Executive Summary – Key Legal & Evidentiary Issues

• Dispute over insurance payout calculation following a 2014 fire, including application of a co-insurance clause.

• Limitation period defense raised by Co-operators; claim dismissed for being filed after statutory deadline.

• Appellants argued promissory estoppel and ongoing discussions extended the limitation period—rejected by court.

• Allegations of bad faith and unfair claims handling were not supported by sufficient evidence.

• Failure by Mr. Goertz to submit proof of loss and relevant documents impacted both the claim and dispute resolution process.

• Court held that no actionable misrepresentation or unjust enrichment occurred due to procedural and evidentiary failures.

Facts of the Case

Robin Goertz and his company, GSL Developments Ltd., owned a rental duplex at 58 & 60 Gray Avenue in Saskatoon, which was insured under a property insurance policy issued by Co-operators General Insurance Company. The policy was purchased through insurance broker Declan O’Reilly and O’Reilly Insurance Ltd., operating as O’Reilly Insurance and Financial Services.

On September 21, 2014, a fire damaged the property. There was no dispute that the fire was accidental and that the insurance policy was in effect and in good standing at the time. The insurance policy covered:

• Building: $328,600 (adjusted to $334,488 due to inflation)

• Contents: $2,000

• Loss of Rent: $24,200

However, a dispute arose over how much the insurer was obligated to pay. Co-operators initially estimated rebuilding costs at $225/sq ft, which meant the property was underinsured. As a result, the co-insurance clause was triggered, reducing the payout.

The insurer paid out:

• $108,976.06 for building loss (after deductible and co-insurance clause)

• $7,051.60 for loss of rent

Mr. Goertz refused to cash the cheques, believing he was entitled to a higher amount. The insurer re-issued the cheques multiple times, advising the plaintiffs of the two-year limitation period under the policy and under Saskatchewan's Limitations Act. A formal claim was eventually filed on January 17, 2020, over five years after the fire.

Policy Terms at Issue

The case hinged on the application of two key policy-related legal concepts:

• Co-Insurance Clause: This clause penalized the insured for underinsuring the property. Because the cost of rebuilding was higher than the insured amount, payouts were proportionately reduced.

• Statutory Limitation Clause: The policy, under statutory conditions, required legal action to be initiated within two years of the loss. Co-operators repeatedly reminded the plaintiffs of this.

Arguments and Court’s Analysis

The plaintiffs alleged breach of contract, bad faith, unconscionability, and misrepresentation. They also argued that the limitation period was extended due to ongoing discussions, acknowledgment of debt, and Co-operators’ failure to engage in dispute resolution as required under The Saskatchewan Insurance Act (now repealed and replaced by The Insurance Act, 2015).

The Chambers judge dismissed the claim, finding it was statute-barred, and the Saskatchewan Court of Appeal upheld the decision. The appellate court made several key findings:

• Limitation Period: The court agreed that the claim should have been filed no later than August 17, 2017, or at the very latest January 24, 2017, when the insurer clearly communicated the claim was closed. The 2020 filing was too late.

• Debt Acknowledgment: The court ruled the claim was not a simple debt claim, but one seeking damages and declaratory relief, which did not fall under the acknowledgment of debt provision of s.11(1) of The Limitations Act.

• Promissory Estoppel: The evidence did not support that Co-operators made any binding promises or assurances that the limitation period would be waived.

• Dispute Resolution: Co-operators had fulfilled its duty by providing proof of loss forms and obtaining an appraisal. Mr. Goertz failed to provide his own appraisal or submit required documentation, undermining his argument.

• Unjust Enrichment: Though payments were never completed due to stale-dated cheques, the limitation defense precluded recovery, and this was considered a valid juristic reason for any enrichment.

Outcome

The appeal was dismissed with costs awarded to Co-operators. The Saskatchewan Court of Appeal found no reversible errors in the Chambers judge’s ruling, emphasizing the importance of complying with statutory limitation periods and procedural requirements in insurance disputes.