Stahle appealed the January 13, 2022 decision of Madame Justice Walters
The Appeal was heard on February 14, 2023. The appeal was allowed, and a new trial was ordered for the Superior Court to reconsider if Soave qualified for LTD benefits.
Facts:
- Roberto Soave began working for Stahale Construction Inc. as a site superintendent on October 7, 2013.
- He was eligible for the group benefit program that included long term disability benefits with Great West Life Assurance Company.
- On January 27, 2014 Soave advised Stahle that he needed time off for hernia surgery.
- Soave’s evidence was that Stahle approved this time off.
- Stahle’s evidence was that Soave refused to accept the next assignment offered to him.
- On February 5, 2014 Stahle issued a record of employment for a temporary leave due to medical illness.
- On March 13, 2014 Soave was injured in an MVA.
- After the accident Soave was advised by Stahale that his group benefits were not available to him as he had quit his job.
The Issues at Trial were as follows:
- Was Soave an Employee of Stahale on January 27, 2014?
Justice Walters found that Soave was an employee on both January 27, 2014 his last day of work and March 12, 2014, the date of the MVA. - Did Stahale Terminate Soave’s benefits:
Justice Walters found that Stahale retroactively terminated Soave’s benefits February 28, 2014. - Would Soave have been entitled to received Long Term Disability Benefits?
Justice Walters framed the question as “but for the termination, what benefits would Rob have received?” The GWL Policy was not before the court, but rather the “Mercon benefit plan” [I assume the employee benefit booklet] was entered into evidence. Justice Walters found that “According to the Mercon benefit plan, an individual seeking a temporary leave of absence due to disability can continue their benefits on a contribution basis (50 percent paid by each of the employer and the employee) as long as they are in receipt of long-term disability benefits for a period of two years. There is a 120-day waiting period with an additional 180-day period during which an employee can apply. I have accepted that Rob received his temporary medical leave on January 27, 2014. This would allow him until November 23, 2014 or 120 days, before which he would need to apply for long-term disability benefits.”
She then considered whether Soave would have met the test for LTD benefits as follows:
“In order to be considered disabled, you must be unable to perform the essential duties of your own occupation during the Qualifying Period and during the first two years immediately following the Qualifying Period. Thereafter, you will be considered to be disabled if you are unable to perform the essential duties of: any occupation for which you are qualified or may reasonably become qualified, by training, education or experience.”
It appears that the evidence before the court of Soave’s disability and application to GWL for LTD benefits was limited to Soave’s CPP application, Stahle’s employer statement to GWL, a letter from Stahle to GWL regarding the status of Soave’s employment and GWL’s denial letter dated June 6, 2016 which read:
“Under the provisions of this group plan, in order to be eligible for benefits an employee mush be considered actively at work. To satisfy this requirement, an employee must: 1) not be disabled according to the definition of disability under this plan’s disability income benefits, and 2) be either: a) actively working at the employer’s place of business or a place where the employer requires him to work; or; b) absent due to a period of scheduled vacation up to 4 weeks, weekends, statutory holidays, or shift variances.”
Based on the evidence presented and specifically the medical evidence in the CPP file, the trial Judge found that Soave met the definition of disability for LTD benefits and would continue to meet it until the age of 65.
The Ontario Court of appealed found as follows:
- ISSUE 1: The Trial Judge did not err in refusing to allow Stahle to introduce the Great West Life Insurance policy
It was noted that both parties had a copy of the policy but had only used the Mercon Booklet in all their dealings. The court of appeal found that there was no basis to interfere with the trial judge’s finding in refusing to admit the policy on the basis of trial fairness. - ISSUE 2: The Trial Judge did not err is giving no weight to the Great West Life letter;
*This painful negative is not a typo, nor is it my editing. The decision is otherwise very well written.
The appeal court held that the trial judge did not err in not considering GWL’s denial letter of June 6, 2016, as no context was provided to explain what information GWL relied on in their assessment. As noted above the GWL file was not produce and no witnesses from GWL were called. - ISSUE 3: The Trail Judge erred in finding that Mr. Soave was eligible for Long Term Disability Benefits.
The appeal court agreed that the trial judge failed to properly assess whether Soave met the eligibility requirements for receiving LTD benefits in her interpretations of the Mercon Booklet.
The appeal court noted the following provisions from the booklet:
- Coverage Effective Dates
Coverage for you and your dependents starts on the effective date of your employer joining the plan, or on the date that any waiting period ends, provided that you are actively at work on that date. [Emphasis added.] - Continuation of Coverage
If your employment is temporarily interrupted, under the following circumstances, your benefit coverage may be continued on a contribution basis. Please contact Mercon Benefit Services regarding the continuation of your benefits during any of the following periods of leave.
Leave of Absence: You may continue your benefits under this plan, with the exception of disability benefits, for up to six months during a leave of absence elected by you with your employer’s agreement. Prior to beginning the leave, you and your employer must agree to the scheduled start and finish dates.
Disability: You may continue your benefits while you are unable to work due to disability for up to 24 months from the date you become disabled. To be eligible for the continuation of benefits, you must either be in receipt of Workers’ Compensation or Long Term Disability benefits, or be approved for waiver of premium under the Employee Life Insurance benefit. [Emphasis added.]
“disability” is defined as follows:
In order to be considered disabled, you must be unable to perform the essential duties of your own occupation during the Qualifying Period and during the first two years immediately following the Qualifying Period. Thereafter, you will be considered to be disabled if you are unable to perform the essential duties of:
- any occupation for which you are qualified or may reasonably become qualified, by training, education or experience;
- any occupation for which you are receiving an income that is equal to or greater than the amount of monthly disability benefit payable under this provision, adjusted annually by the Consumer Price Index.
- any occupation for which you are qualified or may reasonably become qualified, by training, education or experience;
- You are not eligible to receive LTD benefits during any period that you are:
on a leave of absence during which you become totally disabled, unless your employer is required to pay benefits during this period as required by legislation, regulation or case law.
- Coverage Effective Dates
The appellate court held that the trial judge erred by failing to consider the provision for entitlement to LTD benefits rather than the provisions for continuation of coverage. They interpreted the booklet to provide that Soave could only be entitled to LTD benefits if he was disabled withing the meaning of the booklet on the date he stopped working or if he became totally disabled during his leave of absence and his employer was required by legislation, regulation, or case law to pay benefits during that period.
The appellate court’s comments were as follows:
- the Continuation of Coverage provisions in the booklet applied to health benefits and not LTD benefits due to the context of the wording.
- the Leave of Absence provision specifically excluded LTD benefits and did not address eligibility.
- The disability provision in the Continuation of Coverage section provides that an employee unable to work due to disability may continue their “benefits” for up to 24 months and eligibility for continuation depends on the employee already being in receipt of WCB or LTD benefits. Again, the court found that “benefits” in this provision applied to other benefits such as health, dental or life insurance benefits.
- The trial judge should have applied the provision that specifically addressed entitlement to LTD benefits rather than continuation of coverage, meaning that Mr. Soave would qualify for LTD benefits only if he was disabled within the meaning of the definition on the date he stopped working.
- The booklet specifically provides that an employee on a leave of absence is only entitled to LTD benefits if the employer is required to pay benefits by legislation, regulation or case law.
Take Away:
LTD cases do not often go to trial without representation from the Insurer. Employee benefit booklets are often verbatim of the policy between the employer and the insurer, but without evidence from the insurer on the policy and booklet wording, employers leave themselves open to the court’s interpretations of the contract they negotiated for their employee benefits. It is always helpful to have context for the provisions for continuation of benefits and eligibility as they are a reflection of the different risks and considerations associated with insuring individuals who are at work vs. individuals who are on leaves of absences. These situations are all considered in the negotiations when employers are building their employee benefit coverage.