Law Times

Law Times • June 25, 2018 Page 11 www.lawtimesnews.com Decision may impact insurers on policies BY MARG. BRUINEMAN For Law Times A n Ontario Court of Ap- peal decision reversing a lower court ruling on a delayed long-term disability claim will likely send insurers back to the drawing board to revise their policies, say insurance and personal injury lawyers. In MacIvor v. Pitney Bowes, an employee who was refused long-term disability coverage for which he had paid through his job should get the coverage even though his claim was delayed and he was no longer working for the same company, the ap- peal court ruled in April. Lenard MacIvor was consid- ered a star employee at Pitney Bowes when he went to Costa Rica on a company-sponsored event in April 2005, where he had an accident. He suffered a traumatic brain and back in- jury and was off work for four months. He didn't recognize the permanence of the brain injury until much later. When he did go back to work where he had risen through the ranks to achieve the position of division sales vice president, his performance was subpar, his re- sponsibilities were reduced and, in 2008, he quit his job out of frustration. He soon found an- other job, but he was fired the following year. In 2010, MacIvor applied for long-term disability benefits, but he was denied because he was no longer working with Pitney Bowes. The Superior Court of Justice came to the same conclu- sion at trial. But at the Ontario Court of Appeal, Justice Jean L. MacFar- land wrote that MacIvor's policy did not specify that coverage would be terminated for un- discovered disability claims for injuries that occurred during employment after employment ceases. "It's one of the few times the Court of Appeal has overturned a lower court decision on this contractual interpretation is- sue," says David Preszler, a per- sonal injury lawyer and partner at Preszler Law Firm LLP in Toronto, who did not act in the case. "They gave a broad, liberal sort of read to the policy. They were looking for exclusionary language and they didn't find any. That's my view on how they were able to overturn it." To leave him without any kind of coverage "would be con- trary to the very purpose of dis- ability insurance and the plain meaning of the coverage provi- sion," wrote MacFarland. The appeal court came to a similar conclusion on the time- liness of the proof of claim, in which the court found to be about 10 days after the allowed 90-day contractual period. "It would be most unfair, in my view, to permit the imper- fect compliance with the 90-day contractual period to defeat the appellant's claim in the particu- lar circumstances of this case," the justice wrote. The third issue was the one- year limitation period set out in the policy. In the unanimous decision, the appeal court panel relied upon the two years al- lowed through the Limitations Act and found the plaintiff 's action was commenced within two years of the time that he realized his brain injury would prevent him from working in the future. The appeal court found noth- ing in the contract specifically stating that coverage wouldn't be provided if the insured per- son was no longer working with the company through which he had purchased the plan. If the plan stated that the claim could only go ahead during the period of employment with that par- ticular company even if the in- jury wasn't discovered until later, Preszler says, the appeal decision may have been different. Insurance defence lawyer Lisa Armstrong, a partner with Strigberger Brown Armstrong LLP, points out that while mo- tor vehicle insurance contracts are generally standard, contracts for long-term disability insur- ance vary. So, the wording of the contract became a major focus of the appeal court. But, from her perspective, Armstrong says, she is con- cerned with how the court de- termined that he hadn't run out of time in applying for benefits. "It definitely went beyond what employers and insurers understood they were insuring, which is difficult. They've writ- ten the premium based on what they understood the coverage to be," she says, and that is that, once the person left employ- ment, their exposure ended. "I think they need to look carefully at the language of their contract. The case certainly seems to support the position that it's the employment status at the time of the injury or illness, when the injury or illness oc- curs, not the employment status at the time the claim was made that will be relevant assuming the contract has similar lan- guage to this one." Waterloo disability and personal injury lawyer Robert Deutschmann says the employer dropped the ball in this situation as a star employee injured him- self on a work excursion to Costa Rica. Suddenly, his performance drops and the employer doesn't intervene or extend help. He says most people don't read their disability policy booklet. They know they have coverage, but they likely know little else, such as its definition and when it applies. MacIvor presented a unique fact situation. Deutschmann says he expects that insurance companies will review their pol- icies and perhaps re-write them so they won't be obliged to pay FOCUS David Preszler says he expects insurance companies will take heed of a recent Ontario Court of Appeal decision. See Ruling, page 12 What do your clients need? The means to move on. Guaranteed. ™ Baxter Structures customizes personal injury settlements into tax-free annuities that can help your clients be secure for life. » Pre- and post- settlement consultation and support » Caring professionalism for over 30 years » No fee to you or your clients Need more information? Contact us at 1 800 387 1686 or baxterstructures.com Kyla A. Baxter, CSSC PRESIDENT, BAXTER STRUCTURES Untitled-3 1 2018-02-08 2:41 PM

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