April 30, 2018, Kitchener, Ontario
Posted by: Robert Deutschmann, Personal Injury Lawyer
MacIvor v. Pitney Bowes, 2018 ONCA 381 (CanLII)
Date of Decision: April 19, 2018
Heard Before: MacFarland J.A.
LIMITATION PERIOD: LTD; when can the injured party apply for LTD; policy ambiguity; rules of contract construction; policy details; nature of the injury TBI prevented full appreciation of the severity of the injury by the applicant; agreed statement of facts that injury occurred while applicant was employed and insured;
On appeal from a trial judgment holding that Lenard MacIvor as a former employee of Pitney Bowes, had no coverage for his claim under the Manulife LTD policy.
Mr. MacIvor suffered a TBI and a severe back injury during a company sponsored event in Costa Rica on April 16, 2005. He was unaware of the permanent and disabling nature of his brain injury until after he had resigned his employment with Pitney Bowes.
Three issues are presented in this appeal:
- whether Mr. MacIvor, as a former employee of Pitney Bowes, is entitled to coverage under the Manulife Policy;
- whether Mr. MacIvor submitted a timely proof of claim; and
- whether the one-year contractual limitation period in the policy bars Mr. MacIvor’s claim.
BACKGROUND AND FACTS
Following his accident, Mr. MacIvor was off work for nearly four months and returned to work in August 2005. It is clear from the Agreed Statement of Facts that his work performance deteriorated dramatically from what it had been. For the years preceding the accident he rose through the ranks from junior sales representative to Division Sales Vice President, managing over 130 sales representatives.
He was a different man when he returned to his employment following the accident. He encountered serious difficulties when he returned to work. His responsibilities were continuously reduced and in frustration he quit his job at Pitney Bowes on August 11, 2008.
Within days he took up employment with Samsung to perform a role similar to the one he held at Pitney Bowes before his accident. The difficulties he’d experienced in job performance before leaving Pitney Bowes soon became apparent and he was fired from Samsung in August 2009. He asked Samsung about making an LTD Claim and was told that, because his injury occurred when he was working for Pitney Bowes, he would have to apply under that policy. He tried to train as a real estate agent but his efforts resulted in overall failure.
It is apparent from the medical evidence summarized in the Agreed Statement of Facts that Mr. MacIvor was, for a long time, unaware of the seriousness of his brain injury and in particular the permanent nature of that disability. He thought that he would recover from the effects of his brain injury.
On September 9, 2010 Mr. MacIvor applied for LTD benefits and provided proof of claim. On November 1, 2010 Manulife denied his claim. On April 11, 2011 he started this proceeding.
The parties agree Mr. MacIvor is unable to perform the essential and material duties of his regular occupation and for any occupation for which he was reasonably fitted, or could so become, by education, training or experience under the terms of the Manulife policy, and has been since the date of his injury in Costa Rica on April 16, 2005. They further agree that he meets the qualification for disability benefits as set out in the Manulife Policy. Manulife agrees that it received sufficient notice of the claim in April 2005.
There is no issue that Mr. MacIvor had coverage while he was employed. Manulife argues however, that:
“[h]e had access to [LTD] benefits if he applied while he was employed and, therefore, covered. Once he was outside of this coverage and/or failed to meet the Policy’s terms, he no longer had entitlement to claim”; and that “[t]he policy indicates that coverage ends when employment ends.”
The trial judge accepted this argument concluding that the policy “states in clear terms that there is no coverage for persons who are not employed by Pitney Bowes.”
Issue #1: Is Mr. MacIvor, as a former employee of Pitney Bowes, entitled to coverage under the Manulife Policy?
The trial judge’s conclusion that the policy provided no coverage for former employees raises a question of law reviewable on a standard of correctness. It arises in the context of the interpretation of a standard form group policy insurance: Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co.
Manulife’s position is that the Policy provides for coverage only during employment and that coverage ended when Mr. MacIvor resigned from his position on August 11, 2008.
The Justice reviewed that policy and noted that there is no issue that Mr. MacIvor ceased to be actively employed at Pitney Bowes on the date he quit, August 11, 2008, but that the language of the Manulife Policy when considered as a whole is clear; it means only that coverage does not continue when an employee begins working for another employer or after the employee has retired. The “Termination of Coverage” language relates to future claims, not claims that may have arisen during the course of the employee’s employment. In other words, if an employee’s claim arises as the result of an occurrence that takes place during their employment, the policy provides coverage. The additional words “unless continuation of coverage is provided under the Extension of Coverage provision” supports this conclusion. Moreover, the Manulife Policy also provides that a Monthly Benefit will be paid if you become Totally Disabled while covered under the Long-Term Disability Coverage and are under the continuing care of a physician.
The Justice noted that the language of this provision confirms the entitlement to be paid a monthly benefit if the total disability occurs during the coverage period and noted that this provision contains no language indicating that it applies only to current employees. He also noted that where the language of a policy is ambiguous, the general rules of contract construction must be employed to resolve that ambiguity: Ledcor, at para. 50. These principles include that the interpretation “should not give rise to results that are unrealistic or that the parties would not have contemplated in the commercial atmosphere in which the insurance policy was contracted”: Ledcor, at para. 50. If ambiguity still remains after applying the general principles, then the principle that coverage provisions are to be interpreted broadly, and exclusion clauses narrowly, may be considered: Ledcor, at para. 51.
The Justice concluded that these principles do not support Manulife’s position. The Manulife Policy does not contain the type of exclusionary language that terminates coverage for undiscovered disability claims the employee had and that originated during their employment, when their employment ceases. To so conclude would leave former employees, like Mr. MacIvor, in the untenable position of having no disability coverage from either their former employer or any new employer. Such a result would be contrary to the very purpose of disability insurance and the plain meaning of the coverage provision.
Benefits under the policy are paid monthly in arrears. Accordingly, the date that benefits “would begin” was June 1, 2010 at the earliest. Mr. MacIvor’s proof of claim was filed September 9, 2010. Based on the date of termination and the package that Mr. MacIvor received from Samsung, the proof of claim appears to have been provided some 10 days after the required 90-day contractual period.
It would be most unfair to permit the imperfect compliance with the 90-day contractual period to defeat Mr. MacIvor’s claim in the particular circumstances of this case. Mr. MacIvor was injured during his employment when he was covered by a LTD policy but did not appreciate the significance of his injury during his employment. Manulife has conceded Mr. MacIvor’s total disability as of the date of the accident and that he enjoyed coverage under its policy at the time of his injury. Mr. MacIvor left his employment sometime after he was injured but before he was aware of the extent of his injury. The imperfect compliance with the requirement to file the proof of claim form may only be a matter of 10 days at most. His employer and the insurer were aware that he had suffered a serious injury that included a brain injury at the outset. All of the foregoing facts have been known to the parties for years now.
Manulife alternatively relies on the one-year limitation period set out in the Manulife Policy to say that, in any event, the claim is out of time. Even on Mr. MacIvor’s evidence, he became aware of his ability to claim in August 2009. Accordingly, if the one-year contractual limitation period began tolling on that date, the claim issued in April 2011 is out of time. Manulife argues that Mr. MacIvor knew he had a claim while he was still employed at Pitney Bowes and ought to have brought his claim much earlier. It points to the fact that his “awareness was sufficient” to apply for WSIB benefits in 2005 and that he continues to receive those benefits.
This argument fails to take into account the fact that Mr. MacIvor suffered not only a TBI in April 2005 but that he also had a significant musculoskeletal injury and was unable to work for nearly four months after the accident. The focus of medical attention at the time Mr. MacIvor suffered his injuries appears to have been on his “severe back injury”. There is nothing in the Agreed Statement of Facts that explains or details in any way what the WSIB payments relate to. What is clear, however, is that it was not until his discussion with personnel at Samsung that he became aware that the seriousness of his brain injury would prevent him from working in the future. The only reasonable available conclusion on this record is that Mr. MacIvor could not reasonably have appreciated he had a cause of action until the end of August 2009. The claim was therefore not discovered until that time: Limitations Act, 2002, S.O. 2002, c. 24, Sched. B, at s. 5. Even on that basis his action was commenced well within two years of that date. He did not receive his CPP disability pension until May 2011.
For these reasons the appeal is allowed.