Does a lawyer’s letter stating that his clients intend sue the recipient commence the applicable limitation period? Not necessarily.
In Naipaul v. State Farm Mutual Insurance Company, the plaintiffs had a motor vehicle accident in which one of the drivers was uninsured. The plaintiffs’ lawyer wrote to their insurer, the defendant, to advise that they would be claiming against it “for damages arising out of personal injuries sustained […] in the motor vehicle accident”. Through inadvertence, the plaintiffs’ lawyer commenced the action against the defendant more than two years later. The insurer moved for summary judgment to dismiss the claim as statute-barred
It’s long settled that when an insured motorist sues her insurance company for uninsured motorist coverage, the limitation period begins on the day that the insured motorist knew or ought to have known that she had a claim based on the fault of the uninsured motorist.
The insurer argued that the lawyer’s letter established that the plaintiffs knew that they had a claim against the uninsured driver, and so it commenced the limitation period. The plaintiffs replied that at the time of the letter there was wasn’t enough medical evidence that in the lawyer’s opinion could meet the statutory threshold in section 267.5(5) of the Insurance Act.
Justice Perell agreed with the plaintiffs:
[18] In the circumstances of the case at bar, it does not follow that because Mr. Lofranco wrote letters indicating that his clients intended to sue State Farm that at the time of the writing of the letters, the Naipauls immediately knew or ought to have known that they actually had a claim that would satisfy the statutory threshold. It also does not follow that because Mr. Lofranco admitted that it was only through inadvertence that State Farm was not joined as a party defendant to what would have been a timely claim, that the claim that they did bring in September 2012 was untimely.
[19] In bringing its summary judgment motion, in the case at bar, State Farm relied entirely on Mr. Lofranco’s letters as triggering the running of the limitation period, but at the time of writing of those letters, i.e. 89 days after the accident, there was not sufficient available evidence to be placed before a judge that, in counsel’s opinion, had a reasonable chance of persuading a judge on the balance of probabilities that the injury satisfied the threshold set by s. 267.5 (5) of the Insurance Act. The limitation period did not begin to run with the posting of Mr. Lofranco’s letters.
[…]
[32] In Everding v. Skrijel, 2010 ONCA 437 (CanLII), approving Vosin v. Hartin, [2000] O.T.C. 931 (S.C.J.), the Court of Appeal held that in applying the discoverability principle of the Limitations Act, 2002, the court should consider the threshold requirements of the Insurance Act, and the Court of Appeal held that a plaintiff will not have discovered his or her claim before he or she knows they have a substantial chance to succeed in recovering a judgment for damages. A person cannot be expected to commence an action before he or she knows that the necessary elements as set out in the legislation can be established on the evidence: Hoffman v. Jekel, 2011 ONSC 1324 (CanLII) at para. 9.
