Accident and Sickness Insurance - Policies and Insurance Contracts - Rights and Duties of Insurer - Limitation of Actions - Statutory Provisions - Bad Faith; Practice - Summary Judgments, Availability
An insurer's application for summary judgment was dismissed as the court could not determine the limitation period for a claim alleging bad faith.
 N.B.J. No. 309
2013 NBQB 327
New Brunswick Court of Queen's Bench
P.C. Garnett J.
October 4, 2013
The insured was covered under his employer's group insurance policy with the insurer. The insurer denied the insured's application for short term and long term disability benefits. The insured commenced an action alleging bad faith and claiming, among other relief, for short term and long term disability benefits, and a declaration for entitlement to future benefits. The insurer took the position the insured was not entitled to any benefits and that his claim was barred by operation of the limitation period set out in s. 168 of the Insurance Act, R.S.N.B. 1973., c-I-12.
The insurer applied for summary judgment on the basis that the claim was statute barred by s. 168. The insured took the position that his claim for damages for bad faith is a claim in tort and is not covered by a statutory limitation period relating to claims under the policy.
The court held that, even if the limitation period was six years as argued by the insured, it would still have to determine the issue of when it operated. The allegation that the insurer's failure to alert the insured of the limitation period constituted bad faith raised the issue of whether that was a continuing failure and, if it was, when should the insured have reasonably been expected to discover it. The court held these questions could not be answered in a motion for summary judgment as it was not possible to determine whether the insurer was guilty of bad faith.