Insured releases accident benefits insurer from all claims and is precluded from seeking punitive and aggravated damages as a result

The insured’s claim for punitive and aggravated damages for conduct relating to provision of statutory accident benefits was dismissed. The insured had settled her claim for benefits with her benefits provider and signed a release and could not therefore maintain her claim for punitive and aggravated damages against another party which had originally provided her benefits, as that claim arose from the denial of benefits.

Insurance law – Automobile insurance – Accident benefits – Damages, punitive and aggravated – Practice – Summary judgments

Imeri v. Laidman, [2023] O.J. No. 3946, 2023 ONSC 5095, Ontario Superior Court of Justice, September 8, 2023, P.R. Sweeny R.S.J.

The insurer was successful in its motion for summary judgment dismissing the insured’s claims for punitive and aggravated damages.

The insurer provided Statutory Accident Benefits (“SABS”) to the insured following a car accident in 2013. In 2016, following an arbitration initialized by the insurer, it was determined that a different insurer was in fact the appropriate party to provide SABS (the “SABS Insurer”). In 2020 the insured settled their claim with the SABS Insurer and signed a release. The settlement was for payment of amounts for past and future medical benefits, non-current benefits, and unspecified other amounts. The insured maintained claims for punitive and aggravated damages against the insurer with respect to the conduct in handling the SABS claim.

The insurer applied to dismiss the insured’s claim because the insured failed to mediate the issue of punitive and aggravated damages, and on the basis that the insured was precluded from pursuing the claim against the insurer as a result of the settlement for SABS and extra contractual damages with the SABS Insurer.

On the first issue, the court held that failing to mediate the claims for punitive and aggravated damages did not preclude the insured’s claim. With respect to the second issue, the court held that the claim for accident benefits had been resolved in full and the insured had given up the right to litigate this issue against the insurer. The claim for punitive and aggravated damages arose from the denial of benefits and there was no other basis to sustain this claim against the insurer.

This case was digested by Mark A. McPhee, and first published in the LexisNexis® Harper Grey Insurance Law Netletter and the Harper Grey Insurance Law Newsletter. If you would like to discuss this case further, please contact Mark A. McPhee at [email protected].

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