Schmitz et al. v. Lombard General Insurance Co. of Canada, 2014 ONCA 88
| Judge | Hoy, A.C.J.O., Cronk and Epstein, JJ.A. |
| Court | Court of Appeal (Ontario) |
| Case Date | January 16, 2014 |
| Jurisdiction | Ontario |
| Citations | 2014 ONCA 88;(2014), 315 O.A.C. 187 (CA) |
Schmitz v. Lombard Ins. (2014), 315 O.A.C. 187 (CA)
MLB headnote and full text
Temp. Cite: [2014] O.A.C. TBEd. FE.014
Eckhart Schmitz, Louise Darling and Erika Schmitz and Kristian Schmitz by their litigation guardian, Louise Darling (plaintiffs/respondents) v. Lombard General Insurance Company of Canada (defendant/appellant)
(C56587; 2014 ONCA 88)
Indexed As: Schmitz et al. v. Lombard General Insurance Co. of Canada
Ontario Court of Appeal
Hoy, A.C.J.O., Cronk and Epstein, JJ.A.
February 4, 2014.
Summary:
Schmitz was hit by a vehicle being driven by Bakonyi in July 2006. In June 2007, Schmitz sued Bakonyi for damages in excess of $1,000,000 for injuries that he sustained in the accident. In June 2010, Bakonyi's automobile insurance coverage was limited to $1,000,000. Schmitz therefore brought an action against his own insurance company (Lombard) for indemnity under the underinsured motorist provisions (OPCF 44R) of his policy. Schmitz brought a motion to have a question of law determined before trial. At issue was (1) whether the 12 month limitation period in s. 17 of the OPCF 44R was displaced by the two year limitation period in s. 4 of the Limitations Act, 2002, and (2) when the limitation period began to run in respect of claims for underinsurance coverage pursuant to the OPCF 44R.
The Ontario Superior Court ruled that the two year limitation period in s. 4 of the Act began to run when a claimant made a request for compensation provided by the OPCF 44R. Lombard appealed.
The Ontario Court of Appeal dismissed the appeal.
Insurance - Topic 4112
Automobile insurance - Uninsured or underinsured motorist coverage - Limitation period - In July 2006, Schmitz was injured in a motor vehicle accident allegedly caused by Bakonyi - In June 2007, Schmitz sued Bakonyi for damages in excess of $1,000,000 - In June 2010, Bakonyi's automobile insurance coverage was limited to $1,000,000 - Schmitz therefore brought an action against his own insurer (Lombard) for indemnity under the underinsured motorist provisions (OPCF 44R) of his policy - Schmitz moved to have a question of law determined before trial - At issue was (1) whether the 12 month limitation period in s. 17 of the OPCF 44R was displaced by the two year limitation period in s. 4 of the Limitations Act, 2002, and (2) when the limitation period began to run in respect of claims under the OPCF 44R - The motion judge ruled that the two year limitation period in s. 4 of the Act began to run when a claimant made a request for compensation provided by the OPCF 44R - He reasoned that this commencement date met the requirement in ss. 5(1)(ii) and (iii) of the Act that the loss be "caused" by the "omission" of Lombard - Lombard appealed - Lombard accepted that the applicable limitation period was governed by the Act, but argued that the definition of discoverability in s. 17 of the OPCF 44R applied rather than that set out in s. 5 of the Act - The Ontario Court of Appeal rejected this argument - As a matter of statutory interpretation, once it was acknowledged that s. 4 of the Act applied, so too did s. 5 - The two provisions had to be read together to determine the commencement date of the limitation period provided for under s. 4 - A claimant suffered a loss "caused by" the insurer's omission in failing to satisfy a claim for indemnity the day after the demand for indemnification was made - This interpretation did not prejudice underinsurers - There were a number of ways that they could protect their interests, including those provided for in s. 14 of the OPCF 44R and through a provision requiring the insured to provide timely notice to the insurer when he knew or ought to have known he was underinsured - See paragraphs 15 to 21.
Insurance - Topic 4112
Automobile insurance - Uninsured or underinsured motorist coverage - Limitation period - In July 2006, Schmitz was injured in a motor vehicle accident allegedly caused by Bakonyi - In June 2007, Schmitz sued Bakonyi for damages in excess of $1,000,000 - In June 2010, Bakonyi's automobile insurance coverage was limited to $1,000,000 - Schmitz therefore brought an action against his own insurer (Lombard) for indemnity under the underinsured motorist provisions (OPCF 44R) of his policy - Schmitz moved to have a question of law determined before trial - At issue was (1) whether the 12 month limitation period in s. 17 of the OPCF 44R was displaced by the two year limitation period in s. 4 of the Limitations Act, 2002, and (2) when the limitation period began to run in respect of claims under the OPCF 44R - The motion judge ruled that the two year limitation period in s. 4 of the Act began to run when a claimant made a request for compensation provided by the OPCF 44R - He reasoned that this commencement date met the requirement in ss. 5(1)(ii) and (iii) of the Act that the loss be "caused" by the "omission" of Lombard - Lombard appealed - Lombard argued that if s. 5 of the Act was the operative discoverability provision, on proper application of s. 5 to the unique circumstances involving claims under the OPCF 44R, the limitation period started to run when a claimant had accumulated a body of evidence that would permit him a reasonable chance of persuading a judge that his claims would exceed the limits of his policy - The Ontario Court of Appeal rejected this argument - Starting the limitation period with reference to when the demand for indemnification was made did not limit when that demand could or should have been made - The motion judge's order was amended to provide that the limitation period started to run the day after the demand for indemnity was made - The limitation period did not start to run when the demand for indemnity was made as a default had to occur first - See paragraphs 22 to 26.
Limitation of Actions - Topic 15
General principles - Discoverability rule - Application of - [See both Insurance - Topic 4112 ].
Limitation of Actions - Topic 2344
Actions in contract - Contract of indemnity - When time begins to run - [See both Insurance - Topic 4112 ].
Cases Noticed:
Markel Insurance Co. of Canada v. ING Insurance Co. of Canada - see Federation Insurance Co. of Canada v. Markel Insurance Co. of Canada.
Federation Insurance Co. of Canada v. Markel Insurance Co. of Canada (2012), 290 O.A.C. 75; 109 O.R.(3d) 652; 2012 ONCA 218, folld. [para. 7].
Counsel:
William S. Chalmers and Roseanna R. Ansell-Vaughan, for the appellant;
William S. Zener, for the respondents.
This appeal was heard on January 16, 2014, before Hoy, A.C.J.O., Cronk and Epstein, JJ.A., of the Ontario Court of Appeal. The following endorsement was delivered by the court on February 4, 2014.
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