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Automobile insurance - Compulsory government schemes - Uninsured or underinsured motorist coverage

Thursday, December 08, 2016 @ 7:00 PM  


Appeal by the plaintiff, Brugger, from dismissal of his action and from a counterclaim judgment in favour of the defendant, the IWA Forest Industry LTD Plan. The plaintiff was disabled in a 2001 automobile accident and received benefits under the defendant’s LTD insurance plan. He also received disability benefits from the ICBC calculated as a percentage of his gross earnings. In addition, the plaintiff received an ICBC settlement of $197,775 in satisfaction of his tort claim, plus $240,000 in underinsured motorist protection benefits. Payments under the defendant’s LTD Plan were conditional upon a reimbursement agreement in the event of an eventual settlement. The defendant sought repayment of $59,861 in LTD benefits pursuant to the LTD Plan and ceased payment of further benefits. The plaintiff commenced proceedings alleging wrongful termination of benefits. The defendant counterclaimed for payment under the reimbursement agreement. A summary trial judge concluded that the defendant was entitled to repayment of $40,383 plus interest. The plaintiff’s claim was dismissed. The plaintiff appealed.

HELD: Appeal allowed. The defendant and the chambers judge erred in determining the plaintiff’s obligation to repay benefits by considering no-fault benefits to be compensation paid by or on behalf of a person who caused the plaintiff’s disability. Such benefits were not properly included in the calculation, as they flowed from a statutory scheme of universal compulsory insurance rather than compensation from a tortfeasor within the scope of the defendant’s plan. However, the defendant did not err in adopting the underinsured motorist policy to account for ICBC’s wage indemnification deductions from the plaintiff’s compensation, or in applying the underinsured motorist factors as the last step in the calculation of the reimbursement obligation. Applying the policy with appropriate adjustments to remove the no-fault benefits from the calculation resulted in reduction of the plaintiff’s repayment obligation to $16,025. An order was substituted accordingly.