Cory Grams died while at work at a Maple Leaf Metal Industries Ltd. (“Maple Leaf”) plant in Edmonton, Alberta. His parents, as beneficiaries and administrators of his estate, claimed damages against Maple Leaf for $92,000 for negligence in failing to provide insurance coverage under an employment contract. A claim against the insurer, Zurich, was settled prior to trial.
Mr. Grams was hired under an employment contract that provided for a benefits package commencing 90 days after he started work. The policy required Mr. Grams to apply for benefits within 31 days of the date he became eligible, after which evidence of insurability would be required of him. The policy was to be in effect on the latest of: (1) the date he was eligible, (2) the date his application was received by the employer, or (3) the date evidence of insurability was provided to the insurance company (if required).
Mr. Grams became eligible for the benefits provided by Zurich on October 7, 1998. Mr. Grams’ application for benefits was completed February 23, 1999. He died on February 24, 1999.
Zurich stated that as a late applicant, Mr. Grams was required to provide evidence of insurability. Under the terms of the plan, coverage would not have commenced until approval of the evidence of insurability by Zurich.
Mr. Grams’ estate claimed that Maple Leaf breached its duty of care to Mr. Grams by: (1) failing to administer the employment contract so that Mr. Grams was provided benefits; (2) failing to provide appropriate information with respect to benefits and their provision; (3) failing to enrol Mr. Grams for benefits in a timely fashion; and (4) failing to provide Mr. Grams with the proper information so as to confirm coverage under the policy.
Maple Leaf alleged in its defence that Mr. Grams knew the insurance coverage was a voluntary program and it was his decision as to whether or not he wished to enrol in the program and pay for the benefits.
The Court found that Maple Leaf was required to:
- provide timely disclosure to its employees of the basic details of the benefits coverage afforded under the policy;
- advise its employees of the time line for applying for benefits; and
- inform its employees of the consequences of a late application.
The Court found that Mr. Grams was not provided with sufficient information on the benefits program at the time of hiring and Maple Leaf failed to exercise the standard of care that would be expected of a reasonable person in the circumstances. Maple Leaf was found to have breached the duty of care it owed to Mr. Grams under its employment contract with him.
Nonetheless, the Court found that Mr. Grams failed to request benefits until February of 1999. It held that he should have taken prompt action to inquire about the benefits and the time deadlines for application. Mr. Grams was found to be contributorily negligent with liability apportioned equally between Mr. Grams and Maple Leaf.
Grams v. Maple Leaf Metal Industries Ltd. (2006) ABQB 146
Nick Ellegood & Monica Balaski
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