Our first case this month deals with the interpretation of the “intentional act” exclusion under a homeowner’s policy
Our second case deals with the application of limitation periods in actions dealing with long term disability insurance.
Our final case deals with entitlement to Section B weekly indemnity benefits past the original 104 week period.
Darch Estate v. Farmers’ Mutual Insurance Co., 2011 ONSC 3696
This case arises from a fire which destroyed the Plaintiff’s home. The fire was set by the Plaintiff’s 51 year old son, who was living at the home and who battled drug addiction and mental illness.
The son was arrested and charged with arson and weapons charges following the fire. The son was found “not criminally responsible” for the arson and weapons charges.
Shortly after the fire, the home owner died and her estate submitted a proof of loss. The Defendant insurer denied coverage, relying on a clause in the home owners policy providing that it would not “insure loss or damage caused by or resulting from wrongful conversion, secretion, intentional, willful, criminal acts, infidelity or any other dishonest act or omission by you, your tenants, employees or other persons to whom the property insured may be loaned, rented or entrusted”.
The Court held that the son was an insured under the policy and interpreted the above paragraph to mean that the policy excluded coverage for any “intentional act, willful act and criminal act”.
The court noted that the test for an “intentional act” in civil cases is different than the test found in the Criminal Code for an accused who is found “not criminally responsible”.
In civil proceedings, the test is whether the insured was able to understand the nature and consequences of his acts, however, the “consequences” do not refer to the moral aspect of that act (i.e. whether it is right or wrong).
The court found that the son “knew that what he was doing was setting a fire and he knew that the consequences would be that the house would burn down”. As such, the court concluded that the fire was caused by the intentional act of the son. The exclusion under the policy applied and the action was dismissed.
Sander v. Sun Life Assurance Company of Canada, 2011 BCCA 3
The Plaintiff, a dentist, was diagnosed with cataracts in 1998, which affected his ability to practice dentistry. He started receiving disability benefits from Sun Life under a group insurance policy.
In 2000, the Plaintiff was advised that the policy required him to undergo cataract surgery and that if he did not, he would only receive benefits for a period of time equivalent to what would have been expected if he had undergone successful cataract surgery. The Plaintiff initially refused to undergo surgery.
The Plaintiff was advised by Sun Life that benefits would cease as of June 14, 2001. The Plaintiff later underwent cataract surgery in 2003, but remained unable to practice dentistry.
In November 2004, the Plaintiff commenced an action for a declaration that he was entitled to disability benefits. Sun Life applied for and was successful in having the action dismissed as having been started outside of the 1 year limitation period found under the Insurance Act. The Policy in question did however contain a provision that no action under the policy shall be commenced more than two years after the insurance money was payable. The Plaintiff appealed the lower court’s decision on that basis.
The British Columbia Court of Appeal found that the limitation period under the Insurance Act set out a minimum level of protection, and that insurers were prohibited from providing a less generous limitation period than provided for in the legislation. If the insurance policy provided a greater limitation period than that provided in the Act, the insured would benefit from the limitation period provided in the policy.
In addition, the Court of Appeal found that since the policy involved continuous entitlement to benefits, it created a “rolling” limitation period where a new cause of action accrues at each date that a payment would have been payable.
The appeal was allowed and the action was remitted to trial for a determination of whether the Plaintiff was entitled to benefits for the period of two years preceding the filing of the action.
Hayston v. Wawanesa Mutual Insurance Company of Canada, 2011 NBQB 381
The Plaintiff, an orthotics technician, was injured in a motor vehicle accident on November 18, 2005. The Plaintiff suffered a fractured spine, a broken nose, broken kneecap, various cuts and bruises and what was described as a “mild concussion or closed head injury”.
The medical evidence was clear that the Plaintiff, 67 years of age at the date of trial, was unable to resume his previous occupation as an orthotics technician. By the date of trial, the Plaintiff’s physical injuries had healed, but the Plaintiff alleged he suffered from cognitive impairment affecting his concentration and memory related to his closed head injury .
The Defendant Section B insurer paid weekly indemnity benefits for 104 weeks following the accident. After receiving several Independent Medical Examinations, the insurer advised the Plaintiff that they were ceasing to pay weekly indemnity benefits.
The Plaintiff commenced an action for entitlement to Section B benefits past the 104 week period. In his decision, Creaghan J. noted that the onus lies with the Plaintiff to establish on a balance of probability that the injuries continuously prevents him “from engaging in any occupation or employment for which he is reasonably suited by education, training or experience...”
Creaghan J. also noted that the issue is not whether the Plaintiff wanted to work, nor whether somebody would want to employ him, but rather whether the injuries render him unable to work at any job for which he is reasonably suited.
The Defendant insurer relied on the reports and testimony of a neurologist, physiologist, psychiatrist and a psychologist, who were all of the opinion that there were no problems resulting from the accident, from a physical, neurological or a psychological perspective, that would prevent the Plaintiff from engaging in an occupation that he was suited for.
The Defendant insurer also relied on the testimony of an occupational therapist who reviewed the medical documentation and the Plaintiff’s employment history to provide a list of occupations for which the Plaintiff may have been reasonably suited. Creaghan J. noted that this assessment was conducted without the participation of the Plaintiff and as a result, he found this was a “rather sterile exercise” and placed no weight on that evidence.
Creaghan J. preferred the testimony of the Plaintiff’s family physician and treating psychologist, who had a better understanding of the Plaintiff’s ongoing issues, namely that despite receiving psychological treatment, he was unable to improve his cognitive functioning, and there was no indication of memory problems, psychological disorders or similar cognitive issues before the accident.
Creaghan J. found that based on the treating doctors testimony, the Plaintiff had proven on a balance of probability that as a result of the accident, the Plaintiff had problems with attention and concentration that would prevent him from engaging in any occupation or employment for which he is reasonable suited and found that he was entitled to weekly indemnity benefits from the date the Defendant ceased making payments.