Disability insurance - Policies and insurance contracts - Interpretation of policy - Total disability - Misrepresentation - Contra proferentum rule

Olfman v. RBC Life Insurance Co.

An action by an insured for disability benefits. The action was dismissed.

[2013] M.J. No. 203

2013 MBQB 142

Manitoba Court of Queen’s Bench

C. Suche J.

June 17, 2013

The plaintiff, who is a lawyer, purchased disability insurance in 1989 from a company which was assumed by the defendant. Once the plaintiff received the policy he noted that he would only be considered disabled if he was totally unable to work at his occupation. It also required that he be under the "regular and personal care" of a doctor - a phrase that was not defined, and which he found to be unclear. He decided to write a letter to the insurance company.

He received a letter in response dated September 13, 1989 which he says satisfied him that he now had the coverage that he wanted. In part, the letter stated: “It should be noted, however, that Total Disability benefits are payable while you are enable to perform the important duties of your occupation, and are under the care of a physician, even though you may be engaged in another occupation and earning an income from it.” The word “enable” was a typograhical error and should have been “unable”.

In 2009, the plaintiff suffered a heart attack that prevented him from working for several months. The defendant paid him benefits during the period he was off work. The plaintiff asserts that he continued to be entitled to benefits after his return to work because the defendant had amended the definition of total disability in the policy by the wording of the September 13, 1989 letter to him. He asserts that the letter eliminated the requirement that he be unable to perform the important duties of his occupation in order to be entitled to benefits.

The plaintiff’s action was dismissed. The court found that the insurer's 1989 letter did not amend the definition of “total disability” in the policy. The provisions of the policy indicated that an amendment could only be made in writing and must be signed by an officer of the company. These sections did not create any ambiguity and therefore the doctrine of contra proferentum did not apply.

The use of the word "enable" in the defendant's letter, rather than "unable", was a spelling or typographical error. It was objectively apparent, not only on a plain reading of the phrase, but also when the phrase was considered in light of the rest of the paragraph, and also in light of the provisions of the policy itself.

The claim of negligent misrepresentation was not made out since it was not reasonable for the plaintiff to rely on the word "enable" as it was obvious that the word was used in error. The facts of the case did not support a claim in error in substantialibus or on the basis that there was a collateral contract. The policy was not a “product” and therefore the plaintiff was not entitled to protection under the Consumer Protection Act.