Earner Qualifies for Non-Earner Benefits

July 24, 2012

The Ontario Court of Appeal has held that a person employed (and earning) at the time of an accident could still be entitled to receive non-earner benefits under the SABS.

In Galdamez v. Allstate, the claimant was injured on October 26, 2002 when a car ran over her foot. Prior to the accident, she worked at a Fortino’s supermarket. According to Galdamez, she returned to work four days after the accident on modified duties and hours because she was unable to do any heavy lifting or complete her work-related tasks at her pre-accident levels. She says that she eventually left Fortino’s on January 19, 2004 and that she has not worked since that date.

Galdamez applied to the driver’s insurer for statutory accident benefits on November 8, 2002. On January 7, 2003, the insurer advised her that she “may be eligible for more than one weekly benefit.” The insurer requested that she select which benefit she wished to receive by completing an Election of Benefits form. Galdamez completed the form on January 15, 2003, indicating she wished to receive an income replacement benefit.

On January 28, 2003, the insurer informed Galdamez she was not eligible for income replacement benefits. The insurer explained that the Employer’s Confirmation of Income form indicated that she only missed one day of work as a result of the accident, and that, under s. 5(2)(a) of the 1996 SABS, no benefit is payable for the first week of disability. The insurer also noted that because Galdamez had elected income replacement benefits, she was not entitled to non-earner benefits.

After a failed attempt at mediation, Galdamez commenced an action against Allstate (which in 2005 accepted priority of her claims from the initial insurer) for breach of contract and failure to pay income replacement benefits. In its statement of defence, Allstate pleaded, among other things, that Galdamez did not, as a result of and within 104 weeks of the accident, suffer a substantial inability to perform the essential tasks of her employment. That action was scheduled for trial in November 2011.

In 2009, Ms. Galdamez wrote to Allstate and applied for a non-earner benefit arising from the 2002 accident. Allstate denied her request. After a failed mediation on the issue of non-earner benefits, Ms. Galdamez started the present action on December 16, 2010.

On a summary judgement motion, the judge dismissed the plaintiff’s action against Allstate. He concluded that because the appellant was employed at the time of the accident, she could not qualify for non-earner benefits regardless of whether or not she met the disability requirement.

The Court of Appeal disagreed. The Court held:

[I]t is clear from a plain reading of ss. 4 and 12 of the 1996 SABS that a claimant’s status as an employed person does not, in itself, establish that the claimant is ineligible for non-earner benefits. Moreover, I do not agree that the motion judge’s interpretation of these provisions is supported by the scheme of the 1996 SABS, or the purpose of these specific provisions. Instead, I conclude that such considerations support the opposite interpretation to the one he reached.

. . .

The language of s. 12(1)(1) is clear: an individual can only qualify for a non-earner benefit if he or she does not qualify for an income replacement benefit. However, the language of s. 4(1)(1) is equally clear. Employment status at the time of an accident is only one part of the test for qualifying for an income replacement benefit; a claimant must also demonstrate that he or she meets the relevant disability standard – namely, a substantial inability to perform the essential tasks of his or her employment.

This analysis would likely apply under the post-September 1, 2010 SABS too.

See Galdamez v. Allstate Insurance Company of Canada, 2012 ONCA 508.

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