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Reprinted from the Insurance Brokers Association of Alberta’s magazine – The Alberta Broker (August/September 2019)

The Case

In Greenidge v Allstate Insurance Company,[1] the insured, Jenine Greenidge (“Ms. Greenidge”), sued her insurer, Allstate Insurance Company (“Allstate”), after Allstate terminated Ms. Greenidge’s Section B accident benefits under Alberta’s Standard Automobile Policy SPF No. 1 (“SPF No. 1”).  Following a motor vehicle accident in which Ms. Greenidge suffered whiplash and temporomandibular joint (“TMJ”) injuries, Ms. Greenidge had made a claim under Section B of the SPF No. 1, and initially, Allstate made payments to Ms. Greenidge for her claim.  However, when Allstate requested that Ms. Greenidge attend an independent medical examination, Ms. Greenidge refused to do so unless she could video-record the examination.  Allstate’s chosen examiner’s policy was not to permit the recording of evaluations, and when Ms. Greenidge insisted, Allstate ceased to provide further benefits on the basis that Ms. Greenidge had breached her policy.

The parties agreed to put certain key questions before the Court in a ‘trial of issues’.  Justice Neilson heard the matter at the Alberta Court of Queen’s Bench, and he considered whether Ms. Greenidge’s refusal to attend an examination without a videographer justified Allstate’s discontinuance of benefits and whether Allstate should have accommodated Ms. Greenidge’s request.

The Law

At the center of the dispute was the wording of Special Provisions 4 and 6(b) of Section B of the SPF No. 1.  These provisions, like all of Section B, are prescribed by the Automobile Accident Insurance Benefits Regulations[2] to the Insurance Act.[3]  The provisions read as follows:

(4)  Medical Reports – Subject to provision (4.1), the Insurer has the right and the claimant shall afford to a duly qualified medical practitioner named by the Insurer an opportunity to examine the person of the insured’s person when and as often as it reasonably requires while the claim is pending, and also, in the case of the death of the insured person, to make an autopsy subject to the law relating to autopsies.

(6)  When Moneys Payable –

… (b)   No person shall bring an action to recover the amount of a claim under this section unless the requirements of provisions (3) and (4) are complied with, nor until the amount of the loss has been ascertained as provided in this section.

Justice Neilson began his analysis with a review of basic principles.  First, he acknowledged that insurance contracts are contracts of uberrima fides—that is, contracts of utmost good faith—because of the vulnerability that each party has to the other: insurers rely on insureds to provide all material information relevant to risk and loss, and insureds rely on insurers as the ones that ultimately hold the purse strings.[4]  Pursuant to their implied obligation of utmost good faith, insurers must “act both promptly and fairly when investigating, assessing and attempting to resolve claims made by [their] insureds”.[5]  However, this duty of good faith cannot be construed as an obligation to pay on every claim that the insured makes; rather, the duty simply requires that, when refusing payment, insurers do so with “reasonable justification”.[6]  An insurer could breach its duty by demonstrating a bias in its selection and use of experts or by placing unjustified conditions on the payment of benefits.[7]

Next, Justice Neilson reviewed the law on the interpretation of insurance policies as recently summarized by the Alberta Court of Appeal in Cardinal v Alberta Motor Association Insurance Co.[8]  In that case, the Court of Appeal had specifically stated:

If the language of an insurance policy, when read as a whole, is unambiguous, effect should be given to the clear language…  An ambiguity requiring the use of rules of construction must be real. That is, the words of the provision must be reasonably capable of more than one meaning having regard to the entire context of the provision.

An ambiguity cannot be created by external means such as reading in an element not present on a plain reading of the provision. As there is no ambiguity, there is no need to resort to interpretation rules such as the reasonable expectations of the parties or contra proferentem to construe the insuring agreements. It is normal for insurance policies to contain exclusions and the fact that some claims are thereby removed from coverage does not, in itself, give rise to unfairness. …

Applying these principles to Section B, Justice Neilson found that Special Provision 4 gave an insurer the right to have the insured attend a medical examination by a practitioner of its choosing, and correspondingly, the insured must afford that practitioner an opportunity to examine the insured.[9]  Nothing in Section B restricted the insurer’s choice of practitioner or the manner in which the practitioner conducts their examination.[10]  In this case, Justice Neilson found nothing unfair about insisting that Ms. Greenidge undergo an examination according to the protocol of the examiner selected by Allstate.  Special Provision 4 of Section B was unambiguous.[11]  As such, Allstate’s position on video-recording the examination was “reasonably justified”.[12] 

Furthermore, Allstate had not acted unfairly in discontinuing benefits.  Since Allstate’s policy on video-recording the examination was reasonably justified and Ms. Greenidge had refused to attend the mandatory examination, Allstate was also reasonably justified in denying coverage.[13]

Justice Neilson also distinguished medical examinations under Section B from those undertaken in the context of litigation and the Alberta Rules of Court[14] and, in particular, Rule 5.42(1)(b).  Under Rule 5.42(1)(b), a person being examined may indeed elect to video-record the exam, as Ms. Greenidge intended.  However, Justice Neilson found that it was inappropriate to import the Rules of Court into Section B where the legislature, in drafting Section B, had not demonstrated any intention to do so.

Finally, Justice Neilson found that Special Provision 6(b) was also unambiguous and that, unless an insured had complied with Special Provision 4, the insured could not bring an action to recover ‘the amount of a claim’.[15]  Special Provision 6(b) did not permit an insured to distinguish between ‘subclaims’ for specific injuries, and as such, even if Ms. Greenidge’s non-compliance with Special Provision 4 related only to an examination for her whiplash injuries, she was nevertheless barred for an action related to her TMJ injuries, since all were part of the same ‘claim’.[16]

On appeal, Ms. Greenidge argued that Justice Neilson erred in finding that Special Provision 4 mandated the insured’s attendance at the examination.  Rather, she argued, she had discharged her obligation to “afford an opportunity” to be examined by being willing to attend if the examination was video-recorded.  The Court of Appeal unanimously disagreed, holding that the “practitioner must be allowed to conduct the examination in accordance with the practitioner’s protocol, otherwise the insurer’s right to select the practitioner may be nullified.  The insured is obliged to attend an examination by the practitioner selected by the insurer in accordance with the practitioner’s protocol”.[17]

The Take-Away

Like any contract, an insurance contract is premised upon a quid pro quo and a mutual exchange of obligations—a give and take.  Although our focus is often trained upon insurers as the gatekeepers to compensation, it is important not to lose sight of insureds’ responsibilities.  Where, as here, the insureds’ responsibilities are clear and plain, the courts will hold the insureds to account and not stray from the wording of the policy.  Greenidge confirms that insureds’ compensation is not unconditional: if they fail to comply with clearly-stated policy conditions for coverage, insurers, acting with reasonable justification, will have the right to deny or discontinue coverage.

For more information, please contact Sara Hart, David Cowley-Salegio or another member of Dentons’ Insurance group.

[1] 2018 ABQB 266 [Greenidge QB].

[2] Alta Reg 352/1972, as amended.

[3] RSA 2000, c I-3.

[4] Ibid at para 18.

[5] Ibid at para 20, citing 702535 Ontario Inc. v Non-Marine Underwriters, Lloyd’s London, England, 184 DLR (4th) 687, 2000 CarswellOnt 904 at para 27.

[6] Greenidge QB, supra note 1 at para 21.

[7] Ibid.

[8] 2018 ABCA 69.

[9] Greenidge QB, supra note 1 at para 24.

[10] Ibid at paras 25-26.

[11] Ibid at para 38.

[12] Ibid at para 28.

[13] Ibid at para 39.

[14] Alta Reg 390/1968.

[15] Greenidge QB, supra note 1 at para 42.

[16] Ibid at paras 43-45.

[17] Greenidge v Allstate Insurance Company, 2019 ABCA 52.