A recent Ontario Court of Appeal case had to determine whether an employee was entitled to disability benefits from a former employer when he had only discovered the extent of his injury after leaving his employment.
The employee had worked for the employer since 1996, beginning as a junior sales representative and eventually becoming a sales vice president, managing over 130 sales representatives.
However, the employee suffered a traumatic brain injury and a severe back injury during a company sponsored event in Costa Rica in April 2005. Following his accident, the employee was off work for nearly four months and returned to work in August 2005.
After his return, his work performance deteriorated dramatically from what it had been. As a result, his responsibilities were continuously reduced and in frustration he quit his job on August 11, 2008.
Within days he took up employment with another company in a similar position. However, he continued to experience difficulties and was fired a year later. It was only around this time that he discovered that the accident in Costa Rica had actually caused a permanent and disabling brain injury.
He asked his second employer about making a long term disability claim but was told that, because his injury occurred when he was working for the former employer, he would have to apply under that policy.
On September 9, 2010 the employee applied for long term disability benefits with his former employer’s insurance company and provided proof of claim. On November 1, 2010 the insurance company denied his claim.
There was no issue that the employee had coverage while he was employed. The insurance company argued however, that:
“He had access to [Long Term Disability] benefits if he applied while he was employed and, therefore, covered. Once he was outside of this coverage and/or failed to meet the Policy’s terms, he no longer had entitlement to claim”; and that “[t]he policy indicates that coverage ends when employment ends.”
On April 11, 2011 the employee commenced a court proceeding.
The trial judge accepted the insurer’s argument. She concluded that the policy “states in clear terms that there is no coverage for persons who are not employed by [the employer].”
The employee appealed the decision.
The three issues raised on appeal were:
(1) whether the employee, as a former employee of the employer, was entitled to coverage under the insurance company’s policy;
(2) whether the employee submitted a timely proof of claim; and
(3) whether the one-year contractual limitation period in the policy bars the employee’s claim.
Court of Appeal Decision
On the first issue, the court noted that the insurance policy stated:
“A Monthly Benefit will be paid if you become Totally Disabled while covered under the Long Term Disability Coverage and are under the continuing care of a physician.”
The court found that the language of this provision confirmed the entitlement to be paid a monthly benefit if the total disability occurred during the coverage period and that it contained no language indicating that it applied only to current employees. The court concluded:
“The [insurance] Policy does not contain the type of exclusionary language that terminates coverage for undiscovered disability claims the employee had and that originated during their employment, when their employment ceases. To so conclude would leave former employees, like the [employee], in the untenable position of having no disability coverage from either their former employer or any new employer. Such a result would be contrary to the very purpose of disability insurance and the plain meaning of the coverage provision.”
As a result, the court found that the employee was covered under the insurance policy.
On the second issue, the court also sided with the employee. Despite the fact that the employee missed the filing deadline by 10 days, the court stated:
“It would be most unfair, in my view, to permit the imperfect compliance with the 90-day contractual period to defeat the [employee]’s claim in the particular circumstances of this case. The [employee] was injured during his employment when he was covered by a Long Term Disability policy, but did not appreciate the significance of his injury during his employment. […] The [employee] left his employment sometime after he was injured but before he was aware of the extent of his injury. The imperfect compliance with the requirement to file the proof of claim form may only be a matter of 10 days at most. His employer and the insurer were aware that he had suffered a serious injury that included a brain injury at the outset. All of the foregoing facts have been known to the parties for years now.”
Finally, the court found that the employee had filed his claim within the contractual period due to the timing of the injury’s discovery.
As a result, the court allowed the appeal, finding the employee was entitled to the disability benefits under the former employer’s insurance policy.
The insurance company appealed to the Supreme Court of Canada, which refused the leave to appeal.
At Campbell Litigation, our Waterloo-based disability claims lawyers will act as your advocates to help you claim the money and other benefits you are entitled to receive from disability insurance plans.
At Campbell Litigation, we know that having your claim denied can cause you stress and emotional strain. Hiring a lawyer to act on your behalf can not only get you the benefits you need, but it can also take the burden of dealing with government and private bureaucracies out of your hands. If we take on your case, we will work to get you what you need to get on with your life.
If you have been denied disability benefits, there are appeal procedures you can take advantage of. A lawyer can advise as to whether an appeal is feasible in your case. To speak with a member of our firm, call us at 519-886-1204 or contact us online. We offer prospective disability benefits clients a free initial consultation.