Plaintiff Failed to Meet Threshold

The Court of Appeal recently affirmed a trial judge's decision to dismiss an action based on the failure to meet threshold. 

In Jennings v. Latendresse, 2014 ONCA 517 (C.A.), the plaintiff was in a motor vehicle accident in 2005.  The defendant admitted liability.  While the jury was deliberating the judge heard a threshold motion, and ultimately dismissed the action after the jury rendered a verdict.  The jury held that the plaintiff had recovered from her injuries and did not award any amount for general damages or past loss of income, although they valued a loss of competitive advantage at $58,000.

The plaintiff submitted that her diagnosis of chronic pain, by definition, must indicate the injuries were permanent.  The Court of Appeal disagreed.  There was evidence that the plaintiff was improving and continued to improve, her functional abilities showed no impairment, she had returned to her pre-accident employment, her medical examination showed full range of motion, expert evidence stated recurring pain was not caused by the original injury, and pre-accident physical and psychological stressors contributed to the chronic pain but had nothing to do with the injury.  The evidence supported the trial judge's decision the plaintiff did not meet threshold.

One of the arguments made by the plaintiff on appeal was that the jury verdict was inconsistent when it found the plaintiff had recovered from her injuries but awarded an amount for loss of competitive advantage.  The Court of Appeal held that there was nothing inconsistent in finding a loss of competitive advantage but that it was not caused by the accident.

Jennings shows the importance of marshalling the evidence at trial as well as conducting a causation analysis, especially in chronic pain cases.

Limitation to Add Defendants Expired

Issues relating to discoverability can be decided on a motion to amend a claim.

In Garic v. Mack Trucks Canada 2014 ONSC 3103 (S.C.J.), the plaintiff was injured in 2006 while operating a dump truck owned by her husband.  One of the axles gave way, causing her to lose control and roll into a ditch.  Her husband was initially named as an FLA claimant.

In 2012, the plaintiff brought a motion seeking to add her (now former) husband and his company as defendants for failing to maintain the vehicle.  She argued the claim was not discoverable until the named defendants gave evidence on discovery that the owner had not followed proper maintenance procedures. 

The Court dismissed the motion to add defendants, holding that:

[19]           The difficulty with the plaintiff's position is that the case law has established that to discover a claim the plaintiff must only have sufficient facts upon which to support an allegation that there is a cause of action, and it is not necessary for the plaintiff to have discovered complete evidentiary support to make the claim winnable (see Wilkinson v Braithwaite [2011] O.J. No. 1714 (S.C.J.) at para. 32).

The Statement of Claim alleged the named defendants were responsible for "service, inspection and maintenance" of the truck, which was expressly denied in the Statement of Defence.  The plaintiff knew her husband was responsible for maintenance of the truck since the business commenced.  Justice Broad held that the essential facts were either actually known to the plaintiff or at least obtainable with due diligence more than two years since the motion was brought.

The Limitation Period to Commence a Claim under OPCF-44R

The decision in Schmitz(Litigation guardian of) v. Lombard General Insurance Co. of Canada, 2014 ONCA 88 (C.A.) is an important decision on when the limitation period begins to run in a claim under form OPCF-44R, for underinsured motorist coverage.

This matter concerned a motor vehicle accident that occurred on July 19, 2006. The plaintiff had a policy of insurance which included a provision for underinsured motorist coverage. The plaintiff commenced a claim against the defendant driver in June 2007 and a claim against his insurer for underinsured motorist coverage in June 2010. The plaintiff’s insurer brought a motion to dismiss the plaintiff’s claim on the basis that it was commenced after the expiry of the 1 year limitation period set out in section 17 of the OPCF-44R. The plaintiff took the position that section 17 did not apply and the 2 year limitation period set out in section 4 the Limitations Act overrode section 17 of the OPCF-44R. The motions judge accepted the plaintiff’s argument and dismissed the insurer’s motion. The plaintiff’s insurer appealed this decision.

 On appeal, the plaintiff’s insurer conceded that the 2 year limitation period in the Limitations Act applied and overrode the 1 year limitation period in the OPCF-44R. Instead, the insurer asserted that the limitation period began to run when the plaintiff knew or ought to have known that their claim exceeded the Defendant’s policy limits, embodied under section 15 of the OPCF-44R. The insurer argued that this section was not overridden by the discoverability provision under section 5 of the Limitations Act.

 
The Ontario Court of Appeal rejected the insurer’s argument. The court concluded that once it was accepted that the 2 year limitation period set out in the Limitations Act applied so did the discoverability provisions in section 17 of the Act. Turning to discoverability, the court held that this loss was only discovered by the plaintiff after a formal request for indemnification was made to the insurer and the insurer failed to indemnify the plaintiff. Given this finding, the court held that the 2 year limitation period did not begin to run until the day after the demand for indemnification was made to the plaintiff’s insurer under the underinsured motorist provision of the policy.

New Practice Directions

As of July 1, 2014 there are new Practice Directions that come into effect across Ontario.  There is a new province-wide direction and well as new ones for each judicial region.  

Here is the link to the provincial direction:

http://www.ontariocourts.ca/scj/practice/practice-directions/provincial/

 
Here is the link to the regional directions:

http://www.ontariocourts.ca/scj/practice/practice-directions/

 

It is important to be aware of these Practice Directions because some of them change the requirements under the Rules; for example, whereas the Rules do not require factums for each motion, the Practice Direction says factums are required for all long motions. 

Consent to Receive the Ontario Insurance Law Blog

Thank you for subscribing to the Ontario Insurance Law Blog. On July 1, 2014, Canada's new Anti-Spam Legislation law takes effect. It requires companies to have your consent to continue sending you information by email. Please click on the following link to continue receiving the Ontario Insurance Law Blog by email. You may unsubscribe by clicking the link at the bottom of the email.

https://www.surveymonkey.com/s/HGLG2F8

 

Laches Applies to Loss Transfer Actions

Insurers dealing with loss transfers should be aware of the decision in Zurich Insurance Company v. TD General Insurance Company, 2014 ONSC 3191 (S.C.J), where the Court dismissed the claim.

The claim arose out of a motor vehicle accident that occurred July 14, 1999.  In 2010, approximately 11 years after the accident, TD sent Zurich a Notice of Loss Transfer alleging Zurich's insured was 100% at fault.  Shortly after, TD made two requests for indemnification.  In 2011, TD brought an application requiring Zurich to participate in an arbitration.  Zurich brought a motion to decide a preliminary issue as to whether the application was barred by the equitable doctrine of laches and the Limitations Act.  The arbitrator dismissed the motion and Zurich appealed.

Justice Lederman held that TD's claim was not barred by the Limitation Act, relying on decision in Markel Insurance v. ING Insurance Company of Canada, 2012 ONCA 218 (CanLII), where the Court of Appeal held that the limitation period runs from the day the first party insurer requests loss transfer from the second party insurer.

However, Justice Lederman held that laches applied in the circumstances.  Applying laches in the circumstances was consistent with the fusion of law and equity to achieve just results.  He held that acquiescence is a stand-alone basis for laches, and there need not be prejudice for the doctrine to apply.  The 11-year delay coupled with a directive that the first party insurer notify the second party insurer promptly and the fact the TD is a sophisticated insurer, gave rise to an inference that it had abandoned or waived its rights to the claim. 

The “Curtain” of Asserted Claims of Privilege Lifted to Permit a Full Examination of all Available Evidence

In Tomasone v. Capo, Sgro LLP, 2014 ONSC 2922 (CanLII) the defendant had provided two legal opinions to the plaintiffs which the plaintiffs claimed failed to meet the requisite standard of care. The plaintiffs sued the defendant in negligence. The defendant brought a motion for summary judgment asserting that the plaintiffs’ claim was statute barred by the Limitations Act, 2002.

In defence to the summary judgment motion, the plaintiffs put forward affidavit evidence suggesting they discovered their claims against the defendant after retaining counsel. Their counsel also swore affidavits but during cross-examinations they refused to answer any questions about when or how they discovered those claims.

In advance of the summary judgment motion, the defendant moved for answers to refusals with respect to discoverability, particularly dealing with information and documentation the plaintiffs claimed privilege over.

Master Short considered whether the plaintiffs could rely on privilege in these circumstances and concluded at paragraph 48 as follows:

The plaintiff ought not to be allowed to rely on discoverability arguments to seek to avoid a limitations defence, without making full disclosure with respect to all relevant facts relating to what knowledge was acquired and when.

Master Short also considered the defendant’s argument that even if privilege applied, the plaintiffs waived privilege. Master Short agreed, taking into account the following factors inter alia:

1) the plaintiffs undertook to prove their action was not statue-barred and they put their state of mind and their lawyer’s mind in issue to argue that the action was not statute-barred;

2) the plaintiffs relied upon the affidavit evidence of their lawyer; and

3) the plaintiffs subpoenaed former counsel to give evidence.

Master Short went on to review the guidance provided by the Supreme Court of Canada in Hryniak v. Mauldin, 2014 SCC 7 regarding the importance of full disclosure in light of the court’s power on the hearing of summary judgment motions to assess the quality and sufficiency of the evidence and the requirement that the parties "put their best foot forward".

The plaintiffs were ordered to answer the questions they refused related to the timing of receipt and review of relevant documents and the timing of investigations into possible claims against the defendant.