Once a person enters into a settlement agreement it will be difficult, absent bad faith on behalf of the insurer, to rescind the agreement.
The Plaintiff sued her insurer for accident benefits and sought to rescind a settlement agreement that she had entered into with it. Her insurer applied for summary judgment. The Court granted the application and held that the insurer had not acted in bad faith.
Perri v. Kingsway General Insurance Co., [2009] O.J. No. 2451, June 11, 2009, Ontario Superior Court of Justice, J.A. Ramsay J.
After the Plaintiff was involved in a motor vehicle accident she sought accident benefits from her insurer for injuries to her arm and shoulder. She was paid a small amount of housekeeping and attendant care expenses. There was no claim for loss of income or for medical or rehabilitation expenses. Her benefits were cut off when her insurer received an assessment from a kinesiologist. The insurer subsequently offered to settle the claim for $1000. The Plaintiff accepted and signed a settlement agreement drafted by the insurer as well as a disclosure form.
The Plaintiff subsequently returned to work and her pain flared up again. She began massage therapy at her own expense. She then sought to rescind the settlement agreement and filed a claim against her insurer. She did so on the basis that the form did not comply with regulations under the Insurance Act, R.S.O. 1990, c. I-8 because it did not set out the commuted value for medical or rehabilitation benefits. The regulation required that the commuted value be set out for any “lump sum” benefits. The Court held that in this case rehabilitation and medical expenses had not been claimed and therefore the insurers disclosure was sufficient to comply with the regulation.
The Plaintiff also alleged that the insurer acted in bad faith. The Court held that the settlement agreement was sufficiently clear and provided the Plaintiff with all the information that she needed to make an informed decision. The insurer had not acted in bad faith in drafting the agreement, which also had a clause which advised her to get independent legal advice. The insurer was not required to set out the amounts for medical and rehabilitation expenses that had not yet been claimed.
This case was originally summarized by Kim Yee and originally edited by David W. Pilley.
