Jackie Thomas is seeking damages for post traumatic stress disorder following the death of her dog, Black Jack, in 2011.
Thomas said she hired Camrick PurrFetch Petcare so Black Jack wouldn't get lonely while she was working.
But a year into their contract, Thomas said, the business owner called her in a panic.
"She said, 'Black Jack's gone,'" Thomas told CBC News
According to documents filed in court, the incident happened when Black Jack and the dog's handler were out for a walk near a busy Esquimalt road.
There was a large dog in a nearby car belonging to another dog walker and Black Jack became distressed, but the handler did not notice, the lawsuit alleges.
"Black Jack eventually managed to free himself from his leash and ran away from the large dog as quickly as he could ... Black Jack ran in terror onto a busy road," the lawsuit claims.
Thomas said she had told the doggie daycare that Black Jack was afraid of big dogs.
"I was in shock. I was just traumatized," she said.
Call for regulations
Insurance covered the cost of the dog and the hospital bill, but Thomas wants compensation for the loss of her pet and for the mental distress the loss of Black Jack has caused her.
Thomas said she considered the little white Havanese dog with a big personality her friend.
"They're very good companions," she said.
Thomas, who is a nurse, said doggie daycares should be regulated like child daycares and is calling for greater regulation of the dog-walking industry.
"There's no accountability. I'm a nurse and if I'm responsible for somebody's death I'll be held accountable and there will be a price to pay," she said.
"There has to be some regulation. There has to be some consumer place I can phone to say is this person reputable. There has to be some kind of standard. I mean, I think that was even more traumatizing to me — the fact this could happen and there's no recourse."
Camrick Purr Fetch Petcare declined to comment on the lawsuit.
None of the allegations made by Thomas have been proven in court.