Some appellate clarity on the issue on non-earner benefit is now emerging some two years after the confusion arising from the appellate decision in Galdamez v. Allstate.
In Sietzema v. Economical, the Court of Appeal dismissed the insured’s appeal of the summary judgment dismissal of her claim for non-earner benefits as statute barred by the two-year limitation period. In its unanimous February 11, 2014 decision, the appellate court emphasized that one of the primary purposes of the Statutory Accident Benefits (SABS) regime is the need for the timely submission and resolution of accident benefit disputes.
The accident occurred on November 11, 2005. An Explanation of Benefits (OCF-9) on December 19, 2005 stated that the claimant was not eligible for non-earner benefits as she was employed at the time of the accident. The Appellant issued a claim for non-earner benefits over 5 years later, on April 14, 2011, far beyond the two-year refusal to pay limitation period.
The Appellant argued that the limitation period did not commence as the insurer gave incorrect reasons for her ineligibility for non-earner benefits. As a result of the insurer’s error, she did not apply for non-earner benefits when the insurer terminated her income replacement benefits, at which time the insurer ought to have also told her that she may be eligible for the non-earner benefit. However, the Court of Appeal found that the insurer provided the insured with the appropriate information to claim benefits and correctly stated the non-earner test as it was then understood in 2005, when it was generally assumed that employment at the time of the accident precluded receipt of non-earner benefits. There was also no requirement in the legislation for an insurer to advise a claimant that they may have a right to revive a claim that was previously denied.
The Court of Appeal applied another appellate decision, Turner v. State Farm, wherein clear and unequivocal notice given by the Insurer cancelling benefits is sufficient to trigger the limitation period notwithstanding that the Insurer gives legally incorrect reasons. If the Appellant’s position was correct then the limitation period would never begin to run.
Of note, the court appeared to give implicit approval of two other lower court decisions on the same issue in Katanic v. State Farm Mutual Automobile Insurance Company and Sagan v. Dominion General Insurance; both of which are also the subject of appeals still to be heard.