Supreme Court of Canada denies Zefferino leave to appeal decision in Ontario auto lawsuit

The Supreme Court of Canada has denied an application by Nicola Zefferino, who lost a lawsuit two years ago against Meloche Monnex Insurance Company, to appeal a ruling by the Ontario Court of Appeal. 

On March 1, the provincial appeal court upheld an Ontario Superior Court of Justice ruling released Jan. 9 2012. In that decision, Mr. Justice Robert B. Reid found that Meloche Monnex breached its duty of care in 2003 by “failing to properly offer optional income replacement” coverage to Zefferino under his Ontario auto policy.

However, Judge Reid had dismissed Zefferino’s lawsuit because he was not convinced that Zefferino would have purchased optional income replacement benefits even if Meloche Monnex had fully explained it to him.

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The highest court in the land noted Thursday it had dismissed, with costs, Zefferino’s application for leave to appeal the Ontario Court of Appeal ruling.

Zefferino’s wife, Sabina Zefferino, was an employee of the Toronto Dominion Bank at the time she purchased auto insurance through Meloche Monnex in September, 2003.

Court records indicate that Nicola Zefferino suffered personal injuries, such that he can no longer be gainfully employed, in a vehicle accident in May, 2005.

“Under the standard policy terms, [Nicola Zefferino] was entitled to receive and did receive the statutory minimum income replacement benefit of $400 per week as a result of his income loss following the accident,” according to background information provided with Judge Reid’s decision. “The plaintiff alleges that [Meloche Monnex] failed to offer optional income replacement benefits which, if they had been offered, the plaintiff would have purchased. As a result of that failure on the part of the defendants, the plaintiff alleges he was under-insured. His income at the time of the accident would have qualified him for income replacement benefits of $1000 per week.”

Judge Reid explained in his ruling why he was not convinced that the Zefferinos would have bought additional coverage.

“The plaintiff and his spouse purchased insurance from four other insurance companies during the ten years before relationship with [Meloche Monnex] began,” Judge Reid wrote. “There is no evidence that anything other than basic coverage was secured on any of those prior occasions.”

Zefferino appealed and Meloche Monnex cross-appealed Judge Reid’s decision.

In a decision released March 1, 2013, the Ontario Court of Appeal ruled that because Zefferino’s appeal is dismissed, it was not necessary to consider Meloche Monnex’s cross-appeal of Judge Reid’s finding it had breached its duty of care.

“In our view, the trial judge carefully reviewed the relevant facts and reached a conclusion that was open to him,” wrote Judges Marc Rosenberg, James C. MacPherson and Harry S. LaForme. “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. He also drew, permissibly in our view, an adverse inference against the appellant because his wife, who dealt with the respondent’s representatives, provided no evidence about her dealings with those respondents.”

In ruling that Meloche Monnex breached its duty of care, Judge Reid noted that Ontario law requires auto carriers to offer optional coverage.

“To make the mandatory offer of optional coverages meaningful, consumers must be given an understandable alternative which would allow them to measure the need for more coverage against risk and cost,” Judge Reid wrote. “Otherwise, there would be no purpose behind that mandatory language. The plaintiff argued, and I agree, that there is a consumer protection purpose behind the need to offer the optional coverages.”

However, Meloche Monnex’s representative, who sold insurance to Sabina Zefferino over the phone, “did not engage either the plaintiff or his spouse in detailed discussion of the income replacement benefits or the potential for securing optional benefit coverage,” Judge Reid wrote.

“There was no discussion of the plaintiff’s income nor were there examples given of the levels of income that would support the optional benefit coverage. The defendant did not quote the additional cost of optional benefits at any level.”

Court records indicate that Sabina Zefferino declined optional additional benefits during two phone conversations.

“On the first of those calls, the notation reads: ‘No need,'” Judge Reid wrote in 2012. “Similarly in a conversation with the plaintiff on the same date, it is noted that he was offered and declined optional accident benefits coverage as well as other modifications to the basic insurance contract terms. On February 4, 2004, the defendant’s records indicate a call from Sabina Zefferino to change vehicles under the policy with the note: ‘Discussed coverages. Clt. chose to keep cov same.'”

Zefferino applied April 23 for leave to appeal to the Supreme Court of Canada. On May 24, Meloche Monnex applied for leave to cross appeal. As of Aug. 26, all materials on both the application to appeal and the application to cross appeal had been filed.