Neutral Citation: 1995 ONICDRG 34

File No. A-008191

ONTARIO INSURANCE COMMISSION

BETWEEN:

INNA LEVITAN

Applicant

and

LIBERTY MUTUAL FIRE INSURANCE COMPANY

Insurer

DECISION

Issues:

The Applicant's parents, Jakow and Rosa Blitz, died as a result of a motor vehicle accident on March 10, 1993. Ms. Levitan applied to the Liberty Mutual Fire Insurance Company ("Liberty Mutual") for death benefits, according to section 11(1)(c) of Ontario Regulation 672¹. Liberty Mutual refused Ms. Levitan's application on the basis that she was not a "dependant" at the time of the accident.

After an unsuccessful attempt at mediation, Ms. Levitan applied for arbitration under the Insurance Act, R.S.O. 1990, c.I.8, as amended. The issues in this hearing are:

1. a) Is Ms. Levitan entitled to death benefits under section 11(1)(c) of the Schedule?

(b) If so, is she entitled to $10,000 or $20,000?

2. Ms. Levitan also claims interest on any amounts owing, and her expenses related to the hearing.

Result:

1. Ms. Levitan is not entitled to death benefits under section 11(1)(c) of the Schedule.

2. Ms. Levitan is entitled to her expenses related to the arbitration.

Hearing:

The hearing was held in North York, Ontario, on March 23, 1995, before me, David R. Draper, arbitrator.

Present at the Hearing:

Applicant:

Inna Levitan

Applicant's Representative:

Harve Lewin

Barrister and Solicitor

Insurer's Representatives:

Khalid Baksh

Barrister and Solicitor

Kelly Rivard

Barrister and Solicitor

Insurer's Officer:

Leanne Lagana

Case manager

Witnesses:The only witness was the Applicant, Ms. Inna Levitan.

Reasons for Decision:

Ms. Levitan applied to Liberty Mutual for death benefits of $20,000 ($10,000 for each of her deceased parents). She is asserting her claim under section 11 (1)(c) of the Schedule, which states:

11.-(1) If, as a result of an accident, an insured person dies within the benefit period set out in subsection (3), the insurer will pay with respect to the insured person, if Optional Benefit 1 has not been purchased,

(c) $10,000 to each of his or her surviving dependants who was a dependant at the time of the accident;

Liberty Mutual refused Ms. Levitan's claim on the basis that she was not a dependant at the time of the accident. "Dependant" is defined in section 3(2) of the Schedule, as follows:

3(2) For the purposes of this Schedule, a person is a dependant of another person if the person is principally dependent for financial support on the other person or the other person's spouse.

In order to succeed, therefore, Ms. Levitan must establish that at the time of the accident, she was "principally dependent for financial support" on her father, her mother, or both. In other words, she must establish that she relied more on her parents for financial support than on other sources.

Ms. Levitan clearly had a life apart from her parents. At the time of the accident, she was 23 years old, married and had two children. Her husband was employed full-time as the general manager of his father's company, and she was a full-time student participating in a co-op or work term. Ms. Levitan claims, however, that she and her husband relied heavily on her parents for financial assistance because they did not earn enough to support their lifestyle.

This may not be the typical dependency claim, but in my opinion, it is plausible. If Ms. Levitan's parents were her primary source of financial support at the time of the accident, then she meets the definition of "dependant" in section 3(2) of the Schedule. The onus, however, is on her to establish her financial dependence on her parents.

At the outset of the hearing, Liberty Mutual asked for an adjournment because Ms. Levitan had failed to produce some of the information required by the pre-hearing arbitrator. The pre-hearing letter, dated November 4, 1994, states that she must provide Liberty Mutual with the following information prior to the hearing:

1. Financial records indicating the Applicant's assets and income from one year before the accident (March 10, 1992) to one year after (March 10, 1994). These documents should include bank records, income tax documents, and information about any investments.

2. Documentation of the husband's income, either his 1992 income tax return or a letter from his employer, for one year before the accident.

3. Details and any available records of contributions made by the Applicant's in-laws. This should include proof of rent payments and records of any other contribution.

4. Details and any available records of contributions made by the Applicant's parents, in support of the schedule appended to the Applicant's supplementary affidavit. This should include proof of contributions in respect of the car, vacations, and the Applicant's college tuition.

5. The Applicant's income tax return for 1993. At the time of the accident, the Applicant was on a January-April work term, which she was unable to finish after the accident. She had no income for 1992, when she attended school all year.

Ms. Levitan provided only the documents that were introduced as exhibits in this hearing². However, she contested Liberty Mutual's adjournment request, and asked that the hearing proceed. It was submitted on her behalf that she had substantially complied with the required productions, and that she intended to rely only on the documents that had already been provided to Liberty Mutual, plus her own testimony.

I concluded that Ms. Levitan should be allowed to proceed. I made it clear, however, that the onus was on her to prove her claim, and that it remained open to Liberty Mutual to argue that I should draw an adverse inference from her failure to provide supporting documents. I also indicated that I would reconsider the adjournment request if Ms. Levitan's testimony included any new and significant information that she should have provided prior to the hearing.

The hearing proceeded without delay. Ms. Levitan was the only witness. Unfortunately, I found her testimony imprecise and inconsistent. This is a major problem because the documentary evidence is also quite inconclusive. Previous arbitration decisions have spoken of the need for reliable and credible documentation³. I accept that financial arrangements among family members may be quite informal. Even taking that into account, however, I conclude that Ms. Levitan fell short of proving her case.

Ms. Levitan swore an affidavit on August 10, 1993 in support of her claim, which states in part:

3. I am a student at Centennial College in the accounting program.

4. My husband, Val, is 29 years of age and is employed as a general manager earning $27,000.00 per annum.

5. My father supported me during his lifetime even after my marriage as we could not live on $27,000.00 per annum. My father purchased my car which is a Mazda Mini-Van 1992 and paid by [sicl tuition to Centennial College together with all of my books and gave me the sum of $200.00 per week for my living expenses.

This affidavit is misleading in at least one respect. At the time of the accident, Ms. Levitan was a student, but she had an income through her work placement. She acknowledged in cross-examination that the deposits in her bank book from Mandelbaum & Partners for $570.17 were her paycheques for two weeks. Based on her Notice of Assessment from Revenue Canada, I find that she had gross earnings of $4,206 in 1993 prior to swearing this affidavit.

Ms. Levitan swore a second affidavit on February 17, 1994. It sets out her income and expenses in an appendix that was later revised. It became clear during Ms. Levitan's testimony that there are serious problems with many of the amounts set out in her revised statement of income and expenses.

For example, Mr. Levitan's "approximate net salary" is listed as $18,000. However, his yearly income on both his Notice of Assessment for 1992 and Ms. Levitan's previous affidavit is $27,000. Ms. Levitan was unable to explain how she calculated the net income figure of $18,000, and conceded that it should be more like $21,000. She testified that the regular deposits of approximately $440 shown in her bank statements were her husband's pay. I find, therefore, that Mr. Levitan's annual net income was at least $22,880 ($440 x 52 = $22,880).

It is disturbing that Mr. Levitan's income was reported incorrectly because there is no obvious excuse. He is the general manager of his father's company and, presumably, is in a position to provide complete and accurate financial information.

There are also problems with Ms. Levitan's own income. She lists her 1993 net income as $3,000, based on a net income of approximately $250 per week for 12 weeks. It is difficult to understand, however, why she needed to estimate her net income. As stated above, she received a paycheque every two weeks for $570.17, or $285.08 per week. The difference between $250 and $285.08 is not great, but it is consistent with Ms. Levitan's pattern of providing estimates, rather than precise amounts, that support her claim.

Ms. Levitan's position is that her parents' financial contribution was greater than the total of her income and her husband's. According to her revised statement of income and expenses, her parents provided the following:

$200/week (regular contribution)

$10,400

$900/semester at Centennial College

2,700

Vacation in December 1992

5,000

Dental and medical

500

Clothing & miscellaneous

3,135

Yearly value of vehicle purchased in 1992 for $30,000

5,000

$26,735

Even if I were able to accept all of these amounts, the contributions of Mr. and Mrs. Blitz would be very close to Mr. and Ms. Levitan's income in the year preceding the accident. For the following reasons, however, I am unable to accept this as an accurate record of the Blitz's contributions.

Ms. Levitan provided some documentary evidence about the purchase of the vehicle and the vacation. I accept that Mr. Blitz provided her with $29,118.00 on May 1, 1992 for the purchase of a new Mazda mini-van. I also accept the Mr. Blitz helped with vacations, including paying $2,416.00 for airline tickets for Ms. Levitan's family and her brother to go to Margarita Island in December 1992.

No documentary evidence was provided to support the other contributions, the most significant of which are the weekly contributions. Ms. Levitan claimed that her parents gave her $200 per week in cash, or by making direct deposits into her bank account. She explained that she used $100 for rent and the remainder for other expenses. Her bank account, however, does not show any regular pattern of deposits, other than paycheques. I also found her testimony about these payments vague and inconsistent. She insisted that they were regular weekly payments, but spoke about her father giving her money when she needed it. Ms. Levitan may have received financial contributions from her parents, but I find that they were not regular weekly payments, as she claimed.

I am also troubled by Ms. Levitan's evidence about her rent. She and her family live in a home owned by her husband's parents. She claims that the monthly rent was $1,100, and that although her in-laws were willing to give them extra time to pay, they never waived the rent. I find it odd that Ms. Levitan needed financial assistance from her parents to pay what she claimed to be market rent to her husband's parents. This is especially unusual given that Mr. Levitan works for his father.

Ms. Levitan initially testified that she gave her in-laws 12 post-dated cheques for $697.35, the amount of their mortgage, and paid the rest in cash. When she was asked why her bank records show only one or two cheques for $697.35, she speculated about combined payments, or changes in her in-laws' mortgage. I did not understand her explanation, or find any support for it in the bank records. I note, however, that the bank records show a number of cheques for $348.68, or one-half of $697.35. This may provide some support for Ms. Levitan's claim of monthly payments of $697.35, but no documents were provided to support rental payments of $1,100.

In my view, the basic problem is that no good explanation was provided for Ms. Levitan's failure to document the rental payments. Even if she has no receipts, surely her in-laws have some record of their rental income. At a bare minimum, they could have testified about the rent they received from their son and daughter-in-law.

Ms. Levitan did not provide any documents to support her claim that her parents paid her school fees, her family's dental and medical expenses, and for clothing. Again, I found her testimony about these expenses vague and unconvincing. In cross-examination, she was asked if she used any of her parents' regular contribution for school expenses. She answered that she might have, but might not have. Given my concerns about the accuracy of Ms. Levitan's testimony, I am not prepared to accept her estimates in the absence of supporting evidence.

Ms. Levitan has certainly suffered a loss. She has lost her parents. I am quite prepared to accept that Mr. and Mrs. Blitz were generous parents who assisted their daughter and her family. It appears that they made rather significant contributions that enhanced Ms. Levitan's lifestyle. However, I am unable to find on the evidence provided that they were her primary source of income at the time of the accident. I conclude, therefore, that Ms. Levitan was not a "dependant" of her parents at the time of the accident. As a result, she is not entitled to death benefits under section 11 (1) (c) of the Schedule.

3. Expenses

An award for expenses may be made under section 282(11) of the Insurance Act, which provides as follows:

282 (11) 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.

Arbitrators have consistently granted expenses unless the claim was fraudulent, manifestly frivolous or vexatious, or the applicant's conduct unduly prolonged the proceedings. Despite my concerns about this claim, I do not believe that it was fraudulent, manifestly frivolous or vexatious.

Given the limited productions and the relatively short hearing, the expenses should be modest. In the circumstances, I conclude that I should exercise my jurisdiction to grant Ms. Levitan her expenses, calculated according to Schedule 1 of the Dispute Resolution Practice Code and in Ontario Regulation 664, R.R.O. 1990.

The parties are encouraged to reach an agreement as to the amount of the expenses. However, if an agreement cannot be reached, I remain seized of this matter and either party may apply for an assessment of the expenses.

Order:

1. Ms. Levitan is not entitled to death benefits under section 11(1)(c) of the Schedule.

2. Ms. Levitan is entitled to her expenses related to the arbitration.

April 12, 1995

David R. Draper

Arbitrator

Date

APPENDIX A

Exhibit 1

A photocopy of an Affidavit sworn by Ms. Inna Levitan on August 10, 1993.

Exhibit 2

A photocopy of a Supplementary Affidavit sworn by Ms. Inna Levitan, together with an amended Appendix A.

Exhibit 3

A photocopy of an Affidavit sworn by Mrs. Rosa Blitz, the Applicant's grandmother, on February 17, 1994.

Exhibit 4

A letter, dated March 7, 1995, from Ms. Ellen Garber, Manager, Vacation Enterprises.

Exhibit 5

An invoice from Vacation Enterprises, dated November 11, 1992.

Exhibit 6

The client copy of a Canadian dollar draft for $29,118, dated May 1, 1992.

Exhibit 7

Notice of Assessment from Revenue Canada, dated July 5, 1993, with respect to Mr. Valery Levitan for the 1992 taxation year.

Exhibit 8

Notice of Assessment from Revenue Canada, dated May 30, 1994, with respect to Ms. Inna Levitan for the 1993 taxation year.

Exhibit 9

Bank statements from the Canadian Imperial Bank of Commerce with respect to the joint account of Ms. Inna Levitan and Mr. Val Levitan, for the period from April 3, 1992 to April 6, 1994.

APPENDIX B

Arbitration decisions

Daniel Cattrysse and The Westminster Mutual Fire Insurance Company and Anglo Canada General Insurance Company, June 21, 1993, OIC File Nos. A-001618 and A-001789.

Adolph Crnkovic and Maria Crnkovic, parents of the late Dubravka (Debbie) Crnkovic and Simcoe & Erie General Insurance Company, April 8, 1993, OIC File No. A-002228.

Brenda M. Lautaoja and General Accident Indemnity Company, May 10, 1994, OIC File No. A-007087.

Bruce and Eleanor McDonald and State Farm Insurance Company, March 11, 1993, OIC File No. A-001347.

Pietro Manti and Wawanesa Mutual Insurance Co., December 17, 1992, OIC File No. A-001496.

Peter Najem and AXA Insurance Company and Economical Mutual Insurance Company, July 27, 1993, OIC File Nos. A-003115 and A-003116.

Dianne Raffoul and State Farm Mutual Automobile Insurance Company, September 21, 1994, OIC File No. A-004476.

Maninder Singh and State Farm Mutual Automobile Insurance Company and Pilot Insurance Company, June 4, 1993, OIC File Nos. A-001525 and A-001526.

Court decisions

Elliot v. Elliot (1993), 1993 CanLII 3429 (ON CA), 48 R.F.L. (3d) 237 (C.A.) [excerpt].

Moge v. Moge, 1992 CanLII 25 (SCC), [1992] 3 S.C.R. 813 [excerpt].

Footnotes

1. 1Prior to January 1, 1994, Ontario Regulation 672 was called the No-Fault Benefits Schedule. After that date it became the Statutory Accident Benefits Schedule - Accidents Before January 1, 1994. In this decision, the term "Schedule" will be used to refer to Regulation 672.
2. 2The exhibits are listed in Appendix A
3. 3see, Jagdishar Singh and Kingsway General Insurance Company, January 29, 1993, OIC File No. A-000890; and, Patricia F. Main and Canadian General Insurance Company, May 6, 1994, OIC File No. A-006208.