Manulife guilty of fraudulent concealment.

A judge of the Alberta Court of Queen’s Bench found The Manufacturers Life Insurance Company (“Manulife”) guilty of fraudulent concealment in Atchison v. Manufacturers Life Insurance Company. The trial judgment is found at: Atchison v Manulife, 2002 ABQB 1121. Ms. Atchison’s husband was covered by a group life insurance policy with Manulife. He applied and paid for “excess” life insurance, in addition to his group coverage. The excess policy was issued, with coverage effective one month prior to his death in a boating accident. Manulife paid the...

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ICBC punished for fraud allegation.

On September 18, 2015, a judge of the BC Supreme Court found that that unproven allegations of fraud can be used as a factor to minimize a successful party’s costs entitlement after beating a formal offer. In Gupta v. Doe the plaintiff was involved in three separate collisions and sued for damages.   At trial the plaintiff was awarded just over $43,000.  Priro to trial ICBC made several formal offers, the first at $90,000 and the last at $164,000.  Having beaten their formal offer by a considerable margin ICBC asked for post offer costs. The Court agreed that ICBC was entitled to post offer...

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Bad faith claim leads to broad disclosure obligations.

Shirley Wade suffered injuries as a result of a motor vehicle accident in 2005. In 2008, her insurer, the  Wawanesa Mutual Insurance Company, stopped paying her disability benefits. Wade started  a lawsuit for breach of contract and bad faith against Wawanesa. During the discovery of Wawanesa’s representative on the bad faith claim, counsel for Wawanesa refused four requests for information, as follows: 1. During the 5 years before Wawanesa terminated Wade’s benefits, provide the number of policy holders who received income replacement benefits like Wade, provide the average length of time...

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Appeal Court reduces punitive damages for bad faith.

On June 19, 2015, the Saskatchewan Court of Appeal reduced awards of extra-contractual damages made on March 21, 2013. The trial decision of a Justice of the Saskatchewan Court of Queen’s Bench assessed punitive damages totalling $5,000,000 against two insurers in a recent trial decision, Branco v. American Home Assurance et. al., 2013 SKQB 98. In rendering a decision in which he found the insurers’ treatment of the insured to be “calculated and abhorrent”, Justice Acton sent a message to all insurers doing business in Canada: “It is hoped that this award will gain the attention of the...

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Parties to a contract must be honest with each other.

In Bhasin v. Hrynew, 2014 SCC 71, the Supreme Court clearly stated that there is a duty to be honest in the performance of a contract. Mr. Bhasin, started an action after his relationship with Canadian American Financial Corp. (“Can-Am”) soured. Ultimately, Can-Am refused to renew the dealership agreement it had with Mr. Bhasin. Mr. Bhasin had acted as an enrollment director for Can-Am, which was in the business of marking education savings plans to investors (“ESPs”). Like all other enrollment directors associated with Can-Am, Mr. Bhasin acted like a small...

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Delaying LTD benefits may be bad faith.

On September 17, 2014, the British Columbia Supreme Court refused to summarily dismiss an insured’s claim against the insurer and adjuster for breach of contract and the duty of fairness and good faith; however, the insured’s claims against the adjuster for inducement of breach of contract and interference with contractual relations were dismissed. In Frank v. Kalokina, 2014 BCSC 1866, the insured’s application for long-term disability benefits was denied by the adjuster for five months after the time of her claim. The insured alleges that in denying her claim, the adjuster and the insurer...

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