Fathulla Arabpour v. Allstate Insurance Company of Canada, 1996 ONICDRG 165

Neutral Citation: 1996 ONICDRG 165

OIC A96-000773

ONTARIO INSURANCE COMMISSION

BETWEEN:

FATHULLA ARABPOUR

Applicant

and

ALLSTATE INSURANCE COMPANY OF CANADA

Insurer

DECISION on a PRELIMINARY ISSUE

Issue:

The Applicant, Fathulla Arabpour, was injured in a motor vehicle accident on September 25, 1993. He applied for and received statutory accident benefits from Allstate Insurance Company of Canada ("Allstate"), payable under Ontario Regulation 672.¹ On April 27, 1994 Mr. Arabpour and an Allstate adjuster met at Mr. Arabpour's home. On that occasion, Mr. Arabpour received two cheques totalling $8,987.89 and he signed a "Settlement Agreement." Later, a dispute arose as to whether Mr. Arabpour had settled all his claims against Allstate arising out of the accident.The parties were unable to resolve their disputes through mediation and Mr. Arabpour applied for arbitration under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

The issue in this hearing is:

1. In all of the circumstances, is the agreement of April 27, 1994 a valid and complete release of weekly income and supplementary medical and rehabilitation claims arising out of the accident of September 25, 1993?

Mr. Arabpour also claims his expenses incurred on the hearing of the preliminary issue.

Result:

1. The agreement does not comply with the provisions of the Settlement Regulation (O.R. 780/93) and as such, Mr. Arabpour was entitled to rescind the settlement by written notice to the Insurer, even after two business days had passesd.

2. Mr. Arabpour may proceed to an arbitration on the issues in dispute between him and Allstate.

Hearing:

The hearing was held at the offices of the Ontario Insurance Commission in North York, on September 19, 1996, before me, K. Julaine Palmer, Arbitrator.

Present at the Hearing:

Applicant:

Fathulla Arabpour

Mr. Arabpour's Representative:

Steven D. Benmor

Barrister and Solicitor

Allstate's Representative:

Todd J. McCarthy

Barrister and Solicitor

Allstate's Officer:

Mark Potts

Claim Manager

Witnesses:

Fathullah Arabpour, David Kalicharan.

The proceedings were interpreted by Mr. Babak Ardalan.

Evidence and Findings:

I heard evidence from the Applicant, through the interpreter, and from the adjuster about a meeting which occurred on April 27, 1994 at which time, the Insurer alleges, Mr. Arabpour settled his claims for weekly income benefits and supplementary medical and rehabilitation benefits arising from the accident of September 25, 1993. Both sides had very divergent views as to what kind of agreement was negotiated that day. The Applicant testified he believed he was settling a claim for "back payments" of weekly income benefits owing to him because Allstate had paid him less than he was entitled to based on his income from self-employment prior to the motor vehicle accident. The Insurer alleged that the parties had reached a full and final settlement of all statutory accident benefit claims arising from the accident.

Both parties also testified about communications received from the Applicant in the two days following the meeting of April 27, 1994.

I am persuaded that the adjuster's version of what transpired in the meeting is a more accurate description of the events of April 27, 1994. I do not accept that Mr. Arabpour had a misunderstanding as to the effect of signing the agreement on April 27, 1994.

Mr. Arabpour had the benefit of a professional Farsi-English interpreter² at that meeting, which lasted, I find, approximately five hours, not the two hours he estimated in his testimony. In my view it is incredible that a family friend who was bilingual in Farsi and English could the day following the agreement interpret it to Mr. Arabpour in a manner in which he could understand, when a professional interpreter, present throughout a five-hour meeting, could not.

I do not accept that an interpreter was even necessary to a valid conclusion of the settlement negotiations on April 27, 1994. The insurer provided the interpreter out of an abundance of caution so that precisely this kind of misunderstanding would not take place or be sought to be relied upon.

I do not find the Statutory Declaration of Bahram Kashani, declared February 20, 1996, to be persuasive evidence of either misinterpretation on his part or a lack of understanding on the part of Mr. Arabpour. The Statutory Declaration, especially paragraph seven, is couched in very vague language.

Accordingly, based on the evidence before me, I would find that the parties had effectively settled their disputes, were it not for the effect of section 9.1(2) of the Settlement Regulation, Reg. 664, R.R.O. 1990, as amended by O.R. 780/93. I do find that, in accordance with the Settlement Regulation, a copy of a Disclosure Statement was delivered to Mr. Arabpour in compliance with the provisions of section 9.1(2) of that regulation before a settlement was entered into between Mr. Arabpour and Allstate. However, in this case, I find I cannot uphold the settlement because of the faulty nature of the Disclosure Statement. The Disclosure Statement is satisfactory as to paragraphs I, II, III, IV and VI, which correspond to paragraphs 9.(1)(2)1, 2, 3, 4, and 6 of the Settlement Regulation. However, compliance with paragraph 9.1(2) 5. is deficient. That portion of the Settlement Regulation reads as follows:

5. If the settlement provides for the payment of a lump sum in an amount offered by the insurer and, with respect to a benefit under the Statutory Accident Benefits Schedule that is not a lump sum benefit, the settlement contains a restriction on the insured person's right to mediate, litigate, arbitrate, appeal or apply to vary an order as provided in sections 280 to 284 of the Act, a statement of the insurer's estimate of the commuted value of the benefit and an explanation of how the insurer determined the commuted value.

(Emphasis added)

The paragraphs in section V of the Disclosure Statement which should have been completed with the discount rate, life expectancy, and present value of future weekly income benefits were not completed.

Section 9.1(4) of the Settlement Regulation provides as follows:

(4) If the insurer did not comply with subsection (2), the insured person may rescind the settlement after the period mentioned in subsection (3) by delivering a written notice to the insurer.

I find that the Applicant has rescinded the Settlement Agreement of April 27, 1994 under section 9.1(4) of the Settlement Regulation by delivery of the Application for Mediation and the Application for Appointment of an Arbitrator to the Insurer.

Order:

1. Mr. Arabpour may proceed to an arbitration hearing on the issues in dispute between the parties.

2. Expenses on this hearing on a preliminary issue are reserved to the hearing arbitrator.

October 1, 1996

K. Julaine Palmer Arbitrator

Date

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 interpreter's credentials are set out in exhibit 8.