The recent Ontario Superior Court of Justice decision in Usanovic v. La Capitale Life Insurance Company clarifies the issue of discoverability in long-term disability claims. In this case, the plaintiff was injured in September 2007. The disability insurer paid benefits for a number of years. In January 2012, counsel for the defendant wrote the plaintiff a denial letter advising that his benefits would be terminated as of November 2011, and that if he disagreed, he should submit medical reports to support his claim within 60 days of receipt of the letter. In February 2012, the plaintiff left a message with the defendant “expressing his displeasure” with the termination of benefits. The next day, a representative of the defendant returned the plaintiff’s call and advised him that if he wanted to appeal the decision, he would need to submit a written appeal and new medical evidence. The next communication from the plaintiff did not occur until February 2015, when the defendant received a notice of appeal from the plaintiff’s lawyer, and Statement of Claim issued in April 2015.
The defendant brought a summary judgment motion claiming that the limitation period to dispute the termination had passed, and relying on the 2-year limitation period in the Limitations Act, 2002. The defendant argued that the denial letter of January 2012 was clear notice to the plaintiff, and that the limitation period started to run on that date. The defendant submitted that neither the invitation to appeal, nor the bringing of an appeal stops or delays the limitation period.
The plaintiff argued that because the denial letter stated that further information and medicals could be provided, it did not represent a clear denial of his benefits. The plaintiff submitted that the limitation period did not begin to run until the plaintiff discovered the existence of the claim in March 2015, when the defendant provided a response to the plaintiff’s appeal of February 2015. The plaintiff submitted that the defendant owed a duty of good faith to provide him with clear notice of the limitation period.
The Court found that the defendant’s denial letter represented a clear denial of benefits, and the 2-year limitation period commenced upon the plaintiff’s receipt of the denial letter in January 2012. Finally, the Court held that there was no obligation on the defendant to advise the plaintiff of the applicable limitation period in the Limitations Act, 2002.
The defendant’s motion for summary judgment was granted, and the action was dismissed. This case emphasizes that, in long-term disability claims, the date of discoverability is the date on which an individual is made aware of the denial of benefits, even where there are still options available to the plaintiff to dispute that denial.