2. THE DERIVATIVE CLAIM
[42] The 2011 derivative claim alleges that, as a result of Stuckless’ claim for statutory accident benefits being denied, Watkins was deprived of his mother’s care, guidance and companionship, which ultimately led to Watkins’ inability to acquire a post-secondary degree, achieve his pre-accident goals, maintain relationships and integrate into society. The derivative claim seeks two types of damages:
a) Damages for wrongful infliction of mental distress upon Watkins by the use of unlawful claims practices; bad faith for unreasonable conduct in the claims process; and aggravated, punitive and exemplary damages.
b) In the alternative, Watkins claims pecuniary damages under the Family Law Act for loss of earning capacity and loss of income for Western’s negligent administration of accident benefits to Stuckless.
(b) Bad Faith, Negligence and Family Law Act Claims
[57] Watkins pleads that Western negligently or maliciously denied benefits to the mother, and that this caused the mother’s psychiatric illness, which in turn caused Watkins to lose his mother’s care and guidance. Western could owe Watkins a duty of care not to cause harm, if their relationship was sufficiently proximate; if the harm was foreseeable; and if there are no residual policy reasons negating the duty of care: Cooper v. Hobart, 2001 SCC 79 (CanLII), [2001] 3 SCR 537.
[58] I have concerns about whether harm to Watkins was foreseeable and whether the relationship of the parties was sufficiently proximate. I also have concerns that there are residual policy reasons for negating a duty of care.
[59] The relationship between insured and insurer is contractual in nature: 702535 Ontario Inc. v. Non-Marine Underwriters, 2000 CanLII 5684 (ON CA), [2000] O.J. No. 866 (C.A.). There is arguable policy reason to negate the claims in tort and under the Family Law Act.
[60] The legislature considers it a matter of public policy to define and limit the liability of automobile insurers. Restricting the insured to whatever remedy the statute and contract permit may be better public policy. Arguably, the Insurance Act itself precludes liability in tort by exhaustively listing the remedies that an insured person may pursue. The same arguments would apply to the Family Law Act claim.
[61] Despite my concerns regarding the strength of the non-contractual damages sought, the same evidence will be heard at trial on both contractual and non-contractual issues. It would not prejudice anyone for these matters to proceed together, so that these points of law can be determined after a full record has been created.
IV. CONCLUSION
[62] In the result, the motion for summary judgment is granted and the accident benefits claim (action 12-38604) is summarily dismissed in its entirety.
[63] It is not plain and obvious that the derivative claim (action 11-25909) is certain to fail. The motion to strike the derivative claim is dismissed.