Fraser v. Fenchurch General Insurance Company (2022), ONSC 6222

long term care

In a judge-alone trial decision released on November 2, 2022, Justice Leibovich ruled in favor of the plaintiff, Ms. Fraser, who had her long term disability (LTD) claim denied by the defendant insurer. The defendant failed to conduct a psychiatric assessment despite the recommendation of the independent medical assessor. As a result, Justice Leibovich awarded the plaintiff $150,000 in punitive damages and $10,000 in aggravated damages.

The only issue at trial was extra-contractual damages. Ms. Fraser stopped working in March of 2017 due to severe pain resulting from fibromyalgia, heart attack, and knee surgery. Although an independent medical assessor found nothing physically preventing Ms. Fraser from returning to work, the assessor recommended a psychiatric assessment to determine if Ms. Fraser had psychological impairments. The defendant denied Ms. Fraser's claim without conducting the assessment, claiming that there was no evidence of a mental illness disorder.

After initiating the action, both sides retained psychiatric experts who agreed that Ms. Fraser could not return to work. The plaintiff's expert diagnosed her with psychological impairments related to fibromyalgia, while the defendant's expert's report was consistent with the plaintiff's.

In September of 2020, the defendant granted the plaintiff long term disability benefits retroactively, but the plaintiff maintained the action, claiming bad faith on four grounds. The defendant countered that it acted in good faith and had no obligation to follow the advice of the independent medical examiner.

Justice Leibovich dismissed three of the plaintiff's arguments but found in favor of the plaintiff on the fourth ground, where the defendant ignored the recommendation of the independent medical assessor to conduct a psychiatric evaluation. Justice Leibovich found that the defendant's choice not to obtain a psychiatric assessment was "high-handed" and "designed to take advantage of Mrs. Fraser's vulnerable state and to avoid paying the claim." Justice Leibovich awarded the plaintiff $150,000 in punitive damages and $10,000 in aggravated damages.

In conclusion, Justice Leibovich ruled that the defendant acted unreasonably by ignoring the recommendation of the independent medical assessor and not conducting a psychiatric assessment. The defendant's conduct was "high-handed," and the plaintiff was entitled to punitive damages.

If you are dealing with a LTD claim, it is important to speak with an experienced lawyer as soon as possible. Please contact our team at JEWELL RADIMISIS JORGE LLP for a free initial consultation at (800) 715-1082.

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