Court File and Parties
Court File No.: C-325/15 Date: September 24, 2018 Ontario Superior Court of Justice
Between: Judith Marlen Fricke, Plaintiff And: SSQ, Life Insurance Company Inc., Defendant
Before: Barnes J.
Counsel: Mark S. Grossman for the Plaintiff Tracey L. Hamilton for the Defendant
Endorsement
Summary Judgment Motion
[1] The defendant’s motion for summary judgment is dismissed.
[2] The defendant, SSQ, Life Insurance Company, Inc. (“SSQ”) provides group insurance for employees of the Grand River Hospital. As of January, 23, 2013, the plaintiff, Judith Marlen Fricke (“Ms. Fricke”), had been employed by Grand River Hospital for 17 years. On that same date she stopped working, alleging that she was disabled.
[3] On May 21, 2013, Ms. Fricke applied for disability benefits. On September 6, 2013, SSQ advised Ms. Fricke that there was insufficient medical evidence to support her claim. SSQ paid Ms. Fricke monthly disability benefits while the investigation was ongoing. On March 18, 2014, SSQ advised Ms. Fricke that she did not satisfy the definition of total disability within the meaning of the insurance policy. SSQ declined Ms. Fricke’s disability benefits.
[4] Ms. Fricke appealed this decision. On or about July 23, 2014, SSQ informed Ms. Fricke that her appeal was denied. SSQ provided Ms. Fricke the option of resolving the dispute via the Medical Appeals Process (“MAP”) prescribed by the insurance policy. On October 14, 2014, Ms. Fricke agreed.
[5] The MAP agreement prescribed a resolution whereby the parties agreed to a review of SSQ’s decision to decline the payment of benefits by a mutually selected independent physician; to be bound by the decision rendered by the independent physician; not to appeal the decision of the independent physician; to take no action; and not to commence any action in the courts of Ontario.
[6] The parties selected Dr. Ryan Williams, a physiatrist, as the independent physician. In a report dated December 14, 2014, Dr. Williams concluded that Ms. Fricke was not totally disabled. He reiterated his conclusion in an addendum report dated February 13, 2015.
[7] On April 8, 2015, Ms. Fricke commenced an action against SSQ for payment of LTD benefits pursuant to the insurance policy. The action is premised on allegations SSQ breached its contractual obligations by declining to pay LTD benefits.
[8] SSQ has brought a motion seeking summary judgment submitting that there is no genuine issue requiring a trial because by agreeing to the terms of the MAP agreement, Ms. Fricke waived her right to initiate any proceeding in the Courts of Ontario.
Law
[9] The objective of a summary judgment motion is to demonstrate that a trial is not necessary. Rule 20 allows a party to bring a motion for summary judgment on the basis that there is “no genuine issue” requiring a trial: Rules of Civil Procedure, R.R.O. 1990, Reg. 194, Rule 20.04(2)(a).
[10] The Supreme Court of Canada in Hryniak v Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87 at para. 66, set out the two-part summary judgment test. First, the motion judge should examine the evidence in the motion record to determine whether there is a genuine issue requiring a trial. Second, if there is a genuine issue requiring a trial, the trial judge should determine whether it is in the interest of justice to utilize the enhanced powers under Rule 20.04(2.1) and (2.2). The enhanced powers allow the trial judge to review the factual record to determine if there is sufficient evidence to fairly adjudicate the matter without a trial and whether it will be fair, affordable and proportionate in all the circumstances to do so: Hryniak at paras. 44-45.
[11] The enhanced powers are powers normally exercised only at trial: the power to weigh evidence; evaluate credibility; and draw reasonable inferences from the evidence: Rule 20.04(2.1).
[12] In responding to a motion for summary judgment, a responding party is not confined to affidavits and pleadings. The responding party can provide other evidence which demonstrate specific facts in support of their position: Rule 20.02(2).
[13] In a previous motion, I concluded that Ms. Fricke’s examination of Dr. Williams under Rule 39.03 constitutes an abuse of process and have prohibited the use of evidence obtained from that examination in this motion and future proceedings.
Positions of the Parties
[14] SSQ submits that there is no genuine issue requiring a trial because: the MAP agreement is enforceable; the decision of the independent physician is final and binding in accordance with the MAP agreement; and pursuant to the agreement, Ms. Fricke is precluded from commencing any proceeding in an Ontario court or other tribunal for disability benefits.
[15] SSQ submits Ms. Fricke has not raised any issue regarding the propriety of the MAP agreement in her pleadings. She has not filed a reply. Ms. Fricke’s Statement of Claim is based on a claim of entitlement to benefits based on an alleged breach of contract to provide long term disability benefits. SSQ’s Statement of Defence is based on an assertion that Ms. Fricke waived her right to sue outside the MAP agreement. To permit Ms. Fricke to raise the issue of the MAP agreement at the summary judgment motion would be unfair to SSQ because it deprives SSQ of its right to know the case it must meet.
[16] SSQ submits that the wording and intent of both the policy and the MAP agreement is clear and unambiguous, and as a result there is no need to resort to any other principles of contractual interpretation. SSQ argues that Ms. Fricke was employed for 10 years as a Support Services Officer responsible for reviewing contract and collective agreements and it is unreasonable to expect that someone with her experience would not understand the plain language of the MAP agreement, and that nevertheless, the MAP Agreement is a valid and legally binding contract between Fricke and SSQ.
[17] SSQ explains that the parties agreed to be bound, on a final basis, by the decision of the independent expert and absent evidence of fraud or collusion the parties are bound by the findings of the expert. This is the case even if the expert makes an error. SSQ relies on the English decision of Jones and Others v Sherwood Computer Services plc. (1989), [1992] 1 All E.R. 170, [1992] 1 W.L.R. 277 (C.A.).
[18] SSQ submits that the parties agreed the MAP agreement will be binding and final and the principle of res judicata applies. SSQ concedes that the court has jurisdiction to review the MAP agreement, but submits Dr. Williams’s findings should not be reviewed because: (a) Dr. Williams’ opinion that Ms. Fricke did not exhibit a severe impairment that would render her Totally Disabled from performing her job duties was clear and obvious; (b) Ms. Fricke has not pleaded or established that the findings in Dr. Williams’ report were improper, inappropriate, unconscionable or unjust; and, (c) Ms. Fricke has not pleaded or established that the MAP agreement or the independent physician were in any way biased.
[19] SSQ submits that if I conclude that the insurance policy’s definition of total disability includes both a medical and legal component, SSQ fulfills the legal component by administering the entire MAP agreement and the independent physician fulfills the medical component. SSQ argues that Dr. Williams did not overstep the scope of his authority under the MAP agreement and therefore the MAP agreement is enforceable.
[20] Ms. Fricke submits that the term “total disability” is a legal question. Ms. Fricke relies on Paul Revere Life Insurance v. Sucharov, [1983] 2 S.C.R. 541. She submits that SSQ failed to apply the correct test to determine Ms. Fricke’s total disability within the meaning of the insurance policy. Therefore, the MAP agreement is not valid and binding on Ms. Fricke and there is a genuine issue requiring a trial as to the consequence and remedy resulting from the failure.
[21] Ms. Fricke submits that Dr. Williams’s decision was ultra vires the MAP agreement because the MAP agreement explicitly provided that Dr. Williams will not comment outside his expertise. Ms. Fricke submits that Dr. Williams provided an opinion in the area of psychiatry and not in the area of his expertise physiatry, which deals with disorders which have an organic or physical basis. Presumably psychiatry deals with the non-organic causes of pain.
[22] Dr. Williams testified that there may be organic and non-organic causes for the pain Ms. Fricke said she was feeling. He testified that his non-organic findings were outside his field of expertise. Therefore, Ms. Frick explains, there is a genuine issue requiring a trial as to whether Dr. Williams rendered an opinion outside the MAP agreement and hence whether the MAP agreement is enforceable.
[23] I have excluded Dr. Williams’ evidence and there is insufficient evidence to support Ms. Fricke’s contention that Dr. Williams provided an opinion outside his area of expertise.
[24] Ms. Fricke submits that SSQ asked Dr. Williams to answer questions that were not established in the MAP agreement or which stemmed from the definition of total disability in the policy. She submits that Dr. Williams’ decision was arbitrary and not in accordance with the MAP agreement, and the enforceability of the MAP agreement remains a genuine issue for trial.
Analysis
1. The MAP Agreement is Clear, Unambiguous, and Binding
[25] Ms. Fricke did not raise issues of the appropriateness of the MAP agreement in her pleadings. She did not file a reply even though the Statement of Defence clearly demonstrates that SSQ’s defence is based on challenging Ms. Fricke’s the entitlement to sue because of the MAP agreement. In responding to the summary judgment motion, Ms. Fricke is not limited to her pleadings. She may rely on other evidence to “show specific facts that there is a genuine issue requiring a trial”: Rule 20.02(2).
[26] The timing of the substantive issues raised by Ms. Fricke is not unfair to SSQ. SSQ has suffered no non-compensable prejudice. It would have been prudent for Ms. Fricke to have filed a reply raising these new substantive issues. This would have provided SSQ the opportunity to assess whether to have commenced or proceeded with this summary judgment motion and provided SSQ with ample time to prepare a response. While a complaint of unfairness was levied, SSQ did not request additional time to prepare a response. I am satisfied that SSQ has had the full opportunity to adequately respond to the new substantive issues raised by Ms. Fricke and have not been prejudiced.
[27] The insurance policy and MAP agreement are clear and unambiguous on their face. Where this no ambiguity in the words of a contract it is unnecessary to look to extrinsic evidence to assist in interpreting the contract: Eli Lilly & Co. v Novopham Ltd., [1998] 2 S.C.R. 129 at para. 55.
[28] Paragraph 4 of the insurance policy offers the MAP agreement as a binding resolution agreement. The policy states:
In the case your claim is declined or benefit payments are terminated, you can appeal that decision by submitting new medical evidence within 4 months of the initial decline letter.
If, after you have followed this appeal agreement for declined and SSQ is satisfied that all available medical documentation has been submitted but the decision has not changed, you will be offered MAP (Medical Appeals Process) for final resolution of the claim.
First, you will be asked to sign an agreement and authorization form to continue on with the appeal agreement. Then you will appoint a physician to act on your behalf. SSQ’s Medical Director or designate will act on SSQ’s behalf. The two physicians will jointly choose a third independent physician to review all available medical and functional evidence and undertake additional tests or examination, as deemed necessary. The decision of the independent physician to admit the claim or to maintain the decline is binding on you and SSQ, and no further action can be taken.
[29] The binding effect and wavier of the entitlement to sue is clearly articulated in paragraph 9 of the MAP agreement as follows:
By agreeing to this MAP Agreement and by signing this Agreement and Authorization Form, the Parties agree that:
a. There is no further appeal available to either Party;
b. They have not initiated any proceeding in the Courts of Ontario or in any other tribunal in regard to the Claim;
c. shall not initiate any proceeding in the Courts of Ontario or in any other tribunal in regard to the Claim or in regard to the Independent Physician’s decision;
d. have not made an assignment or transfer of any action or proceeding pertaining to the Claim, and
e. are bound by the decision of the Independent Physician as at the date it is made; however, the Parties acknowledge that your medical condition can change and SSQ maintains its rights under the Policy to deny your future claim or make periodic reviews of your condition.
[30] The importance of reviewing the terms of the MAP agreement with a lawyer is stipulated in plain and unambiguous language at paragraph 18(c) of the MAP agreement as follows:
By signing this MAP Agreement and Authorization Form, You …:
…expressly acknowledge that you have had opportunity to review this MAP Agreement and Authorization Form with a lawyer, that you understand each paragraph within this MAP Agreement and Authorization Form and voluntarily agree to its terms, and
hereby certify that the above information is true, accurate and complete.
[31] SSQ provided group insurance benefits to Ms. Fricke’s employer. In accordance with the terms of the policy, Ms. Fricke filed a claim accompanied with appropriate documentation; SSQ rendered a decision on benefits; Ms. Fricke availed herself of appeal routes including accepting the MAP agreement as stipulated in the policy; and the parties agreed to resolve the dispute under the MAP agreement and complied with the preconditions set out in the MAP agreement in order to activate the MAP agreement.
[32] In the face of plain and unambiguous language, Ms. Fricke’s claim that she did not pay close attention to and did not understand what she was agreeing to when she opted to participate in the MAP agreement is unreasonable and untenable. Ms. Fricke’s experience reviewing contracts including collective agreements for her employer, her active steps to seek benefits under the policy, and her active participation in the execution and activation of the MAP agreement provides unequivocal evidence that Ms. Fricke understood and intended to be bound by the terms of the MAP agreement.
[33] The only reasonable inference drawn from all the evidence is that it was the intention of all parties to be bound by the provisions of the policy and the MAP agreement. There is no genuine issue requiring a trial on the issue of whether the parties understood and intended to be bound by the provisions of the policy and the MAP agreement. The evidence in the motion is sufficient to answer that question in the affirmative. There is no evidence of fraud or collusion in the implementation of the execution of the MAP agreement. Absent evidence of noncompliance with the terms of the MAP agreement, neither party is entitled to commence an action or proceeding in any Court in Ontario or in any tribunal or board on matters decided under the MAP agreement.
2. There is a Genuine Issue Requiring a Trial Regarding the Correct Test for Total Disability
[34] There is a genuine is requiring a trial on the issue of whether SSQ applied the correct test for total disability when it instructed the independent physician under the MAP process. The definition of total disability in the SSQ insurance policy is as follows:
During the 2-year period immediately following the date you become disabled, you are unable, due to injury or illness, to perform the regular duties pertaining to the occupation in which you participated immediately before becoming disabled and you are not engaged in any gainful occupation.[emphasis added]
After this 2-year period, you are unable, due to injury or illness, to participate in any gainful occupation for which you are or may become fitted through training, education or experience, regardless of the availability of employment, and that provides you with an income equal to or greater than amount of monthly disability benefits payable under this contract, adjusted annually by the national consumer price index published by Statistics Canada.
[35] The time period captured by the definition is the 2 years immediately following the date Ms. Fricke alleges she became disabled.
[36] The definition of total disability is different in different policies. Each policy must be considered on its own. The Supreme Court of Canada in Sucharov applied this principle in distinguishing a previous decision of the Ontario Supreme Court: Sucharov at p. 546. Judicial decisions considering different policies will be different because these decisions interpret different policies and reflect those policies.
[37] In Sucharov, the insured owned his own general insurance brokerage business. He applied for insurance from his insurance company. The policy made a distinction between total disability and partial disability. The issue was the legal test to be applied to distinguish between total disability and partial disability under the policy. The policy, at p. 542-543, defined total disability as a state where:
… as a result of such injury or sickness, the Insured is completely unable to engage in his regular occupation; however, after Monthly Indemnity has been payable hereunder during any continuous period of disability to the Insured’s fifty fifth birthday or for a period of sixty months, whichever is the longer, then during the remainder, if any, of the period for which Monthly Indemnity is payable, “total disability” shall mean complete inability of the Insured as a result of such injury or sickness to engage in any gainful occupation for which he is reasonably fitted by education, training or experience, giving due consideration to his economic status at the beginning of disability. [Emphasis added.]
[38] In Sucharov, the dispute was over the correct legal interpretation for the phrase “completely unable to engage in his regular occupation”. The insurance company argued that the proper legal test was whether the insured was unable to perform the material duties of his occupation. The insurer would segment each duty and perform particular assessments on each one: Sucharov at p. 546. This test focused on a complete inability to perform the material duties of the insured’s occupation. The Supreme Court disagreed and held that “an owner-manager [the insured] is totally disabled as defined in the policy when he is unable to substantially perform all the duties of that position”: Sucharov at p. 546.
[39] The undisputed medical evidence clearly established that the insured’s efforts to carry on his duties as owner of his occupation caused him stress and nervousness bordering on anxiety. The court applied the legal test prescribed by the policy to the medical evidence and upheld the trial decision that Mr. Sucharov was totally disabled under the terms of the policy. Thus, according to Sucharov, there are both medical and legal components to the definition of total disability. The LTD definition in the Sucharov policy is similar to the SSQ insurance policy. Both policies focus on the insured’s inability to engage in his or her regular occupation by reason of disability.
[40] In Sucharov, the parties had not participated in a medical appeal process. Such a process was analysed in Braithwaite v. Bacich, 1999 NSCA 77, [1999] 176 N.S.R. (2d) 173 (C.A.). Mr. Braithwaite was employed as a correctional officer by the Government of Nova Scotia (the government). This relationship was governed by a collective agreement which provided an insurance policy including Long Term Disability (LTD) benefits (the Plan) to the employees.
[41] Section 6(2) of the Plan provided that an insured may appeal to “the Board of Trustees, who shall arrange a medical hearing.” The decision from the Medical Appeal Board was to be final and not subject to review. The Medical Appeal Board could review the decision of the Plan administrator only on medical grounds and could confirm or set aside the Plan administrator’s decision only on medical grounds. The Medical Appeal Board was not required to give reasons for decision: Braithwaite at para. 15.
[42] Section 7(3) of the Braithwaite Plan permitted the Plan administrator to also decline benefits on non-medical grounds. Therefore, under the Plan there was no appeal from the decision of the Medical Appeal Board. A denial of benefits on non-medical grounds could be appealed to the courts: Braithwaite at paras. 17 and 29.
[43] In 1995, Mr. Braithwaite applied for LTD benefits on the basis of depression. He received benefits until July 1, 1996. On July 2, 1996, the Plan administrator decided that he was no longer disabled and terminated his benefits. He appealed the decision to the Medical Appeal Board as provided for by the Plan. His appeal was denied. Mr. Braithwaite then sued the Plan’s trustees in the Nova Scotia Supreme Court. The Plan’s trustees applied to strike Mr. Braithwaite’s action on the basis that the issues raised in the action had been resolved on a final basis by the Medical Appeal Board as per the terms of the insurance policy. The chambers judge dismissed the application. The trustees appealed the decision of the chambers judge.
[44] Mr. Braithwaite argued on appeal that it was unclear whether the denial of his benefits by the administration was on medical grounds [no disabling psychiatric illness] or non-medical grounds [failure to participate in a recognized rehabilitation program]. This excerpt, at para. 18, from the Plan administrator’s letter denying benefits is instructive:
Please refer to our letter of April 15, 1996 which indicated to you that at that time your benefits were being reinstated based upon your physical limitations only (bilateral carpal tunnel syndrome). No information at that time or now indicates any limitations regarding a disabling psychiatric illness. We therefore have no alternative but to terminate your benefits immediately as you are not cooperating with the recognized rehabilitation program under the provisions of the Plan Document.
[45] At para. 33, Cromwell J.A., as he then was, set out the issue to be resolved on appeal as follows:
Does the fact that Mr. Braithwaite’s medical appeal was denied mean that it is clear and obvious that he is not disabled within the meaning of the Plan? The Trustees say the answer is yes. Mr. Braithwaite and the Chambers judge say the answer is no. I agree with Mr. Braithwaite and the Chambers judge.
[46] Cromwell J.A. concluded, at para. 34, that in order to show the Medical Appeal Board had resolved the issue of whether Mr. Braithwaite was disabled within the meaning of the Plan, these three criteria must be established:
It must be shown that the question of whether the plaintiff was and is disabled within the meaning of the Plan is purely a medical ground. This follows because the medical appeal system, as specified in the Plan, deals with medical grounds only; it does not address other questions
It must be shown that the issue of disability within the meaning of the Plan has been finally and conclusively resolved by the medical appeal process culminating in Dr. Reid’s decision; in other words, the issue of the plaintiff’s disability within the meaning of the Plan is res judicata; and,
It must be shown that the medical appeal decision cannot be questioned collaterally in this action.
[47] The analytical frame work set by Cromwell J.A. necessarily flows from the components of the Policy. Cromwell J.A. concluded that the insurance company had failed to meet any of the three criteria and therefore the action should proceed to trial: Braithwaite at para. 33 and 62.
[48] The Supreme Court in Sucharov did not have to consider the impacts of a final and binding medical appeal process mandated by the policy. The Nova Scotia Court of Appeal in Braithwaite assessed a policy which created two avenues of appeal. The first, on medical grounds through the medical appeal process, would produce a final and binding decision. The second avenue is through the courts when the reason for refusal of benefits is on non-medical grounds.
[49] In this case, the MAP agreement and resulting process provides for a review on medical grounds. It is common ground that the LTD definition in the Sucharov policy is similar to the LTD definition in the SSQ policy. As in Sucharov, there is thus a medical component and a legal component to the determination of LTD under the SSQ policy.
[50] In Sucharov, the Supreme Court ruled that an insured will meet the criteria for total disability as defined by that policy when the insured is unable to substantially perform all the duties of their employment. SSQ’S policy is similar. As part of the MAP process SSQ sent a letter of instruction to Dr. Williams posing questions for Dr. Williams to answer. An excerpt of Dr. Williams’ response is reproduced below:
In your opinion, what would be the diagnosis?
This assessor is unable to formulate a clinical diagnosis based on the clinical notes and records provided to me at the time of this assessment as the only notable findings via clinical examination and diagnostic imaging are degenerative changes through the cervical and lumbar spines.
Please comment if you feel the treatment is optimal and appropriately focused.
It is this assessor’s opinion that the treatments provide to Ms. Fricke as stated in the various clinical notes and records seem appropriate as there was an attempt to manage and control her pain with global oral medications covering all of the known types of pain, meaning musculoskeletal and neuropathic pain in addition to attempting global pain control with opiate medications, all of which were not reported as being particularly helpful as Ms. Fricke commented that her pain continues to get worse. Ms. Fricke was also noted to have undergone facility-based rehabilitation at different time points, again with no benefit noted.
Based on the information provided, are there any specific limitations and/or restrictions? If so, please include the expected duration.
It is this assessor’s opinion that given the information provided in the clinical notes and records available to me at the time of this file review that there is nothing in the clinical record to suggest any specific limitations or restrictions from a physical medicine and rehabilitation perspective.
In your opinion, would you conclude that Ms. Fricke exhibits a severe impairment that would render her totally disabled from performing her job duties?
It is this assessor’s opinion that Ms. Fricke does not exhibit a severe impairment that would render her totally disabled from performing her job duties as a ward clerk at Grand River Hospital in the Maternity Department, as she displayed the ability to maintain independence with activities of daily living and instrumental activities of daily living providing care and meal preparation for her family, which would not be dissimilar from the sedentary to light work required of a ward clerk. [Emphasis added.]
Please include any additional information you feel will assist with understanding Ms. Fricke’s medical condition.
Not applicable.
[51] This letter and Dr. William’s answers demonstrate that there is a genuine issue requiring a trial. Namely, the issue is whether Dr. Williams was instructed on the proper LTD test to apply under the MAP process and whether he applied the proper test.
[52] SSQ submits that Dr. Williams focused on the medical component of the total disability determination, while SSQ considered his decision and made a decision on the legal component. One of the reasons advanced by SSQ for respecting the MAP process is that it is fair and unbiased. The SSQ MAP process is one where the parties agree to resolve their dispute on a final basis through a third-party independent physician. However, SSQ ultimately decides how the dispute should be resolved.
[53] This arrangement raises questions of bias and fairness, and represents a genuine issue requiring a trial. A significant distinction between the SSQ policy and the policy in Sucharov is the execution of the MAP process. It is unclear in the SSQ MAP agreement whether the parties agreed to resolve the issue of total disability on the medical component of the test alone.
[54] SSQ raises the issue of whether the decision under the MAP process is res judicata. Given my conclusion that there is a genuine issue requiring a trial there is no need for me to resolve this issue. I will note that there may be a question as to whether the principles of res judicata can be extended to the MAP process as presently constituted.
[55] I have concluded that the parties intended the MAP process to be final and binding, however, issues of validity of the MAP process and enforceability of the decision are genuine issues which require resolution at trial. It would seem that a principal witness at trial may be Dr. Ryan Williams, and there may be others. In addition, matters are further complicated by the fact that Ms. Fricke did not amend her Statement of Claim or file a reply to challenge the validity of the MAP agreement and process. Ms. Fricke has not amended her pleadings to reflect the issues she has raised in this summary judgment motion.
[56] For all these reasons, I am not satisfied that the use of the enhanced powers under Rule 20.02 (2.1) and (2.2) will be fair, more expeditious than a trial, and in the interests of justice. SSQ’s motion for summary judgment is therefore dismissed.
[57] Should the parties be unable to agree on costs a cost outline shall be submitted to the court within 30 days.
Barnes J. Date: September 24, 2018