Executive Summary: Key Legal and Evidentiary Issues

• Scope of cancer coverage under a life-savings policy and whether the insured’s breast condition falls within the contractual definition of a covered “cancer” diagnosis
• Effect of an express exclusion for “carcinome in situ” on claims arising from more specifically described diagnoses such as “carcinome canalaire in situ de grade 2”
• Weight and interpretation of competing medical reports explaining distinctions between in situ and infiltrating carcinomas, and the significance of grade and margins
• Impact of unilateral policy amendments and notice to insureds, including the insured’s later decision to retain the cancer coverage following a class action settlement notice
• Limits on judicial power to rewrite or soften clear contractual exclusions based on the seriousness of the insured’s medical condition and personal circumstances
• Allocation of costs in small claims proceedings where medically complex evidence determines the outcome but the claim is dismissed

Facts of the case

Jennifer Gagnon held a life-savings insurance policy (assurance vie-épargne) issued by Desjardins Sécurité financière, compagnie d’assurance vie (Desjardins Assurances). Originally, the policy guaranteed payment of a predetermined indemnity in case of death. On 23 April 2003, she subscribed to this policy, which at that time was essentially life coverage. In 2016, Desjardins unilaterally modified this policy to add a new protection in the event of a cancer diagnosis. Under this added coverage, if the insured, aged between 0 and 69 at the time of diagnosis, was diagnosed with a cancer covered by the policy, an amount of $6,250 would automatically be paid. The description of this cancer protection specifically excluded certain cancers. Among those listed exclusions were: carcinome in situ; melanoma malignant stage 1A; any skin cancer other than melanoma in the absence of metastases; stage A prostate cancer; and any cancer in the presence of HIV. The insurer stated that it had sent its insureds a standard letter describing the new coverage, explaining how to claim, and indicating the applicable monthly premium based on age and account type. Ms. Gagnon, however, denied receiving such a letter. In November 2017, at the request of the Autorité des marchés financiers, Desjardins sent a further letter to all holders of the life-savings contract. This letter informed them that they could choose to retain both death and cancer coverage or maintain only death coverage. Ms. Gagnon also denied receiving this second notice. According to her, she only became aware in December 2023 that she not only had a life-savings insurance but also cancer coverage. She learned this from a letter advising her of the settlement of a class action against Desjardins, alleging that the insurer had added cancer coverage and raised premiums without obtaining its insureds’ consent. Following this settlement notice, Ms. Gagnon had until 22 February 2024 to opt out of the cancer coverage and obtain reimbursement of premiums paid. She chose instead to retain the additional cancer protection rather than cancel it.

Medical history and cancer diagnosis

Ms. Gagnon was under close medical follow-up for breast cancer due to an unfavourable family history. On 19 September 2023, she underwent an MRI which did not reveal any anomaly. After that exam, however, she felt a mass in the external portion of her left breast. An ultrasound on 2 November 2023 did not show any lesion from an echographic standpoint. Mammograms performed on 2 and 9 November 2023 revealed microcalcifications that required further investigation by biopsy. The biopsy, carried out on 21 March 2024, revealed a diagnosis of carcinome in situ. On 17 April 2024, the surgeon informed her that she had a carcinome in situ requiring a second operation to remove the tissue surrounding the nodule sampled during the biopsy. The surgical notes referred to a final pathology report indicating a “carcinome canalaire in situ de grade 2”. After a detailed evaluation at the Centre des maladies du sein of the CHU de Québec, Ms. Gagnon opted for total subcutaneous mastectomy of both breasts (left and right) with reconstruction. This surgery was scheduled and performed on 11 June 2024. On 8 August 2024, she submitted a claim to Desjardins under the life-savings policy, invoking the cancer coverage on the basis that she had received a diagnosis of grade 2 ductal carcinoma in situ (carcinome canalaire in situ) in her left breast.

Insurer’s denial and commencement of proceedings

On 20 September 2024, Desjardins refused the claim, taking the position that the specific diagnosis was not covered under the cancer protection. The insurer relied on the policy wording that expressly excluded “carcinome in situ” from the cancer coverage. It considered Ms. Gagnon’s diagnosis to fall squarely within this excluded category. Following a demand letter sent on 6 October 2024 and the insurer’s continued refusal, Ms. Gagnon instituted proceedings before the Court of Québec, Small Claims Division, on 23 March 2025. She sought payment of the $6,250 insurance indemnity that she believed was due under the policy as modified to include cancer coverage.

Policy terms and exclusion clauses at issue

The central contractual issue was whether the cancer diagnosed in Ms. Gagnon triggered the cancer coverage or was excluded by the policy. The cancer rider promised a fixed sum upon diagnosis of a “covered cancer”, while an exclusion clause removed certain specified cancers from coverage, including “carcinome in situ.” The dispute thus turned on the proper interpretation of this exclusion in light of the precise medical terminology that appeared in the medical reports—namely “carcinome in situ”, “carcinome canalaire in situ”, “carcinome canalaire in situ de grade 2” and “carcinome canalaire in situ avec marge”. During the hearing, the court identified a difficulty: the parties could not fully explain whether these various expressions described different pathologies or the same underlying condition with additional qualifiers. Because of this uncertainty, the court authorized each party to file a medical opinion to clarify the meaning and implications of the terminology used in the medical documentation.

Competing medical evidence

Ms. Gagnon filed a medical report dated 2 March 2026 prepared by Dr. Marie-Hélène Leblanc. In that report, Dr. Leblanc explained that ductal carcinoma in situ (carcinome canalaire in situ) is much more aggressive and has a higher risk of recurrence than lobular carcinoma in situ. She stated that ductal carcinoma in situ is normally non-infiltrating, but in Ms. Gagnon’s case the tumour was grade 2 with a positive margin. A positive margin meant that cancer cells remained at the edge of the tissue removed during the first lumpectomy, implying residual cancer cells and necessitating further surgery. This context, combined with the patient’s very poor family history of breast cancer, led to a recommendation for mastectomy. Dr. Leblanc indicated that a mastectomy had been suggested to Ms. Gagnon based on these factors—positive margins and strong family history—underscoring the seriousness of the condition despite its classification as in situ. The insurer filed an administrative-medical opinion dated 12 February 2026 prepared by Dr. Bruno Denis. His role was to shed light on the medical terminology from an oncological and anatomical perspective. Dr. Denis explained that the term “carcinoma” refers to a malignant tumour originating from epithelial cells. He described ductal carcinomas as cancers starting in the breast ducts that carry milk, and lobular carcinomas as cancers arising in the glands that produce milk. He also explained the distinction between in situ and invasive disease: carcinoma in situ is localized and does not invade neighbouring tissues, remaining within the epithelium; invasive carcinomas, by contrast, are in contact with blood vessels and can spread into adjacent tissues. Finally, Dr. Denis described grading. Grade reflects how abnormal the cancer cells appear and correlates with the aggressiveness of the disease. At grade 1, cells resemble normal cells and grow more slowly. At grade 3, they look very different from normal cells and proliferate rapidly. Grade 2 is an intermediate stage.

Court’s analysis of the exclusion and medical terminology

In light of the expert explanations, the court focused on whether the qualifications “canalaire”, “grade 2” or “avec marge” removed the diagnosis from the scope of the exclusion for “carcinome in situ.” The judge concluded that they did not. He found that regardless of whether the diagnosis was expressed as “carcinome in situ”, “carcinome canalaire in situ”, “carcinome canalaire in situ de grade 2” or “carcinome canalaire in situ avec marge”, the underlying condition remained a carcinoma in situ. The additional descriptors merely specified the site (ductal versus lobular), the severity as reflected in cellular appearance and growth rate (grade 2), and the presence of residual cancer cells requiring re-excision (“avec marge”). None of these qualifiers converted the pathology into an invasive carcinoma; it still fell within the category of localized in situ carcinoma, which the policy expressly excluded from coverage. The court emphasized that it was bound to apply the insurance contract as written and could not modify its scope according to the gravity of the consequences for the insured. The seriousness of Ms. Gagnon’s experience, including bilateral mastectomy and reconstruction, and the emotional and physical burden associated with that treatment, could not override the clear contractual exclusion for carcinome in situ.

Outcome and disposition

Ultimately, the court held that the cancer diagnosed in Ms. Gagnon was captured by the exclusion clause for “carcinome in situ” in the cancer coverage attached to her life-savings policy. Because of this, the triggering event required for payment of the $6,250 cancer indemnity never occurred under the terms of the contract. The court expressed sympathy for Ms. Gagnon’s situation and the difficult medical journey she faced, but found that the law required strict application of the policy language. Consequently, the court dismissed her claim in its entirety. Given the nature of the claim, the identity of the parties and the technically complex medical evidence that proved decisive, the court ordered that each party bear its own costs. In the result, Desjardins Assurances was the successful party, and no monetary amount—whether indemnity, damages or costs—was ordered in its favour, meaning the total award in favour of the successful party was $0.