Judge Rejects NEB Claim; Plaintiff Qualified for IRBs

August 4, 2011

The Superior Court has released an interesting summary judgment decision about whether a claimant who was employed at the time of the accident – but not necessarily disabled from returning to work – could still qualify for a non-earner benefit under the SABS.

In Galdamez v. Allstate, the plaintiff was struck and injured by a motor vehicle on October 26, 2002. The parties agreed that at the time of the accident, she was employed at a supermarket. In the four weeks preceding the accident, she earned a total of $1167.26. They also agreed that as a result of the accident, the plaintiff missed one day of work, and then continued working until January 19, 2004, when she took maternity leave. She never returned to work. She would have received maternity benefits for some period of time, but the parties do not know how much and for just how long.

The plaintiff applied for income replacement benefits and was denied on the basis that she had only missed one day of work. She sued Allstate over the income replacement benefits issue. That action is set for trial in November 2011. In 2009, the plaintiff wrote to the Allstate  to apply for non-earner benefits. When they were denied, she instituted the present action.

Allstate then moved for summary judgment, arguing that the claimant was not entitled to receive non-earner benefits because she “qualified” for income replacement benefits.

The issue turned on the wording in paragraph 1 of section 4(1) and section 12 in the old SABS:

4.  (1)  The insurer shall pay an insured person who sustains an impairment as a result of an accident an income replacement benefit if the insured person meets any of the following qualifications:

1. The insured person was employed at the time of the accident and, as a result of and within 104 weeks after the accident, suffers a substantial inability to perform the essential tasks of that employment.

 . . .

 12.  (1)  The insurer shall pay an insured person who sustains an impairment as a result of an accident a non-earner benefit if the insured person meets any of the following qualifications:

1. The insured person suffers a complete inability to carry on a normal life as a result of and within 104 weeks after the accident and does not qualify for an income replacement benefit. [emphasis added]

The plaintiff argued that there are two components to qualifying for income replacement benefits: Firstly, the claimant must be employed. Secondly, the claimant must meet the disability test.

She argued that although she was employed at the time of the accident, there was still a live issue as to whether she was disabled from working. Therefore, she claimed that until that issue was resolved (at the upcoming trial), she did not “qualify” for income replacement benefits. It followed, she asserted, that she could maintain a claim for non-earner benefits.

Mr. Justice Ramsay disagreed and dismissed the plaintiff’s action.

He found that it was more consonant with the scheme of the SABS to interpret clause 1 under section 12(1) to say that a person who was employed at the time of the accident does not qualify for non-earner benefits, regardless of whether he or she meets the disability requirement.

The judge found that this would not leave a gap in access to benefits. He noted that a person who was employed at the time of the accident would be entitled to income replacement benefits if a certain level of disability was established. A person who was not employed would be entitled to non-earner benefits if a higher level of disability was established. There would be no situation in which a person who was employed at the time of the accident could be so disabled as to qualify for non-earner benefits, but not income replacement benefits.

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