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Case Study: Limitation periods under the uninsured motorist coverage provided by the OMPP

The case:
The plaintiff, Carole Caruso was injured in a collision with a vehicle owned by Blyzchyk on June 23, 1990, one day after the Ontario Motorist Protection Plan (OMPP) came into force. On October 24, Blyzchyk's insurer advised Caruso's solicitor Gent that Blyzchyk's policy had lapsed prior to the date of the accident. Gent issued a statement of claim for personal injuries against Blyzchyk on June 2, 1992. Blyzchyk was noted in default on September 22, 1993, but no judgment had been obtained against him as of the date of the appeal.

Gent died, and Gent's successor issued a statement of claim on behalf of Caruso on November 10, 1993, claiming declaratory relief against her own insurer, Guarantee Company of North America , regarding the uninsured and underinsured motorist coverages in her policy. Guarantee delivered a statement of defence alleging that Caruso's action was statute barred. When Caruso brought an application to strike out Guarantee's pleas that the action was out of time, the insurer moved for summary judgment against Caruso.

The court's decision:
Jenkins, J. held that Caruso's action for declaratory relief was statute barred, but also dismissed the insurer's motion for summary judgment. Both sides appealed.

LAWPRO became involved because if Guarantee's arguments concerning the limitation period had been accepted, the plaintiff's solicitor would have been liable for allowing the limitation period to expire.

The Court of Appeal held that the limitation period for an insured's declaratory action with respect to his or her entitlement to uninsured motorist coverage was two years from when the insured "knew or ought to have known" that the tortfeasor was uninsured. The Court of Appeal felt that the date on which Gent was advised that Blyzchyk's insurance had lapsed was not determinative. Perhaps the better trigger date was Blyzchyk's failure to defend the action. This was a triable issue.

The Court also held that even if the declaratory action were out of time, the insured could have an additional cause of action against the insurer arising from when the insured knew or should have known that his or her claim arising from the judgment against the tortfeasor would not be honored by the insurer. In effect, as long as the insureds sue either the tortfeasor or the insurer within two years of the accident, they will recover under their uninsured motorist coverage.

[Caruso v. The Guarantee Company of North America (1996) 31 O.R. (3d) 339]


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