McQueen v. Echelon General Insurance Company

McQueen v. Echelon General Insurance Company (2011) O.J. No. 4563 (Ont CA).

In McQueen, the Ontario Court of Appeal upheld a $25,000 award for mental distress to a plaintiff who was denied accidents benefits by her insurer.

 Background

The plaintiff, Janey McQueen sustained soft tissue injuries and psychological problems as a result of a January 31, 2004 motor vehicle collision.   Subsequent to the collision, the plaintiff applied for and was denied various accident benefits. 

In the course of denying the benefits the defendant, Echelon General Insurance Company ignored assessment reports favorable to the plaintiff (including one from its own expert), refused to pay for assessments recommended by its experts and failed to explain why some of the denied benefits were not reasonable or necessary.

 Superior Court of Justice

The plaintiff commenced an action for the denied benefits and for mental distress.  The plaintiff took the position that her psychological condition deteriorated as a result of the defendant’s conduct.

The court accepted the defendant’s position.  Harris J. found that one object of the insurance contract was to secure the plaintiff’s peace of mind and that it was within reasonable contemplation of the parties that a breach of the peace of mind promise would bring about mental distress.

Harris J. reiterated the Supreme Court’s holding in  Fidler v. Sun Life Assurance Co. Ltd., (2006) 2 S.C.R. 3[Fidler], stating that an insurer owes the duty at common law to act in good faith in all its dealings with the insured and has an added duty not to inflict unnecessary mental distress.

Harris J. awarded the plaintiff just under $20,000.00 in benefits and $25,000.00 for mental distress.

 Ontario Court of Appeal

The defendant appealed the decision.  It took the position that since the plaintiff was not a party to the insurance contract (her husband was the policyholder) she was   not entitled to claim damages for mental distress.  The defendant also attempted to distinguish McQueen from Fidler, arguing that Fidler pertained to a policy for long term disability benefits and not statutory accident benefits.

The appeal was denied.  The court upheld the mental distress award and concluded as follows:

 People purchase motor vehicle liability policies to protect themselves from financial and emotional stress and insecurity. An object of such contracts is to secure a psychological benefit that brought the prospect of mental distress upon breach within the reasonable contemplation of the parties at the time the contract was made (Fidler, at para. 56). As an insured person entitled to call on the policy, Ms. McQueen was entitled to that peace of mind and to damages when she suffered mental distress on breach.

Alexander Rozine is an Associate at D’Angela Fox Vanounou LLP, a plaintiff-side personal injury firm in Toronto.

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