Smith v. Sun Life 2021 ONSC 7109 (CanLII)
The Ontario Court granted the Plaintiff relief from forfeiture for failing to submit a formal Long Term Disability (LTD) application and dismissed Sun Life’s motion for summary judgment to dismiss the Plaintiff’s claim.
Key Facts and timing in Smith
The Plaintiff was approved for Short Term Disability (STD) benefits under the same Policy through his employer with Sun Life. The Plaintiff was participating in an approved gradual return to work (GRTW) plan when he was unable to continue working and submitted another STD claim. The Plaintiff’s STD benefits were declined at first review and then upon appeal. The time to submit an LTD application was less than a month after the STD benefits were denied. The Plaintiff sued Sun Life about two months after the STD denial.
Wiles v. Sun Life 2018 ONSC 1090 (Can LII) (appeal dismissed 2018 ONCA 766 (CanLII)
In Wiles, Sun Life was successful in their motion for summary judgment to dismiss the Plaintiff’s claim for salary continuance and LTD benefits. Sun Life was the administrator of a Salary Continuance Service for the Employer as well as the insurer for LTD benefits. The Plaintiff claimed disability in 2015, after she was terminated by her Employer without cause. She submitted Salary Continuance forms in December of 2015. An attending physician’s statement (APS) was requested by Sun Life and not submitted. The Claim was closed in February of 2016 for failure to submit an APS. A Statement of Claim was issued in January of 2017 only against Sun Life for breach of a group Disability Policy. The motion for summary judgment was served in May of 2017, an attending physician’s statement and LTD claim was served in July of 2017 and the Statement of Claim was amended to include LTD benefits in September of 2017.
The court found that:
- The Plaintiff did not submit a claim for LTD benefits until May 2017.
- The LTD claim was not completed until July 2017, when the Plaintiff’s lawyer submitted an APS.
- The Plaintiff was aware of the distinction between Salary Continuance Services and LTD benefits in November of 2015.
- There was no explanation why the forms were not submitted in a timely manner.
- There was no explanation why a claim for LTD benefits was not made within the time limits as set out in the insurance Policy.
Non-Compliance vs. Imperfect Compliance
The transition between STD and LTD can trigger procedural issues if there is a denial at the STD stage and the claim does not officially transition into LTD benefits. It can be even more complicated if there are different carriers for the STD and LTD benefits. Many contracts provide that LTD benefits are only available once STD benefits are paid in full, but as seen in the Smith case, the Courts was unwilling to find that a separate process was necessary, when the Plaintiff’s disability had been adjudicated for STD benefits and little time had passed, which would result in the Plaintiff being barred from further benefits due to a procedural failure. Although the courts have often chosen the two year statutory limitation period over any shorter contractual period, one of the larger differences between these cases is the unexplained delay in Wiles, of almost two years before the insurer had the documents to assess the disability claim, compared to Smith, where the insurer had already made an initial assessment of the claim when the LTD period arose.