Contracts and your Claim
Time is of the essence. An age old saying that can be applied to most things in life especially the law. Ignorance, non compliance and failure to follow-up on certain aspects of the law when it concerns personal injury can be detrimental to the success of your case.
We have addressed this issue in previous articles and we would like to provide a follow up on one of the more popular cases that addressed this issue in great detail.
In Kassburg vs Sun Life Assurance Company of Canada, a summary judgment was requested by Sun Life to dismiss a claim by Kassburg based on the simple fact that the contractual time period to do so had passed. The insurer believed that the time limitation commenced on the date of the submittal of her application and the insured (Ms. Kassburg) believes that the limitation period would start from the date of the first denial of her coverage.
Karen Kassburg was employed by the North Bay Police Service in 2003 which was group-insured by Sun Life. In October of 2007, she stopped working citing physical and psychological incapability. She submitted her paperwork within the required time period (in April of 2008) with help from another employee, Ms. Cousineau of the North Bay Police Association.
In both May and September of 2008, the insurance company requested additional medical information from Ms. Kassburg and she complied through her physician and Ms. Cousineau.
In December of 2008, they wrote to Ms. Kassburg informing her that the medical information supplied so far was not sufficient and that her application for long term benefits was denied. In the letter, they also informed her that were it her choice to appeal they reserved the right to "apply any available contractual or statutory limitation periods" and new medical information would be required with the appeal.
Ms. Cousineau (on behalf of Ms. Kassburg) wrote to Sun Life in late January of 2009 and acknowledged their denial and posed two questions concerning the procedure for initiating the appeal process and the impact it would have on the contractual time constraints. She received no response to her queries and her subsequent follow-up request went unanswered as well.
This was the continuing cycle for the next two years. More medical information was requested, and more denials based on the insufficient medical causation.
The insurer continuously stated that they would retain their right to apply the time constraints within the contract but also advised that she could continue to appeal and that her case would be reconsidered.
In January of 2011, the insurer informed Ms. Kassburg that her final appeal would require additional medical information in order to see if she qualified for long term disability. The request was obliged. Again her request for benefits was declined on the basis that her medical state did not warrant a total disability claim. They also informed her that this was the third and final level of appeal and a complaint could be filed or she could seek legal representation.
Based on the relevant jurisprudence, the appellate Judge found no reason to reverse the initial ruling on the commencement of the time limitation. He found that the information surrounding the rules governing time limits and periods were unclear, especially with the amendment in 2004 to Section 22(2) of the Limitations Act, 2002.
The contract with Ms. Kassburg started the year before in 2003 and was excluded to the limitation periods that were amended the following year. This means that her contract would fall into the two year claim period found in Section 4 of the Limitation Act 2002, which starts from the day that the claim was filed.
He also found that he could only overturn the motion Judge's ruling if there was gross error and misrepresentation found in his decision; neither of which were found here.
Because the specifics on time limitation were ambiguous, and it was seen that the date of discovery for Ms. Kassburg was December of 2008, the Judge rightfully followed procedure and found in favor of Ms. Kassburg.
Another important issue to be addressed was the classification of contract between the insurer and client. The insurance company deemed that the contract should be seen as a business contract as it was entered into by two business entities and not an actual individual.
The motion Judge agreed with the classification but on appeal it was overturned because the purpose of the contract should have been the deciding factor. It was for personal insurance to cover income loss if disabled (long-term disability).
According to Canadian Law, a business contract exists where there are no individually named people participating directly in the contract and the contract is not for family, household or personal intent. Considering that this contact was for long-term disability for and individual, it is not a business contract.
The Judge dismissed the insurer's appeal for summary judgment pertaining to both the time limitation and classification of contract.
With an experienced and professional team of lawyers and aides in your corner, your rights can be successfully represented against insurance companies.
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