COURT FILE NO.: CV-18-0029
DATE: December 23, 2019
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
THE ESTATE OF THE LATE DOUGLAS JAMES KULP DECEASED, BY ITS LITIGATION ADMINISTRATOR, RUTH LUELLA KULP and RUTH LUELLA KULP
Plaintiffs
– and –
CUMIS LIFE INSURANCE
Defendant
Michael R. Switzer, for the Plaintiffs (Responding Parties)
Benoir M. Duchesne, for the Defendant, (Moving Party)
HEARD: December11, 2019
Tausendfreund, J.
reasons
[1] The Defendant/Moving Party (“Cumis”) brings this Summary Judgment Motion to dismiss the claims of the Plaintiffs (Responding Parties) on the basis that there is no genuine issue requiring a trial.
[2] Cumis states that the single issue in this action is whether Cumis under sections 183 and 184(3) of the Insurance Act, R.S.O. 1990, c. 1.8 was entitled to rescind or void the life insurance coverage Cumis had issued to the now late Douglas James Kulp (“Mr. Kulp”) on the basis that he failed to disclose or he misrepresented material facts regarding his diabetes during the supplementary health questionnaire (“S.H.Q”) he completed on May 20, 2016.
[3] The responding Plaintiffs (“Plaintiffs”) state that this question of whether Mr. Kulp failed to disclose or made material misrepresentations on his application for life insurance raises genuine issues requiring a trial.
OVERVIEW
[4] Mr. Kulp was a truck driver. He passed away on November 8, 2017 as a result of a heart attack. Some 7-10 years earlier, he had been diagnosed with diabetes. His family physician, Dr. Sandra Best, had been treating him for this and other general health issues.
[5] Mr. Kulp had been issued two certificates of insurance by Cumis less than two years prior to his death. The Kawartha Credit Union was the beneficiary of that insurance. Claims for life insurance certificate proceeds were made after Mr. Kulp’s death. Following an investigation, Cumis denied the claims based on Mr. Kulp’s stated misrepresentation of facts pertaining to the status and control of his diabetes. Cumis states that these facts on which it relied were material to its decision to insure Mr. Kulp.
[6] Mr. Kulp participated in an “S.H.Q”. arranged by Cumis by way of a telephone interview on March 20, 2016. During this S.H.Q., Kulp was asked if his doctor provided him with his ““A1C”” reading – a key indicator of diabetes control in a patient – and if so, what the reading was. Mr. Kulp stated that he thought it was 7.5 or 7.7. This would have indicated that Mr. Kulp’s diabetes was in the range of “good control” from an underwriting perspective.
[7] On the basis of this information, Cumis issued Mr. Kulp two certificates of life insurance for which he had applied.
[8] Following the death of Mr. Kulp which occurred less than 2 years following the issue of these two coverage certificates of life insurance, Cumis investigated these two claims. Based on information it received, Cumis concluded that Mr. Kulp had misrepresented to Cumis during the May “S.H.Q.” that:
a) he had received his most recent blood test results from his doctor, when he had not received them; and
b) his “A1C” result was “7.5 or 7.7” when, in reality, he did not then know what his “A1C” result was. His most recent “A1C” result actually was 10.5.
[9] Cumis states that a 10.5 reading indicated that Mr. Kulp’s diabetes was in “poor control” and that Cumis would not have issued these two policies on terms applied for, had it known the actual reading.
THE FACTS
[10] Mr. Kulp was born January 1, 1954. While in his mid-40’s, he had been diagnosed with diabetes. He was under the care of his family physician, Dr. Best, who managed his diabetes and other necessary medical issues. For his diabetes, Dr. Best put him on meds and arranged periodic blood tests. For unclear reasons, Mr. Kulp did not proceed with some of these blood tests for which his family physician had provided lab requisitions. These blood tests would provide an “A1C” reading as a global indicator of blood sugar control for an approximate 3 months period.
[11] The following is a summary of Mr. Kulp’s medical appointments with Dr. Best;
May 12, 2013
Mr. Kulp had a general checkup with Dr. Best. This included blood work carried out by a lab for which Dr. Best had provided a requisition. Such test results generally would be sent by the lab to Dr. Best who would review these results with the respective patient during his/her next medical appointment. For Mr. Kulp, this was on October 3, 2013.
October 3, 2013
His “A1C” reading was .072. Although she had no specific recall of this appointment, on the basis of her normal routine with patients, Dr. Best stated that she would have reviewed this test result with Mr. Kulp. She described the reading as falling into the range of a “lab flag”, but that it was still close to ideal control.
Dr. Best agreed that she would have monitored Mr. Kulp’s progress with diabetes on a “relatively regular basis”.
It was not her general practice to give copies of blood work to her patients, unless they asked. She described Mr. Kulp as a person who would not make such a request. Based on this evidence, I find that she did not provide Mr. Kulp with copies of the blood test results received from the lab.
Dr. Best stated that she would have told Mr. Kulp that the “A1C” reading was a global measure to indicate what his average sugar control was over an approximate 3 months time frame. She further stated that Mr. Kulp, as a non-insulin dependent diabetic, should have been taking his own sugar readings regularly, but not necessarily on a daily basis.
September 14, 2014
Dr. Best noted that Mr. Kulp was not checking his blood sugar regularly, did not go for a blood test and was not taking his meds.
Earlier that year, Mr. Kulp had applied for life insurance coverage with London Life. His application was declined. Dr. Best reviewed with him the London Life letter to her of July 23, 2014 which stated in part:
“We found it necessary to decline his application in view of his history with diabetes with sub-optimal control”
Dr. Best recalled telling Mr. Kulp, as he was not checking his blood sugars regularly and was not taking his meds, that it was not a surprise to her that the London Life sugar readings would have been much higher than she had expected and much higher than they should be.
Dr. Best did not give Mr. Kulp a copy of the London Life readings. She noted that it was difficult to impress on Mr. Kulp the importance of sugar readings. She stated:
“My feeling [is] that he was probably fairly unsophisticated in his understanding of medical conditions in general and … specifically of the implications of the diabetes and blood pressure control.”
April 10, 2015
Mr. Kulp was still not checking his blood sugar regularly. She gave him a requisition for lab work.
May 29, 2015
Dr. Best noted that Mr. Kulp was not checking his blood sugar levels at home and that there was no record of blood work having been done. She gave him another requisition for blood work.
December 15, 2015
Mr. Kulp had not gone for blood work. Dr. Best stated that it was extremely difficult to impress on him the importance of sugar readings and that she told him so.
February 19, 2016
Dr. Best noted that Mr. Kulp had not been checking his blood sugar. She told him that this absence of blood readings could imperil the treatment of his diabetes.
April 4, 2016
Mr. Kulp attended for a “driver’s medical”. This meant a full medical examination. Dr. Best noted that Mr. Kulp had not been to any of the blood tests she had arranged for him from 2014 to March 2016. At this medical appointment, she did not have the benefit of a patient’s log book with blood sugar readings generated by a glucometer at the patient’s own home. She was basically in the dark as to what his sugar readings would then have been. She would not have admonished him about his blood sugar control. She was not in a position to know if it was well or horribly controlled, as she did not have any test results. She stated that:
“He would have left the office hopefully with the impression that he needed to be vigilant about checking his blood sugars at home and that he needed to be compliant about going for the 3-month blood sugars to monitor ongoing progress”
Dr. Best provided Mr. Kulp with a lab requisition. The test result arrived at her office on April 5, 2016. She made a note that she needed to see him.
October 17, 2016
This is the next time she saw Mr. Kulp. The “A1C” reading from the lab of April 4, 2016 was 10.5. This test result was first disclosed to Mr. Kulp on October 17, 2016. Dr. Best agreed that this “A1C” reading was high and was an indication of poor blood sugar control.
The following is an excerpt of the examination of Dr. Best concerning the “A1C” reading she reviewed with Mr. Kulp on this date:
Q - …There was nothing to indicate that a heart attack was imminent?
A – There were no red flags.
Q – And while an “A1C” reading that’s high as his was at the time, a certain indication of poor control of blood sugar, it’s not an indication that death is imminent?
A – Correct
Q – Is it fair to say that a high “A1C” is more an indication of, if in the long term that is not better controlled, then over a long-term period of time, you could start to develop complications that could lead to death?
A – Correct.
Q – So the reading that you saw was high, it was a concern, but it didn’t trigger an emergency in your mind?
A – Correct.
[12] Dr. Best reviewed the medical documents of Mr. Kulp’s cause of death. These documents state that the cause of death was a heart attack with pre-existing underlying conditions that could have contributed to the event. Based on these documents, Dr. Best stated that there may have been pre-disposing factors, but she could not state if they contributed or not to the heart attack.
Insurance Application – January 2016
[13] On January 9, 2016, Mr. Kulp and his spouse, Ruth Luella Kulp (“Mrs. Kulp”) had applied for a line of credit (“LOC”) group policy for Creditor’s Group Insurance. This group policy was issued by Cumis. The group policy holder and beneficiary was the Kawartha Credit Union Limited. The maximum coverage was $124,500. Their application coincided with a line of credit the Kulps took out from the Kawartha Credit Union. Mr. Kulp was then 62 years of age.
[14] This “LOC” application was completed by Mr. Kulp at the Kawartha Credit Union in the presence of the credit union’s loan manager. It was an application for life insurance coverage.
[15] The application form stated in part:
• Incorrect responses could lead to your application being denied at claim time.
• If you answer “No” to the Health Questions, your application for insurance coverage may be automatically issued.
• I declare that all information provided by me is true and complete and has been correctly recorded including, where applicable, my answers to health and smoking status questions. I understand if I provide incorrect information or fail to disclose information, my insurance may be void and treated as if never enforced.
• Cumis Life may require that I provide additional health or medical information…by participating in a recorded telephone interview with a health underwriter representing Cumis.
[16] The Cumis underwriting protocol prescribed that if an applicant answered “Yes” to the Health Questions – as Mr. Kulp had – the applicant must participate in a tele-underwriting “S.H.Q”.
[17] An “S.H.Q.” followed on January 22, 2016. A Cumis tele-underwriter spoke to Mr. Kulp by telephone. The following are excerpts of some of the questions and answers:
Q – …have you had your “A1C” blood test in the past 6 months?... a blood test for diabetes.
A – No. But I’m due here, I think, next visit I got to go in for blood.
Q – Do you self monitor at home?
A – I did…not as often as I should.
Q – And do you know what your average reading in the morning before you eat is?
A - … that 7…depending on the night and how much sleep you got.
Q – Does your doctor feel that your diabetes is well controlled?
A – Well, she is following it.
Q – So she is just monitoring it?
A – Yeah
Q – What’s the name of the medication for the diabetes?
A – George Forman.
Q – Metformin?
A – Metformin, good lord ….
Q – what’s the dosage of the Metformin?
A – Wait here, I’ll have to look at it. 500– mg.
Q – How often do you take that pill?
A – I take it in the morning and in the evening…
Q – Have you ever had an application for life, disability or critical illness insurance declined…
A – London Life, I guess about a year ago… they said we’re going to hold off and you can re-apply in a year.
Q – They postponed it?
A – yeah, they just said, no, we’d like you to re-apply again…
Q – Do you know when they are giving you your next “A1C” test?
A – That will probably be in the next month.
Q – Is there any other condition which you’d like to disclose regarding any of the questions I have just asked you?
A – Yeah, with the Metformin… So I’m looking at it here now. It says 500 – mg, but I take the 2 pills in the morning and the 2 pills in the evening.
Q – So you take 4 pills.
A - Yeah
[18] On March 2, 2016 there was a further contact by a Cumis tele-underwriter with Mr. Kulp. The tele-underwriter asked Mr. Kulp whether the “A1C” test had been completed. Mr. Kulp said “No”, but that he expected to have it done shortly.
March 9, 2016 - Mortgage Protection Application
[19] On March 9, 2016, Mr. and Mrs. Kulp applied again to Cumis, this time for additional Creditor’s Group Insurance. The group policy holder and beneficiary was the Kawartha Credit Union. The specific insurance product they applied for was Group Mortgage Protection Life and Disability coverage with a maximum amount of $100,000.
[20] The application for this insurance product contained the same explicit statements and cautions, as well as the same agreement, authorization and disclosure terms as the above noted Line of Credit Insurance. The application was completed by Mr. Kulp in the presence of a Kawartha Credit Union employee.
[21] As he had done previously, Mr. Kulp again answered “Yes” to certain of the General Health Questions.
[22] Cumis determined that a new “S.H.Q” was needed. They attempted unsuccessfully to contact Mr. Kulp. Cumis took steps during that period to engage a third-party medical services provider to collect blood and urine samples from Mr. Kulp. As neither Cumis nor the third-party medical services provider were able to contact Mr. Kulp, Cumis withdrew Mr. Kulp’s two applications as of May 16, 2016.
S.H.Q. – May 20, 2016
[23] Based on the same format as the previous “S.H.Q.”, Cumis conducted another “S.H.Q.” on May 20, 2016. It was a telephone interview with Mr. Kulp by Diane Lee, a Cumis tele-underwriter. The following are excerpts from this interview:
Q: Hi Doug, It’s Diane calling back from Cumis Insurance.
A: Good…
Q: I had to get help on this one, this is a difficult one here to figure out.
A: It was so bizarre because I did obligated 20 (in audible) so I phoned back … I think it was the third time they said, you said you weren’t diabetic. No, I’m diabetic, I take pills, right? You said you didn’t have high blood pressure. No, I take a small 10-mg (inadible)… she had my wife’s file… I was saying, you know, I’m diabetic. No you’re not diabetic according to this. You said you weren’t diabetic, and she – she has my wife’s file.
Q: I’m so sorry about this.
A: That’s fine…go ahead, I know because you’re diabetic, usually that puts a great big target on you anyway.
A: So I went and talked to an underwriter, because this was just – I wanted to make sure I didn’t mess this up, ok?
A: Sure
Q: So she advised that we would have to go through the health questionnaire again because you’ve added on disability since we did -- it was just life when we did the last one
…they also wanted to know if you got the blood test results from your doctor…because you were having a physical, I think.
A: Yeah.
Q: …now, do you remember if you got your “A1C” reading from the doctor there?
A: I think it was 7.5 or something. 7.7 or 7.5. I got to go and she said, well we’ve got to get it down a little bit - I’m the worst one for swallowing pills…
…I have been a lot more diligent. I got to get that under control a bit better, right?
Q: Ok, are you pretty sure it’s 7.5, the “A1C”?
A: Yeah, it was either 7.5 or 7.7
Q: …you also have diabetes, heart trouble, kidney trouble, chest pain or abnormal cardiac test?
A: … I’m junior diabetic.
Q: You’ve got the diabetes, yes. Ok.
A: Yeah.
Q: Any diabetes or tendency towards elevated blood sugar, thyroid or other endocrinal gland disorders?
A: The diabetes.
Q: Ok. Now, is it insulin dependant or non-insulin?
A: Non.
Q: Non-insulin, ok. And how old were you when you got the diabetes?
A: probably -- I’d say 45 -- I don’t know -- no more than 15 years ago, I guess, 10,15.
Q: …your age at onset of diabetes?
A: Well, I’m 62 now so lets put down 52.
Q: 52 when you got the diabetes?
A: I’d think, yeah.
Q: …So you think you’ve had it for about 10 years?
A: Yeah. 10. No more than 10, for sure.
Q: And what’s the medication you are taking for this?
A: Altaz
Q: I know that was for the heart, right?
A: Right. Metformin.
Q: Okay. And do you know the dosage on that guy?
A: It’s 2 caplets. I think it’s 500.
Q: Up, 500-mg. And how many tablets a day?
A: Two in the morning, two in the evening.
Q: So four tablets…Any other medication for the diabetes?
A: No.
Q: Okay. And does the doctor consider it well controlled?
A: Yeah. I go in there, like I say, quite regularly…
Q: Ok, and you said the last “A1C” was 7.5, right?
A: Yeah…7.5 or 7.7 I know it was in the mid 7s.
Q: Do you take your own readings at all? Like, on the diabetes? Do you take your own blood sugar readings?
A: No…
Q: And have you ever had an application for life, disability or critical insurance declined, rated, issued at a higher premium, modified, voided or cancelled in any way?
A: I have had life insurance from I don’t know -- (inaudible) they said, well, you can apply next year. Screw it. I’m 62, right?
Q: …so you had a life insurance --
A: Yeah, London Life.
Q: Did they decline you?
A: Yeah.
Q: And did they say why?
A: Diabetes…
Q - …And that was the year ago?
A - two years ago…
…they wanted me to reapply because they said, you were very close, but apply again next year…
Q:… when was the last time you’ve seen the doctor or a health care provider for any reason?
A: Three weeks ago, Dr. Best.
Q: Okay, and what was that one for?
A: Well, it’s just routine, right? You’ve got to get your pills renewed. So in you go, takes your blood pressure. That’s why I say, she’s monitoring everything.
Q: Was everything normal, abnormal?
A: Yeah, normal.
[24] Cumis issued insurance certificates to Mr. Kulp on May 24 and May 26, 2016. The respective insurance certificate set out that:
a) Cumis had approved life insurance coverage under the “LOC” application for a maximum benefit amount of $124,500; and
b) Cumis had approved life insurance coverage under the Group Mortgage Protection Application for a maximum benefit amount of $100,000; and
c) Cumis had declined Mr. Kulp’s application for disability insurance benefits under the Group Mortgage Protection Application.
[25] Cumis states that its decision to grant this life insurance coverage was based on the health information Mr. Kulp provided during the “S.H.Q.” held in January and May 2016.
DENIAL OF CLAIMS
[26] Kulp died November 8, 2017, less than two years after Cumis granted the insurance coverage Mr. Kulp had sought.
[27] On December 8, 2017, Cumis received two insurance claims with respect to Mr. Kulp, both submitted by Kawartha Credit Union. These claims sought payment of the life insurance benefits described in the May 24 and 26, 2016 certificates of insurance.
[28] As the claims were made within two years of the effective date of the life insurance coverage, Cumis followed its practice of verifying the responses to health questions asked in the application.
[29] On March 13, 2018, Cumis advised Mrs. Kulp of its decision to deny coverage. This letter reads in part:
• The information received to date establishes that the coverage would not have been issued for Mr. Kulp, if he had disclosed the details as required in the Supplemental Health Questionnaire, completed by telephone on May 20, 2016.
• On the May 20, 2016 telephone interview, Mr. Kulp disclosed that his most recent “HbA1C” reading was 7.5 or 7.7. He also stated that he does not take his own readings, but his doctor considers his diabetes well controlled.
• It is out position that [this information] would have been known by Mr. Kulp and should have been disclosed at the time of the application for insurance coverage. It has therefore been determined that the … life insurance coverage would not have been issued, as applied for, had the appropriate response(s) been provided as required by the Declaration of Insurability contained in the Application for Insurance.
• The medical records provided by Dr. Sandra Best confirmed that Mr. Kulp’s most recent (April 4, 2016) “HbA1C” reading was in fact 10.5. It is also noted in Dr. Best’s records…that Mr. Kulp was not testing his blood sugar range/readings [and] “that he was not taking his medications”; indicating poor control of his diabetes.
• It is our position that the above would have been known by Mr. Kulp and should have been disclosed at the time of the application for insurance coverage. It has therefore been determined that the Group Mortgage Protection and Monthly Premium life insurance coverage would not have been issued, as applied for, had the appropriate responses been provided as required by the Declaration of Insurability contained in the Application for Insurance.
• The insurance coverage will be rescinded to the date of issue for each certificate.
ANALYSIS
[30] Rule 20.04(2)(a) of the Rules of Civil Procedure requires the court to grant Summary Judgment if it is satisfied that there is no genuine issue requiring a trial with respect to a claim or defence.
[31] In a Summary Judgment Motion, “the court is entitled to assume that both parties have put before the court all of the evidence they would intend to adduce at trial…that relates to the issues for decision on the motion.”; see 2313103 Ontario Inc. et al. v. J.M. Food Services Ltd. et al., 2015 ONSC 4029 at para 40.
[32] 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 Judgment. This will be the case when the process 1) allows the judge to make the necessary findings of fact, 2) allows the judge to apply the law to the facts, and 3) is a proportionate, more expeditious and less expensive means to achieve a just result: see Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87 at para 49.
[33] The action that gives rise to this Summary Judgment Motion turns on the central issue of whether Cumis breached its contracts of insurance with Mr. Kulp by declaring these insurance contracts void on March 13, 2018, based on Mr. Kulp’s represented failure to disclose and/or his misrepresentation of material facts to Cumis.
[34] The duty to disclose in the context of an application for insurance is addressed in the Insurance Act, R.S.O. 1990, c.1.8 in these sections:
183 (1) An applicant for insurance and a person whose life is to be insured shall each disclose to the insurer in the application, on a medical examination, if any, and in any written statements or answers furnished as evidence of insurability, every fact within the person’s knowledge that is material to the insurance …
(2) Subject to section 184 and subsection (3) of this section, a failure to disclose, or a misrepresentation of, such a fact renders the contract voidable by the insurer.
184(3)(a) … if the failure to disclose or misrepresentation relates to evidence of insurability specifically requested by the insurer at the time of application for the insurance in respect of the person, the insurance in respect of that person is voidable by the insurer; …
[35] Cumis decided to deny the Plaintiffs’ claims on March 9, 2018, as Mr. Kulp had not provided Cumis with accurate information during the May “S.H.Q.” as to his “A1C” results.
[36] As of March 9, 2018, Cumis had the following information concerning the status of Mr. Kulp’s diabetes:
• May 12, 2013:
Mr. Kulp’s blood test indicated an “A1C” reading of .072
• July 23, 2014:
London Life declined Mr. Kulp’s application for insurance based on his blood sugar reading.
• September 14, 2014:
Dr. Best noted Mr. Kulp was not checking his blood sugar regularly, was not taking his prescribed meds and did not go for a blood test.
• April 10, 2015:
Mr. Kulp reported to Dr. Best that he was not checking his blood sugar regularly.
• May 29, 2015:
Dr. Best noted that Mr. Kulp was not checking his blood sugar at home.
• December 15, 2015:
Dr. Best noted that it was difficult to impress on Mr. Kulp the importance of regular sugar readings and that he had not gone for a blood test.
• January 22, 2016:
Mr. Kulp stated to Cumis that:
• He was due for an “A1C” blood test.
• He did not self monitor at home his blood sugar level as often as he should.
• His doctor is monitoring his blood sugar level.
• He was confused about the medication he was taking for his diabetes, referring to it as “George Forman”.
• He corrected himself by stating that he was taking 4 pills of Metformin per day for his diabetes, not 2 pills as he had stated earlier.
• January 25, 2016:
Cumis noted that if no “A1C” reading was forthcoming, then its assessment of Mr. Kulp’s application for insurance was to be postponed.
• February 19, 2016:
Mr. Kulp reported to Dr. Best that he was not checking his blood sugars.
• March 2, 2016:
Mr. Kulp told Cumis that he expected to have an “A1C” reading done shortly.
• March 11-May 16, 2016
Cumis unsuccessfully attempted several times to contact Mr. Kulp to obtain his current “A1C” readings and to conduct a further “S.H.Q.”
• May 20, 2016 “S.H.Q.”
Mr. Kulp stated that on an earlier “S.H.Q.”, he corrected a Cumis representative by stating that he was in fact a diabetic and was taking pills for it.
When asked whether he remembered if he obtained an “A1C” reading from the doctor, he answered “I think it was 7.5 or something, 7.7 or 7.5” and that the doctor said “we’ve got to get it down a little bit”. The doctor considered the diabetes to be well controlled.
• Q – You said the last “A1C” was 7.5, right?
• A – Yeah
• Q – Do you take your own readings….on the diabetes?
• A – No
• Q – When is the last time you’ve seen the doctor?
• A – 3 weeks ago, Dr. Best.
• Q – What was that one for?
• A – It’s just routine…you’ve got to get your pills.
• Q – Was everything normal?
• A – Yeah, normal.
Following Mr. Kulps death, Cumis learned that:
• Mr. Kulp had an “A1C” test conducted April 4, 2016
• The result of that “A1C” reading was 10.5
• Kulp first learned about this result on October 17, 2016, when Dr. Best discussed it with him.
[37] In support of its position to decline Mr. Kulp’s insurance coverage for which Mr. Kulp had applied, Cumis stated in part:
• Jeff Mather, Underwriting Consultant:
As I review the May 20, 2016, telephone interview record…, Mr. Kulp confirmed on two separate occasions…that his most recent “A1C” reading was 7.5 or 7.7.
• Megan Mang, Life Claims Examiner, wrote to Mrs. Kulp on May 13, 2018 that:
• On May 20, 2016 telephone interview, Mr. Kulp disclosed that his most recent “A1C” reading was 7.5 or 7.7. He also stated that he does not take his own readings, but his doctor considers his diabetes well controlled.
• Dr. Best confirms that Mr. Kulp’s most recent (April 4, 2016) “A1C” reading was in fact 10.5.
• It is our position that the above would have been known by Mr. Kulp and should have been disclosed at the time of the Application for Insurance Coverage.
[38] Justice Misener in Stewart v. Canada Life Assuance Co., 1999 CanLII 36845 (ON SC), [1999] O.J. 2842 (upheld by the OCA at [200] O.J. 2970) stated at para 53:
“Subsection 183(1) [of the Insurance Act] imposes the obligation to disclose facts “within the person’s knowledge. That surely means that the obligation is to disclose facts that the insured consciously believes are or might well be true.”
This decision appears to stand for the proposition that the honest belief of the applicant for insurance is relevant to the question of whether facts were within his or her knowledge.
[39] I note from the evidence that during the “S.H.Q.’s”, Mr. Kulp corrected himself and the interviewer in his apparent attempt to provide correct information to the person interviewing him over the phone. I also note this part of the transcript of the examination of Diane Lee who had interviewed Mr. Kulp in the “S.H.Q.” of May 20, 2016:
Q - …so I'm just asking you for your impression, … was your impression at the end of the call that Mr. Kulp seemed to be truthful in his answers?
A - Yes.
[40] I also have regard to this assessment Dr. Best gave of Mr. Kulp:
Q - …did you have an impression about Mr. Kulp’s level of sophistication when it comes to medical science and conditions such as diabetes mellitus?
A- “My feeling that he was probably fairly unsophisticated in his understanding of medical conditions in general and then specifically of the implications of the diabetes and blood pressure control.”
[41] There is nothing in the evidence before me on this Summary Judgment Motion that would challenge a finding on the balance of probabilities that Mr. Kulp was not telling the truth as he saw it. Accordingly, I find on a balance of probabilities that Mr. Kulp did not conceal or knowingly misrepresent to Cumis any answers that he provided in his Application for Insurance and in his responses to questions put to him. The information he gave and the answers he provided were based on facts as he understood them to be.
[42] The following is a further extract of the transcript of the examination of Diane Lee:
Q – Had you called him on his cell phone number; is that what the problem was?
A - I believe so.
Q - And so there wasn't a great connection?
A - In some areas, yes.
Q - Do you remember, or did he sound like he was in his truck driving about, or was he at home? Do you remember what the situation was at that time?
A - I believe he was in his truck, …
Q - So he's driving. He's -- you, of course you know he's a truck driver?
A - Yes.
Q – And so your understanding was, he was driving the truck at the time; doing the phone interview with you over the phone while driving the truck?
A - I'm guessing right now… But I think that was the case.
[43] In Belley v. The Paul Revere Life Insurance Company et al. [1999] O.J. 4856, the court dealt with the case of an application completed at a retail counter. The court, at para. 31 held that those circumstances were not conducive to a proper consideration of the questions and answers in the Application for Insurance and the proper completion of the document. The court found that the responsibility for completing the application in that environment was that of the insurer.
[44] The answers given by Mr. Kulp during the “S.H.Q.” of May 20, 2016 are central to the issues raised in this action. The circumstances surrounding this telephone interview are of concern. As the parties were not face to face, it may not have been conducive to questions Mr. Kulp might have asked for clarification, if needed. Additionally, the fact that he was probably operating his truck during this interview and was therefore not as focused as he should have been, may have led to misinterpretation of questions asked and answers given. That would particularly be so with questions that might have lacked clarity, were thus ambiguous and therefore subject to misinterpretation.
[45] The May 20, 2016 telephone interview raises other concerns. These include:
• Is the question “do you remember if you got your “A1C” reading from the doctor there?” sufficiently clear?
• Was the wording such that it was obvious to Mr. Kulp that the question related to his most recent appointment with Dr. Best about 6 weeks earlier?
• As Mr. Kulp did not then know the test result of April 4, 2016, is it likely that in Mr. Kulp’s mind the question addressed the last reading of which he was aware?
• To what degree, if at all, does the wording of that question raise an ambiguity?
• With respect to the question “…and you said the last “A1C” was 7.5, right?” and the answer “Yeah”, is it likely that Mr. Kulp in his answer would have referred to the last test result of which he was aware, or did he knowingly give a misleading or incorrect answer?
[46] If a question is ambiguous and open to multiple interpretations and leads an applicant for insurance coverage to provide incorrect information, the ambiguity must be resolved as against the insurer: see Caverhill Estate v. Bank of Monreal, [1994] N.B.J 434 (NBQB) at paras 23 and 36, aff’d [1995 no.165 N.B.C.A]
[47] I find that the answers given by Mr. Kulp in the May 20, 2016 “S.H.Q.” raise triable issues.
[48] Following the May 20, 2016 interview and before Cumis made the decision to extend coverage to Mr. Kulp, it had the following information on Mr. Kulp and the manner with which he managed his diabetes:
• He did not self monitor his diabetes regularly.
• He was confused regarding his medications for diabetes for which he could not recall the name, and which he confused with other medication he was taking.
• About 2 years earlier, his Application for Insurance had been declined by London Life based on his high blood sugar reading.
[49] Had a blood sugar test been ordered by Cumis, it would have provided Cumis with a definitive reading. Although Cumis had considered to proceed with its own test, for reasons that are not clear on this motion, Cumis decided to cancel it. It chose to rely entirely on the self reporting provided by Mr. Kulp.
[50] In Ipapo Estate v. Citadel Life Insurance Co., (Man. C.A), 1989 CanLII 10426 (MB CA), [1989] M.J. 123 at page 5, the court held that in the case of medical disclosure, an insurer “may be under a duty to make further inquiries of the insured’s doctor” where an applicant for insurance discloses facts that “would alert a reasonable prudent insurer” of the need to make such inquiries.
[51] While there is no general duty owed by an insurer to investigate representations made in an application for insurance, there may be circumstances where such a duty will be found to exist: see Pereira v. Hamilton Township Farmer’s Mutual Fire Insurance Co., 2006 CanLII 12284 (ON CA), [2006] O.J. 1508 ONCA at para 62.
[52] I find that the issue of the status of Mr. Kulp’s control of his diabetes raises a triable issue of whether under these circumstances Cumis should have made further inquiries, including obtaining its own blood sugar test of Mr. Kulp.
[53] For reasons noted, this motion is dismissed with costs. If required, I may be spoken to on the issue of costs within 15 days.
Tausendfreund, J.
Released: December 23, 2019
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
THE ESTATE OF THE LATE DOUGLAS JAMES KULP DECEASED, BY ITS LITIGATION ADMINISTRATOR, RUTH LUELLA KULP and RUTH LUELLA KULP
Plaintiffs
– and –
CUMIS LIFE INSURANCE Defendants
REASONS
Tausendfreund, J.
Released: December 23, 2019