Neutral Citation: 1993 ONICDRG 25

File No. A-002249

ONTARIO INSURANCE COMMISSION

BETWEEN:

CONCETTA BRUNO

Applicant

and

LIBERTY MUTUAL INSURANCE COMPANY

Insurer

DECISION

Issues:

The Applicant, Concetta Bruno, was injured in a motor vehicle accident on October 4, 1990. She applied for and received accident benefits from the Insurer payable under Ontario Regulation 672 (the "No-Fault Benefits Schedule"), enacted under the Insurance Act, R.S.O. 1990, c. I.8.

Weekly disability benefits under section 13 of the No-Fault Benefits Schedule were paid until June 5, 1992, when they were terminated. Mediation was unsuccessful in resolving the dispute between the Applicant and the Insurer, and the Applicant applied for arbitration under the Insurance Act.

The issues in this hearing are:

1. Are the Applicant's Canada Pension Plan benefits deductible from the accident benefits under section 13 of the No-Fault Benefits Schedule?

2. Is the Applicant obligated to repay any funds to the Insurer?

3. Was the Applicant's airline ticket to Italy a reasonable medical expense?

Result:

1. The Insurer may deduct the Applicant's Canada Pension Plan payments from her section 13 weekly income benefits.

2. The Applicant must repay $10,224.40 to the Insurer through her future weekly income benefits.

3. The Applicant's airline ticket to Italy is not a reasonable medical expense.

Hearing:

The arbitration hearing was held in North York, Ontario, on March 29, 1993, before me, Fred B. Sampliner, arbitrator.

Present at the Hearing:

Applicant:

Concetta Bruno

Applicant's Daughter:

Tina Bruno

Insurer

John McLean

Claims Representative

Liberty Mutual Insurance Group

Insurer's

George Frank

Representative:

Barrister & Solicitor

Witnesses:

Concetta Bruno, Applicant

Exhibits:

Exhibit 1 Tempo Travel receipt for return airfare to Italy

Exhibit 2 Alitalia Airline ticket, dated August 27, 1992

Exhibit 3 Reports of Dr. Patmanidis, dated July 15 and July 16, 1992

Evidence and Findings:

1. Deductibility of C.P.P. benefits:

The facts are not in dispute. The Applicant testified that she had been a housewife from 1985 to the October 4, 1990 accident. From the accident date until the hearing, the Insurer agrees that the Applicant continued to be substantially disabled from her duties as a homemaker, and that she qualified for section 13 weekly benefits under the No-Fault Benefits Schedule. Section 13 of the No-Fault Benefits Schedule provides $185 weekly benefits for unemployed persons who sustain disabling injuries in an automobile accident.

The Insurer paid the Applicant $185 per week from one (1) week after the accident until June 5, 1992. During early June 1992, the Applicant testified that she had telephoned the Insurer to explain that she had begun to receive Canada Pension Plan benefits. When the Insurer learned of the Applicant's eligibility for and receipt of Canada Pension Plan benefits (referred to as C.P.P.), it ceased payment of accident benefits. The Applicant stated that she has continued to receive C.P.P. benefits until the date of this hearing.

The Insurer claims that it is entitled, under section 13(3) of the No-Fault Benefits Schedule, to deduct the Applicant's C.P.P. benefits from her weekly income benefits. The Applicant argues that the deduction unfairly denies her the accident benefits for which she has paid auto insurance premiums.

Section 13(3) of the No-Fault Benefits Schedule provides:

The weekly benefit under subsection (1) will be $185 less any payments for loss of income, except Unemployment Insurance benefits.

(a) received by or available to the insured person under the laws of any jurisdiction or under any income continuation benefit plan; or

(b) received under any sick leave plan.

The Director of Arbitrations appeal decision in Michael Morin v. The Personal Insurance Company of Canada (O.I.C. File No. P-000468, dated February 26, 1993) has determined that Canada Pension Plan benefits are deductible from weekly income benefits under section 13 of the No-Fault Benefits Schedule. I find the logic of the Director's interpretation of section 13(3) of the Schedule persuasive.

"The No-Fault Benefits Schedule is not designed to compensate every person through automobile insurance in every situation which may arise as a result of an automobile accident. Where specific instances were meant to be included, as in receipt of workers' compensation benefits under s. 20, the drafters were careful to include limitations on the deduction. Similarly, other sections of the Act limit recovery where there is any other insurance plan or law which might pay the benefit or expense sought.

Placing the disputed words of s.13 in their context, and looking to the scheme and object of the Schedule, coupled with reading it as a whole, I find the words are not ambiguous or unclear in their intent. The deduction from benefits otherwise payable under the section is unqualified and not subject to a secondary meaning which would strain the plain language."

The Director has held that the legislators carefully crafted into section 13(3), and other sections of the Schedule, clear authority to deduct all income plan benefits which are not excluded from the deduction by specific mention. Quite simply, the Morin decision means that the Insurer may deduct all income continuation plans from section 13 benefits, except Unemployment Insurance benefits.

The Applicant may disagree with the legislative policy set forth in the Schedule, but the plain meaning of section 13(3) and the legislative intent are clear to me. Thus, the Insurer may deduct the Applicant's Canada Pension Plan benefits from her section 13 weekly income benefits.

2. Overpayment:

The deduction of the Applicant's C.P.P. from her accident benefits results in an overpayment. The Applicant testified that she became eligible for C.P.P. in February 1991 and received $627.65 per month C.P.P. benefits from February 1991 through December 1991, and $664.05 per month during calendar 1992. From the Applicant's testimony, I calculate that she received $10,224.40 in C.P.P. benefits over 72 weeks, from the date she became eligible for C.P.P. and the date her accident benefits were cut off. The Applicant testified that she was paid $185 per week in section 13 accident benefits during the same period. The Insurer is entitled to deduct the Applicant's C.P.P. from her accident benefits. Thus, I find that the $10,224.40 in C.P.P. benefits received by the Applicant represents the amount overpaid by the Insurer.

Repayments to an insurer are spoken to in section 27 of the No-Fault Benefits Schedule:

(1) A person must repay to the insurer any benefit received under this Schedule that is paid to the person through error or fraud.

(2) A person must repay to the insurer any benefit received under sections 12 and 13 that is paid to him or her if the person or the person in respect of whom the payment was made was disqualified from payment under section 17.

(3) A person must repay to the insurer any benefit received under sections 12 and 13 to the extent of any payments received by the person that are deductible from benefits under subsection 12(4) or 13(3).

(4) The insurer may charge interest from the day the amount owing to the insurer under this section is determined at the bank rate on that day.

(5) In subsection (4), "bank rate" means the bank rate established by the Bank of Canada as the minimum rate at which the Bank of Canada makes short term advances to the banks listed in Schedule 1 to the Bank Act (Canada).

The facts in this case fall squarely within section 27(3); the C.P.P. payments received by the Applicant are deductible under section 13(3), and the Applicant is obligated to repay the Insurer the amount she was overpaid. However, the Schedule is silent on the repayment terms. I find that it is within the arbitrator's discretion to determine the plan of repayment.

In this case, the Applicant has acted in good faith with her Insurer. To her credit, the Applicant informed this insurer of her application for and receipt of C.P.P. benefits. She testified that she informed the Insurer's claims adjuster at the time of her C.P.P. application. In June 1992, the Applicant had four telephone conversations with the claims adjuster, informing the Insurer of her receipt of C.P.P. benefits, and inquiring whether the Insurer considered these C.P.P. benefits deductible. The Applicant also spoke to the claims supervisor twice in an attempt to resolve the issue. Throughout the process, it is my opinion that the Applicant was open and honest with the Insurer.

The manner in which the Applicant has acted towards her insurer merits consideration in a repayment plan. Several plan alternatives exist. The entire $10,224.40 overpayment could be ordered repaid to the Insurer, but that would be inequitable in my estimation. Alternatively, the overpayment could be deducted from the Applicant's future weekly income benefit entitlements, as suggested by the Insurer. This repayment method would appear to cause the Applicant the least financial difficulty, and is warranted by these facts. Therefore, I find that the Insurer shall recover the $10,224.40 overpayment by offset against the Applicant's future weekly income benefits.

3. Airline Ticket:

The Applicant claimed that her airfare to Italy is a reasonable medical expense, compensable under section 6 of the No-Fault Benefits Schedule. The Applicant submitted her airline ticket and purchase receipt from the travel agency as evidence of her expense (Exhibits 1 and 2). The airfare from Toronto to Italy and return cost the Applicant $1,229. She departed Toronto for Italy on August 30, 1992 and returned October 2, 1992. The Applicant testified that she stayed with relatives and friends in Italy. The time in Italy was spent relaxing, visiting and shopping. For one week, the Applicant visited with friends at a beach house. During her stay at the beach, she usually got up late, had a leisurely breakfast, swam and took long walks on the beach. The Applicant stated the "weather was great". Without the pressures of daily chores at home and her children, she "felt like a new woman". According to the Applicant, "it was the best therapy", and she would do it again. Upon her return, the Applicant was calmer with her children. However, the Applicant testified that her ability to cope with her home life has deteriorated recently, and she now feels that things are no better than before her trip to Italy. The Applicant maintains that the trip was superior to any therapy available in Canada.

The Insurer agreed that the Applicant did travel to Italy, but argued that the airfare did not qualify as a necessary medical expense.

Section 6(1) of the No-Fault Benefits Schedule provides an insured person with compensation for supplementary medical and rehabilitation expenses:

(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,

(a) medical, psychological, surgical, dental, hospital, chiropractic, nursing and ambulance services and the services of physiotherapists;

(b) prostheses, dentures, prescription eyewear, hearing aids and other medical or dental devices;

(c) rehabilitation, life-skills training and occupational counselling and training;

(d) transportation for the person to and from treatment, counselling and training sessions, including transportation for an assistant;

(e) home renovations to accommodate the needs of the insured person;

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

An airline expense, being non-medical in nature, falls into section 6(1)f, other goods or services the insured person requires as a result of the accident.

The tests for qualification of a medical expense under section 6 are set forth in Richard Plows v. Jevco Insurance Co. (O.I.C. File No. A-000175, A-000588, dated January 16, 1992, p. 46). Senior Arbitrator Rotter stated that three criteria must be met before an Insurer is obligated to pay a medical expense:

1. It must be a reasonable expense resulting from the accident.

2. It must be required because of the accident.

3. A medical practitioner must provide a signed statement that the expense is necessary for the insured's treatment or rehabilitation, if the insurer so requires.

In support of the claimed expense, the Applicant introduced two medical reports from Dr. Patmanidis, dated July 15, 1992 and July 16, 1992 (Exhibit 3). In the first report, Dr. Patmanidis diagnosed Mrs. Bruno with a post traumatic depressive disorder and chronic pain syndrome. He states, "It is strongly recommended at this point in time, that the patient does go away for a vacation to Portugal ("Portugal" is crossed out and "Italy" is penned above), as it is felt that a change in climate as well as hydrotherapy, once she is there, would be beneficial to her." The second report reiterated the doctor's previous diagnosis and recommendations, adding that Mrs. Bruno needed to get away from her stressful environment and be with supportive family members.

The doctor's recommendation did not establish the necessity of the Italian trip. Section 6(4) states that an insurer, before making payment of a expense, may require the insured person to submit a statement signed by the insured person's qualified medical or psychological practitioner, stating that the expense is necessary for the insured person's treatment or rehabilitation. The Oxford English dictionary defines "necessary" as "requiring to be done", "essential" or "requisite". However, Dr. Patmanidis does not say the trip was required for the Applicant's treatment, only that it was strongly recommended. Although the Applicant testified, "I was just following doctor's orders" in going to Italy, it is my finding, based on the two medical reports, that the doctor had not ordered her to go on a vacation to either Italy or Portugal as an essential, required or necessary part of her treatment.

The recommended hydrotherapy or warm water swimming did not necessitate a trip to Italy. The July 15 and 16, 1992 reports of Dr. Patmanidis specifically recommend warm water swimming. A local health club or spa could have accommodated the Applicant's needs. An Italian vacation is not a reasonable consequence of the doctor's recommendation.

The Applicant argues that the $1,229 cost of her airline ticket was more cost effective compared to a health spa. I heard no evidence to substantiate this claim. Even if it was true that her airfare was less expensive than a health club membership, the Insurer's obligation is not predicated on cost effectiveness alone, according to the Schedule.

The psychological benefit of the Applicant's trip to visit relatives does not qualify the expense. The July 16, 1992 report of Dr. Patmanidis recommended that the Applicant travel to Italy to enjoy the beneficial psychological effects of being with supportive family members. Section 6(2) provides:

(2) The insurer will pay with respect to each insured person who sustains physical, psychological or mental injury as a result of an accident an allowance that is reasonable having regard to all of the circumstances for expenses actually incurred by a spouse, child, grandchild, parent, grandparent, brother or sister of the insured person in visiting the insured person during his or her treatment or recovery.

Essentially, the section says that the Applicant's relatives could come to Canada to assist in her recovery, if it was reasonable under the circumstances, but the Schedule does not provide any compensation for the Applicant's travel to visit her Italian friends and relatives.

3. Expenses

Section 282(11) of the Insurance Act provides:

The arbitrator may award to the Insured person such expenses incurred in respect of an arbitration proceeding as may be prescribed in the regulations to the maximum set out in the regulations.

Arbitrator Naylor in Ralph McCormick and Economical Mutual Insurance Co. (O.I.C. File No. A-000139, dated October 2, 1991) stated:

...It is appropriate to award an applicant his or her expenses unless, in the circumstances of the particular case, it is determined that the application for appointment of an arbitrator was manifestly frivolous or vexatious, or that the applicant's conduct unreasonably prolonged the proceedings.

In this case, I find that the Applicant is entitled to her expenses, including her filing fee, the costs of the two medical reports, and her transportation to the hearing.

Order:

1. The Applicant is not entitled to further weekly income benefits until the Insurer has recovered the $10,224.40 overpayment from the Applicant's future weekly income entitlements.

2. The Applicant is not entitled to reimbursement for her airline ticket to Italy.

3. The Applicant shall recover her expenses incurred in this arbitration.

May 6, 1993

Fred B. Sampliner Arbitrator

Date