Limitation Periods in Actions Under the OPCF

Roque v. Pilot Insurance Company, 2012 ONCA 311 (C.A.)

The plaintiff was injured in an automobile accident in 1996. He commenced an action against the defendant driver in 1998 for $1.75 million.  He commenced an action against his own insurer in 2002.   Section 17 of the OPCF provides an.action against one's own insurer under the underinsured provisions of the policy must be commenced within one year from when the claimant knew or ought to have known the quantum of claims exceeds the defendant's motor vehicle liability limits. The plaintiff argued the limitation did not begin to run until his damages were quantified by settlement or judgment.  This interpretation had previously been accepted in Hampton v. Traders General Insurance Company (1996), 27 O.R. (3d) 285 (Gen. Div).  On the insurer's motion for summary judgment, the motion judge dismissed the action.  The Court of Appeal dismissed the appeal, overruling Hampton.  Justice Juriansz preferred the reasoning of Master Dash in McCook v. Subramaniam (2008), 172 A.C.W.S. (3d) 344 (S.C.) at para. 5:

The plaintiff’s case runs from when he has a body of evidence accumulated that would give him a “reasonable chance” of persuading a judge that his claims would exceed $200,000.

Roque had a DAC, medical reports and an economic loss report going back to 1998 and more than two years passed after he knew or ought to have known his claims exceeded $200,000. As a result, the action was statute barred. 

The Court did not accept the plaintiff`s submission that applying s. 17 would amount to a multiplicity of proceedings, since s. 258.4 of the Insurance Act requires an insurer to advise of the defendant`s policy limits.  Where an insurer fails to comply, the Court stated it would be prudent for a plaintiff to commence an action against its own insurer.

This decision should help to provide greater certainty with respect to the timing for claims under the underinsured provisions of the motor vehicle policy. 

Duty to Defend - Winter Maintenance Contractor

Minto Developments Inc. v. Carlsbad Paving, 2012 ONSC 1574 (S.C.J.)

Minto brought an application seeking a declaration that Carlsbad and its insurer, Intact, were obligated to provide it with a defence.  Minto was a property owner that was named as a defendant in a slip and fall action.  Carlsbad contracted with Minto to provide winter maintenance on the property.  In the contract, Carlsbad agree to indemnify and save harmless Minto, to maintain a CGL policy with $2,000,000 limits and to add Minto as an additional insured.

Carlsbad refused to assume the defence.  It argued that the claim included allegations of negligence with respect to snow and ice removal, inspection, warning signs, breach of lease agreement and occupier's liability.  Its position was that the majority of the claims did not fall within the scope of coverage and stood on their own.

Justice Kershman held that the true nature of the Statement of Claim was that of a negligence case where the plaintiff slipped on snow and ice in the parking lot.  It therefore fell within the scope of coverage and Intact had a duty to defend Minto. 

Duty to defend issues arise fairly often in slip and fall cases where the property owner hires a contractor to maintain the property.  It is important to look closely at the Statement of Claim to determine the true nature of the claim; the mere insertion of a number of different allegations by the plaintiff will not necessarily be enough to take the claim outside of the scope of coverage.

SABS - Pursuing Litigation without a Mediator's Report

Cornie v Security National, 2012 ONSC 905 (S.C.J.)

This motion involved plaintiffs in four actions who commenced actions against their insurers for statutory accident benefits.

The Insurance Act imposes a mandatory mediation scheme in accident benefits cases.  Rule 19 of the Dispute Resolution Practice Code (DRPC) provides that mediation must be concluded within 60 days of the filing of an application.  Once mediation has failed, the plaintiff may pursue litigation.  In all four cases, the plaintiffs filed mediation applications and after 60 days passed without a mediator being appointed, they wrote to FSCO requesting a mediator's report confirming mediation had failed.  FSCO refused, taking the position that the 60 day period does not begin to run until a mediator is appointed.

The insurers brought motions to dismiss on the basis that mediation had not failed.  Justice Sloan dismissed the motion.  The 60 day period in the DRPC is mandatory.  The plaintiffs did not require a report from FSCO in order to claim that mediation failed through non-compliance with r. 19.  The plaintiffs were therefore able to show that mediation had failed and they were entitled to proceed with litigation.

This decision is a clever way to get around the lengthy back-up taking place at FSCO; however, does it transfer the backlog to the court system?

Supreme Court will not hear Giuliani appeal

The Supreme Court of Canada has refused leave to appeal the decision in Giuliani v. Halton.  A link to our commentary on Giuliani is found at http://ontarioinsurancelaw.blogspot.ca/2012/02/minimum-maintenance-standards-ruled.html.  In Giulini, the trial judge held that the Minimum Maintenance Standards did not provide a defence where the snow accumulation  was less than 5 cm (as provided by s. 4 of the MMS for a Class 2 road).  In addition, s. 5 of the MMS did not establish a minimum standard for conditions that had not yet become icy. The Court of Appeal decision is found at: http://www.ontariocourts.ca/decisions/2011/2011ONCA0812.htm.

Giuliani leaves municipalities vulnerable to additional claims.  If the gap in the MMS is to be addressed, it will have to be done through legislation.