Neutral citation: 1991 ONICDRG 2

File No. A-000133

ONTARIO INSURANCE COMMISSION

BETWEEN:

Elizabeth Donlan

Applicant

• and -

The Personal Insurance Company

Insurer

DECISION

ISSUE:

The Applicant Elizabeth Donlan was injured in a motor vehicle accident on December 3, 1990. The Applicant was insured under a standard automobile owner's policy issued by the Insurer. She applied for supplementary medical and rehabilitation benefits under the policy. Every motor vehicle policy provides for the no-fault benefits specified in Ontario Regulation 273/90 ("the No-Fault Benefits Schedule"), enacted under the Insurance Act, R.S.O. 1980 c.218, as amended by the Insurance Statute Law Amendment Act, S.O. 1990, c.2.

As a result of the Applicant's back injury from the motor vehicle accident, she was no longer able to lift her twelve-year-old handicapped child, who is confined to a wheel chair, into her car. The Applicant's vehicle could not be modified to accommodate a wheelchair lift. Accordingly, the Applicant was obliged to purchase an equivalent vehicle which could be fitted with a lift. The Insurer agreed to pay the difference between the trade-in value of the Applicant's car, and the cost of an equivalent vehicle, but disputed the actual amount claimed by the Applicant.

The Applicant applied for mediation. The mediation was unsuccessful in resolving the dispute as to the amount that was payable for the replacement vehicle. The Applicant subsequently applied for the appointment of an arbitrator under s.242d of the Insurance Act, as amended.

The issue to be determined at the arbitration hearing was:

What is the amount of supplementary medical and rehabilitation benefits which the Insurer is required to pay with respect to the cost of the replacement vehicle, under s.6 of the No-Fault Benefits Schedule?

The Applicant also claimed interest upon any amounts found to be owing, and an award for her expenses incurred in relation to the arbitration, under s.242d(11) of the Insurance Act, as amended.

Result:

The decision is:

The Applicant is entitled to be reimbursed for the full cost of the replacement vehicle which she purchased, and which she required as a result of the accident.

The Applicant is also entitled to interest on outstanding amounts, and an award for her expenses.

The Evidence:

A hearing was held in Ottawa, Ontario on September 19, 1991, before me Frederika M. Rotter, Senior Arbitrator.

The Applicant gave evidence which she solemnly affirmed was true. She explained that she had injured her back in an accident on a bus on December 3, 1990. The Applicant stated that she has a twelve-year-old handicapped child who is confined to a wheelchair, and requires total care. As a result of the accident, the Applicant could no longer lift the child and his wheelchair into her car.

The Applicant drove a 1988 Nissan Multi van which could not be modified to install a wheelchair lift. Her van had approximately 60,000 kilometres on it. As a result of the accident, the Applicant was obliged to trade in her van for a comparable Caravan mini-van which could be fitted with the appropriate lift. The cost of the Caravan was $13,000, $4800 more than the trade-in price of $8200 which she received for the Nissan.

The Applicant referred to a document filed by the Insurer entitled Total Loss Report. A copy of this document was marked Exhibit 1 to the hearing. The report, prepared by an appraiser, is dated 19 March 1991 and indicates that three comparable Nissan vehicles were appraised on behalf of the Insurer. The vehicles were valued between $ 11,500.00 and $9900.00. Accordingly, the Applicant's car was appraised at $ 10,850, from which $450 was deducted on account of damage to the side doors. The final cash value of the Applicant's vehicle was determined to be $10,400.00.

The Applicant indicated that she disputed this appraised value of her car, on the basis that it represented market value, rather than trade-in value.

The Applicant testified she had shopped at three different dealerships and that $8200.00 was the highest offer she received for trading-in her vehicle. She also testified that she consulted a Nissan dealer who advised her that $8200 was an appropriate trade-in price for her car.

The Applicant then referred to a second document filed by the Insurer, a letter dated March 22, 1991, from Centretown Appraisals. A copy of the letter was marked Exhibit 2 to the hearing. In the letter, the appraiser indicates that he spoke to a car dealer who had two 1988 Caravans in stock. The first vehicle had 65,000 kilometres on it and was selling for $13,000.00. The second had 78,000 kilometres and was selling for $ 10,000.00.

The appraiser called a second dealer who advised that comparable vans ranged in price from $10,000.00 to $ 14,000.00. A 1988 Caravan LE with 139,000 km mileage was listed for $12,500. A salesman advised the appraiser that the Applicant had been in to trade her van, but left when she was offered $9000 for it.

The appraiser also spoke to a third dealer who said there would not be a problem in "fixing up" the Applicant with something.

The Applicant testified that her Nissan vehicle had 60,000 kilometres on it -- less mileage than the first vehicle described in Exhibit 2, the 1988 Caravan, that was selling for $13,000.00. That Caravan vehicle with a mileage of 65,000 km. was the closest match to her own car.

The Applicant testified that she checked the prices of 1988 Caravans and compared mileage and other features. She testified that she shopped at three different dealerships, including the dealers referred to in Exhibit 2. She referred to a newspaper advertisement from the first dealer mentioned in Exhibit 2, which offered a vehicle with 95,000 km. mileage for sale at $12,995. She testified that she had also been to the second dealer mentioned in Exhibit 2, and had agreed to a deal on a Friday night. The next day, the manager reneged on the deal. The manager of that dealership refused to give the Applicant $9000 for her van, contrary to the information in Exhibit In cross-examination, the Insurer's representative asked the Applicant why she had not attempted to sell her car privately. The applicant replied that she is not a car salesperson, that she does not know anything about selling cars, and that was not something that she would do.

Susan MacCullum, the Insurer's representative gave evidence which she solemnly affirmed was true. She indicated that the Insurer was disputing the replacement value of the van and the amount for which it should be liable. She referred to Exhibit 1 and indicated that the Nissan Multi had a retail value of $11,000.00 to $11,500.00, according to the Insurer's appraiser. Therefore the Insurer determined that the value of the vehicle was $10,400.00. The Insurer's position was that a comparable Dodge Caravan was valued at $12,100.00. Therefore the Insurer was prepared to compensate the Applicant for the difference of $1700.00, plus an additional $500.00 to settle the matter. The Insurer maintained that the Applicant had received too low a price for her Nissan vehicle, and indicated that the "red book" listing car prices, which it usually relied on, showed a much higher resale value for that car.

Findings:

In this case, it was not disputed that a replacement vehicle which could be fitted with a wheelchair lift was required by the Applicant as a result of the accident. Therefore, under the No-Fault Benefits Schedule, the Applicant is entitled to be reimbursed for her expenses in obtaining such a vehicle, provided that those expenses were reasonable. The applicable section of the No-Fault Benefits Schedule is section 6(1)(f) which provides as follows:

(1) The insurer will pay with respect to each insured person who sustains physical, psychological or mental injury as a result of an accident all reasonable expenses resulting from the accident within the benefit period set out in subsection (3) for,

(f) other goods and services, whether medical or non-medical in nature, which the insured person requires because of the accident.

(emphasis added)

The Insurer is therefore required to pay the full price of the replacement vehicle (which falls within the definition of goods required because of the accident) unless it can prove, on the balance of probabilities, that the price paid by the Applicant does not constitute a reasonable expense.

I accept the Applicant's evidence that she shopped at three different car dealers and accepted the best price that she was offered as a trade-in for her Nissan. I also find that the price she paid for the replacement vehicle was reasonable, in the circumstances. The evidence of both the Applicant and the Insurer suggests that a 1988 Caravan with milage and features similar to the Applicant's Nissan was selling for approximately $13,000. Exhibit 2 supports this finding, since the vehicle with the mileage that was most comparable to the mileage on the Applicant's car was selling for precisely that price.

I am satisfied that by attending at three different dealerships and by accepting the best offer for her car, the Applicant acted as a reasonable and prudent consumer. The Applicant is not a professional car dealer and cannot be required to obtain a theoretical or arbitrarily assessed "cash value" for her car. Her bargaining position is such that she can only accept the best price that a dealer is prepared to offer. Further, I find that the Applicant is not obliged to incur voluntarily the additional expense and effort involved in privately selling her car, especially in a situation where she is recovering from the physical effects of a motor vehicle accident.

Order:

I find that in replacing her vehicle the Applicant acted entirely appropriately and reasonably. Therefore, she is entitled to the difference between the trade-in price for her old car and the cost of the replacement vehicle which she required, namely: $13,000 (cost of replacement vehicle) - $8200 (trade-in price)= $4800.

The Applicant is also entitled to an additional 15% of that amount in respect of the applicable provincial and federal sales taxes. She is also entitled to interest on all outstanding amounts owed, as well her reasonable expenses for the arbitration hearing, as prescribed under Ontario Regulation 275/90 and the Dispute Resolution Practice Code.

October 9, 1991

Frederika Rotter

Senior Arbitrator

Date