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ACTIONS - Legislation - Summary judgments - Limitation periods

Monday, March 11, 2019 @ 9:39 AM  

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Motion by the defendant insurer for summary judgment to dismiss the plaintiffs’ action. Richards was an insured person under a policy of group insurance between his employer and the insurer. The insurer paid Richards long-term disability benefits from April 2010 until December 2011. In November 2011, the insurer advised Richards he no longer satisfied the policy’s definition of total disability and that his benefits would cease. The insurer’s Appeal Committee denied Richards’ appeal in 2012. Richards passed away in 2015. The plaintiffs, Richards’ children, claimed against the insurer for the denial of long-term disability benefits and for life insurance benefits pursuant to the same policy. They commenced their action in 2015. The policy contained a one-year limitation period from the date on which the cause of action arose.

HELD: Motion allowed. Sections 206 and 209 of the Insurance Act were applicable to the claim for disability insurance, as a subset of life insurance. The event on which the insurance was allegedly payable was the denial or termination of benefits. The one-year limitation period in s. 209 was applicable. Section 209 constituted the “former limitation period” referred to in s. 23 of the Limitations of Actions Act. That limitation period applied and had expired in March 2013, one year after the insurer denied benefits. The insurer’s letter was a clear and unequivocal denial of future benefits. Section 19 of the Limitations of Actions Act was not applicable to the claim. Since Richards’ claim for additional disability benefits was time-barred, any rights he had to return to the status of a participant necessary for his beneficiaries to receive life insurance proceeds were also time-barred. The limitation period for the bad faith claim was triggered by the denial of further benefits and was statute-barred. The failure to commence the action within the limitation period constituted non-compliance with the contract and was not subject to relief from forfeiture.

Richards Estate v. Industrial Alliance Insurance and Financial Services, [2019] N.S.J. No. 42, Nova Scotia Supreme Court, A.E. Smith J., February 5, 2019. Digest No. TLD-March112019001