In Desjardins Sécurité financière v. Hébert, the Court of Appeal reminds us of an essential condition often overlooked in order to claim disability insurance benefits: the obligation to be under the care of a medical team and to receive medical treatment, a contextualization of the obligation to mitigate one’s damages. The Court also considers the transposition of the findings of the Supreme Court in the case of Fidler v. Sun Life Assurance Co. of Canada – often invoked to justify compensatory damages – into Quebec law.
Respondent Hébert, a dermatologist, suffered a severe myocardial infarction in November 2014. Despite an attempt to return to work in February and March 2015, he was unable to perform the tasks he had previously performed. He therefore decided to close his clinic and give up his license to practice.
Considering that he was no longer disabled as of March 30, 2015, the appellant stopped paying disability insurance benefits.
Despite respondent’s requests and the transmission of medical reports, the appellant refused to reinstate the payment of benefits.
On May 17, 2022, the Honourable Janick Perreault ordered the appellant to pay the respondent the benefits due since April 1, 2015, as well as $20,000 in moral damages, all with interest at the legal rate, as well as the additional indemnity.
Respondent’s medical condition
The respondent was under the care of two doctors: an internist and his family physician. Both noted that, for all intents and purposes, the patient had recovered from his heart attack. However, Hébert continued to experience symptoms that prevented him from performing his usual duties, and the source of which the doctors were unable to identify.
In July 2018, the respondent produced the report of an expert psychiatrist, who concluded that the symptoms affecting him were indeed incapacitating and revealed a chronically evolving somatic symptomatology disorder “reflecting the psychic impact of [his] myocardial infarction”. According to psychiatrist Marc-André Laliberté, the respondent had developed, “an inordinate anxiety about the recurrence of a myocardial infarction, and an anticipatory anxiety about possible health problems”. This anxiety was said to be intensely paralyzing, leading Hébert to severely restrict all of his activities.
A counter-expertise produced by the appellant and prepared by Dr. Gérard Montagne confirmed a chronic somatic disorder and narcissistic personality traits, but concluded that none of these disorders was truly incapacitating. Dr. Montagne pointed out that Hébert had a tendency to dramatize, and that he had received no care or treatment for his psychological disorder, had not sought any, and did not intend to do so.
This reluctance was not new, since during his examination, in November 2018, Hébert indicated that he was only considering the possibility of undertaking psychological follow-up. In 2020, the respondent also refused the offer of a CHUM cardiology psychologist to participate in a consultation.
At trial, Justice Perreault acknowledged that the heart condition was not disabling, but concluded that regardless of the diagnosis, if Hébert was in a state of incapacity that prevented him from performing the main tasks of his essential functions, he met the criteria for the definition of disability. According to the judge, the somatic disorder rendered him unable to perform his duties. She dismissed the appellant’s argument concerning the requirement for appropriate medical follow-up, since Hébert was under the care of his attending physician and of an an internist (who was subsequently replaced by a cardiologist) and his condition was stationary.
Mitigation obligation and stationary state
The relevant clauses of the insurance contract are the following:
9) Disability: Occupational definition
Total disability means a state of incapacity resulting from an illness or accident which prevents the member from performing the main tasks of his usual professional duties, which requires the continuous care of a physician other than the member himself and which, if it persists after his 65th birthday, without necessarily requiring continuous medical care, then completely prevents him from engaging in any gainful occupation.
It is understood, however, that when medical care is required and falls within the competence of a specialist, it must be rendered by a specialist in the appropriate field in order for total disability to be recognized.[…]
The Insurer will not pay any benefits during a period of disability:[…]
4) during which the member is not under medical treatment and under the regular care of a physician other than the member himself, except in the case of a stationary state certified by a physician other than the member himself;[emphasis added]
According to the Court of Appeal, the combined reading of clauses 1(9) and 7(4) leaves room for only one interpretation: the care or treatment referred to therein must be related to the condition giving rise to the disability, i.e., the illness or accident that generates it, its symptoms, its after-effects and sequelae. Thus, an insured who is disabled as a result of illness or accident obtains and retains the benefits provided under the policy if his or her incapacitating condition is and remains under medical treatment and under the regular care of a physician, unless his or her condition has become stationary. A stationary condition is defined as one that is not likely to improve or progress with treatment.
The Court reminds us that the insurance contract may require that the treatable disabling condition be, in fact, treated, at least by reasonable means – in a way, this kind of requirement contractualizes the insured’s obligation to mitigate (article 1479 C.C.Q.). The Court also confirms that the burden of demonstrating that the insured does not meet the conditions for granting and maintaining the benefit rests on the insurer.
In this case, Justice Bich drew a distinction between the periods from April 2015 to July 2018 and from July 2018 to the present.
When Hébert received his diagnosis in July 2018, his disability was the subject of ongoing, albeit inadequate, care and treatment. Thus, Hébert could not be blamed for not having undertaken a therapeutic approach prior to receiving Dr. Laliberté’s report. He was therefore entitled to benefits from April 1, 2015, until the end of July 2018.
However, the evidence is to the effect that the respondent did not undergo any treatment of a nature to remedy or alleviate his condition following Dr. Laliberté’s diagnosis. Thus, the Court of Appeal is of the opinion that the trial judge, in determining that the respondent’s condition was stationary due to his constant medical follow-up, interpreted clauses 1(9) and 7(4) in an extremely restrictive manner, which does not suit their purpose, deprives them of their true function and substantially neutralizes them.
In this case, the respondent had not received (and did not intend to receive) any follow-up or treatment in connection with his somatic disorder. Consequently, it cannot be assumed that this disorder could not have been resolved or alleviated. Although we can be flexible and understand the respondent’s procrastination, at the very least, steps should have been taken when the appellant, in the summary statement of its grounds of defence, raised the absence of medical follow-up or treatment. Thus, benefits should have been paid for the period of April 1, 2015, to April 30, 2019, alone.
Application of the Fidler decision in Quebec law
The appellant also contested her condemnation to pay $20,000 in damages for moral prejudice resulting from the wrongful handling of the respondent’s insurance claim.
In Fidler, the Supreme Court concluded that, in the context of a disability insurance contract, it is appropriate to recognize the moral prejudice arising from the simple non-performance of the contract, even if not accompanied by a distinct fault, and to hold the insurer liable. The appellant maintains that this common law case does not apply in Quebec law.
In this case, the award of damages was based on the insurer’s actual fault in handling the respondent’s claim, not on a transposition of Fidler. Justice Bich points out that, to date, the Court of Appeal has not applied Fidler to insurance contracts governed by the Civil Code of Québec, ruling instead on the basis of a characterized fault on the part of the insurer or the absence of preponderant evidence of the alleged moral prejudice. However, Justice Bich suggests that art. 1617 C.C.Q., which could be seen as an exception to art. 1613 C.C.Q., seems apriori to militate against such a transposition, by limiting to interest the prejudice and reparation arising from delay in the performance of the obligation to pay a sum of money. The Court emphasizes the choice of words used in article 1617 C.C.Q. It is not that delay in the payment of a sum of money “entails” or “causes” the payment of interest. Rather, it is that the damages resulting from such delay “consist of” interest unless otherwise stipulated, which is not the case here.
Nonetheless, the Court of Appeal upheld the trial judge’s finding of fault in the handling of the claim, justifying the award of compensatory damages.