to have occurred within 90 days of the injury

15There is no doubt that the applicant lost his leg within 90 days of the surgery, but not within 90 days of the meniscal tear in 2006.

Loss to have occurred directly by the injury

16While arguably the loss of his leg was caused by a medical failure to correctly diagnose and treat the injury which occurred during the surgery of October 27, 2010, there is similarly no doubt that the applicant lost his leg directly as a result of the transected artery and vein during the surgery.

17I find that the applicant has brought himself within the coverage provided in the respondents' dismemberment policy.

Exclusion: caused wholly or partly, directly or indirectly, by disease or bodily infirmity, or medical or surgical treatment thereof

18The respondent contends that the applicant's claim is excluded by the policy exclusion because he suffered from a bodily infirmity -- namely, chronic pain in his left knee, and was at the time of the injury being surgically treated for the chronic knee problem. During submissions, he took the position that evidence of the description of the surgery shows that the transection was intended but by implication was deeper than anticipated. The applicant says that the respondent has the burden to show that the transection to the applicant's artery and vein was part of the medical or surgical treatment, and that the evidence shows the injury to have been inadvertent, and not part of the treatment.

19There is no doubt the evidence shows that the applicant undertook the surgery on October 27, 2010 because of the chronic problems he had been having with his knee, and those problems constituted an infirmity as defined in the exclusion. There is further no doubt that the "injury" occurred during the "medical or surgical treatment thereof". However, the language of the exclusion requires the respondent to establish that the injury was caused by the medical or surgical treatment.

20The surgery on October 27, 2010 was intended to be ["arthroscopy and debridement of left knee plus opening wedge distal femoral osteotomy with substitute bone graft as well as allograft and TomoFix plate fixation"].

21The operative note of October 27, 2010 in part describes the surgery: "A transverse osteotomy was then carried out to the junction of the diaphysis and metaphysis. This was done with the [page392] reciprocating saw as well as with an osteotome. Great care was taken to protect the soft tissues throughout the procedure. No unusual bleeding was encountered throughout this part of the procedure. Then, using the image intensifier again, an opening wedge was carried out leaving the medial cortex and periosteum intact. We opened this up with the distractor to about 15mm and then inserted a 13mm bone substitute wedge. The distractor was removed and the osteotomy was then closed down onto the wedge".

22I note the surgeon's note of October 31, 2010, when after discovering the applicant had no blood flow in his leg following the October 27 surgery, he reopened the incision and "discovered that the popliteal artery and vein had been disrupted. This appeared to me to be a tear rather than a cut. The only explanation I have for this would be that this cut was a result of the retractors, possibly as a result of impact from the osteotome, but it wasn't my recollection that I had gone that deep."⁹

23The evidence is very unclear as to whether the transection to the artery and vein was inadvertent or whether it was part of the surgical treatment that was done poorly. I am unable to say that the respondent has met the onus of showing beyond a reasonable doubt that the injury was caused by the medical or surgical treatment. The exclusion does not apply.

Conclusion

24In conclusion, I find that the applicant is entitled as a named beneficiary to an accidental death and dismemberment policy arranged through the respondents' Group Policy #906906 in the amount $125,000 plus prejudgment interest.

25One counsel filed a costs outline at the conclusion of submissions. If the parties are unable to agree on costs, they may make written submission of two pages or less within 14 days, and a further five days for reply.

Application granted.

Notes

End of Document

Footnotes

1. 1Consolidated Bathurst Export Ltd. v. Mutual Boiler and Machinery Insurance Co., 1979 10 (SCC), [1980] 1 S.C.R. 888, at paras 25 and 26.
2. 2Lumbermens Mutual Casualty Co. v. Herbison, 2007 SCC 47, para. 14.
3. 3Kinnear v. Canadian Recreational Excellence (Vernon) Corp., 2012 BCCA 291, at paras. 28, 43 and 52.
4. 4O'Connor v. Canada, [1995] F.C.J. No. 531, 94 F.T.R. 93 (T.D.); Bradley v. Canada (Attorney General), 2011 FC 309; Frye v. Canada (Attorney General), 2004 FC 986; and Fournier v. Canada (Attorney General), 2005 FC 453.
5. 5Bradley v. Canada (Attorney General), supra, paras. 29 and 30.
6. 6Bradley v. Canada (Attorney General), supra, para. 24.
7. 7Voisin v. Royal Insurance Co. of Canada (1988), 1988 4736 (ON CA), at paras. 8 and 9.
8. 8Martin v. American International Assurance Life Co., 2003 SCC 16, at paras. 14, 15, 21 and 30.
9. 9Operative Note, 2010-Oct-30 13:36:00, John N McCall, MB, CHB.