In Anand v. Belanger, Justice David Stinson considered whether State Farm Insurance, which had been sued in this case by virtue of its uninsured motorist coverage, was bound by admissions that it had made about the plaintiff’s condition in its capacity as accident benefits insurer. He concluded that it was not.
As AB insurer, State Farm had terminated the plaintiff’s claim for income replacement benefits. The plaintiff disputed the termination and the parties eventually settled for a lump sum payment of $100,000 plus costs. The release signed by the plaintiff contained an acknowledgment by her, that the payment “is deemed to be no admission of liability on the part of the insurer, State Farm Mutual Automobile Company, and further that such liability is expressly denied.”
At the trial of the tort action, the plaintiff argued that because of the position that State Farm had taken in settling the AB claim, it could not, in the tort trial, dispute that the plaintiff’s injuries and disabilities had been caused by the motor vehicle accident. In the alternative, the plaintiff raised arguments of issue estoppel and abuse of process.
Justice Stinson rejected these arguments. He pointed to the provision in the release signed by the plaintiff, quoted above, and said that “having agreed to and benefited from the terms of settlement, she cannot now resile from them.” He also noted that the relationship between the plaintiff and State Farm as no-fault insurer was quite different from the relationship with that company as tort insurer. A duty of utmost good faith existed in the first situation but not in the second.
His Honour also rejected the issue estoppel argument, pointing to the fact that there had been no adjudication of the issues in the AB claim and referring again to the provision in the release that the plaintiff had signed.
Finally, on the abuse of process argument, Stinson J. observed that “it is mere happenstance that State Farm is a named defendant: it would not have been joined at all had the at-fault driver been properly insured.” As the no-fault insurer, State Farm owed certain contractual obligations to the plaintiff but as tort insurer, it was stepping into the shoes of the uninsured motorist who, of course, owed no such obligations.
Accordingly, the motion was dismissed.