Toresho v. Primmum Insurance Company

[Indexed as: Toresho v. Primmum Insurance Co.]

Ontario Reports

Ontario Superior Court of Justice,

Glithero J.

January 28, 2015

124 O.R. (3d) 134 | 2015 ONSC 516

Case Summary

Insurance — Automobile insurance — Statutory accident benefits — Plaintiff electing to receive and receiving income replacement benefits ("IRBs") — Plaintiff suing defendant for payment of IRBs and applying for non-earner benefits ("NEBs") after defendant terminated IRBs — Plaintiff bringing another action claiming NEBs — Partial summary judgment granted in that action dismissing claim for NEBs relating to period when plaintiff received IRBs — Plaintiff entitled to bring concurrent actions claiming entitlement to IRBs and NEBs for period after defendant terminated IRBs.

The plaintiff was injured in a motor vehicle accident in 2006. She elected to receive income replacement benefits from the defendant insurer and received IRBs until June 28, 2007, when the defendant terminated the benefits. The plaintiff commenced an action against the defendant for payment of IRBs. She also applied for non-earner benefits. The defendant rejected that application. The plaintiff commenced a second action claiming NEBs. The defendant brought a motion for summary judgment dismissing that action.

Held, the motion should be granted in part.

Section 36 of the Statutory Accident Benefits Schedule -- Accidents on or after November 1, 1996, O. Reg. 403/96 provides that only one of IRBs, NEBs and caregiver benefits may be paid to a person "in respect of a period of time". Partial summary judgment should be granted dismissing the claim for NEBs relating to the period when the plaintiff was receiving IRBs. However, the plaintiff was not precluded from bringing contemporaneous actions for both IRB payments and NEB payments in respect of the period after the defendant terminated her IRBs. It would be up to the court to determine which benefit, if any, was payable.

Galdamez v. Allstate Insurance Co. of Canada (2012), 111 O.R. (3d) 321, [2012] O.J. No. 3394, 2012 ONCA 508, 294 O.A.C. 133, [2012] I.L.R. I-5313, 36 M.V.R. (6th) 117, folld [page135]

Sietzema v. Economical Insurance Co. (2014), 118 O.R. (3d) 713, [2014] O.J. No. 665, 2014 ONCA 111, 315 O.A.C. 392, 32 C.C.L.I. (5th) 1, 237 A.C.W.S. (3d) 483 [Leave to appeal to S.C.C. refused [2014] S.C.C.A. No. 172, 2014 CanLII 68702], consd

Other cases referred to

Hryniak v. Mauldin, [2014] 1 S.C.R. 87, [2014] S.C.J. No. 7, 2014 SCC 7, 314 O.A.C. 1, 453 N.R. 51, 2014EXP-319, J.E. 2014-162, EYB 2014-231951, 95 E.T.R. (3d) 1, 12 C.C.E.L. (4th) 1, 27 C.L.R. (4th) 1, 21 B.L.R. (5th) 248, 46 C.P.C. (7th) 217, 37 R.P.R. (5th) 1, 366 D.L.R. (4th) 641; Smith v. Co-operators General Insurance Co., [2002] 2 S.C.R. 129, [2002] S.C.J. No. 34, 2002 SCC 30, 210 D.L.R. (4th) 443, 286 N.R. 178, J.E. 2002-663, 158 O.A.C. 1, 36 C.C.L.I. (3d) 1, [2002] I.L.R. I-4071, 112 A.C.W.S. (3d) 950; Somersall v. Friedman, [2002] 3 S.C.R. 109, [2002] S.C.J. No. 60, 2002 SCC 59, 215 D.L.R. (4th) 577, 292 N.R. 1, J.E. 2002-1464, 163 O.A.C. 201, [2002] R.R.A. 679, 39 C.C.L.I. (3d) 1, [2002] I.L.R. I-4114, 25 M.V.R. (4th) 1, 115 A.C.W.S. (3d) 695

Rules and regulations referred to

Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rules 20.04, 21.05

Statutory Accident Benefits Schedule — Accidents on or after November 1, 1996, O. Reg. 403/96, ss. 4, (1), 12, (1), (1)2, 36, (1)

MOTION for summary judgment dismissing an action.

Sean Oostdyk, for plaintiff, respondent.

Jeffrey Naganobu, for defendant, applicant.

[1] GLITHERO J.: — The defendant insurer brings this motion for summary judgment dismissing the plaintiff's action for non-earner benefits ("NEBs").

[2] The plaintiff's motor vehicle accident was on May 17, 2006. On July 21, 2006, she submitted Application for Accident Benefits (OCF-1) indicating that she was employed and working at the time of the accident.

[3] A Disability Certificate (OCF-3) indicated that she was entitled to an income replacement benefit ("IRB") as a result of being unable to perform the essential tasks of her pre-accident employment, and further indicated that she did not suffer a complete inability to carry on a normal life in order to be eligible for a NEB as the disability test was marked "no" for that benefit. On June 28, 2006, she submitted two Employer's Confirmation Forms (OCF-2) confirming pre-accident employment earnings.

[4] On November 17, 2006, the plaintiff submitted an election of benefits form Election of Income Replacement, Non-Earner or Caregiver Benefit (OCF-10) in which she elected to receive an IRB.

[5] On March 27, 2007, she submitted a subsequent OCF-3 indicating she was entitled to an IRB as a result of being unable to perform the essential tasks of her pre-accident employment. [page136] That form also indicated that she did not suffer a complete inability to carry on a normal life in order to be eligible for NEB and the disability test for that benefit was checked with "no".

[6] The defendant, Primmum, determined the plaintiff to be qualified for an IRB and paid her from one week after the accident until terminating the benefits on June 28, 2007 as a result of an insurer examination which found her capable of completing essential tasks of pre-accident employment. Primmum advised the plaintiff of this decision by Explanation of Benefits (OCF-9) dated June 21, 2007.

[7] On January 26, 2009, the parties mediated the issue of IRB but failed to settle.

[8] On May 6, 2009, the plaintiff commenced an action No. 09-11325 against the defendant for payment of IRBs, and the defendant filed a statement of defence in that action on September 2, 2009.

[9] On May 18, 2010, plaintiff's counsel wrote the defendant advising that the plaintiff may qualify for NEBs. The defendant responded by letter dated July 7, 2010, advising the plaintiff was ineligible for NEBs given that she had qualified, elected and received payments of IRBs and that the OCF-3 noted she did not suffer a complete inability to carry on a normal life.

[10] On August 3, 2011, the parties participated in a FSCO mediation on the NEB issue which failed to settle at mediation.

[11] On October 17, 2011, the plaintiff commenced this action against the defendant claiming NEBs. On January 27, 2012, the defendant filed a statement of defence in this action denying that the plaintiff met the qualifications for an NEB.

[12] In this action, the plaintiff claims $100,000 for wrongful infliction of mental distress, $100,000 for bad faith, aggravated punitive and exemplary damages in the amount of $1 million, interest and costs. With respect to the NEB claim, it seems, in para. 1, to fall under "damages for breach of contract of insurance in the amount claimed in the Mediator's Report, the subject of this claim". At para. 10, this is supposedly clarified by the claim "for the payment of benefits mediated and particularized in the Financial Services Commission of Ontario Report of Mediator dated August 3, 2011".

[13] The August 3, 2011 report indicates that the issue is NEBs and specifies that the claim is for the period from November 7, 2006 "to date and ongoing". The report then indicates that interest is claimed on the allegedly overdue payments.

[14] Accordingly, this case involves a plaintiff who applied for, elected to receive and did receive IRBs until June 28, 2007. She commenced an action claiming further IRBs. Almost three years [page137] after the IRBs were terminated, the plaintiff's counsel wrote advising she may qualify for NEBs, which suggestion the defendant insurer denied and 15 months after that the plaintiff commenced this action for NEBs. The claim for those benefits is from November 7, 2006 "to date, and ongoing".

[15] The parties agree that the facts are not in dispute and that the issue on this motion involves a question of law: pursuant to the Statutory Accident Benefits Schedule Schedule -- Accidents on or after November 1, 1996, O. Reg. 403/96 ("SABS"), is a plaintiff who applies for, qualifies for, elects to receive and receives payments of IRB benefits eligible to later request an NEB? During the hearing of the motion, neither counsel differentiated between a claim for NEBs from November 7, 2006 through to June 28, 2007, when the insurer stopped paying IRBs, and the ongoing period thereafter.

[16] Rule 20.04 [of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194] permits the court, if satisfied that the only genuine issue is a question of law, to determine that question and grant judgment accordingly. Here, counsel agree that the issue before me is one of statutory interpretation and hence a question of law. The position of the parties is that if the motion succeeds, judgment would be granted for the defendant moving party. If the defendant's motion fails, counsel contemplate that the matter would proceed to trial on issues of limitation periods and disability issues. Those two issues, by express agreement of counsel, are not before me.

[17] The position of each party as presented essentially fell into four considerations:

(a) consideration of the wording of various provisions in the accident benefits legislation;

(b) consideration of the decision of Galdamez v. Allstate Insurance Co. of Canada (2012), 111 O.R. (3d) 321, [2012] O.J. No. 3394, 2012 ONCA 508;

(c) consideration of the decision in Sietzema v. Economical Mutual Insurance Co. (2014), 118 O.R. (3d) 713, [2014] O.J. No. 665, 2014 ONCA 111;

(d) consideration of the purpose and policy of the benefits legislation.

A. The Legislative Provisions

[18] The relevant provisions of the SABS in the circumstances of this case are agreed to be as follows: s. 4(1) deals with IRB entitlement and provides: [page138]

4(1) The insurer shall pay an insured person who sustains an impairment as a result of an accident an income replacement benefit if the insured person meets any of the following qualifications:

1. The insured was employed at the time of the accident and, as a result of and within 104 weeks after the accident, suffers a substantial inability to perform the essential tasks of that employment.

[19] Section 12(1) deals with NEBs and provides that:

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:

1. The insured person suffers a complete inability to carry on a normal life as result of and within 104 weeks and does not qualify for an income replacement benefit.

2. 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.

[20] Section 36 provides as follows:

36(1) Only one of the following benefits may be paid to a person in respect of a period of time:

1. An income replacement benefit.

2. A non-earner benefit.

3. A caregiver benefit.

(2) If a person's application indicates that he or she may qualify for more than one of the benefits referred to subsection (1), the insurer shall notify the person that he or she must elect within 30 days after receiving the notice of which benefit he or she wishes to receive.

(3) The insurer shall deliver the notice under subsection (2) within 10 business days after receiving the person's application.

[21] The applicant submits that here the plaintiff's purported election is four years later and points out that there is nothing in the provisions I have quoted which contemplates a change of election or a re-election in the future.

[22] The applicant further points to the provisions quoted above from s. 12(1) and argues that the provisions contain a transition vehicle such that in s. 12(1)2, if the insured meets the disability provision and was in receipt of a caregiver benefit, but then if there is no longer a person in need of such care the insured becomes entitled to an NEB. The applicant's position is that as the legislature recognized and provided for a transitional mechanism for an insured no longer required to provide care, it is telling that no such provisional section was provided where a person no longer qualifies for IRBs such as to become entitled [page139] to NEBs. The submission is that by providing a transitional mechanism for the one situation, failure to do so in respect of the other indicates that the legislature did not intend a switch from IRBs to NEBs or it would have spoken to that issue, as it did in respect of caregiver benefit recipients. The submission continues that as the legislation provides for a transition from one type of benefit to another under certain circumstances, the failure to provide a transition mechanism from a different type of benefit to another on becoming unqualified for the first is a clear and unambiguous indication that no switch from IRBs to NEBs was contemplated or intended. The respondent, of course, argues the opposite and submits that the transitional section supports that an insured can change from one type of benefit to another.

B. Galdamez v. Allstate Insurance

[23] Both sides before me argue that this case supports their position.

[24] In terms of basic background, Galdamez was working at the time of her accident in October 2002, and returned to her employment on modified duties and hours, four days later according to her, and after missing only a six-hour shift according to her employer, and then left work totally after 15 months. She applied for statutory accident benefits on November 8, 2002, and on January 7, 2003 was advised by the insurer that she may be eligible for more than one weekly benefit and was asked to elect which she wished to receive. She completed the election of benefits form on January 15, 2003, electing to receive an IRB. Thirteen days later, she was advised by the insurer she was not eligible for an IRB because she only missed one day of work, and no benefit is payable during the first week of disability. The insurer took the position because she had elected [an] IRB, she was not entitled to an NEB. Later, on June 14, 2005, the insurer took the position that she did not qualify for an IRB because her 2002 disability certificate did not indicate "a substantial inability to perform the essential tasks of her employment", because the employer's confirmation of income form indicated she had only missed a six-hour shift of work on the day of the accident, and the employer's records confirm she had worked continuously from the date of the accident until the date she left work for good.

[25] Galdamez sued Allstate for breach of contract for failing to pay income replacement benefits.

[26] While that action was pending, Galdamez then applied for NEBs and that request was denied. Galdamez then started an action to recover NEBs and it is that action that was the [page140] subject of the summary judgment motion in which the motion judge granted summary judgment and dismissed her action for NEBs.

[27] The Court of Appeal allowed the appeal and set aside the motion court order dismissing the action for NEBs. As the issue of whether she qualified for an NEB was not in issue on the summary judgment motion, the setting aside of the summary judgment motion was made without prejudice to the insurer's right to renew the motion.

[28] The moving defendant relies on Galdamez because it reiterates several times that one of the eligibility requirements for an NEB is that the insured does not qualify for an IRB: see para. 2 and para. 31. That is obviously so from the very wording of the NEB requirement conditions as set forth in s. 12 of SABS.

[29] Counsel for the responding plaintiff relies on the case as standing for the proposition that an action for IRB and another action for NEB can properly both be proceeding at the same time and in respect of the same time period in that Galdamez had not been paid either benefits and both actions claimed benefits for the entire period of time. Plaintiff's counsel also points to para. 23 of Galdamez, which makes clear that only one of the three benefits available, IRB, NEB or a caregiver benefit, "may be paid to a person in respect of a period of time" (emphasis added).

[30] Here, as in Galdamez, the plaintiff has one action proceeding for IRBs and another action proceeding for NEBs. At first blush, it is tempting to say that the difference between this case and Galdamez is that Galdamez was relating to two actions going on for the same period of time, whereas this case involves two actions relating to different periods of time.

[31] Here, the plaintiff received the IRB payments for a period of time. On my understanding, her IRB action is not to recover benefits for the period of time for which she was already paid, but rather for IRB benefits for the period of time following termination of payment by the insurer for reasons relating to the extent of her disability. Similarly, this action is in part for NEB payments for the same period of time, namely, from the point where the IRB payments were terminated by the insurer. In respect of that time period, Galdamez does not seem to present the obstacle relied upon by the moving defendant.

[32] The real crux of Galdamez lay in the Court of Appeal's decision that the motion judge was wrong in deciding that someone who can work at their job may still be able to demonstrate "a complete inability to carry on a normal life". [page141]

[33] As was the case in Galdamez, I am unable to deal with the issue of the extent of the disability and whether it satisfies either s. 4 or s. 12 of the SABS's definitions, as counsel expressly agreed that if this motion fails and the matter proceeds to trial, the two actions would be tried together and the limitation period issues and the extent of the disability issues would be the subject of trial evidence.

C. Sietzema v. Economical Mutual

[34] This was an appeal from a summary judgment order dismissing the plaintiff's action based on a limitation period (in November leave to appeal further was denied by the S.C.C.: 2014 CanLII 68702). In that case, following an automobile accident, the plaintiff filed for benefits. As she was employed at the time of the accident, and the disability certificate filed by her physician indicated that she was "substantially unable to perform the essential tasks of his/her employment at the time of the accident" and that she met the "disability test" for income replacement benefits. That same form answered negatively the question as to whether the applicant suffered a complete inability to carry on a normal life and that accordingly she did not meet the "disability test" for NEB. The insurer advised the insured that she was eligible for IRB, but that she was not eligible for NEB because she was employed at the time of the accident.

[35] On appeal, that reasoning was held to be erroneous, and the court found that she was indeed not eligible for NEBs because she was qualified for IRBs and the SABS did not permit her to receive both benefits. The plaintiff received IRB payments for a period of time. They were then terminated by the insurer. The insured did not reassert a claim for NEB until almost four years later. That violated the two-year limitation period and for that reason summary judgment was granted dismissing her action, which judgment was upheld on appeal.

[36] Accordingly, the case has little direct bearing on the outcome of this motion. It is relied upon by the moving defendant for the statement, at para. 16, that "one of the primary purposes of the SABS regime, namely, to ensure the timely submission and resolution of claims for accident benefits".

[37] Further, although upholding the summary judgment ruling based on the lapse of the limitation period, the Court of Appeal does not take issue with, and indeed seems to infer, that it would be permissible to bring a NEB claim after the termination of IRB payments, as long as it is brought in a timely way, and doesn't seek double payment in respect of the same time period. [page142]

D. Policy Considerations

[38] The responding plaintiff argues that from a policy perspective, the courts have recognized that the Ontario no-fault system involved a loss by a victim of the right to sue unless coming within certain statutory exemptions, but that in return, the legislation provided a more generous scheme of benefits from the victim's insurer. The responding plaintiff further relies on jurisprudence establishing that the objective of automobile insurance is, at least in part, consumer protection: Smith v. Co-operators General Insurance Co., 2002 SCC 30, [2002] 2 S.C.R. 129, [2002] S.C.J. No. 34. The plaintiff further relies on the doctrine of contra proferentem when interpreting an automobile insurance contract such that "coverage provisions should be construed broadly and exclusion clauses narrowly": Somersall v. Friedman, 2002 SCC 59, [2002] 3 S.C.R. 109, [2002] S.C.J. No. 60.

[39] The defendant relies on the comment in Sietzema, infra, at para. 16, quoted earlier to the effect that "timely submission and resolution of claims for accident benefits" is a primary purpose of the SABS regime. During argument, counsel for the moving defendant argued that the plaintiff's interpretation here would lead to ludicrous results in that the plaintiff could successfully apply for and receive IRB payments for a period of time, following which a number of years could lapse, and then the plaintiff could bring an application for NEB payments. The defendant's theory is that this would lead to mischief in both ways. The only way an insurer could protect itself is to have the plaintiff medically evaluated to not only the IRB benefit standard, but also would have to have the plaintiff evaluated from the s. 12 NEB standard prior to the expiration of the 104 weeks provided for in s. 12, as otherwise the defendant would be unable to lead medical evidence if it did not cause an evaluation to be done until the claim was made years later. The defendant further says that would be equally unfair to an insured if he or she were to be required to submit to disability assessments to determine if the s. 12 NEB standard of disability was met within the 104-week period, even though that was a benefit that the insured had never applied for, and hence it would simply result in needless medical examinations.

[40] While not a complete answer to the defendant's contention, surely the two-year limitation period offers some protection against claims made so late in the day as to effectively preclude the necessary assessments. Further, whatever difficulties arise within the two-year period, they may very well be equally [page143] shared by both sides, and if necessary, after-the-fact medical assessment evidence can be tested, often effectively, at trial.

E. Decision

[41] The Court of Appeal in Galdamez seems to be of the view that contemporaneous actions for both IRB payments and NEB payments, in respect of the same time period, can co-exist. I am bound by that decision. That finding defeats the legislative interpretation argument which is the foundation of this motion. Much of the Galdamez reasoning centres on the decision that, although rare, an insured could be substantially able to perform the essential tasks of her employment, and yet be completely unable to carry on a normal life. I have no evidence as to the extent of the disability in this case, and that issue is expressly not before me on this case, as was the case before the Court of Appeal in Galdamez.

[42] I am also mindful of the emphasis by the Supreme Court of Canada in Hryniak v. Mauldin, [2014] 1 S.C.R. 87, [2014] S.C.J. No. 7, 2014 SCC 7, favouring a process that is proportionate and that often summary judgment rules interpreted broadly will achieve a timely and just adjudication of claims. In this case, the plaintiff's IRB claim is proceeding to trial and will involve issues relating to the extent of the plaintiff's disability. If this action is allowed to proceed, it will involve issues relating to the extent of the disability, as well as Limitation Act considerations. There would be no reason the two actions could not be tried together and, if so, in my opinion much of the evidence would be common to both actions and hence require little extra time for the resolution of this action over and above what would be required for the resolution of the IRB action.

[43] The only basis upon which I am asked to grant summary judgment dismissing the plaintiff's action is on the basis that the legislation does not permit a NEB claim after the termination of payments for an IRB arising out of the same accident. In my opinion, the outcome of this motion must be determined having regard to the circumstances of two different time periods falling within the relief claimed in this action. The first time period is from November 7, 2006 to June 28, 2007. That is the period during which it is agreed that the insurer paid IRBs. The second time period commences June 29, 2007 and continues thereafter.

[44] Section 36(1) makes it clear that only one of such benefits may be paid in respect of a period of time. Both counsel seem to recognize this in their submissions. As pleaded, the plaintiff's claim for NEBs for the period prior to June 28, 2007 amounts to [page144] a claim for the NEB payments for a time period in which the plaintiff has already received IRBs. In my opinion, as a matter of statutory interpretation, that is not permissible.

[45] As to the claim for NEBs for the period after June 28, 2007, then the claim in both actions, that is, the IRB action and the NEB action, would relate to the same period of time. Again, while it is clear that the plaintiff cannot collect both types of benefits for that same time period, it seems on the authority of Galdamez and by inference Sietzema that the legislation does not prohibit concurrent actions, one for each type of benefit. This is exactly the result of the Court of Appeal decision. Concurrent actions, relating to the same time period, each claiming a different type of benefit can proceed forward to a resolution by the trial court on the question of which benefit, if either, are payable.

[46] For these reasons, I am of the opinion that as a matter of statutory interpretation the plaintiff's claim for NEBs for the period during which IRBs were paid, namely, up to June 28, 2007, must fail as a matter of law and summary judgment will issue dismissing the plaintiff's action, with respect to the NEB claim, for that time period.

[47] In terms of the claim for the period following June 28, 2007, in as much as issues relating to the extent of the disability, and the applicability of any limitation period are expressly not before me on this summary judgment motion, I conclude that on the statutory interpretation basis which form the issue before me, this motion for summary judgment dismissing the plaintiff's action should be dismissed.

[48] Accordingly, partial summary judgment is granted dismissing the claim for NEBs for the period up to June 28, 2007. The motion as it relates to the time period after June 28, 2007 is dismissed.

[49] Presumably counsel will see fit to obtain an order that the IRB action and the NEB action, as herein modified, be tried together or one after another, as the evidence as to the extent of any alleged disability would be common to both.

[50] I decline to adopt the direction set forth in paras. 75 and 76 of Hryniak. The restricted basis on which this motion was argued did not provide me with sufficient (any) evidence such as to permit an order under rule 21.05. I decline to seize myself of the trial of the NEB action, as it should be joined with the IRB action, and because the lack of evidence before me defeats any contention that there would be any economy of effort for the parties if I presided over the trial.

[51] Counsel are urged to agree on the issue of costs with respect to this motion. If they are unable to do so, written [page145] submissions may be forwarded to my attention, and to my chambers on the 7th floor, Courthouse, Kitchener, Ontario N2H 0A7. Those of the responding plaintiff should be delivered within 21 days of the release of this ruling. Responding cost submissions by the moving defendant should be delivered within 21 days thereafter. In each case, the submissions should not exceed five pages, exclusive of bills of costs and any relevant authorities. If such submissions are not received within these timelines, or any extensions thereof sought and granted, the issue of costs will be deemed to have been settled and no order will issue.

Motion granted in part.

End of Document