The Court of Appeal for Ontario has released a decision
determining when the limitation period starts to run for
underinsurance claims under the OPCF 44R (Family Protection
In Schmitz v. Lombard, the plaintiff was struck by a
vehicle in July 2006. In June 2007, he and members of his family
sued the driver for damages in excess of $1,000,000 arising out of
the injuries Schmitz sustained in the accident. In June 2010, the
driver's automobile insurance coverage was limited to
$1,000,000. The respondents then brought this action against
Lombard for indemnity under the OPCF 44R for any amounts found
owing to them that were in excess of that amount (up to his limits
In its statement of defence, Lombard pleaded that the action was
commenced after the expiry of the 12-month limitation period in s.
17 of the OPCF 44R. The plaintiffs relied on the two-year
limitation period set out in s. 4 of the Limitations Act,
2002. They moved under Rule 21 for a determination of the
The questions before the motion judge were 1) whether the
12-month limitation period in s. 17 of the OPCF 44R was displaced
by s. 4 of the Act, and 2) when the limitation period began to run
in respect of claims for underinsurance coverage pursuant to the
Relying on the Court of Appeal's decision in Markel v. ING (2012), the motion judge concluded that
a two-year limitation period applicable to claims under the OPCF
44R started to run when the claimant made a request for
indemnification under the OPCF 44R. He reasoned that this
commencement date met the requirement in s. 5(1)(ii)-(iii) of the
Act that the loss be "caused" by the "omission"
The Markel decision decided when the limitation period
starts for loss transfer claims. The Court of Appeal held that it
starts the day after the second party insurer receives a loss
transfer request for indemnification. The basis for that decision
was that the criteria under section 5 of the Limitations Act,
2002 (when a claim is discovered) were not satisfied until
that day, being the date that the first party insurer suffers a
"loss" as a result of the second party insurer's
Lombard's appeal was limited to its challenge of the motion
judge's ruling that the two-year limitation period under s. 4
of the Act "commences to run when the claimant makes a request
for compensation provided by OPCF 44R".
The Court of Appeal dismissed Lombard's appeal and held that
the two-year limitation period begins to run the day after the
insurer receives a claim under the Family Protection Endorsement.
Following the decision in Markel, the court held:
Once a legally valid
claim for indemnification under the OPCF 44R is asserted, the
underinsured coverage insurer is under a legal obligation to
respond to it. To paraphrase and adapt Sharpe J.A.'s
observations at para. 27 of Markel, the claimant for
indemnity under the OPCF 44R "suffers a loss from the moment
[the insurer] can be said to have failed to satisfy its legal
obligation [under the OPCF 44R]". Thus, the claimant suffers a
loss "caused by" the underinsured coverage insurer's
omission in failing to satisfy the claim for indemnity the day
after the demand for indemnification is made.
Accordingly, the Court of Appeal held that the limitation for
underinsurance claims under the OPCF 44R starts on the day after
the insurer receives a claim under the Family Protection
Like Markel, this case highlights the need to look at
the criteria under section 5 of the Limitations Act, 2002
to determine when a limitation period might start. The start date
may not always be so obvious.
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