CITATION: Straus v. Aviva; Hanna v. Aviva; Dushenko v. Aviva; Messer v. Aviva; Larsen v. Aviva; Dexter v. Aviva 2015 ONSC 4589
COURT FILE NOs.: 11-31098, 12-35008, 12-36327, 13-40564, 13-40615, 13-40221
DATE: 2015-10-02
ONTARIO
SUPERIOR COURT OF JUSTICE
Court File No. 11-31098
B E T W E E N:
Shawn Straus
Plaintiff
Andrew Rudder, for the Plaintiff
- and -
Aviva Canada Inc.
Defendant
Pamela Quesnel & Andrew Baerg,
for the Defendant
Court File No. 12-35008
B E T W E E N:
Albert Hanna
Plaintiff
Andrew Rudder, for the Applicant
- and -
Aviva Insurance Company of Canada
Pamela Quesnel & Andrew Baerg,
Defendant
for the Defendant
Court File No. 12-36327
B E T W E E N:
Misty Dushenko
Plaintiff
Andrew Rudder, for the Applicant
- and -
Aviva Canada Inc.
Pamela Quesnel & Andrew Baerg,
Defendant
for the Defendant
Court File No. 13-40564
B E T W E E N:
Jeremy Messer
Plaintiff
Andrew Rudder, for the Plaintiff
- and -
Aviva Insurance Company of Canada
Defendant
Pamela Quesnel & Andrew Baerg,
for the Defendant
Court File No. 13-40615
B E T W E E N:
Keir Larsen
Plaintiff
Andrew Rudder, for the Plaintiff
- and -
Aviva Canada Inc.
Defendant
Pamela Quesnel & Andrew Baerg,
for the Defendant
Court File No. 13-40221
B E T W E E N:
Jennifer Dexter
Plaintiff
Andrew Rudder, for the Plaintiff
- and -
Aviva Canada Inc.
Pamela Quesnel & Andrew Baerg,
Defendant
for the Defendant
HEARD: June 23 and 25, 2015
The Honourable Justice C.D. Braid
REASONS FOR JUDGMENT
I. INTRODUCTION
[1] Six plaintiffs brought actions against their insurer, Aviva Canada Inc. (also named Aviva Insurance Company Inc. and hereinafter referred to as “Aviva”) seeking accident benefits. Aviva brought motions for summary judgment seeking to dismiss the six actions because they were commenced outside the two-year limitation period. Aviva argues that there is no genuine issue requiring a trial.
[2] The plaintiffs argue that Aviva did not comply with informational requirements as set out in section 32(2) of the Statutory Accident Benefits Schedule, O. Reg. 403/96. The plaintiffs state that Aviva failed to provide a written description of benefits and should not be entitled to rely on the limitation period in the circumstances.
[3] Since the issues raised by these motions are almost identical in each of the six actions, the motions for summary judgment were heard together before me. The motions were argued on two days in June of 2015, and counsel subsequently provided written submissions to address additional issues.
II. FACTS COMMON TO ALL SIX ACTIONS
[4] All of the plaintiffs were insured by Aviva, either as the primary insured or as a result of being a passenger in a vehicle that was insured by Aviva. All of the plaintiffs were injured in motor vehicle accidents in 2004 or 2005. All of them applied for and received accident benefits from Aviva pursuant to the Statutory Accident Benefits Schedule.
[5] The Statutory Accident Benefits Schedule provided for three different types of weekly benefits that an insured person may be entitled to receive, namely Income Replacement Benefits, Non-Earner Benefits or Caregiver Benefits. The Schedule sets out the test that the insured person would have to meet in order to qualify for these benefits. The relevant portions of that legislation are set out in more detail below.
[6] All of the plaintiffs retained Mr. Lou Ferro, a lawyer specializing in personal injury cases, to represent them with respect to the accident. Mr. Ferro was retained by each plaintiff within approximately the first year of their respective accidents.
[7] Aviva sent each plaintiff an Accident Benefits Application Package, which included an Application for Accident Benefits, a Disability Certificate, and other documents. The Application for Accident Benefits consisted of several numbered sections and check boxes where the insured person was asked to provide information about his or her status that would allow an insurer to determine which, if any, of the three different types of weekly benefits the insured person may be entitled to.
[8] The Disability Certificate, sent along with the Application Package, was to be filled out by a healthcare provider. The form contained a section entitled “Disability Tests and Information.” Under the benefit category “Non-Earner Benefits”, the form set out the following disability test: “Does the applicant suffer a complete inability to carry on a normal life? (i.e. Has the applicant sustained an impairment that continuously prevents the person from engaging in substantially all of the activities in which the person ordinarily engaged before the accident?).” This question is followed by boxes for the health practitioner to fill in that state “Yes”, “No” or “N/A” and a space for further details to be provided, if applicable.
[9] The Application Package that Aviva sent to the plaintiffs did not include a separate informational document providing a written explanation of the benefits as contemplated by section 32(2) of the Statutory Accident Benefits Schedule.
[10] Each plaintiff filled out an Application for Accident Benefits and submitted it to the insurer. At some point after receiving the Applications, Aviva advised each
plaintiff that they were not eligible for Non-Earner Benefits. The Explanation of Benefits, which contained the denial of Non-Earner Benefits, stated the following:
WARNING: TWO YEAR TIME LIMIT
You have TWO YEARS from the date of your insurer’s refusal to pay, or reduction of a benefit, to arbitrate or commence a lawsuit in court. You may have longer than two years if the arbitration or lawsuit is commenced 90 days from the date a mediator provides his or her mediation report, or within 30 days from the date the neutral evaluator provides his or her report.
[11] None of the plaintiffs commenced a court action or otherwise began the dispute resolution process within two years of the denial of Non-Earner Benefits.
[12] At various times in 2010 and 2011, the plaintiffs submitted Applications for Mediation for Non-Earner Benefits. Mediation was held at the Financial Services Commission of Ontario but the issue of the entitlement to Non-Earner Benefits was not resolved.
[13] Each of the plaintiffs commenced an action approximately seven or eight years after Non-Earner Benefits had been denied.
[14] All six of these plaintiffs state that they did not understand what Non-Earner Benefits were at the time that Aviva denied the benefit. None of them have provided any information as to whether the benefits were discussed with counsel.
[15] None of the plaintiffs have provided explanations as to why it took so long for them to bring the action contesting the denial of Non-Earner Benefits.
III. FACTS SPECIFIC TO EACH CASE
A. Action 11-31098 - Plaintiff Straus
[16] Shawn Straus (“Straus”) was involved in a motor vehicle accident in 2004. He applied to Aviva for accident benefits in November 2004. Straus sent a Disability Certificate to Aviva which had been completed by his doctor. The certificate concluded that Straus did not suffer “a complete inability to carry on a normal life.”
[17] On November 23, 2004, Aviva received a letter from Mr. Ferro, which stated that he had been retained by Strauss. Counsel requested a copy of Straus’ property damage file and accident benefits file, which were sent by Aviva on January 10, 2005.
[18] On December 9, 2004, Aviva sent an Explanation of Benefits to Strauss. The document stated that Strauss was eligible for Income Replacement Benefits and provided an attached letter with the calculation of those benefits. The Explanation denied Non-Earner Benefits as “Not eligible” for the stated reason: “Non-earner: You were employed at the time of the accident.” The Explanation also denied Caregiver Benefits as “Not eligible” for the stated reason: “Caregiver: You were not a primary caregiver at the time of the accident.”
[19] On February 21, 2005, Aviva sent a letter and Explanation of Benefits to Strauss, which stated that he no longer met the eligibility criteria for the Income Replacement Benefit.
[20] In total, Aviva paid Strauss $5,957.14 in Income Replacement Benefits and also an amount for medical expenses.
[21] On November 1, 2011, Straus issued a Statement of Claim, which was nearly seven years after the denial.
B. Action 12-35008 - Plaintiff Hanna
[22] Albert Hanna (“Hanna”) was involved in a motor vehicle accident in 2004. Aviva received Hanna’s Application for Accident Benefits in February 2005, in which Hanna stated his status was “employed and working.” In June 2005, Hanna sent a Disability Certificate to Aviva, which stated that Hanna was not substantially unable to perform the essential tasks of his employment at the time of the accident. In the category of Non-Earner Benefits, the question was asked whether Hanna suffered “a complete inability to carry on a normal life”, to which the doctor checked off the box for “not applicable.”
[23] On August 26, 2005, Aviva sent an Explanation of Benefits to Hanna. The Explanation of Benefits stated that he was “Not eligible” for Income Replacement Benefits for the stated reason: “We are now in receipt of your application for accident benefits. According to your application, your injuries do not prevent you from working. Therefore, the benefit would not apply.” The form also stated that Hanna was not eligible for Non-Earner Benefits and Caregiver Benefits for the stated explanation: “Deemed employed at the time of loss and you have no dependants.”
[24] On August 15, 2012, Hanna issued a Statement of Claim, which was nearly seven years after the denial.
C. Action 12-36327 - Plaintiff Dushenko
[25] Misty Dushenko (“Dushenko”) was involved in a motor vehicle accident in 2004. She applied to Aviva for accident benefits in December 2004. In January 2005, Dushenko sent a Disability Certificate to Aviva which stated that she was not substantially unable to perform the essential tasks of her employment at the time of the accident, and that she could return to work on modified hours and/or duties. Under the category of Non-Earner Benefits, the certificate stated that Dushenko suffers a “complete inability to carry on a normal life.”
[26] On February 8, 2005, Aviva sent an Explanation of Benefits to Dushenko. Under the heading for Income Replacement Benefit, the form stated that she was “Not Eligible” for the stated reason: “The Disability Certificate dated January 19, 2005 by Dr. Virk indicates that you are not substantially unable to perform the essential tasks of your employment, and that you can return to work; therefore, you are not eligible for this benefit.” Further, under the Non-Earner Benefit category, the form stated that Dushenko was “Not eligible” for the stated reason: “You must suffer a complete inability to carry on a normal life as a result of and within 104 weeks of the accident. There is a 26 week waiting period for this benefit.” The form also stated that Dushenko was “Not eligible” for Caregiver Benefits for the stated reason: “You have indicated on your Application that you were not the primary caregiver to any people in your household at the time of this accident.”
[27] On August 2, 2012, Dushenko issued a Statement of Claim, which was more than seven years after the denial.
D. Action 13-40564 - Plaintiff Messer
[28] Jeremy Messer (“Messer”) was involved in a motor vehicle accident in 2005. Aviva received his Application for Accident Benefits in October 2005. Aviva also received a Disability Certificate, which did not indicate that Messer suffered a “complete inability to carry on a normal life.”
[29] On October 31, 2005, Aviva sent an Explanation of Benefits to Messer, which stated the following under the heading for Income Replacement Benefits: “We are now in receipt of your application for accident benefits which indicates that you are off work. We are unable to determine your entitlement for an income replacement benefit pending receipt of the OCF-2 form which is the employer’s confirmation form.” Under Non-Earner Benefit, the form stated that Messer was “Not eligible” with the following explanation: “Non-earner benefit - you do not qualify for this benefit as you were employed at the time of your accident.” Under Caregiver Benefit, the form stated that Messer was “Not eligible” with the following explanation: “You were not a primary caregiver at the time of your accident therefore you do not qualify for this benefit”.
[30] On November 9, 2005, Aviva sent a second Explanation of Benefits to Messer. Under the heading for Income Replacement Benefits, the form stated “We are in receipt of your application for accident benefits which indicates that you are unable to work. Please note that the first week of your disability is not payable, there is a one week waiting period. We have paid you from Oct 21/05 to Nov 17/05 at a rate of $315.24 per week.” The Explanation denied the Non-Earner Benefit as “Non-eligible” for the stated reason: “Non-earner benefit - you must suffer a complete inability to carry on a normal life as a result of and within 104 weeks after the accident as per section (12) of the statutory accidents benefits schedule.” The form repeated the denial of Caregiver Benefit for the same reasons as set out in the first Explanation.
[31] In total, Aviva paid Messer $2,073.48 in Income Replacement Benefits and $2,875.56 in medical expenses.
[32] On April 9, 2013, Messer issued a Statement of Claim, which was more than seven years after the denial.
E. Action 13-40615 - Plaintiff Larsen
[33] Keir Larsen (“Larsen”) was involved in a motor vehicle accident in 2004. He applied to Aviva for accident benefits in August 2004.
[34] On his application for benefits, Larsen stated that he was “employed and working” at the time of the accident. Larsen returned to work as a product handler immediately after the accident.
[35] On October 12, 2004, Aviva sent an Explanation of Benefits to Larsen. Under the heading for Income Replacement Benefits, the form stated that he was “Not Eligible” for the specified reason: “As per your application for accident benefits submitted, you are not entitled to the income replacement benefit. You have not suffered an Income loss as a result of the motor vehicle accident. Please notify us if your situation changes.” The form also stated that Larsen was “Not eligible” for the Non-Earner Benefit and provided the following explanation: “You are not entitled to the non-earner benefit, you were employed at the time of the accident.” The form also stated, “You are not entitled to the caregiving benefit, you are not a primary caregiver to any dependents at the time of the accident.”
[36] Aviva approved several medical-rehabilitation benefits that were proposed by Larsen’s treatment providers in 2004 and early 2005. By May of 2006, Larsen had not requested any benefits in over a year. Aviva sent letters in May (to Larsen’s counsel) and June (to Larsen) of 2006, inquiring whether Larsen intended to pursue further benefits. No response was received to these letters.
[37] On April 12, 2013, Larsen issued a Statement of Claim, which was more than eight years after the denial.
F. Action 13-40221 - Plaintiff Dexter
[38] The facts in the first five actions mentioned above are similar. Jennifer Dexter (“Dexter”) made an election to receive Caregiver Benefits rather than Non-Earner Benefits, which distinguishes her action from the others.
[39] Dexter was involved in a motor vehicle accident in 2004. She applied to Aviva for accident benefits in August 2004. On October 12, 2004, Aviva sent an Explanation of Benefits to Dexter. The form stated that Dexter was “Not Eligible” for Income Replacement Benefits for the stated reason: “As per your application submitted you are not entitled to this benefit due (to the fact that) you were not considered employed at the time of the accident.” The form also stated that Dexter was eligible for Non-Earner Benefit and Caregiver Benefit, with the following explanation: “This benefit compensates you for expenses incurred if you cannot continue as the main caregiver for a person in your household such as a child under age 16 or other person who needs care. The benefit pays expenses up to $250 per week. Please refer to the attached letter for further breakdown of the election of benefits between caregiver and non-earner.”
[40] Aviva enclosed a letter which stated that Dexter was eligible for both Caregiver and Non-Earner Benefits, and that she must make an election between the two. The letter contained the following description of the benefits:
Non-Earner Benefit
This benefit compensates you if you are completely unable to carry on a normal life, and do not qualify for an Income Replacement Benefit or Caregiver Benefit. The benefit is $185 per week, but may be $320 per week if you were a student or recent graduate. The benefit begins twenty-six weeks after you become completely unable to carry on a normal life.
Caregiver Benefits
This benefit compensates you for expenses incurred if you cannot continue as the main caregiver for a person in your household such as child under age 16 or other person who needs care. The benefit pays expenses up to $250 per week, but if you provide care for more than one person, the limit is increased by $50 for each additional person. If you are covered by optional caregiver benefits, the benefit pays expenses up to $325 per week and $75 per week for each additional person.
Please be advised that once you have made your election on which benefit you wish to receive, and you have submitted the complete election form to Aviva Canada, you cannot change your choice at a later date.
[41] Along with the correspondence, Aviva sent a blank election form which stated, in bold: “If you need help in choosing the benefit, please contact your insurance company representative immediately”. Aviva also requested that Dexter provide a Disability Certificate.
[42] In October of 2004, Dexter elected to receive Caregiver Benefits instead of Non-Earner Benefits.
[43] In February 2005, Aviva received a medical report, in light of which Aviva determined that Dexter was no longer entitled to Caregiver Benefits. The termination of the Caregiver Benefits was communicated to Dexter in a letter sent with an Explanation of Benefits on February 10, 2005. The form stated that Dexter was “Not eligible” for Income Replacement Benefits, Caregiver Benefits and Non-Earner Benefits.
[44] With respect to Caregiver Benefits, the document stated, “Based on the enclosed in-home occupational therapy assessment report, you are no longer deemed to suffer a substantial inability to perform your pre-accident caregiving tasks. You are no longer eligible to receive this benefit. If you wish to dispute this stoppage, please sign and return the enclosed form.” The letter provided notice that the Caregiver Benefit would be discontinued effective March 2, 2005. The letter further stated that, if Dexter wished to dispute the termination, Dexter must inform Aviva within 14 days of the letter and provide a Disability Certificate. However, no Disability Certificate was provided after the February 2005 medical report.
[45] In total, Aviva paid Dexter $3,110.00 in Caregiver Benefits, $7,909.25 in medical expenses and $2,564.40 in housekeeping benefits.
[46] On or about May 16, 2005, Dexter’s counsel prepared an Application for Mediation with the Financial Services Commission of Ontario, which stated that Dexter was disputing the February 10, 2005 denial of “Income Replacement Benefits.” However, Dexter did not contest Aviva’s denial of Non-Earner Benefits. Shortly thereafter, Aviva wrote to Dexter’s counsel and requested that he confirm that Dexter was contesting Aviva’s decision to terminate Caregiver Benefits rather than Income Replacement Benefits, as Dexter had never received Income Replacement Benefits. Aviva has no record of a response to this letter. It appears that the Application for Mediation was never filed, and the mediation was never pursued by Dexter.
[47] On February 28, 2012, counsel for Dexter wrote a letter to Aviva and stated that the letter should be considered as “an Application for Non-Earner Benefits.” This was the first time that Dexter had made mention of a change of election to Non-Earner Benefits.
[48] On March 21, 2013, Dexter issued a Statement of Claim, which was more than eight years after the denial.
IV. RELEVANT LEGISLATION
[49] The relevant legislative sections are as follows:
STATUTORY ACCIDENT BENEFITS SCHEDULE,
Accidents on or After November 1, 1996, O. Reg. 403/96
PART III – NON-EARNER BENEFIT
12.(1) The insurer shall pay an insured person who sustains an impairment as a result of an accident a non-earner benefit if the insured person meets any of the following qualifications:
The insured person suffers a complete inability to carry on a normal life as a result of and within 104 weeks after the accident and does not qualify for an income replacement benefit.
The insured person suffers a complete inability to carry on a normal life as a result of and within 104 weeks after the accident, received a caregiver benefit as a result of the accident and there is no longer a person in need of care.
(The remaining portions of this section are not relevant to this motion).
PART X - PROCEDURES FOR CLAIMING BENEFITS
32.(1) A person shall notify the insurer of his or her intention to apply for a benefit under this Regulation…
(2) The insurer shall promptly provide the person with,
(a) the appropriate application forms;
(b) a written explanation of the benefits available under this Regulation;
(c) information to assist the person in applying for benefits; and
(d) information on any possible elections relating to income replacement, non-earner and caregiver benefits.
Income Replacement, Non-earner or Caregiver Benefits and Housekeeping or Home Maintenance Expenses
35.(1) In this section and section 37,
“specified benefit” means an income replacement benefit, non-earner benefit, caregiver benefit or a payment for housekeeping or home maintenance services under section 22.
(2) An insured person who applies for a specified benefit shall submit with the application a disability certificate completed no earlier than 10 business days before the date the application is submitted.
Time Limit for Proceeding
51.(1) A mediation proceeding or evaluation under section 280 or 280.1 of the Insurance Act or a court proceeding or arbitration under clause 281(1)(a) or (b) of the Act in respect of a benefit under this Regulation shall be commenced within two years after the insurer’s refusal to pay the amount claimed.
(2) Despite subsection (1), a court proceeding or arbitration under clause 281(1)(a) or (b) of the Insurance Act may be commenced within 90 days after the mediator reports to the parties under subsection 280(8) of the Act or within 30 days after the person performing the evaluation provides a report to the parties under section 280.1 of the Act, whichever is later.
INSURANCE ACT, R.S.O.1990, C. I.8
Relief from Forfeiture
- Where there has been imperfect compliance with a statutory condition as to the proof of loss to be given by the insured or other matter or thing required to be done or omitted by the insured with respect to the loss and a consequent forfeiture or avoidance of the insurance in whole or in part and the court considers it inequitable that the insurance should be forfeited or avoided on that ground, the court may relieve against the forfeiture or avoidance on such terms as it considers just.
Litigation or Arbitration
281.1 (1) A mediation proceeding…or a court proceeding or arbitration under section 281 shall be commenced within two years after the insurer’s refusal to pay the benefit claimed.
(2) Despite subsection (1), a proceeding or arbitration under clause 281(1)(a) or (b) may be commenced,…
(b) if mediation fails…within 90 days after the mediator reports to the parties under subsection 280(8). [Emphasis added]
V. ISSUES
[50] The following is a list of the issues raised by these motions:
A. Should portions of the affidavits be struck?
B. Test on motion for summary judgment
C. Limitation period
D. How does section 32(2) of the Statutory Accident Benefits Schedule affect the limitation period?
E. Whether Dexter’s election affected the limitation period
F. Failure to provide a Disability Certificate
G. Claims of mental distress and bad faith
VI. ANALYSIS
A. Should Portions of the Affidavits be Struck?
[51] Aviva raised a preliminary issue regarding the propriety of certain paragraphs within the affidavits filed in the plaintiffs’ motions records. In support of their request to have the motion for summary judgment dismissed, the plaintiffs have filed responding motion records which contain the affidavits of Jane Poproski or Sean Oostdyk (lawyers from Mr. Ferro’s office); and an affidavit from the plaintiff in each case. Aviva has asked the court to strike out portions of these affidavits.
[52] Rule 4.06(2) of the Rules of Civil Procedure states that an affidavit shall be confined to the statement of facts within the personal knowledge of the deponent or to other evidence that the deponent could give if testifying as a witness in court. Aviva argues that the affidavits of Ms. Poproski and Mr. Oostdyk contain paragraphs that are improper, including evidence that is expert opinion evidence and argument. In addition, the plaintiffs’ affidavits contain medical evidence, which the insurer also says is improper.
[53] In response to these concerns, counsel for the plaintiffs argues that the impugned paragraphs are not true expert evidence. He submits that the paragraphs that are said to contain legal argument contain appropriate evidence that is within the personal knowledge of the affiant and is therefore appropriate.
[54] In my view, the concerns raised with respect to the lawyers’ affidavits are valid. To the extent that the impugned paragraphs in the affidavits refer to “industry standard” and the lawyer’s experience, it is in the nature of expert evidence. It is therefore not appropriate for the court to receive this evidence by affidavit, especially from counsel.
[55] Further, the information is not relevant to the issue. Even if the affiant lawyer could say that she has reviewed hundreds of files where certain information was provided by an insurance company, it does not assist the court in determining what the statute requires the insurer to provide and/or whether any such duty affects the limitation period.
[56] Other paragraphs in the lawyers’ affidavits refer to what the Statutory Accident Benefits Schedule requires an insurer to provide; opine on whether Aviva complied with its “informational obligation” to explain the benefits; and comment on whether Aviva met their obligations generally. These paragraphs constitute legal argument and are similarly improper.
[57] The portions of the lawyers’ affidavits that contain opinion and legal argument are improper and will therefore be given no weight on this motion.
[58] To the extent that the plaintiffs’ affidavits contain medical evidence and/or medical documents that are attached, I find those portions of the affidavits are not improper. While the plaintiffs cannot formulate their own prognosis, the plaintiffs are entitled to describe the nature of their injuries as they understood them to be. The plaintiffs are required to put their best foot forward on these motions and have simply provided an outline of the evidence that would be available at trial. It would be impractical and unduly onerous to require affidavits from experts and medical practitioners at this stage of the proceeding. Although those paragraphs are not particularly relevant to the issues raised on this motion, there is no basis to strike those portions of the affidavits.
B. Test on Motion for Summary Judgment
[59] Rule 20.04 of the Rules of Civil Procedure states that, on a motion for summary judgment, the court shall grant judgment when it is satisfied there is no genuine issue requiring trial. In determining whether there is a genuine issue requiring a trial, the court shall consider the evidence submitted by the parties and the judge may exercise any of the following powers:
- Weighing the evidence.
- Evaluating the credibility of a deponent.
- Drawing any reasonable inference from the evidence.
[60] Rule 20 remains a means of avoiding protracted and expensive litigation when there is no requirement for a trial because there is no genuine issue of fact. The summary judgment rule, properly applied, shall be liberally construed to secure the most expeditious and least expensive determination of the civil proceeding on its merits (Irving Ungerman Ltd. v. Galanis, 1991 7275 (ON CA), [1991] O.J. No. 1478 (C.A.) at paras. 19 and 20).
[61] The change in the Rules and the interpretation of those rules by the Supreme Court of Canada permits a more meaningful review of the paper record and expressly overrules jurisprudence that prevented motions judges from making evidentiary determinations. As a result, cases or issues need not proceed to trial unless it is genuinely required. (Cuthbert v. TD Canada Trust, 2010 ONSC 830, [2010] O.J. No. 630 (Sup. Ct.) at para. 10).
[62] In Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87 (at para. 5), the Supreme Court of Canada held that the rule for summary judgment must be interpreted broadly, favouring proportionality and fair access to the affordable, timely and just adjudication of claims.
[63] In the case of Canadian Imperial Bank of Commerce v. Mitchell, 2010 ONSC 2227, [2010] O.J. No. 1502 (at para. 18), the court recognized that, on a motion for summary judgment, a party’s evidence must set out coherent evidence of specific facts showing that there is a genuine issue requiring a trial. A responding party to a motion for summary judgment is obliged to put his or her best position forward and, in that context, must do more than simply assert uncorroborated facts.
[64] The six actions are appropriate examples of cases where the court may consider summary judgment. The evidence is mainly found in documents exchanged between the parties, which have been provided to the court. The limitation period raises a question of law, and there is little factual dispute.
C. Limitation Period
[65] In Haldenby v. Dominion of Canada General Insurance Co., (2001) 2001 16603 (ON CA), 55 O.R. (3d) 470 (C.A.), the Ontario Court of Appeal stated that limitation periods play an important role in the administration of justice by encouraging the timely resolution of legal issues and the competing interests of potential claimants, potential defendants and society at large. Limitation periods provide finality and certainty; they ensure that evidence is maintained; and they provide an incentive for plaintiffs to act in a timely fashion.
[66] Section 281.1(1) of the Insurance Act and section 51(1) of the Statutory Accident Benefits Schedule establish a two year limitation period for the commencement of litigation or arbitration after the insurer’s refusal to pay a benefit.
[67] In Smith v. Co-operators General Insurance Co., 2002 SCC 30, [2002] 2 S.C.R.129, the Supreme Court of Canada set out the factors required for insurers to be able to rely on the limitation period. Insurers have to provide a valid refusal of benefits, which must state a clear and unequivocal denial; give the reasons for the denial, including accompanying medical documentation if applicable; and provide a description of the dispute resolution process.
[68] The Court of Appeal has repeatedly said that, so long as the insurer provides a valid refusal, the limitation period should be strictly applied. It does not matter if the reason provided for the refusal of the benefit is incorrect or inaccurate at law (Turner v. State Farm Mutual Automobile Insurance Company, (2005) 2005 2551 (ON CA), 195 O.A.C. 61; Sietzema v. Economical Insurance, 2014 ONCA 111, 118 O.R. (3d) 713).
[69] None of the plaintiffs have provided an explanation as to why they did not contest the denial of Non-Earner Benefits within two years. The lack of adequate explanation as to why a claim was not commenced within two years is a relevant factor on this motion.
[70] I have reviewed the denial of benefits provided by Aviva to each of the six plaintiffs. I find that, in each case, the Explanation of Benefits was a clear denial of Non-Earner Benefits. The document stated that the insured party was “not eligible” for Non-Earner Benefits and provided a reason for that lack of eligibility. Although Dexter’s Explanation of Benefits did not specifically state the reason on that document itself, it was absolutely clear that the denial stemmed from her election of Caregiver Benefits over Non-Earner Benefits.
[71] The Explanation of Benefits also provided a description of the steps involved in the dispute resolution process that the insured party could follow if they wished to dispute the decision, and provided a clear warning that there was a two-year time limit from the date of denial to commence any such dispute. All of the plaintiffs retained Mr. Ferro well within the two year period, and no explanation has been provided for their failure to act within two years after the denial of Non-Earner Benefits.
[72] On its face, it would appear that the plaintiffs have not brought their claims within the two-year limitation period as set out in the Insurance Act and the Statutory Accident Benefits Schedule. However, the plaintiffs argue that, since the insurer did not provide a description of the benefit itself, the denial of Non-Earner Benefits is not valid. They argue that, because the insurer breached their obligation under section 32(2), the limitation period on Non-Earner Benefits cannot be said to run against the plaintiffs. The analysis on this issue is set out below.
D. How Does Section 32(2) of the Statutory Accident Benefits Schedule Affect the Limitation Period?
[73] The plaintiffs state that Non-Earner Benefits were not explained to them; nor did Aviva provide a written description of the benefits available under the policy. They further argue that the denial of the Non-Earner Benefit claimed is a denial of an unexplained benefit, and that Aviva has not complied with its informational obligation to provide a written explanation of the benefits available under the Statutory Accident Benefits Schedule. This argument suggests that the limitation period that is normally triggered by a denial of benefits by the insurer never begins to run if there is a procedural defect under section 32(2).
[74] Aviva states that, after an insured has submitted an Application for Accident Benefits, the insurance company reviews the file to determine what benefits are potentially available to that insured. Aviva submits that the obligation to describe the benefit arises during the adjustment process, which does not affect the running of the limitation period. Aviva argues that a valid denial is all that is required in order for the limitation period to commence.
[75] One of the main objectives of insurance law and the Statutory Accident Benefits Schedule is consumer protection (Smith v. Co-operators General Insurance Company, supra, at para.11). Another important objective is the timely submission and resolution of accident benefits (Sietzema v. Economical Insurance, supra; Sagan v. Dominion of Canada General Insurance Co., 2014 ONCA 720, 123 O.R. (3d) 314).
[76] Section 32(2) of the Statutory Accident Benefits Schedule states that the insurer shall promptly provide the applicant with (1) the appropriate application forms; (2) a written explanation of the benefits available under the Regulation; (3) information to assist the person in applying for benefits; and (4) information on any possible elections relating to income replacement, non-earner and caregiver benefits [Emphasis added].
[77] In Spadafora v. Dominion of Canada 2013 ONSC 182, 113 O.R. (3d) 782, Justice Reilly of the Superior Court of Justice stated that the “written explanation of the benefits available” under the Statutory Accident Benefits Schedule permits the insured person to make a timely application for benefits.
[78] In the cases before me, Aviva sent blank Applications for Accident Benefits to each of the plaintiffs. The Application form contained very simple language that permitted the insured to check boxes that described their status at the time of the accident and to provide more information where appropriate. This form provided the plaintiffs with sufficient information to allow them to claim the benefits and permitted a timely application for benefits. The insured person did not need to elect which kind of benefit to apply for, and were effectively applying for all benefits that were potentially available to them. Although it would have been preferable for the insurance company to provide a written explanation of benefits when sending the Application Package to each insured, the application process was not hindered in any way by Aviva’s failure to do so.
[79] In addition to the Application forms, Aviva sent blank Disability Certificates to each of the plaintiffs. The Certificate stated that the disability test for Non-Earner Benefits was “complete inability to carry on a normal life.” The Certificate contained a detailed description of what the disability test means and what is required to qualify for Non-Earner Benefits.
[80] After receiving the Applications for benefits, Aviva sent an Explanation of Benefits to each plaintiff. The content of those forms were all slightly different and are set out in more detail above. The explanations provided by Aviva can be summarized as follows:
i. Straus, Messer and Larsen were advised that they were not entitled to Non-Earner Benefits because they were employed at the time of the accident. The Explanation of Benefits made it very clear that a person cannot be eligible for both Income Replacement Benefits and Non-Earner Benefits at the same time, and that Non-Earner Benefits are only available to someone who was not employed at the time of the accident.
ii. Hanna was advised that he was not eligible for Non-Earner Benefits because he was “deemed employed” at the time of the accident, and Aviva was considering paying Income Replacement Benefits instead. The Explanation of Benefits made it clear that a person cannot be eligible for both Income Replacement Benefits and Non-Earner Benefits at the same time, and that Non-Earner Benefits are only available to someone who was not employed at the time of the accident.
iii. Dexter was provided with a very detailed description of both Non-Earner Benefits and Caregiver Benefits. She was asked to elect between Caregiver and Non-Earner Benefits. She was advised that, once she made her election, she would not be able change it. Dexter elected to receive, and did receive, $3,110 in Caregiver Benefits. As a result of that election, Aviva subsequently stated that Dexter was ineligible for Non-Earner Benefits.
iv. Dushenko was denied Non-Earner Benefits because she “must suffer a complete inability to carry on a normal life as a result of and within 104 weeks of the accident. There is a 26 week waiting period for this benefit.” The Explanation of Benefits also stated that the Disability Certificate provided by Dr. Virk indicates that she was not substantially unable to perform the essential tasks of her employment and she can return to work. The Explanation of Benefits made it very clear that Non-Earner Benefits were only available to a person who suffered a complete inability to carry on a normal life as a result of the accident.
[81] In the cases before the court, I find that Aviva provided descriptive information regarding Non-Earner Benefits in the various forms that it provided to the plaintiffs. Although Aviva did not provide a separate informational document during the initial application process, the failure to do so did not prevent a timely and fulsome application for benefits. By the time the Non-Earner Benefits were denied, the plaintiffs had received sufficient information to understand Non-Earner Benefits as they were recognized in the insurance industry at the time. The plaintiffs were clearly advised of the reason for the denial. They had retained counsel within the two year limitation period and had access to legal advice.
[82] The Explanation of Benefits explained the plaintiffs’ right to dispute the insurer’s assessment of the claim and to have the claim addressed through mediation followed by arbitration, litigation or neutral evaluation. Under the heading “WARNING: TWO YEAR TIME LIMIT”, it explained that the plaintiffs had two years from the refusal to pay a benefit, or from reduction of a benefit, to arbitrate or commence a lawsuit.
[83] In 2004 and 2005, it was generally assumed in the insurance industry that employment precluded receipt of Non-Earner Benefits. However, in 2012, the Ontario Court of Appeal in Galdamez v. Allstate Insurance, 2012 ONCA 508, 111 O.R. (3d) 321 stated that, rare though the situation might be, a person who was able to continue to work might nevertheless qualify for Non-Earner Benefits. In light of the Galdamez decision, these six plaintiffs may now wish to argue that the denial of benefits was wrong in law. However, even if the reason for the refusal was improper, the denial was clear and unequivocal. The correctness of the denial does not affect the validity of the refusal for purposes of the limitation period.
[84] As stated above, the two-year limitation period ordinarily starts to run on the date of the refusal of the benefit, subject only to brief extensions to await reports from a mediator or evaluator. A clear and unequivocal refusal is all that is required. An erroneous reason for the denial does not affect the validity of the refusal for the purposes of section 281.1 of the Insurance Act (Turner, supra; Sietzema v. Economical Insurance, supra, leave to appeal refused [2014] S.C.C.A. No. 172).
[85] The denial of Non-Earner Benefits as set out in the Explanation of Benefits in these cases complied with the Supreme Court of Canada decision in Smith v. the Co-operators:
- The denial was a clear and unequivocal denial of the benefit.
- It set out the reason for the refusal (as noted in the caselaw, the reason for the refusal does not need to be legitimate).
- It provided a detailed description of the dispute resolution process and a warning of the two-year limitation period.
[86] Limitation periods cannot be extended indefinitely. There must be some finality to the process. To suggest that the failure to provide a description of all benefits creates an unfettered right to bring a claim at any time defeats the mandate of facilitating the quick resolution of claims and the need for finality, certainty and the principle of diligence.
[87] As the Ontario Court of Appeal stated in Sietzema, which was recently repeated and reinforced in Bustamante v. Guarantee Company of North America, 2015 ONCA 530, [2015] O.J. No. 3704, at para. 20: “If we accepted the appellant’s argument, the limitation period for making a claim for Non-Earner Benefits never began to run. This would defeat one of the primary purposes of the SABS regime, namely, to ensure the timely submission and resolution of claims for accident benefits.”
[88] In all of these actions, the limitation period began at the time of the denial of the benefit. All six of these actions were brought well outside the limitation period and are therefore statute barred.
E. Whether Dexter’s Election Affected the Limitation Period
[89] Section 36 of the Statutory Accident Benefits Schedule requires insured persons to elect between Income Replacement Benefits, Caregiver Benefits and Non-Earner Benefits. A re-election of benefits can only occur in narrow circumstances. The factors include the time that has passed since the initial election, the reasons for the delay, the reasons for seeking re-election and the effect of the re-election and potential prejudice to the insurer. (Grewal v. AIG Commercial Insurance Co. of Canada, 2014 CarswellOnt 11362 (F.S.C.O.).
[90] Dexter had made an election to receive Caregiver Benefits rather than Non-Earner Benefits, and was therefore not entitled to receive Non-Earner Benefits at the same time. Dexter took seven years to assert her re-election and there was no reasonable explanation provided for the delay or for the re-election. The limitation period was triggered once the Notice of Refusal was sent to Dexter and expired well before the Statement of Claim was issued.
F. Failure to Provide Disability Certificate
[91] Straus, Hanna, Messer, Larsen and Dexter did not provide Disability Certificates to Aviva showing that they meet the criteria for Non-Earner Benefits. The Disability Certificate is a basic prerequisite for a claim for Non-Earner Benefits under section 35(2) of the Statutory Accident Benefits Schedule (Sagan v. Dominion of Canada General Insurance Co., supra; Steele v. Intact Insurance Co., 2014 ONSC 6999, [2014] O.J. No. 5765).
[92] These five plaintiffs argue that they are entitled to relief from forfeiture under section 129 of the Insurance Act. The court may grant relief from forfeiture of insurance benefits where there has been imperfect compliance with a statutory condition as to the proof of loss to be given by the insured or other matter or thing required to be done or omitted by the insured with respect to the loss. The remedy may be granted if the court considers it inequitable that the insurance be forfeited or avoided on that ground.
[93] I am mindful of the fact that, if relief from forfeiture is not granted, the plaintiffs will not be able to receive Non-Earner Benefits. This may pose a significant hardship. Had the plaintiffs submitted a Disability Certificate outside the time period required by the Statutory Accident Benefits Schedule, it may have been available to them to argue imperfect compliance. However, the failure to submit a Certificate at all means that there was non-compliance.
[94] This is not simply a matter of insured persons missing a deadline. None of the five plaintiffs have provided a Disability Certificate from a health practitioner stating that they have met the statutory requirements for Non-Earner Benefits. Ten years have passed since the accidents, and the plaintiffs have provided no explanation for their failure to submit Disability Certificates. I am not prepared to grant relief from forfeiture in the circumstances.
[95] Even if I am wrong about the limitations issue, Aviva is entitled to summary judgment in the Straus, Hanna, Messer, Larsen and Dexter actions, on the grounds that these five plaintiffs have not provided Disability Certificates stating that they meet the criteria for Non-Earner Benefits.
G. Claims of Mental Distress and Bad Faith
[96] Apart from damages for breach of contract for failure to pay Non-Earner Benefits under the contract of insurance, the plaintiffs have also claimed damages for Aviva’s alleged wrongful infliction of mental distress upon the plaintiffs by the use of unlawful claims practices; damages for bad faith or unreasonable conduct in the claims process; and aggravated punitive and exemplary damages. Hanna is the only plaintiff (of the six plaintiffs on these motions) who is not seeking punitive and exemplary damages.
[97] None of the plaintiffs have provided evidence to support claims of mental distress or bad faith. Although there may have been a difference of opinion between the plaintiffs and the defendant as to entitlement to benefits, there is no evidence of bad faith on the part of the insurance company. The actions of Aviva, in these cases, were far from the "highhanded, malicious, arbitrary or highly reprehensible” conduct that would justify an award for punitive or aggravated damages.
[98] In responding to these motions for summary judgment, the plaintiffs are required to put their best foot forward. Even without a limitations issue, there is no evidence to support these additional claims and they are therefore dismissed.
VII. CONCLUSION
[99] The six actions for accident benefits were brought well outside of the limitation period as set out in section 51(1) of the Statutory Accident Benefits Schedule and section 281.1(1) of the Insurance Act, and are statute barred. The defendant Aviva has satisfied the onus of demonstrating that there is no genuine issue for trial. In the result, the motions for summary judgment are granted and the six actions are summarily dismissed.
VIII. COSTS
[100] In the event that counsel cannot agree as to costs, they are directed to provide written submissions as to costs. The submissions shall be no longer than two typed pages, double-spaced, in addition to any relevant offers or Bill of Costs. Aviva shall provide cost submissions by October 30, 2015 and the plaintiffs shall provide any response by November 15, 2015.
Braid J.
Released: October 2, 2015
CITATION: Straus v. Aviva; Hanna v. Aviva; Dushenko v. Aviva; Messer v. Aviva; Larsen v. Aviva; Dexter v. Aviva 2015 ONSC 4589
COURT FILE NOs.: 11-31098, 12-35008, 12-36327, 13-40564, 13-40615, 13-40221
DATE: 2015-10-02
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Shawn Straus, Albert Hanna, Misty Dushenko, Jeremy Messer, Keir Larsen, Jennifer Dexter
Plaintiffs
- and –
Aviva Canada Inc./Aviva Insurance Company of Canada
Defendant
REASONS FOR JUDGMENT
CDB
Released: October 2, 2015