CITATION: Litvinau v. Manufacturers Life Insurance Company, 2015 ONSC 4609
COURT FILE NO.: CV-11-0822-00
DATE: 20150720
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: ANTON LITVINAU – and – THE MANUFACTURERS LIFE INSURANCE COMPANY
BEFORE: André J.
COUNSEL: Sergio Grillone, for the Plaintiff
Ted R. Schieck, for the Defendant
HEARD: June 29, 2015
E N D O R S E M E N T
[1] The defendant, Manufacturers Life Insurance Company (“the Company”) brings a motion for summary judgment dismissing the plaintiff, Mr. Anton Litvinau’s (“Mr. Litvinau”) claim against it for the payment of disability benefits. Mr. Litvinau contends however, that not only should the Company’s motion be dismissed but that he is entitled to summary judgment.
[2] I must therefore decide whether I should grant summary judgment on behalf of either party in this case.
BACKGROUND FACTS
[3] Mr. Litvinau was employed by The Forzani Group Ltd. Company (“Forzani”) on July 11, 2005.
[4] Mr. Litvinau became a fulltime employee of Forzani on November 23, 2009.
[5] Mr. Litvinau purchased group disability insurance issued by the Company to Forzani. The policy indicated that eligibility for coverage arose when a person became a fulltime employee of Forzani. It further stipulated that any employee hired prior to April 1, 2008, was not subject to a waiting period before the policy became effective. However, any employee hired after April 1, 2008 was subject to a three month waiting period before becoming eligible for coverage. The policy also stipulated that no benefits are payable for any pre-existing disability directly or indirectly within the first 12 months of insurance under this benefit.
[6] Mr. Litvinau stopped working for Forzani on July 7, 2010 on account of a medical condition.
[7] On December 14, 2010, the defendant denied Mr. Litvinau’s claim for long term disability benefits (“LTD”) on the basis of the contractual exclusion relating to pre-existing conditions.
[8] Mr. Litvinau commenced his action against the Company on February 23, 2011.
POSITION OF THE PARTIES
[9] The Company contends that Mr. Litvinau, under the terms of the insurance policy only became eligible for disability coverage on February 23, 2010, or three months after he was employed fulltime by Forzani. Given that Mr. Litvinau was disabled within the first twelve months of his insurance coverage he is not covered by the policy. Accordingly, the court should grant summary judgment in favour of the Company.
[10] Mr. Litvinau, on the other hand, maintains that he became available for disability coverage under the insurance policy when he became a fulltime employee on November 23, 2009. Because he was hired prior to April 1, 2008, he was not subject to the three month waiting period before the policy became effective. Accordingly, he became eligible for coverage immediately upon becoming a fulltime employee on November 23, 2009. The 90 day pre-existing condition provision therefore ran from August 23, 2009 to November 23, 2009; not from November 25, 2009 to February 22, 2010, as the Company contends.
LEGAL PRINCIPLES
[11] Rule 20.04(2) of the Rules of Civil Procedure (“the Rules”) indicates that:
20.04(2) the court shall grant summary judgment if,
a) the court is satisfied that there is no genuine issue requiring a trial with respect to a claim or defence; or
b) the parties agree to have all or part of the claim determined by a summary judgment and the court is satisfied that it is appropriate to grant summary judgment.
[12] Rule 20.04(2.1) provides that:
In determining under clause (2)(a) whether there is a genuine issue requiring a trial, the court shall consider the evidence submitted by the parties, and, if the determination is being made by a judge, the judge may exercise any of the following powers for the purpose, unless it is in the interest of justice for such powers to be exercised only at trial:
weighing the evidence
evaluating the credibility of a deponent
drawing any reasonable inference from the evidence.
[13] There will be no genuine issue requiring a trial when the judge is able to reach a fair and just determination on the merit of a motion for summary judgment. This will be the case when the process (1) allows the judge to make the necessary findings of fact, (2) allows the judge to apply the law to the facts, and (3) is a proportionate, more expeditious and less expensive means to achieve a just result. Hryniak v. Mavolin, 2014 SCC 7 at para. 49.
ANALYSIS
[14] Both parties concede that if the Company is correct in its interpretation of the effective coverage date of its insurance policy with Forzani, I should grant summary judgment in favour of the Company.
[15] There is no dispute that the policy came into effect on April 1, 2008.
[16] There is no dispute that Mr. Litvinau had a pre-existing condition as defined by the insurance policy. Neither is there any dispute that within 90 days of November 23, 2009, Mr. Litvinau sought medical treatment for this pre-existing medical condition.
[17] Furthermore, there is no dispute that primarily on account of this pre-existing condition, Mr. Litvinau ceased working for Forzani on July 7, 2010.
[18] In determining the scope of coverage which Mr. Litvinau enjoyed as an employee of Forzani, the Company’s Group Benefits Policy must be reviewed. The policy extends insurance coverage to employees of Forzani.
[19] It defines “employee” as a person who:
a) is directly employed by the employer on a permanent and fulltime basis;
b) is compensated for services by the employer, and
c) is residing in Canada.
[20] Under the heading, “Disabilities Not Covered”, the policy provides that no benefits are payable for any disability directly or indirectly related to:
g) A pre-existing condition which causes disability within the first 12 months of insurance under this benefit. A pre-existing condition is any injury or illness (whether diagnosed or not) for which an employee was treated or attended by a physician or for which drugs were prescribed, within 90 days prior to the date the employee’s insurance under the benefit became effective.
[21] The policy also indicates, under the heading, “Waiting Period”, the following:
For employees hired on or prior to the policy effective date
None
For employees hired after the policy effective date
3 months
[22] Based on these provisions, persons eligible for insurance coverage under the Company’s policy with Forzani, had to come under the definition of “employee” in the insurance policy. The definition specifically defines an employee as a person who is directly employed by the employer on a permanent and fulltime basis.
[23] Mr. Litvinau submits that the ambiguous definition of the term “employee” in the policy makes Mr. Litvinau an employee of Forzani prior to April 1, 2008. Second, in 2010, Forzani viewed Mr. Litvinau as fulltime for “5+ years” and consequently regarded him as a fulltime employee in 2005 when they designated him as a “fulltime salesperson”. To that extent, Mr. Litvinau should not be prejudiced by being denied disability benefits due to an ambiguity in Forzani’s insurance policy with the Company for which he was not responsible.
[24] In Brissette Estate v. Westbury Life Insurance Co., 1992 32 (SCC), [1992] 3 S.C.R. 87 (S.C.C.) at para. 55, the Supreme Court of Canada set out the following guidelines for the interpretation of insurance contracts:
i) The court must search for an interpretation from the whole of the contract which promotes the true intent of the parties at the time of entry into the contract;
ii) Where words are capable of two or more meanings, the meaning that is more reasonable in promoting the intention of the parties will be selected;
(iii) Ambiguities will be construed against the insurer; and
(iv) An interpretation which will result in either a windfall to the insurer or an unanticipated recovery to the insured is to be avoided.
[25] Upon reading the provisions of the insurance policy between the Company and Forzani, it is clear that only employees of Forzani are entitled to disability benefits under the policy. Employees are defined in the policy as “permanent and fulltime”. Mr. Litvinau was designated a fulltime employee on November 22, 2009. Accordingly, his eligibility to receive benefits under the coverage commenced when he became a fulltime employee.
[26] If, as Mr. Litvinau contends, he became a fulltime employee in 2005, then there would have been no need for Forzani to designate him a fulltime employee in November 2009.
[27] Second, it does not appear that Mr. Litvinau had any doubts or uncertainty about when he became a fulltime employee of Forzani. During an examination for discovery on May 15, 2013, Mr. Litvinau provided the following answers to questions from opposing counsel:
Q21 When did you start working for Forzani?
A. Summer 2005.
Q22 Was that on a part-time basis?
A. Correct.
Q23 Were you entitled to benefits as a part-time employee?
A. No.
Q25 Let me ask you this : As a fulltime employee you became eligible for certain eligible for certain benefits with Forzani, correct?
A. To the best of my knowledge, yes.
Q26 Would you agree with me that you became eligible for those benefits – in particular, long term disability benefits – as of February 23, 2010?
A. Yes.
[28] Third, Mr. Litvinau never pleaded in his Statement of Claim that his insurance coverage commenced on November 23, 2009. In its Statement of Defence, the Company pleaded that Mr. Litvinau became eligible for disability benefits on February 23, 2010. Mr. Litvinau, pursuant to Rule 25.08(2) of the Rules of Civil Procedure, failed to file a reply or rebuttal of the Company’s contention that he only became an “insured employee” in February 2010. This failure, in combination with Mr. Litvinau’s testimony, provides further evidence that Mr. Litvinau believed that his effective date of coverage was February 2010.
DISPOSITION
[29] For the above reasons, the Company’s motion for summary judgment is granted. Mr. Litvinau’s Statement of Claim is thereby dismissed.
COSTS
[30] The parties have agreed that costs of this motion should be fixed at $5,000 and that regarding the action at $9,000. They also agreed that if I rule in favour of the Company, I should qualify the award of costs by the phrase “if demanded by the Manufactures Life Insurance Company”.
[31] I therefore order that:
(a) The plaintiff, Mr. Litvinau shall pay costs to the defendant, the Manufacturer’s Life Insurance Co., fixed in the amount of $14,000 inclusive, if demanded by Manufacturers Life Insurance Company.
André J.
DATE: July 20, 2015
CITATION: Litvinau v. Manufacturers Life Insurance Company, 2015 ONSC 4609
COURT FILE NO.: CV-11-0822-00
DATE: 20150720
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: ANTON LITVINAU – and – THE MANUFACTURERS LIFE INSURANCE COMPANY
BEFORE: André J.
COUNSEL: Sergio Grillone, for the Plaintiff
Ted R. Schieck, for the Defendant
ENDORSEMENT
André J.
DATE: July 20, 2015