Anand v. Belanger, 2010 ONSC 2345 (CanLii)
The plaintiff was injured when she was struck by a stolen vehicle. State Farm was the plaintiff’s accident benefits provider, and was named as a tort defendant pursuant to the uninsured motorist provisions of the policy.
State Farm paid IRBs until the 104 week mark, when it terminated benefits on the basis that Ms. Anand did not suffer a complete inability to engage in any employment for which she was reasonably suited by education, training or experience. At a mediation, the parties settled past and future IRBs for $100,000. Ms. Anand signed a release that included a provision that the settlement was not an admission of liability.
At the tort trial, the plaintiff sought to preclude State Farm from alleging the plaintiff did not meet threshold on the basis that it had paid for past and future IRBs, which constituted an implicit admission.
Justice Stinson held that payment of IRBs does not amount to an admission in the tort action. The plaintiff signed a release specifically agreeing that the settlement was not an admission of liability. In addition, in its capacity as the accident benefits carrier, State Farm had contractual duties and a duty of utmost good faith in dealing with its insured, Ms. Anand. As a tort defendant, State Farm owed no such duties. Accordingly, State Farm was free to argue the plaintiff did not meet threshold.
Justice Stinson's decision is sensible, especially given the differing characteristics of accident benefits and tort. It also underscores the importance of including a paragraph in releases that settlement is not an admission of liability.