Applicant confused about who insures her and misses filing deadlines - Wiles v. Sun Life, 2018 ONSC 1090

September 24, 2018, Kitchener, Ontario

Posted by: Robert Deutschmann, Personal Injury Lawyer

Wiles v. Sun Life, 2018 ONSC 1090 (CanLII)

Date of Decision: February 15, 2018
Heard Before:  The Honourable Mr. Justice G.E. Taylor

SUPERIOR COURT OF JUSTICE

TIME LIMITS: did the applicant submit required forms in a timely manner; was the applicant clear on who the insurer for what benefits was; applicant fails to meet required timelines and application is dismissed

This is a motion for summary judgment by Sun Life to dismiss Ms. Wiles’s claim against it.

Ms. Wiles was an employee of Spaenaur Inc. until November 3, 2015 when her employment was terminated without cause. Sun Life acted as the administrator for Spaenaur of its Salary Continuance Services Program pursuant to which Spaenaur provided salary continuation to disabled employees for a limited period of time, subject to qualification.  Sun Life was also the insurer for Spaenaur employees for Long-Term Disability benefits.

Promptly after the termination of her employment, Ms. Wiles sought to make a claim for salary continuation on the basis that she was disabled but her claim was not approved.  In January 2017, Ms. Wiles commenced the present action against Sun Life only, claiming damages for breach of a disability policy of insurance.  Sun Life defended the action on the basis that it had no liability to Ms. Wiles for salary continuation because that was a benefit provided by Spaenaur to its employees and Sun Life only acted as the administrator of the program on behalf of Spaenaur.

Sun Life issued its Notice of Motion for Summary Judgment on May 10, 2017.  On September 28, 2017, an order was made, on consent, allowing Ms. Wiles to amend the Statement of Claim to:

a)      add Spaenaur as a defendant;

b)      make claims against Spaenaur for damages for wrongful termination of employment;

c)      make claims against Spaenaur for damages for breach of the terms of the Salary Continuance Services Program; and,

d)      clarify that her claim against Sun Life was for damages for breach of the long term disability policy provided by Sun Life to employees of Spaenaur.

Both defendants delivered Statements of the Defence to the Amended Statement of Claim.  Ms. Wiles has now brought a motion for leave to issue a Reply in which she seeks to plead relief from forfeiture.

Mr. Justice Taylor  dealt with this motion on the basis of the state of the pleadings as a result of the order permitting the amendment of the Statement of Claim and also on the basis that Ms. Wiles has been granted leave to issue a Reply seeking relief from forfeiture. He reviewed the chronology of the case, and the details of the Salary Continuance Services Plan Package, noting the following question:

1. What if I’m still off work when my salary continuance runs out?
    If you are still unable to return to work and are approaching the end of your salary continuance, we will contact you to start the application process for long term disability benefits….

Justice Taylor noted that Sun Life’s role is limited to administration of the Salary Continuance Services program provided by Spaenaur to its employees. Spaenaur is responsible for making any payments to eligible employees pursuant to the Salary Continuance Services program.

Ms. Wiles alleges that she only became aware after service of Sun Life’s Notice of Motion that it was necessary to have a different set of forms submitted to Sun Life to make a claim for long-term disability benefits. Following the termination of her employment, Spaenaur continued to pay Ms. Wiles her salary until April 13, 2016. In her affidavit in response to the present motion, Ms. Wiles asserts that her total disability began in October 2015.  However, in the Plan Members Statement Salary Continuance Services which was completed by Ms. Wiles on November 20, 2015 and submitted to Sun Life, Ms. Wiles indicated that her disability was as a result of an accident which occurred in July 2015.

Although Ms. Wiles states that she became fully disabled as of October 15, 2015, she continued to work full time and perform her employment duties until the date of termination of her employment at the beginning of November 2015. Prior to the termination of her employment, Ms. Wiles did not request of anyone at Spaenaur to be placed on disability.

Ms. Wiles’s primary diagnosis was stated as “major anxiety disorder”. In the Attending Physician’s Statement Claim for Long-Term Disability benefits, Ms. Wiles’s symptoms were described as severe anxiety and depression which first appeared on November 3, 2015. The form also described Ms. Wiles’s symptoms as the result of being dismissed from her employment. Ms. Wiles testified that on her February 22, 2016 appointment with an assessing physician a member of his staff told her that completed forms had been sent to Spaenaur. She also obtained a copy of the form which she delivered directly to her solicitor’s office. She assumed that her lawyer would contact Sun Life after receiving a copy of the Attending Physician’s Statement Salary Continuance Services.

Ms. Wiles testified that she had no evidence to suggest that, prior to July 17, 2017, Sun Life had received the Attending Physician’s Statement. Sun Life stated that Ms. Wiles might have become eligible for long-term disability benefits through Sun Life as of May 2, 2016 but no claim for such benefits had been submitted.

Discussion and Analysis

During the course of oral argument on the motion counsel for Ms. Wiles conceded that Sun Life has no liability to Ms. Wiles for salary continuance. Accordingly, it was conceded that any claim against Sun Life based on the Salary Continuance Services program available to employees of Spaenaur should be dismissed at this stage of the proceeding. Counsel for Ms. Wiles also conceded that Ms. Wiles had failed to provide Sun Life with the necessary forms to make a claim for long-term disability benefits within 90 days after the end of the elimination period as required by the terms of the policy. Counsel for Ms. Wiles acknowledged that the necessary forms were required to be submitted to Sun Life no later than July 31, 2016.

The Statement of Claim in this action was issued on January 20, 2017. At the time of issuance of the Statement of Claim the only defendant was Sun Life. The Statement of Claim makes reference to a “Policy of Insurance” without identifying the policy by number. The Statement of Claim also refers to a “group Disability Policy of Insurance”, again without specifying a policy number.  At the time of the issuance of the Statement of Claim, Ms. Wiles had only submitted a claim for Salary Continuance Services which was a benefit provided, not by Sun Life, but by Spaenaur. The Statement of Claim alleges that Ms. Wiles provided Sun Life with proof of her total disability. As of January 20, 2017 Ms. Wiles had only submitted forms in relation to Salary Continuance Services. It is alleged in the Statement of Claim that Sun Life breached the terms of the Disability Policy in February 2016. This can only be reference to Sun Life advising Ms. Wiles by way of its letter of February 16, 2016 that it was closing Ms. Wiles’s claim for Salary Continuance Services because of the failure to provide a completed Attending Physician’s Statement.

Justice Taylor concluded that at the time of the issuance of the Statement of Claim Ms. Wiles’s action was doomed to fail. Sun Life had no liability to Ms. Wiles for Salary Continuance Services. Despite the vague references in the Statement of Claim to a “Policy of Insurance” and a “group Disability Policy of Insurance”, these can only have been in relation to Salary Continuance Services. However, the Statement of Claim has now been amended.

Although still not a model of drafting clarity the Amended Statement of Claim sufficiently distinguishes between Salary Continuance Services for which liability, if any, would rest with Spaenaur and Long-Term Disability Benefits for which Sun Life is potentially liable pursuant to a group policy of insurance of which Ms. Wiles was a member.

Ms. Wiles failed to submit to Sun Life the appropriate forms for her claim for Long-Term Disability Benefits within the time specified in the policy of insurance. I reject Ms. Wiles’s assertion that she only became aware that different forms were required to assert a claim for Salary Continuance Services and a claim for Long-Term Disability Benefits when the present Notice of Motion was served.

The outcome of this motion therefore turns on the issue of whether Ms. Wiles is entitled to relief from forfeiture for failure to submit her claim for Long-Term Disability Benefits within the requisite time period and for failure to initiate legal action within one year as required by the policy. The options available on the present motion include a finding that a trial is required to determine the issue of whether Ms. Wiles is entitled to relief from forfeiture or a finding that Ms. Wiles is entitled to relief from forfeiture. On either finding, the motion for summary judgment would be dismissed.

The motion for summary judgment will be granted if the issue of whether Ms. Wiles is entitled to relief from forfeiture does not require a trial to be resolved. After reviewing the evidence and the law Justice Taylor concluded that:

a)      Ms. Wiles did not submit a claim to Sun Life for long-term disability benefits until May 17, 2017;

b)      Ms. Wiles’s claim for long-term disability benefits was not completed until July 17, 2017 when her solicitor submitted to Sun Life an Attending Physician’s Statement Claim for Long-Term Disability benefits dated July 11, 2017;

c)      Ms. Wiles and/or her solicitor were aware of the distinction between Salary Continuance Services and Long-Term Disability benefits as of November 18, 2015 upon the receipt by Ms. Wiles’s solicitor of the Salary Continuance Services, Plan Members Package from Spaenaur;

d)      Sun Life did not receive the Attending Physician’s Statement Salary Continuance Services dated February 22, 2016 until July 17, 2017;

e)      There is no explanation as to why Ms. Wiles or her solicitor failed to submit the forms required to make a claim for Salary Continuance Services requested by Sun Life in December 2015, January and February 2016 until July 17, 2017;

f)        There is no explanation as to why Ms. Wiles or her solicitor failed to notify Sun Life of the intention to submit a claim for long-term disability benefits no later than 90 days after the end of the elimination period;

g)      There is no explanation as to why an action was not commenced claiming long-term disability benefits prior to September 29, 2017.

For the above reasons, judgment will be granted in favour of Sun Life dismissing Ms. Wiles’s action. During the course of oral argument, counsel for Ms. Wiles acknowledged that if the claim against Sun Life based on the failure to pay long-term disability benefits was dismissed, it should also be dismissed against Spaenaur. Accordingly, judgment will be granted in favour of Spaenaur dismissing Ms. Wiles’s action for damages based on any alleged failure to pay long-term disability benefits.

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Deutschmann Law serves South-Western Ontario with offices in Kitchener-Waterloo, Cambridge, Woodstock, Brantford, Stratford and Ayr. The law practice of Robert Deutschmann focuses almost exclusively in personal injury and disability insurance matters. For more information, please visit www.deutschmannlaw.com or call us at 1-519-742-7774.