Ontario appeal court upholds decision in favour of Meloche in optional auto accident benefits case

The Ontario Court of Appeal has upheld a lower court’s decision in favour of Meloche Monnex Insurance Company, reiterating that the insurance provider breached its duty of care to a claimant of optional auto insurance benefits, but that the claimant wouldn’t have purchased those benefits anyway.

Zefferino v. Meloche Monnex Insurance Company involved a collision in May 2007. The claimant, Nicola Zefferino, alleged Meloche was negligent in that it in failed to properly offer optional income replacement benefit coverage to the plaintiff as part of his policy.

Background: Court finds direct writer didn’t explain optional benefits properly, but dismisses action against Meloche Monnex

In January 2012, the Ontario Superior Court dismissed the claim in summary judgment on the basis that Zefferino had turned down the optional benefits in two separate telephone calls with the insurer.

While Meloche, in the judge’s view, didn’t offer the optional benefits in a “meaningful way,” he concluded that Zefferino or his spouse wouldn’t have purchased the benefits anyway.

“In my view, the plaintiff (or his spouse) chose to purchase the least expensive form of insurance available,” the judge wrote. “He cannot now change that bargain.  As such, he fails in the third issue necessary to establish a successful claim in negligence in that he has not shown on a balance of probabilities the necessary causal connection between the defendant’s breach of duty and his loss.”

In the appeal, Zefferino argued that the insured only needs to show that the insurer breached its duty of care and there was a gap in coverage.

In a decision March 1, the appeal judges found that the trial judge hadn’t made an overriding error and dismissed the appeal. “In our view, the trial judge carefully reviewed the relevant facts and reached a conclusion that was open to him,” they wrote.

“He noted that the appellant had never before purchased anything other than basic automobile insurance coverage and that according to the insurer’s records, the appellant’s wife indicated that optional coverage was declined because there was no need.”