Heard: February 5, 2016
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Ortiz v. Great-West Life Insurance
BEFORE: Master Joan Haberman
COUNSEL: Lempe, A. for the moving party
Zaidi, S. for Manulife
No one appearing for Great West Life
REASONS
Master Haberman:
1This is a motion to add Manufacturers Life Insurance Company (as this entity is referred to as Manulife by the responding party, that is how I will refer to them hereafter) to this action well beyond the expiry of the presumptive limitation period.
2Although the plaintiff moves under Rule 26 (presumably, Rule 26.01) this is actually a Rule 5.04 motion as it involves the addition of a party. The difference is important as Rule 26.01 essentially states that the court shall grant the amendment sought unless to do so would create prejudice that cannot be compensated for by costs or an adjournment. Rule 5.04, on the other hand, is discretionary, so the court has more flexibility in approaching a motion of this kind.
3Essentially, the motion focuses on the fact that the plaintiff applied for benefits to and then sued the wrong insurer. He submits that unless he is permitted to make the amendment and add the actual insurer now, he may find himself without a remedy.
4The motion was heard and dismissed on February 5, 2016 with Reasons to follow.
THE FACTUAL RECORD CREATED BY THE PLAINTIFF
5This motion arises in the context of a claim for Long Term Disability (LTD) benefits.
6The plaintiff was injured following a slip and fall while at work that occurred on May 28, 2010. Though he claims he has not worked since this event, he did not submit a Notice of Claim for LTD benefits until July 28, 2013, more than three years later. The Notice was submitted to Great West Life (GWL), the insurers on risk at that time. They were not the insurers, however, at the time of the accident that gave rise to this claim.
7Manulife was on risk at that time and has been unaware of this potential claim until they were served with this motion record in August 2015, so more than 5 years after the incident.
8There are two prongs to the plaintiff’s submissions. First, they rely heavily on the fact that plaintiff’s counsel exchanged a few letters with Great West Life over a period of 11 months, during which time Great West Life never mentioned a coverage issue.
9Counsel seems to be trying to advance some sort of estoppel argument, as he spoke of detrimental reliance during the oral hearing. This argument may have legs vis a vis GWL as and when the merits are in issue at trial, but I fail to see what impact it can have on a motion to add the proposed defendant, Manulife. They were not a party to or even privy to this exchange of correspondence so cannot be bound by it. The Limitations Act, 2002 does not provide for an extension of the limitation period where a party sues the wrong defendant.
10The plaintiff also tried to advance an argument based on discoverability. The evidence, however, does not support the application of that doctrine. There is no direct evidence from the plaintiff, himself. Instead, a lawyer in the firm handling the claim swore the supporting affidavit. He stated that the plaintiff assumed that since his claim was being made during the period of time that GWL was the Union’s LTD insurer, (that) GWL was the proper insurer of his LTD coverage.
11There is no evidence in the record before the court to support the passage in paragraph 28 of the plaintiff’s factum, to the effect that he did as he was advised and applied to GWL. This conflicts with the sworn evidence.
12The plaintiff would have been aware that Manulife was his insurer at the time of his accident. He received an extended health benefit card from them, which would have identified them by name. He used the card to obtain medication and dental care during that earlier time frame. He also would have been given a benefits book, where again, Manulife would have been identified as the insurer.
13The plaintiff could have easily given notice to both the former and the current insurer, thereby covering both bases. All he had to do was complete a simple form. He did not do so. There is no evidence to suggest that he undertook any research or made any inquiries to confirm that his assumption was a correct one. He could also have spoken with his union representative or any of his fellow employees to confirm his understanding. It does not appear that he did that, either.
14Further, the plaintiff made no inquiries from GWL to confirm that his assumption was accurate. It does not appear that he even asked GWL to confirm that he had coverage with them when he sent in his notice of claim.
15Although the plaintiff appears to have completed and forwarded the Notice of Claim on his own, it seems he had some legal assistance thereafter. He received the first letter from GWL in response to his Notice, but, after that, all of their dealing with the plaintiff’s claim went through Jose Carlos Macedo, Legal Services.
16None of the letters addressed to Macedo indicate the entity for which Macedo provided legal services and there is no reference to him at all in the evidence. Who is he? Is he a union employee, a lawyer, a paralegal? When was he retained and by whom? There is no evidence in the record to clarify this. The interposition of Mercado in these discussions suggests that the plaintiff was not an unsophisticated litigant, all on his own, without guidance or representation. In the absence of any explanation about Macedo, I am prepared to draw an inference that the plaintiff had some form of legal assistance.
17In their last letter to Macedo, dated June 4, 2014, GWL advised that the claim was not approved as the information to allow them to assess his disability was never received. A month to the day later, this statement of claim was issued, against GWL, only. Even after counsel was involved, no attempt was made to confirm that they were dealing with the correct insurer.
18In July 2014, the plaintiff initiated this action through counsel. In response, GWL wrote to counsel on August 8, 2014 to advise that they only came on risk on March 1, 2011 and as the plaintiff ceased working on January 16, 2010, his claim would have been covered by the prior insurer, Manulife. GWL stated that as they are not a proper party to the action, it should be dismissed against them.
19Counsel responded on September 2, 2014, indicating that he had been told by his client that GWL absorbed all of the liabilities and coverage from Manulife. There are three problems with this. First, counsel does not say in the letter by whom or when his client obtained this information or why he did not act on it sooner.
20The second problem is that this information is not consistent with counsel’s sworn evidence, where he states that his client simply assumed GWL was the insurer of risk.
21Finally, the fact that the counsel related what he was apparently told by his client in a letter to GWL is not evidence that this is what the plaintiff actually said to his counsel or that this occurred. The letter is an exhibit attached to an affidavit in which the contents are not discussed in any detail. As such it cannot stand for the truth of its contents, aside from who sent it, when it was sent and to whom it was sent.
22As a result, there is no reliable evidence before the court to the effect that the plaintiff was under the impression that GWL assumed the liabilities and coverage of Manulife when they became the union’s insurer.
23There is also no evidence that the plaintiff performed due diligence. Contrary to paragraph 31 of his factum, the plaintiff filed no evidence about being told to apply for benefits to GWL. Nor did he continue to correspond with GLW as asserted. The claim was not approved because the plaintiff failed to provide the documents they sought. There is also no suggestion in these materials that GWL was processing the plaintiff’s claim or that he was given any basis to believe that was the case. Instead, the evidence shows that GWL made it clear to the plaintiff that they could not assess his claim until they received the requested materials.
24GWL responded on December 11, 2014, confirm that the plaintiff’s last day of work was May 28, 2010. They also responded to the assertion that they had taken over Manulife’s liabilities and coverage to say that this was not correct.
THE RESPONDING POSITION- EXPIRED LIMITATION PERIOD and ACTUAL PREJUDICE
The action as against them is out of time
25There are three elements to the proposed defendant’s response.
26Pursuant to the provisions of the policy, the plaintiff was required to provide Manulife with written proof of his loss within 6 months after termination of the first month following the qualifying period. According to the insurer, that deadline expired on by June 28, 2011. However, their first Notice of the Claim was not received until August 7, 2015.
27Thereafter, according to Manulife’s evidence, pursuant to the Limitations Act, 2002, S.O. 2002, Chap. 24, Schedule B, the plaintiff had a further two years within which to start his claim, therefore until June 28, 2013. This action, absent Manulife, was not even started until July 4, 2014, more than a full year later.
28The relevant provisions of the Act begin at section 4, which states that:
…unless this Act provides otherwise, a proceeding shall not be commenced in respect of a claim after the second anniversary of the day on which the claim was discovered.
29In terms of how this applies when a party seeks to add others to the action after the expiry of the presumptive limitation period, Section 21(1) of the Act provides that:
…if a limitation period in respect of a claim against a person has expired, the claim shall not be pursued by adding the person as a party to any existing proceeding.
30When relying on discoverability, a plaintiff must have regard to section 5(1)(b) of the Act:
A claim is discovered on the earlier of the day on which a reasonable person with the abilities and circumstances of the person with the claim first ought to have known of the matters referred to in clause (a).
31The matters listed in clause (a) are the elements the plaintiff must be aware of before the limitation period is triggered.
32Section 5(2) adds that:
A person with a claim shall be presumed to have known of the matters referred to in clause (1)(a) on the day the act or omission on which the claim is based took place, unless the contrary is proved.
33The Act therefore sets a strict two year limitation period. There is some leeway where the claim could not have been discovered earlier but that flexibility in the statute is qualified. The term “ought to have known” has resulted in the application of a test of reasonable or due diligence being applied, so it is not enough for a party to simply say they did not know. Evidence of efforts to find out the missing piece must be presented.
34The onus is on the party seeking to shield behind the discoverability provision to establish their entitlement to do so. The Act states that the plaintiff is presumed to have had all the information he needed to start the action on the day of the incident giving rise to the cause of action (see Jodha v. Dineen 2015 ONSC 6848, [2015] OJ No. 6071).
35Despite the relatively low burden to establish that there was due diligence, that statutory presumption has operated to defeat motions of this kind where the court was not satisfied that the moving party performed any real diligence in trying to get all of the pieces of the puzzle within the presumptive limitation period.
36In Wakelin v. Gourley 2005 23123 (ON SC), [2005] OJ No. 2746, a motion to add other drivers to a motor vehicle accident action was dismissed as few, if any, inquiries about their identities appear to have been made until very late in the day.
37Similarly, in Black v. McDonald [2011] OJ No 32 (upheld on appeal at [2012] OJ No. 1957) I also dismissed a motion to add a party, finding that the evidence fell far short of setting up a basis for the plaintiff to argue discoverability.
38On the basis of the evidence and the above legal principles, I find that the plaintiff has failed to give timely notice of his claim, as required by the policy. He has taken me to no provision or case law to suggest that the notice period can be extended or waived. I am therefore bound to apply it as it reads.
39The plaintiff has also failed to commence suit within the presumptive limitation period. Discoverability cannot extricate him from this situation he has failed to file evidence of any inquiries having been made by him or on his behalf to confirm his belief as to who the actual insurer on risk was. In the absence of the use of due diligence or any apparent diligence to get the information he needed, the addition of a new party to this action is statute barred on the basis of application of the 2-year limitation period.
The proposed defendant would be prejudiced if joined as they lost timely assessment opportunities
40LTD insurance policies are generally drafted with short time frames for notice, issuance of a claim and assessments because of the nature of the claim. Whether or not someone is disabled and the extent of their disability can change quickly and impact on their entitlement. An insurer is therefore highly motivated to assess the nature and extent of an alleged disability soon after the claim is made and at various junctures before they continue to pay a claim.
41The evidence before the court indicates that, unlike accident benefit claims, LTD carriers must assess if an insured is totally disabled from their own occupation within the first 24 months and, after a further 24 months, if they are totally disabled from engaging in any occupation for which they are reasonably qualified. Both periods had already elapsed by May 2014, so even before suit was commenced against GWL.
42To further complicate the matter, though there is no evidence on the record before the court, plaintiff’s counsel advised that his client had been involved in a motor vehicle accident in 2011. I am unclear as to why he added this to the mix. In fact, it illustrates why it is critical for LTD carriers to assess a claim early. It allows them to establish an insured’s status soon after the event that led to the LTD claim, so that any changes caused by intervening incidents that could impact on his ability to work can be taken into account. Plaintiffs cannot double-dip and make the same claim against an auto and an LTD carrier. In view of the lack of evidence on this point, I will not include it in my deliberations. I refer to it only to emphasize the importance of an LTD insurer being able to make an early assessment.
43As benefits are only available for up to five years (or age 65, whichever is less), the lack of notice to either insurer for more than 3 years post disability date is a significant gap. Here, the 5-year time frame had already elapsed before Manulife got notice of this claim. As a result, even if the claim had been approved, payment of benefits would have already ceased. That means that the only benefits the plaintiff could seek would be for an earlier period, during which time no assessments were performed. That time frame cannot be physically recreated at this time.
44This is not simply a case where Manulife can step into GWL’s shoes and pick up where they left off in terms of assessment, as the plaintiff suggests. It is clear that, throughout the 11 months that the plaintiff /his representative exchanged only a few letters with GWL, the latter was never in receipt of all of the documents they sought in order to make even an initial assessment. It is as a result of these gaps that the claim was not approved.
45In his initial Notice of Claim dated July 19, 2013, unaccompanied by anything from a physician, the plaintiff wrote that he had “neck pain and headache- has back issues” after he slipped at work and hit the back of his head. He reported that this occurred on January 16, 2010, but that he had been off work only since May 2010.
46GWL responded on February 20, 2014. It is not clear from their letter if this was their first response or if there were phone discussions that intervened. At that time, the adjuster sought a considerable body of documents from the plaintiff to assist with GWL’s assessment of the claim. These included copies of his doctor’s clinical notes; reports from all specialists consulted; copies of all test results going back to the date of the accident and his entire WSIB claim. This would be fairly standard disclosure that an LTD carrier would be looking to for assistance.
47The WSIB file was likely sought as this accident occurred while the plaintiff was at work, so that he would have been entitled to claim WSIB. Had he done so successfully, this may have impacted on his ability to collect LTD benefits?
48Two months later, on April 23, 2014, GWL wrote to Jose Macedo to acknowledge receipt of his letter of April 14, 2014. A copy of that letter was not included in the record before this court. It seems Macedo requested a copy of the claim and it was provided at that time. The adjuster also noted that GWL were still waiting for the rest of the documents sought.
49It appears Macedo spoke with the GWL claims adjuster on April 29, 2014, or at least that is what is referenced in her letter to him. Again, there is no evidence from the plaintiff about any of this.
50The GWL adjuster mentions the call in her letter of June 4, 2014 to Macedo. She points out that, during the call, he asked for a 90-day extension to provide the information requested by GWL in February 2014. She then notes that she had already waited beyond the 90-day deadline and that a decision was required on the file. She concludes by stating that the claim was not approved as, based on the materials in the file, the plaintiff does not meet the definition of disability under his plan.
51On the basis of this exchange, the claim was not approved.
The proposed defendant would be prejudiced if joined as they have lost the opportunity to charge back for benefits paid
52While the Manulife policy was in place, it provided that the policy holder funded LTD benefits paid by Manulife. They did so on a yearly basis.
53This policy ended four years ago, so that contractual provision is no longer in place. As a result, Manulife can no longer charge back these payments and would have to absorb them without recourse.
CONCLUSION and ORDER
54On the basis of all of the foregoing, it appears that both the notice period and the presumptive limitation period to sue Manulife have expired. In fact, they had both expired before the action was commenced against GWL.
55While the plaintiff may say that he did not discover who the correct carrier was until well after the expiry of those deadlines, the issue for the court is not simply whether he was aware of all of the constituent elements of his claim, but if he ought to have been. In order to be eligible to rely on discoverability, he had to demonstrate that he used reasonable diligence to uncover what was missing or to confirm that his assumptions were accurate.
56On the evidence before me, I cannot say that due diligence was performed. The plaintiff’s evidence is very clear – his counsel states that he assumed he was writing to the correct entity, though it appears he would have been aware of who the insurer was at the time of the accident. There is no evidence that he made any inquiries at all, or that he even asked GWL to confirm that they were the correct insurers to handle this claim,
57All of this is complicated by the timelines. Even if the claim had been approved, the benefits period would have already expired. This would cause real prejudice to Manulife, who was not able to conduct assessments during the relevant period. As GWL had already denied the claim, based on insufficient information, there is likely not even enough in the GWL file to allow Manulife to reconstruct the plaintiff’s status at the point in time where he may have qualified for benefits. Without the ability to assess during the policy period, how can Manulife be expected to determine whether benefits were payable and, if so, for what period of time?
58It was the plaintiff’s delay in starting this suit which complicated matters further. He did not file Notice of Claim against GWL until more than three years after he ceased working. He chose the wrong insurer and his failure to provide the requested information delayed their assessment of his file. As a result, by the time he learned he was chasing the wrong insurer, another two years had passed.
59Manulife is now in a position where they would be unable to charge back payments made to the policyholder, a contractual provision now lost to them due to the passage of time and cancellation of the policy.
60For all these reasons, this motion is dismissed, with costs to the responding party fixed at $7500, payable within 30 days.
Master Joan M. Haberman
Released: February 11, 2016