Neutral Citation: 1997 ONICDRG 176
Appeal P96-00024
OFFICE OF THE DIRECTOR OF ARBITRATIONS
KENNETH CARL JOHNSON
Appellant
and
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY
Respondent
Before:
David R. Draper, Director's Delegate
Representatives:
Jack McMaster (for Mr. Johnson)
Joseph J. Sullivan and Edita T. Cimba (for State Farm)
APPEAL ORDER
Under section 283 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:
The appeal is dismissed and the arbitration order, dated January 9, 1996, is confirmed.
No appeal expenses or assessment are payable.
September 26, 1997
David R. Draper Director's Delegate
Date
REASONS FOR DECISION
I. NATURE OF THE APPEAL
This is an appeal by Kenneth Carl Johnson from an arbitration decision dated January 9, 1996. At the appeal hearing, Mr. Johnson limited his appeal to two issues: the denial of his arbitration expenses and the arbitrator's order that he must pay State Farm an assessment of $1,000.
II. BACKGROUND
Mr. Johnson was involved in an automobile accident on July 5, 1991. State Farm paid him weekly benefits for one year. Mr. Johnson applied for mediation, claiming he was entitled to ongoing weekly income benefits under section 12(1) of Ontario Regulation 672, Statutory Accident Benefits Schedule - Accidents Before January 1, 1994 ("the Schedule"). He also disputed State Farm's refusal to pay him certain expenses, including expenses for yard work and medical reports.
The disputes were not resolved during mediation. Mr. Johnson applied for arbitration, but not until late June 1994, nearly 21 months after the mediation failed. In his application for arbitration, he claimed ongoing weekly income benefits from July 1, 1992 and certain expenses. Mr. Johnson signed the form, but listed Mr. Jack McMaster, a non-lawyer, as his representative.
A pre-hearing discussion was held by conference call in November 1994. Mr. Johnson participated on his own, without Mr. McMaster's assistance. The pre-hearing arbitrator, Arbitrator Manji, identified the issues in dispute, determined what documents had to be produced by each party and scheduled the hearing for May 8, 9 and 10, 1995.
At Mr. Johnson's request, a follow-up pre-hearing was held in February 1995 to deal with some questions arising out of the first pre-hearing. Mr. McMaster represented him at this second pre-hearing. Arbitrator Manji clarified the issues and dealt with some additional production questions. A third pre-hearing was held in early May 1995, primarily to consider State Farm's request for an adjournment. At that point, Mr. Johnson was no longer represented by Mr. McMaster. Arbitrator Manji granted a short adjournment because State Farm's lawyer had a scheduling conflict and Mr. Johnson had not yet given State Farm all the documents he was required to produce.
The arbitration hearing took place on May 30 and 31, 1995 and June 1, 1995 before Arbitrator Sampliner. Mr. Johnson represented himself. He filed 28 exhibits and called five witnesses - himself, Dr. Ervin Oinonen (his family doctor), Jens Knof (his chiropractor), Shaun Baylis (his counsellor) and Stephen Burnett (State Farm's claims supervisor). After Mr. Johnson presented his case, the arbitrator told State Farm it did not need to present any evidence. Although he did not call on State Farm, the arbitrator reserved his decision.
On January 9, 1996, Arbitrator Sampliner issued his decision. He found that Mr. Johnson's ongoing disability was caused by a 1989 automobile accident and pre-existing arthritic problems, not the July 1991 accident. He also found that Mr. Johnson prolonged the proceedings by calling irrelevant evidence, engaging in "uncontrolled outbursts, speeches, and diatribes," and refusing to be governed by orders. Not only did the arbitrator refuse Mr. Johnson's claim for additional benefits, he denied his claim for arbitration expenses and ordered him to pay State Farm an assessment of $1,000 under section 282(11.2) of the Insurance Act, R.S.O. 1990, c. I.8, on the basis that his claim was an abuse of process.
Mr. Johnson appealed, challenging all aspects of the arbitrator's order. Although the Notice of Appeal listed Mr. McMaster as his representative, Mr. Johnson prepared his own lengthy written submissions. At his request, the appeal was put on hold due to his ill health.
The appeal hearing finally took place on September 8, 1997, approximately 19 months after he filed his Notice of Appeal. Mr. McMaster was involved again, representing Mr. Johnson at the hearing. He started his submissions by limiting the appeal to two issues: arbitration expenses and the $1,000 assessment. The other claims were abandoned.
III. ANALYSIS
It is unusual for an arbitrator not to call on the insurance company to present its case. Arbitrator Sampliner found, however, that the evidence presented by Mr. Johnson, including his own testimony and that of his experts, did not support his claim. He describes the claim as "completely unmeritorious" and an abuse of process.
Through his representative, Mr. Johnson generally acknowledges the arbitrator's description of his behaviour during the arbitration process, but contends it did not reflect a frivolous or vexatious claim. Rather, it is consistent with his general inability to focus and control himself, a problem he has had since his first automobile accident in 1989. He argues, therefore, that the arbitrator should not have denied his arbitration expenses or ordered him to pay an assessment of $1,000.
Arbitration expenses and assessments are discretionary orders, involving somewhat different considerations. The relevant statutory provisions are sections 282(11) and 282(11.2) of the Insurance Act which, at the time of this arbitration, read as follows:
- -(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.
(11.2) If an insured person commences an arbitration that, in the opinion of the arbitrator, is frivolous, vexatious or an abuse of process, the arbitrator may award an amount to be paid by the insured person to the insurer that does not exceed the amount assessed against the insurer in respect of the arbitration under section 14.
A. Arbitration Expenses
Through a series of arbitration and appeal decisions, a general approach has been adopted for the exercise of the discretion in section 282(11) to grant arbitration expenses. Applicants with legitimate claims, conducted reasonably, can expect to recover their allowable expenses, win or lose. However, expenses can be denied if the claim is not legitimate or the applicant unreasonably prolongs the hearing.1
In this case, the arbitrator denied Mr. Johnson's expenses because he failed to comply with legitimate production orders and wasted a great deal of time at the hearing. I find no reason to interfere with this decision. Mr. Johnson acknowledges that some of his behaviour was inappropriate and although he attempted to explain the production problems, the record supports the arbitrator's findings.
The dispute resolution process is meant to be accessible to unrepresented applicants, but both parties must abide by the rules. Mr. Johnson may have had difficulty focussing and controlling himself, but I agree with the arbitrator that he, not State Farm, must bear the consequences. Therefore, this part of the appeal is dismissed and the arbitrator's order denying expenses is confirmed.
B. Assessment
The statutory criteria for an assessment are more precise. An assessment can be ordered only if the insured person "commences an arbitration that, in the opinion of the arbitrator, is frivolous, vexatious or an abuse of process." Referring to Mr. Johnson's conduct and a lack of supporting evidence, the arbitrator found Mr. Johnson's claim an abuse of process and ordered him to pay an assessment of $1,000.
Mr. Johnson maintains that there was evidence supporting his claim. In particular, he claims the arbitrator misinterpreted the testimony of his family doctor, Dr. Oinonen. At page 6 of the decision, the arbitrator states that he accepts "Dr. Oinonen's unequivocal opinion that Mr. Johnson's chronic back pain and consequent dysfunction were likely caused by his pre-existing arthritic condition and injuries from the 1989 accident."
On appeal, Mr. Johnson filed a letter from Dr. Oinonen disagreeing with the arbitrator's interpretation of his testimony:
Mr. Fred Sampliner, Arbitrator, on hearing my testimony seemed to draw the conclusion that I felt that Mr. Johnson's problems were all pre-existent and related to degenerative arthritis and the 1989 accident. I did not specifically say that, nor imply that, and in case there is any doubt, I express now that my opinion was (and is) that his pain and problems are due to all 3 - namely, degen. arthritis, MVA 1989, and MVA July 5, 1991. I think Mr. Sampliner drew a conclusion that was not warranted from my testimony, and if transcripts of my testimony could be produced, I think they would substantiate my point.
I think the effects of the arthritis, MVA 1989, MVA 1991 were cumulative and additive.
Also, I would point out that although I emphasized repeatedly that Mr. Johnson had developed a chronic pain syndrome as a big part of his disability, I regret that I cannot find one mention of this problem on the decision report.
State Farm raises legitimate questions about the admissibility of this letter as new evidence in the appeal, especially given Mr. Johnson's decision not to order a transcript of Dr. Oinonen's testimony. Assuming the letter is admissible, however, I am not persuaded it affects the result.
The issue before the arbitrator was not simply whether Mr. Johnson was injured in the 1991 accident. To succeed in his claim for weekly income benefits, he had to prove on a balance of probabilities that he suffered injuries that left him substantially unable to perform the essential tasks of his pre-accident occupation. The difficulty is that his pre-accident work situation was also in issue. At the first pre-hearing, Arbitrator Manji's understanding was that he was not working at the time of the 1991 accident because he was still recovering from the 1989 accident. One issue, therefore, was whether Mr. Johnson should be considered for weekly benefits under section 12 or 13 of the Schedule.
The arbitrator dealt with Mr. Johnson's entitlement under section 12 because that is the claim he pursued. He found Mr. Johnson's testimony about his work unreliable, and found no evidence that the 1991 accident significantly affected his work situation. This assessment is supported by the evidence. For example, the arbitration exhibits include a report from Dr. Oinonen stating that Mr. Johnson has been dysfunctional since the 1989 accident. Although the report was written almost 15 months after the 1991 accident, it focuses entirely on the earlier accident. Other examples are included in the arbitrator's decision. As a result, I agree with State Farm that even if I accept that the 1991 accident contributed to Mr. Johnson's problems, there still is no evidence that it significantly affected his ability to do his pre-accident work, which was minimal at best.
It is also not clear that the arbitrator entirely dismissed the role of the 1991 accident. Shaun Baylis, Mr. Johnson's counsellor, testified that although the 1991 accident heightened Mr. Johnson's back problems, he stopped marketing his hockey game in 1989. At page 7 of the decision, the arbitrator accepts this evidence. However, he found nothing in Mr. Baylis' testimony to suggest that the 1991 accident significantly affected Mr. Johnson's ability to do what he was doing before the accident.
While I found Mr. Johnson's appeal submissions sincere, I conclude that the arbitrator acted within his discretion in ordering the assessment. Therefore, I am not prepared to interfere. As Director's Delegate Naylor said in the Allison decision, cited above, an appeals adjudicator should not second-guess the exercise of discretion simply because someone else might have reached a different conclusion.
Finally, there was some suggestion that Mr. Johnson's appeal of the expenses order might have included his out-of-pocket expenses for services like yard work. If so, I find no reason to doubt the arbitrator's decision to deny the claim. He found that the 1991 accident did not significantly affect Mr. Johnson's functioning. Therefore, it would be hard to establish that the services he claimed were required as a result of the accident.
IV. APPEAL EXPENSES / ASSESSMENT
Unsuccessful appellants generally do not receive their appeal expenses. I am not persuaded that they should be awarded in this case, particularly considering the existing order that Mr. Johnson pay State Farm $1,000. However, I am not prepared to order an additional assessment against Mr. Johnson, as argued by State Farm. His decision to abandon most of the arguments raised in his written submissions was wise, although it would have been helpful if he had done so earlier. The appeal, as argued, was not frivolous, vexatious or an abuse of process.
September 26, 1997
David R. Draper Director's Delegate
Date