Insured’s action for long term disability benefits was commenced in time and adequate proof of the claim was provided.
Insurance law – Disability insurance – Long term disability – Limitation of actions – Breach of policy – Practice – Summary judgments
Halladay v. Manufacturers Life Insurance Co. (c.o.b. Manulife Financial Corp.),  O.J. No. 2003, 2020 ONSC 2802, Ontario Superior Court of Justice, May 4, 2020, B.W. Abrams J.
The insurer brought a motion for summary judgment to dismiss the insured’s action for long term disability benefits (“LTD benefits”) on the basis that the insured’s action was commenced outside of the limitation period, no LTD application was submitted or referred to in the statement of claim and because of the insured’s failure to provide medical information to support the LTD benefits claim. The claim arose out of the insured’s disability from her union position as a housekeeper as a result of mental illness.
The claim was not barred because time did not begin to run until the insurer clearly and unequivocally denied the claim on February 21, 2013, three years after the initial denial, when the insured had exhausted the appeal process. The Court also noted it was reasonable for the insured to exhaust the appeal process before commencing an action and that the insurer had failed to make a non-waiver statement in its earlier communications.
The Court found that a letter submitted by the union was a sufficient application for LTD benefits and noted that the insurer had never taken a position otherwise in reviewing the claim. As well, there was no prejudice to the insurer as a result of the pleading not specifically referencing the LTD benefits policy because the insured was unaware it was a separate policy, it was apparent LTD benefits were sought on a plain reading of the pleading and, in any event, an amended pleading was provided with the insured’s materials.
Finally, the Court noted this was not a case where no medical information had been provided in support of the claim. The insured repeatedly provided further and additional medical information, as requested. The insurer conducted its own medical assessments and had the ability to conduct further assessments if necessary. The Court noted the insurer could not create prejudice by its own failure to do something it reasonably could or ought to have done.
This case was digested by Michael J. Robinson, 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 Michael J. Robinson at email@example.com.