November 14, 2019, Kitchener, Ontario
Posted by: Robert Deutschmann, Personal Injury Lawyer
Tomec. v. Economical Mutual Insurance Company, 2019 ONCA 882
HEARD BEFORE: HOURIGAN, BENOTTO AND FAIRBURN JJ.A.
CAT INJURY: contracts, interpretation, insurance, SABs, the Insurance Act: can a claim be made for a condition that does not yet exist; when does limitation clock for making claim begin running
Ms. Tomec was injured seriously injured in a car accident and she was notified by Economical that 104 weeks was the maximum period of entitlement to attendant care and housekeeping benefits “unless you have been determined to have sustained CAT impairment as defined by the SABs”. In 2010 her application for benefits was denied. Sadly for Ms. Tomec her condition continued to deteriorate and 5 years post accident she was declared CAT impaired.
She sought continued benefits on an ongoing basis which were denied by Economical on the basis that it was statute-barred. The Licence Appeal Tribunal (“LAT”) agreed that the limitation period had expired. The Divisional Court upheld the LAT’s decision.
Ms. Tomec made two primary arguments:
1. The initial denials were not valid because at the time she was not CAT impaired and therefore not eligible to claim ACB and housekeeping benefits.
2. The Limitation Period could not begin as she had not discovered she was catastrophically impaired eventually becoming entitled to ACB and housekeeping benefits.
The Vice Chair in rejected both arguments finding the 2010 denials to be unequivocal and clears. They were sufficient to trigger that two year limitation period in the Insurance Act. The limitation period is fixed and triggered by the specific event of the denial letter.
The Divisional Court upheld the Vice Chair’s Decision, comparing the wording of s.281.1 (1) of the Insurance Act
A mediation proceeding or evaluation under s.280 or 280.1 or a court proceeding or arbitration under s.281 shall be commenced within two years after the insurer’s refusal to pay the benefit claimed.
to section 38 (3) of the Trustee Act
An action under this section shall not be brought after the expiration of two years from the death of the deceased.
The Court noted that both sections are analogous as they are triggered by a fixed event. In one case the event is the denial by the insurer and in the other it is the date of death.
The outcome is not favourable for Ms. Tomec. While the reasoning of the Court is understandable the approach is restrictive. It does not acknowledge that there was no claim to be made until Ms. Tomec was declared CAT impaired AND she was not eligible to make the claim for benefits until that determination was made. The determination could not be made until the condition deteriorated to the point of CAT declaration.
The Decision also ignores the fact that the ACB benefit was not claimed post 104-weeks. The submission made by Ms. Tomec was for CAT file review. The insurer responded with a blanket denial for benefits not yet claimed. In this case how can the denied benefits fall within section 281.1 (1).
The case has cemented that limitation periods under the SAS are ‘hard’ limits and any denial must be mediated or disputed within the two-year period.