Alberta Court of Appeal finds policy endorsement in underinsured motorist case trumps 10-year limitation period in Limitations Act

Alberta’s Court of Appeal has allowed a plaintiff to sue his own insurer with respect to an underinsured motorist case more than 10 years after the accident occurred, ruling that a contractual clause in the plaintiff’s policy endorsement trumped a 10-year limitation period in s. 3(1)(b) of the province’s Limitations Act.
In an odd twist, Clause 6(c) of the SEF 44 endorsement on the plaintiff’s insurance policy includes a one-year limitation period. But the limitation period starts based on when the right to sue was discovered or could reasonably have been discovered, which the court found applicable in the underinsured motorist situation.
The plaintiff was injured in what appears to be a three-car collision a little more than10 years ago. After many years had passed, the plaintiff came to believe the compensation to be found elsewhere was inadequate, so he exercised his right to make a claim against his own insurer under the SEF 44 endorsement.
The plaintiff launched his suit against his own insurer six months after the province’s Motor Vehicle Accident Claims fund finally decided how to apportion the claims limits among the plaintiff and another victim of the accident. Payment issues were unclear before that point. Although there is a legislated ceiling on the total claims the fund will pay, the shares cannot be calculated until every injury from the accident is evaluated.
The insurer argued that the plaintiff’s suit was barred by the ultimate 10-year limit.
But the plaintiff argued c. 6(c) of the SEF endorsement allows him one year after his discovery of the right to sue. His suit came six months after the fund’s decision made it clear he would receive inadequate compensation.
“It may well take over nine years to learn of inadequate insurance, or of total claims exceeding minimum insurance limits, or both,” the Alberta Court of Appeal found. “It took that long here. So the contractual cl 6(c) in the endorsement quite often will purport to let the injured person sue later than the ultimate ‘ten-year’ statutory s. 3(1)(b) of the Limitations Act will.”
The full decision can be found at:
http://canlii.ca/en/ab/abca/doc/2011/2011abca367/2011abca367.html