2019 QCCQ 7376, 2019 QCCQ 7376

Franchellini c. Great-West Life Assurance Co. 2019 QCCQ 7376 COURT OF QUÉBEC Small Claims Division CANADA PROVINCE OF QUÉBEC DISTRICT OF MONTREAL TOWN OF MONTREAL Civil Division No: 500-32-703484-172 DATE: July 12, 2019 ______________________________________________________________________ PRESIDED BY THE HONOURABLE DAVID L. CAMERON, J.C.Q. ______________________________________________________________________ FRANK FRANCHELLINI Plaintiff v. GREAT-WEST LIFE ASSURANCE CO.

Defendants ______________________________________________________________________ JUDGMENT ______________________________________________________________________ [ 1 ] The Plaintiff Frank Franchellini, who is an employee of CMHC, sues the Defendant Great-West Life Assurance Co. (“Great- West”), a group insurance provider, in relation to alleged overpayment by Mr.

Franchellini of health care premiums ($800.00) and dental care premiums ($800.00), as well as loss of Wellness credits ($1,400.00), which he asserts should have been applied to his health care premiums. [ 2 ] He adds to his claim $500.00 for preparation, Court time, parking, etc. [ 3 ] His claim relates to the period from July 2014 until September 2017.

He asks, going forward, reimbursement of all additional premiums that are being deducted from his pay in excess of the correct amounts. [ 4 ] In its initial written contestation Great-West simply asserts that it charged correctly the Plaintiff for the health and dental premiums, based on the coverage elected by him from the period when Great-West came the insurer under the group policy on July 2014. [ 5 ] The contestation also makes the issue that effective July 1, 2017 the Plaintiff coverage changed as he reached the age 70. [ 6 ] This very laconic defense was later supplemented by the document entitled Points of Argument dated March 25, 2019 prepared for the hearing which took place on March 26, 2019.

The Points of Argument is a detailed explanation of Great-West’s position, over six pages, completed with several charts and a binder full of exhibits. [ 7 ] Great-West takes the position that under the group policy number 167101-1 the correct premiums have been deducted from Mr.

Franchellini’s pay after certain corrective adjustments were made. [ 8 ] In connection with the active living program account benefits, Great-West points out that contract number 59174 is a contract described as a group insurance contract, provided by CMHC to its employees and that, on this contract, Great-West is simply an administrator and therefore has no legal relationship that would make it reliable towards Mr. Franchellini in relation to certain elections that he made under that policy resulting in his alleged loss or misallocation of wellness credits.

Facts and analysis [ 9 ] The Court will deal which each of Mr. Franchellini’s claims. Health care premiums based on flex credits [ 10 ] Mr. Franchellini received a message [1] through a BAS shared mail box “bas.bas@gwl.ca” which included the following text: This is a friendly reminder that you have not yet completed your 2015/2016 enrollment. If you are receiving this email then your enrollment is not considered complete. Please return to […] at your earliest convenience. Please note that you have until Friday, June 12, 2015 to login and complete your enrollment.

If you wish to reference your current benefit subscriptions and credit allocations, which are in place until June 30, 2015, please refer to your “My Benefits Statement” available on CMHC’s HR on-line intranet site, as the information on GroupNet Flex for the current plan year may not be accurate. Your enrollment is not complete until you press ‘Confirm’. If you have logged back in without confirming, they you need to login again and click ‘Confirm’.

If you do not complete the enrollment process by June 12, 2015, you current coverage will remain in place, your Wellness Flex Credits will default to the Active Living Account and any excess flex credits will be directed to the HCSA. […] [ 11 ] In this last paragraph the statement “your Wellness Flex Credits will default to the Active Living Account” has given rise to a conflict between the parties. [ 12 ] Mr.

Franchellini believes that because he did complete the enrollment process and did not consciously make changes to his coverage, the Wellness Flex Credit should have been used to fund his insurance premium. [ 13 ] The representative of Great-West present at the hearing, Bruna Melo, confirmed that he, in fact, lost $400.00 of this credits, each year, in 2015, 2016 and 2017 for a total of $1,200.00 because he elected for option 1 among five different options, an option whereby he chooses to allocate all of the $400.00 in Flex Credits towards his Wellness account. [ 14 ] The problem arises because Mr.

Franchellini was used to receiving a confirmation of his coverage each year, and under the new system, with Great-West, he did not. [ 15 ] Therefore he was not aware that he had not chosen an option to allocate $0 towards the Wellness account.

Option 5: Increase my Flex $ Awarded by $400 and allocate $0 towards my Wellness Account (proration may apply) [2] [ 16 ] Bruna Melo admits very candidly that the message that “If you do not complete the enrollment process by June 12, 2015, you current coverage will remain in place” was extremely deceiving and that such a message should not have been sent. [ 17 ] In fact, there would have been no carry over of previous coverages and previous selections because of the change of carrier and administrator.

The correct message would have been that whatever had been elected before, would become obsolete and the process would begin completely from the start. [ 18 ] The Court would add to this that the five options, in a context where a beneficiary was completing an online application, is a direct contradiction of the advice given in the communication of June 10, 2015. [ 19 ] Because he did complete his enrollment and did not consciously opt for something different, this changed to the allocation of the Flex Credits took him by surprise. [ 20 ] While Mr.

Franchellini is not in a direct contractual relationship with Great-West as the administrator of the contract concerning the Act of Living Program Account Benefits, he is in a direct relationship with Great-West under the Group Assurance policy. [ 21 ] The administration of the two plans was merged in these communications. [ 22 ] To the extent the Great-West was making a communication about its insurance coverages, the misleading statement constituted a contractual fault. [ 23 ] To the extent that it made the misleading statement in its capacity as an administrator, owing a duty under its contract with the employer, CMHC, it can nevertheless be responsible to Mr.

Franchellini under the doctrine related to extra contractual responsibility enunciated by the Supreme Court of Canada in Banque de Montréal [3] . [ 24 ] In that case, the Supreme Court clarified the principle that the contractual relationship, in this case between Great-West and CMHC, and the fault committed by Great-West in the performance of this contract, are juridical facts which, as such, do not establish a claim on the part of a third party, such as Mr. Franchellini but may give rise to extra contractual liability.

These juridical facts must further fulfil the conditions of delictual liability, in the circumstances, in order that such liability may be asserted against the contracting party which has failed to perform its contractual duties. […] The contractual relationship, the obligations contained in the contract and the failure to perform the contractual obligations are all relevant circumstances in assessing delictual fault.

It is necessary to determine whether the party whom it is sought to make liable behaved like a reasonable person toward the third parties, or in other words what the conduct of a reasonable contracting party would have been toward the third parties. [ 25 ] Ms. Milo’s very honest answer to the Court’s questions, were she spontaneously use the expression “extremely misleading”, is sufficient in the Court’s view to establish the extra contractual liability (formerly referred to as the delictual liability under the Civil code of Lower Canada). [ 26 ] Mr.

Franchellini was misled by the whole process and he, as a result, lost $1,200.00 of credits which he presumed were being applied toward his premiums. In fact they were lost because he did not use them to pay for such indirect health benefits as the purchase of exercise equipment.

[ 27 ] Ms. Milo explains why the error occurred: the paragraph concerning completing the enrollment process was appropriate only were there was no change of carrier, simply a change of programme. [ 28 ] In this case, because there was a change of carrier, the paragraph was inaccurate and misleading. This was an honest mistake on the part of the drafters of the letter but one for which their employer Great-West is liable under the principles of extra contractual liability. [ 29 ] Because his election made in 2015 was an error, this error carried forward automatically into 2016. [ 30 ] Mr.

Franchellini did log in for the 2017 year and made the same mistake apparently in opting for option 1. Changes upon reaching age 70 [ 31 ] Mr. Franchellini reached age 70 on September 2017; changes occurred in his coverage. Various adjustments were made as a consequence because his coverage on certain items ended at 85 working days or 119 calendar days prior to his 70 th birthday. [ 32 ] Ms. Melo explained these adjustments to the Court’s satisfaction. [ 33 ] She also explained how, because of programing limitation on the computer systems, every two weeks, when there is a new pay period, Mr.

Franchellini’s pay roll statements show an over payment of credits, which are then manually corrected by an employee of Great-West, who sends new information to the Ceridian pay roll system so that the adjustment is made. [ 34 ] Because Mr. Franchellini is the only CMHC employee in the group benefits plan that has reach age 70 and is still working, it was not feasible to create the programing that would be necessary to prevent this error from occurring each pay period.

It was more economical and more feasible for Great-West to simply correct the error manually a few days after each pay period. [ 35 ] It became apparent to the Court on hearing the evidence that much of Mr. Franchellini’s frustration about what he perceived to be incorrect pay roll deductions, is a result of this novel process Great-West came up with as a way administer CMHC’s pay roll. [ 36 ] Ms. Melo pointed out the pay roll processes, is the responsibility of CMHC and it was CMHC that did not have the adequate software in place to facilitate the administration of Mr. Franchellini’s plan.

Great-West came up with the process whereby manual adjustments are made. [ 37 ] Great-West made one retroactive adjustment as of October 10, 2017 spreading out over three pay roll periods credits that had been given to Mr. Franchellini without taking into account his change of coverage resulting because of his reaching age 70. [ 38 ] Upon discussion with CMHC, Great-West decided to make this adjustment in a way that was more advantageous to Mr. Franchellini than if the adjustments were applied strictly.

Adjustments totalling $273.60 were made by taking premium adjustments back only to his 70 th birthday, rather than 119 calendar days prior that date. [ 39 ] The Court is satisfied with these explanations concerning to debits and credits, resulting from Mr. Franchellini’s coverage changing when he reached age 70. Life insurance [ 40 ] Part of the claim Mr. Franchellini elucidated at the hearing related to life insurance. He asserts that he missed a deadline to exercises an option to take additional life insurance, under a private plan, for himself and his spouse. [ 41 ] Ms.

Melo points out the Insuring Provisions [4] where the life insurance conversion privilege enabling an employee or spouse to obtain an individual life insurance policy without evidence of insurability is not available “if the insurance terminates because of age”. [ 42 ] She states therefore that it is not a question of Mr.

Franchellini’s missing a deadline to make the conversion but simply the unavailability of that conversion when he reached age 70 and the group life insurance terminated. [ 43 ] In fact, the CMHC documentation provides that upon reaching age 70, a basic insurance of $5,000.00 is available without any medical questionnaire. [ 44 ] This does not conflict with Great-West’s position that the additional life insurance is no longer available as of age 70. [ 45 ] Therefore Mr.

Franchellini did not miss any option as a result of the information provided by Great-West. [ 46 ] There is, however, in an exhibit taken from the CMHC website [5] , a rather ambiguous paragraph concerning the conversion privilege.

The document states clearly that an employee who continues to work on age 70, no longer can participate in the optional life insurance and the optional spousal life insurance, but may continue to participate in basic life insurance. [ 47 ] The paragraph that is ambiguous reads as follows: Once your Optionnal Employee or Spousal Life Insurrance ends, you will have 31 days from the termination date to submit a request to convert the amount of the insurance from a Group Plan to an Individual Plan, without evidence of insurability.

For further details on this option, please contact your HR Representative. [ 48 ] As Mr. Franchellini points out there, is no longer an HR representative, at least not one that can be easily accessed.

[ 49 ] The Court will not express an opinion as to whether this conversion privilege is applicable as against CMHC, as opposed to Great- West. The text states that a request may be submitted, but there is no information given as to what criteria would be applied to such a request. [ 50 ] The statement is not in documentation attributable to Great-West, and would contradict the Group Policy. [ 51 ] The litigation was brought about in part because of Mr. Franchellini’s concerns related to process.

There was a certain awkwardness in the change from the previous carrier and administrator that resulted in the need for new declarations in 2015. [ 52 ] Mr. Franchellini was prejudiced by a misleading statement in the email he received which lead him to believe that his existing coverages would remain in place. [ 53 ] For an ordinary person such as Mr.

Franchellini this would include the option he made to contribute flex credits toward premiums. [ 54 ] The option that he apparently made, without realizing he was making it, resulted from a lack of clarity of the entire package of documents including that email and the information when he logged in. [ 55 ] This resulted in a loss of $1,200.00 of credits that were simply “flushed” from the system when he did not use them; when he did not realize that they had not been used to pay premiums. [ 56 ] The rest of his claim results from the confusing process of making incorrect pay roll credits and debits and then correcting them.

This has resulted in a certain amount of confusion but no financial prejudice. [ 57 ] Finally, Mr. Franchellini has no claim for the inconvenience associated with litigation. Time and efforts spent preparing a case and attending it in Court, is assumed by both parties. It is not part of the claim itself but simply the inconvenience associated with having recourse to a judicial process to resolve small claims. [ 58 ] Although he was only partially successful, the Court will award judicial costs in his favour.

BY THESE REASONS, THE COURT: CONDEMNS the Defendant to pay the Plaintiff the sum of $1,200.00 together with interest at the legal rate together with the additional indemnity provided by

article 1619 of the Civil Code of Quebec , calculated from the date of the institution of the proceedings, November 5, 2017; TOGETHER WITH judicial costs. __________________________ David L. Cameron, J.C.Q. Date of hearing: March 26, 2019