Kaur v. Medavie Blue Cross, 2017 ONSC 7396
COURT FILE NO.: CV-12-5789
DATE: 2017-12-11
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Kulbir Kaur, Plaintiff
AND:
Medavie Blue Cross, Defendant
BEFORE: Petersen J.
COUNSEL: S. Razenberg, Counsel, for the Plaintiff C. Stewart, Counsel, for the Defendant
HEARD: September 20, 2017
ENDORSEMENT
[1] This is a motion for partial summary judgment brought by the Defendant Medavie Blue Cross (“Blue Cross”), requesting an Order that, if long term disability (“LTD”) benefits are payable to the Plaintiff (an issue to be determined at trial), then it is entitled to deduct from any LTD payments $46,915.85 in Income Replacement Benefits (“IRBs”) that she received from her automobile accident benefits insurer. Ms. Stewart (counsel for Blue Cross) advised that the reason for bringing the Motion is that the parties’ settlement discussions have stalled, largely because of disagreement over this deductibility issue and resolution of this issue, necessary in any event, may assist in resolution of the action.
Background Facts
[2] The Plaintiff, Kulbir Kaur was involved in a motor vehicle accident on November 29, 2010. After the accident, she made a claim to Certas Direct Insurance Company (“Certas”) for statutory accident benefits, including IRBs. Certas approved her IRB claim effective December 6, 2010 (7 days post-accident).[^1]
[3] Certas took the position that Ms. Kaur ceased to meet the eligibility criteria for IRBs as of May 20, 2011 and it therefore terminated her benefits effective that date. She received a total of $6,915.85 in IRBs for the period from December 6, 2010 to May 20, 2011.
[4] Ms. Kaur commenced a legal proceeding against Certas, which was settled in February 2015. The terms of settlement included payment by Certas to Ms. Kaur of a lump sum for IRBs in the amount of $40,000, in addition to statutory accident benefits already paid. The Settlement Disclosure Notice indicates that this lump sum payment is “for all past and future income replacement benefits”. It does not allocate fractions of the lump sum to “past” and “future” time periods, does not particularize dates that the payment is intended to cover, and does not specify the number of IRB weekly payments included in the calculation of the lump sum.
[5] At the time of the motor vehicle accident in November 2010, Ms. Kaur’s employer had a group insurance policy with Blue Cross that provided LTD benefits for eligible employees. After the accident, Ms. Kaur submitted a claim to Blue Cross under the group policy. Her claim was denied on April 8, 2011.
[6] Had Ms. Kaur’s LTD claim been accepted, she would not have been entitled to receive any LTD benefits until April 5, 2011 (119 days after the onset of her disability) because the Blue Cross policy contains a 17 week elimination period. After April 5, 2011, her coverage under the policy would have provided a benefit of $1,592.00 per month, indexed to inflation, until age 65,[^2] provided that she continued to meet the eligibility criteria under the policy.
[7] Ms. Kaur commenced her action against Blue Cross on October 31, 2012. She brought a separate action against The Blue Cross Life Insurance Company for LTD benefits under the same policy. She also brought a tort action against the driver and owner of the other vehicle involved in the accident. All three actions have been consolidated to be tried together.
[8] Blue Cross argues that, if Ms. Kaur is eligible to receive LTD benefits (an issue that will be determined at trial), then it is entitled to deduct from any LTD payments the $46,915.95 in IRBs already paid to Ms. Kaur by Certas. It seeks an Order from the Court confirming its entitlement to this deduction by way of partial summary judgment, pursuant to Rule 20.04 of the Rules of Civil Procedure.
Issue and Law
[9] Pursuant to Rule 20.04(2)(a), the question before me is whether Blue Cross has established that the deductibility of IRBs from any prospective LTD benefits entitlement is not a genuine issue requiring a trial. According to the roadmap for summary judgment proceedings set out by the Supreme Court of Canada in Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 SCR 87, at para.66-68, I am required to make an initial determination of this question based on the evidence in the motion record, without using the fact-finding or “mini trial” powers set out in Rules 20.04 (2.1) and (2.2). Only in the event that I find there to be a genuine issue requiring a trial should I then consider whether a conventional trial can be avoided, without prejudicing the interest of justice, by using the fact-finding and “mini trial” powers.
[10] Justice Karakatsanis, writing for the Supreme Court in Hryniak, supra, at paras.49-50, observed:
There will be no genuine issue requiring a trial when the judge is able to reach a fair and just determination on the merits on a motion for summary judgement. 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.
These principles are interconnected and all speak to whether summary judgement will provide a fair and just adjudication. When a summary judgement motion allows the judge to find the necessary facts and resolve the dispute, proceeding to trial would generally not be proportionate, timely or cost effective. Similarly, a process that does not give a judge confidence in her conclusions can never be the proportionate way to resolve a dispute. It bears reiterating that the standard for fairness is not whether the procedure is as exhaustive as a trial, but whether it gives the judge confidence that she can find the necessary facts and apply the relevant legal principles so as to resolve the dispute.
Parties’ Submissions
[11] Blue Cross submits that there is no genuine issue requiring a trial with respect to the deductibility of IRBs from LTD benefits payable under the group insurance policy. It argues that the issue is one of simple contract interpretation and that the proper interpretation of the LTD policy can be fairly and justly decided based on the motion record.
[12] Blue Cross relies on the following provisions in the policy, which address the coordination of LTD benefits with other income payments to which an eligible employee becomes entitled as a result of the same disability that grounds her entitlement to LTD:
Article IV – Integration of Benefits
The amount of monthly Long Term Disability benefit to which the Covered Employee is entitled as of the date of disability will be coordinated with other income payments to which he becomes entitled as a result of the current disability. The benefit co-ordination shall be applied as follows:
The amount of monthly benefits otherwise payable is first reduced directly by any disability benefits available under the Canada or Quebec Pension Plan (primary benefits only) and the Workers’ Compensation Act.
The amount determined in 1. above is further reduced if necessary, so that the amount of monthly benefits, together with “income from all other sources” and the direct offsets in 1. above, does not exceed 85% of Pre-Disability Salary. “Income from all other sources” includes:
a) disability benefits available under any other government program that are payable to the disabled Employee,
b) retirement benefits provided by any employer or government program,
c) income or benefits payable under any group program provided by or through the Employer,
d) income or benefits payable under a plan sponsored by an association, union or fraternal organization of which the Covered Employee is a member,
e) income replacement benefits payable under any plan of automobile insurance, where such reduction is not prohibited by law; and
f) wages or remuneration payable from any employer or from self-employment, but excluding 50% of Pre-disability Salary received under an approved Rehabilitation Program. (For non-taxable plans, Pre-disability Salary shall mean gross salary minus income tax. For taxable plans, Pre-disability Salary shall mean gross salary).
Article V -- Lump-sum Payment
In the event that a lump-sum payment is made under any of the sources mentioned in Article IV – Integration of Benefits, the amount of the monthly benefits payable will be reduced as follows:
a) If the Company knows the number of monthly instalments for which the lump sum is paid, the mount to be resulted from benefits will be obtained by dividing the lump sum by this number of monthly instalments,
b) If the Company does not know the number of monthly instalments on which the lump sum is based, this sum is then considered to be equal to sixty (60) equal monthly instalments, and the amount to be reduced from benefits will be obtained by dividing the lump sum by sixty (60).
[13] Blue Cross submits that, under the clear provisions of the LTD Policy, it is entitled to deduct the IRBs received by Ms. Kaur from any LTD benefits payable to her. Relying on authorities in which courts have supported the deductibility of IRBs (including lump sum payments) from LTD benefits and from damages awarded pursuant to tort claims (e.g. Nardi v. Sunlife, [1999] O.J. No.2248 and Mikolic v. Tanguay (2015), ONSC 71), Blue Cross argues that Ms. Kaur ought not to be permitted to obtain “double recovery” of benefits arising out of the accident.
[14] With respect to the $40,000 lump sum payment by Certas to settle Ms. Kaur’s IRB claim, Blue Cross argues that it must be divided by 60 and offset against any LTD benefits using the formula in Article V of the Policy, because Ms. Kaur has not submitted any evidence to establish the number of installments on which the lump sum settlement was based. (If the number of installments on which the lump sum was based were known, Blue Cross would presumably take the position that the lump sum must still be deducted using a different formula pursuant to the LTD Policy.)
[15] Ms. Kaur accepts the principle that she ought not to enjoy “double recovery” of benefits, but she argues that this equitable concern is not raised in her circumstances. First, she argues that the integration and coordination of benefits under both Articles IV and V of the Blue Cross LTD policy only apply in respect of income benefits received for the same time period that LTD benefits are paid. She submits that the LTD policy does not contemplate an offset of income benefits that pre-date or post-date entitlement to LTD benefits, a submission which Blue Cross does not dispute. She further submits – and this submission is contested by Blue Cross -- that the vast majority of IRBs paid to her by Certas were for periods of time when no LTD benefits would be payable, namely during the 17 week elimination period and for a future period after she reaches age 65. She argues that the cases cited by Blue Cross are all distinguishable because this temporal issue did not arise on the facts of those cases.
[16] In addition, Ms. Kaur submits that permitting Blue Cross to offset her IRBs in calculating any LTD entitlement would be inequitable because, for the periods of time when there would be an overlap in benefits, Certas took into consideration and offset her potential LTD entitlement in calculating the amount of her IRB payments. Ms. Kaur submits that, under the statutory regime, the accident benefits insurer may deduct LTD benefits in calculating IRBs. (I note that s.267.8(1) of the Insurance Act, R.S.O. c.I-8 stipulates that damages for income loss and loss of earning capacity “shall be reduced” by payments under an income continuation benefit plan and/or a sick leave plan arising from the plaintiff’s employment.) Ms. Kaur relies on Intact Insurance Co. v. Marianayagam, 2016 ONSC 1479 as authority for the proposition that a statutory accident benefits insurer is entitled to deduct any LTD benefits received by a claimant from the calculation of IRBs payable to the claimant. She also relies on the affidavit of Savannah Chorney, discussed below, to support her submission that Certas applied an LTD deduction when it calculated her IRBs.
[17] Finally, Ms. Kaur argues in the alternative that, even if her IRBs can be deducted from any LTD benefits, Blue Cross must first establish that the pre-condition in Article IV(2) of the policy has been met, namely that her post-disability income does not exceed 85% of her pre-disability income. She submits that this pre-condition applies to Article V as well as Article IV of the policy (i.e., it applies to the $40,000 lump sum payment). She argues that a determination of whether or not the contractual precondition has been met is a genuine issue requiring a trial.
[18] In reply, Blue Cross submits that, although it bears the onus to show that there is no genuine issue requiring a trial, Ms. Kaur has the onus of proving that Certas took prospective LTD payments into consideration when it calculated the amount of her IRBs and that the majority of the IRBs paid to her were for periods of time that either pre-dated or post-dated any possible LTD entitlement (e.g., during the 17 week elimination period or after age 65). Blue Cross concedes that some of the $46,915.85 is not deductible because it is “captured by the 17 week elimination period” (i.e., some IRBs were paid for a period of time when no LTD was payable). Blue Cross argues, however, that there is no evidence on this Motion that would negate its contractual right, under the LTD Policy, to deduct IRBs (including the entire $40,000 lump sum settlement) from LTD benefits. Blue Cross submits that, as a respondent to a summary judgment motion, Ms. Kaur is not permitted to argue that further or better evidence will be available at trial. She must present her best case in the motion or risk losing. Landrie v. Congregation of the Most Holy Redeemer, 2014 ONSC 4008, at para.47.
Analysis and Decision
[19] On a summary judgment motion, both parties must put their “best foot forward” with respect to the existence or non-existence of issues requiring a trial. Sweda Farms v. Egg Farmers of Ontario, 2014 ONSC 1200, at para.32, aff’d 2014 ONCA 878. This includes a responsibility to submit all relevant evidence in support of their respective positions and also a responsibility to challenge the opposing party’s evidence. A party that fails to cross examine on affidavits may suffer negative consequences of this strategic choice. Mazza v. Ornge Corporate Services Inc., 2015 ONSC 7785, at paras.50-51, aff’d 2016 ONCA 753.
[20] In this motion, there are deficiencies in the record on both sides, which render it impossible for me to make the necessary factual findings to resolve the central issue in dispute.
[21] Ms. Kaur relies on an affidavit sworn by Savannah Chorney, the lawyer who represented her in respect of her statutory accident benefits claim against Certas. Ms. Chorney’s affidavit attaches a valuation of Ms. Kaur’s prospective LTD entitlement, prepared by an accounting firm in October 2015. Ms. Chorney uses the valuation to calculate the amount of weekly IRBs that would have been payable to Ms. Kaur over her lifetime, had she been in receipt of LTD pursuant to the Blue Cross policy, and assuming that LTD benefits were offset against the statutory IRBs.
[22] Ms. Chorney’s calculations show that, if LTD benefits (as valued by the accountant) were deducted from Ms. Kaur’s IRB entitlements, Certas would owe Ms. Kaur only a total of $2,790.74 in IRBs from May 20, 2011 (the effective date of termination of her benefits) until her 65th birthday in January 2020. At that point, her LTD benefits would terminate under the Blue Cross Policy and, provided that she continued to meet the relevant disability criteria, she would then be entitled to receive substantial IRBs (because there would no longer be an offset of LTD benefits). Based on these calculations, Ms. Chorney argues in her affidavit that “the vast majority” of the $40,000 lump sum was “for payment of IRBs beyond age 65 when the LTD benefit is no longer available to Ms. Kaur”. This statement amounts to an inference that Ms. Chorney is asking the Court to draw rather than a statement of fact based on personal knowledge. It constitutes submissions, not evidence.
[23] Although Ms. Chorney was involved in the negotiations with Certas, her affidavit does not include any evidence about how the parties arrived at the $40,000 figure in their settlement of Ms. Kaur’s IRB claim. The October 2015 valuation of Ms. Kaur’s LTD entitlement could not have been done in connection with the Certas negotiations because the action against Certas was settled in February 2015. Mr. Chorney provides no information about whether any portion of the $40,000 was for interest on past benefits payable, or for costs associated with the action against Certas. During oral submissions, Mr. Razenberg (counsel for Ms. Kaur) noted that evidence from Ms. Chorney regarding settlement negotiations would be privileged. That may be true, but Ms. Kaur has the option to waive that privilege. Moreover, she could call evidence from a Certas representative about the calculations used by Certas to arrive at the $40,000 lump sum without divulging any solicitor-client privileged information.
[24] With respect to the $6,915.85 in IRBs that Ms. Kaur received to the date of Certas’s termination of benefits, Ms. Chorney’s affidavit includes an Exhibit that she identifies as a calculation prepared by Certas regarding Ms. Kaur’s weekly entitlement for the period from December 6, 2010 until May 20, 2011 (“the Certas Calculation”). The Certas Calculation is divided into two time periods. From December 6, 2010 to April 4, 2011, it shows a weekly IRB in the amount of $400.00 (the statutory maximum allowable). For the period from April 5, 2011 to May 20, 2011, it shows a weekly IRB in the amount of $17.63. The reduction in the weekly IRB payment commencing on April 5, 2011 results from a deduction in the formula of $393.79 for “gross weekly payments for loss of income”. Ms. Kaur asks the Court to deduce from this Exhibit that Certas offset her LTD benefits under the Blue Cross policy when it calculated the amount of IRBs to which she was entitled for the period from April 5, 2011 to May 20, 2011.
[25] Ms. Chorney deposed that Certas calculated the date on which Ms. Kaur’s LTD benefit would become available (April 5, 2010) based on the 17 week elimination period in the Blue Cross policy. She also deposed that Certas calculated the amount of Ms. Kaur’s LTD weekly benefit to be $393.79, then deducted that amount in the calculation of the IRBs that it paid Ms. Kaur.
[26] There are difficulties with this evidence. First, Ms. Chorney is not the author of the Certas Calculation document, so the basis of her knowledge is questionable. The calculation appears to be computer-generated. The “Adjuster Name” listed on the document is Tricia Barry, presumably the person who input the relevant data for the calculation to be processed. Ms. Barry provided no evidence in this Motion.
[27] Second, although I have no basis to disbelieve Ms. Chorney’s sworn statement that the calculation was prepared by Certas in respect of Ms. Kaur’s claim for IRBs, I am left with questions about whether Ms. Chorney’s interpretation and explanation of the calculation are accurate. The document does not specify that the deduction after April 5, 2011 was for LTD benefits payable under the Blue Cross policy. The Certas Calculation is dated August 19, 2011, which is three and a half months after Blue Cross denied Ms. Kaur’s claim for LTD benefits but before Ms. Kaur commenced her action against Blue Cross. This begs the question why Certas would have deducted LTD benefits in calculating Ms. Kaur’s IRBs given the circumstances at the time.
[28] Moreover, the parties agree that, if Ms. Kaur is entitled to LTD benefits under the Blue Cross policy, then her weekly entitlement will be $367.38 per week, not the amount shown as a deduction in the Certas Calculation ($393.79). Ms. Kaur argues that Certas simply made a mistake when it calculated the amount of her gross weekly LTD benefit. She submits that the error ought not to detract from the probative value of the Exhibit, which she argues is evidence that LTD benefits were deducted from her IRB payments. She submits that there is therefore no risk of double recovery by her if Blue Cross is not permitted to deduct her IRB payments from the calculation of any LTD benefits to which she may be entitled.
[29] Although the Certas Calculation constitutes some evidence that a deduction was applied by Certas when it calculated Ms. Kaur’s weekly IRBs, I am left with questions about precisely what the deduction represents. On this point, Ms. Chorney’s affidavit contains unhelpful and inappropriate statements in the nature of submissions, asking me to draw certain inferences based on circumstantial evidence.
[30] The deficiencies in the Motion record are not one-sided. Blue Cross chose not to cross-examine Ms. Chorney, even though it challenged both her credibility and the reliability of her evidence in its arguments. Blue Cross submitted no evidence regarding any other deductions that may apply to Ms. Kaur’s prospective LTD benefits pursuant to Article IV(1) of the policy. Blue Cross led no evidence that would permit me to determine whether the 85% threshold stipulated in Article IV(2) is triggered on the facts of this case.
[31] In Creston Moly Corp. v. Sattva Capital Corp., 2014 SCC 53, 2014 S.C.C. 53, at para.50, the Supreme Court held that contractual interpretation involves issues of mixed fact and law. It described contractual interpretation as “an exercise in which the principles of contractual interpretation are applied to the words of the contract, considered in light of the factual matrix.” Conducting that exercise in this case requires more than a simple reading of the contract language, as Blue Cross suggests. It also requires consideration of facts that are in dispute regarding Mr. Kaur’s individual circumstances, which affect whether or not certain provisions in the policy apply in her case. Based on the motion record before me, I am not confident that I can make the necessary findings of fact.
[32] At the hearing, Ms. Stewart submitted, in the alternative to the relief requested in her factum, that I simply order that Blue Cross is entitled to rely on the Integration of Benefits provisions in the policy, without deciding whether any or how much deduction applies in the specific circumstances of this case. I do not see the point of such an order. The enforceability of the policy is not at issue.
[33] I am unable to grant summary judgment based on the motion record alone because there is insufficient evidence to allow me to draw the inferences necessary to make dispositive findings. I am not able to arrive at a fair and just adjudication of the deductibility issue on a summary judgment motion.
[34] I agree with the Plaintiff’s submission that the issue raised by the motion should be decided as part of the trial of Ms. Kaur’s actions. Employing the “mini trial” powers set out in Rules 20.04(2.1) and 20.04(2.2) would not be in the interest of justice because it would not constitute a more expeditious and less expensive means of arriving at a just result.
[35] Conducting a mini trial to arrive at a partial judgment on the IRB deductibility issue alone is not an efficient and cost effective manner in which to proceed. Ms. Kaur’s eligibility for LTD benefits would not be resolved and other offset issues would still need to be addressed to calculate the quantum of her entitlement if she were found to be eligible under the Blue Cross policy. Partial summary judgment is therefore inadvisable in the context of the litigation as a whole. Baywood Homes Partnership v. Haditaghi, 2014 ONCA 450, at para.33.
Decision
[36] For the reasons set out above, the Defendant’s Motion for partial summary judgment is dismissed.
Costs
[37] Ms. Kaur and Blue Cross agreed at the hearing that costs should be awarded to the successful party. I see no reason to depart from this approach. Both parties submitted costs outlines.
[38] In the event that the motion was dismissed, Ms. Kaur requested costs on a partial indemnity scale in the amount of $7,725.00. I am of the view that the hours docketed by her counsel are somewhat excessive based on the nature of the issue in the dispute and what an unsuccessful party could reasonably expect to pay in relation to such a Motion. I therefore fix costs in the amount of $6,500.00, all inclusive, payable by Blue Cross within 30 days of this decision.
Petersen J.
Date: December 11, 2017
CITATION: Kaur v. Medavie Blue Cross, 2017 ONSC 7396
COURT FILE NO.: CV-12-5789
DATE: 2017-12-11
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Kulbir Kaur, Plaintiff
AND:
Medavie Blue Cross, Defendant
BEFORE: PETERSEN J.
COUNSEL: S. Razenberg, Counsel, for the Plaintiff C. Stewart, Counsel, for the Defendant
ENDORSEMENT
Petersen J.
Date: December 11, 2017
[^1]: Under s.6(2)(a) of the Statutory Accident Benefits Schedule, O.Reg.34/10, insurers are not required to pay an IRB for the first week of disability post-accident.
[^2]: Article IX of the Blue Cross group insurance policy stipulates that LTD benefits are not payable beyond an eligible employee’s 65th birthday.