Gerhard M. Schneider v. State Farm Mutual Automobile Insurance Company, 1997 ONICDRG 97

Office of the Director of Arbitrations

Neutral Citation: 1997 ONICDRG 97
Appeal: P96-00029

Gerhard M. Schneider
Appellant

and

State Farm Mutual Automobile Insurance Company
Respondent

Before:
David R. Draper, Director’s Delegate

Counsel:
Gerhard M. Schneider (representing himself)
Lawrence R. McRae (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:

1. The appeal is dismissed and the arbitration decision, dated January 12, 1996, is confirmed.

2. No appeal expenses are payable.

June 12, 1997

David R. Draper
Director’s Delegate

Date

Reasons for Decision

I. Nature of the Appeal

This is an appeal by Gerhard M. Schneider from an arbitration decision, dated January 12, 1996, in which the arbitrator denied his claims for housekeeping, medication, chiropractic expenses, the cost of a home whirlpool spa, weekly income benefits, and arbitration expenses. Mr. Schneider also appeals the arbitrator’s refusal to order State Farm Mutual Automobile Insurance Company (“State Farm”) to pay a special award under section 282(10) of the Insurance Act.

II. Background

Mr. Schneider was injured in an automobile accident on March 5, 1992. At that time, he was working for his own closely-held corporation as a certified general accountant. His former spouse, Caroline Meyer, also worked there, plus two or three other employees. Mr. Schneider returned to work after the accident, but claims his business lost money because the accident affected his ability to do the work properly.

Mr. Schneider had a standard automobile policy issued by State Farm. As required by the Insurance Act, it provided the benefits set out in Ontario Regulation 672, Statutory Accident Benefits Schedule - Accidents Before January 1, 1994 (“the Schedule”). A major problem with Mr. Schneider’s claim, throughout, has been his inability or unwillingness to frame his claims according to the benefits available under his policy.

State Farm paid some chiropractic and related travel expenses, but refused Mr. Schneider’s other claims. The rejected claims included weekly income benefits (although he continued to work), business losses, time missed due to medical appointments at his professional rate of $120 per hour, and a whirlpool spa.

Mr. Schneider disagreed with State Farm’s decision to deny his claims and with the assistance of a lawyer, applied for mediation. Although the mediation was unsuccessful, Mr. Schneider did not apply for arbitration until February 1995, approximately 19 months later. By that time, he was no longer represented. The letter accompanying his application for arbitration states his view that the no-fault benefits system is a violation of basic human rights. Further, he alleges that State Farm’s employees and Dr. Bartol, who was retained by State Farm to conduct an assessment, acted improperly and should be jailed, or Dr. Bartol should lose his medical licence. While an expression of frustration may be understandable, Mr. Schneider’s language is intemperate. More importantly, he continued to present his claim as if it were a tort claim, seeking compensation for business losses, the cost of hiring additional employees, and compensation at his hourly rate as an accountant for time spent for medical treatments and related travel.

At a pre-hearing in May 1995, Mr. Schneider presented essentially the same claims. The pre-hearing letter confirmed that he was to give State Farm the following documents before the hearing:

1. Dr. Sharma’s medical report, at State Farm’s expense.

2. Dr. Steel’s records from March 5, 1992, at State Farm’s expense.

3. The records of Dr. St. Louis, at State Farm’s expense.

4. Any document supporting his claim for medical, rehabilitation and transportation expenses.

5. His personal income tax returns from 1989 to the present.

At some point after the pre-hearing, Mr. Schneider retained a lawyer, although not the same one who represented him during the mediation. Despite the involvement of a lawyer, State Farm did not receive the required documents until the Friday before the hearing was to start on Monday, August 28, 1995. Even then, disclosure was incomplete because the records of Dr. Steel and Dr. St. Louis were not provided.

At the start of the arbitration hearing, State Farm argued that Mr. Schneider’s documents should all be excluded due to his late and incomplete disclosure. The arbitrator denied State Farm’s request. He accepted the documents, but advised Mr. Schneider there could be cost consequences.

The hearing went ahead on August 28 and 29, 1995, with Mr. Schneider represented by counsel. He and Ms. Meyer were the only witnesses.

One issue at the arbitration was whether Mr. Schneider’s symptoms were related to the accident. Dr. Bartol did not testify at the hearing, but stated in his report that he was unable to connect any of the complaints to the accident. The arbitrator did not accept Dr. Bartol’s opinion because he found it was based on mistaken information about when the symptoms started. Looking at all the evidence, including the testimony of Mr. Schneider and Ms. Meyer, the arbitrator found that Mr. Schneider’s neck and back pain started with the accident. He also accepted that the memory and concentration problems were connected to the accident, but also found they had essentially resolved by the end of 1992. Finally, the arbitrator was not satisfied that Mr. Schneider’s ongoing shoulder problems were related to the accident.

The arbitrator then went on to consider whether Mr. Schneider was entitled to the benefits he claimed due to his accident-related injuries. For reasons set out in the decision, he rejected most of the claims. He also denied Mr. Schneider’s arbitration expenses on the basis that he prolonged the hearing. In part, this was due to the late and incomplete disclosure, but the arbitrator also referred to Mr. Schneider’s insistence on claiming what he thought was fair without regard to whether his claims were available under the automobile policy or were properly before the arbitrator.

III. New Evidence

Mr. Schneider asked me to consider documents that were not filed as exhibits at the arbitration hearing. State Farm objected.

I accept the general criteria for the introduction of new evidence used in previous appeal decisions. For example, in the recent decision in Allishah and Allstate Insurance Company of Canada, (April 26, 1996, OIC P-002780), Director’s Delegate Naylor states the following at page 4:

There is a broad discretion to entertain new evidence on appeal. However, in both the courts and the Commission’s dispute resolution system, the admission of new evidence has been circumscribed, in order to bring some closure to the adjudication process. For the most part, evidence that was not before the arbitrator will not be allowed on appeal unless the following conditions are met:

(i) the party could not have obtained the evidence by due diligence before the hearing;

(ii) the evidence must be reasonably capable of belief;

(iii) the evidence must relate to a potentially decisive issue, and if believed, when taken with the other evidence adduced at the hearing, be reasonably expected to have affected the result or be an important influence upon it.

I agree with State Farm’s submissions that most, if not all, of the new evidence fails to meet these criteria. Much of it was available at the time of the arbitration hearing. In fact, Mr. Schneider was required to produce some of the documents for the hearing, but failed to do so. Despite my concerns about the new evidence, however, it is unnecessary for me to decide whether it is admissible. For the reasons below, I am not persuaded there is any basis for interfering with the arbitrator’s decision even if the new evidence is considered.

IV. The Appeal

A. The Arbitration Process

Mr. Schneider raises a number of objections about the arbitration process. First, he submits that the lack of a court reporter made the hearing a “waste of time” and, therefore, it should be treated as “null and void.” I am not persuaded, however, that there was anything unusual or unfair about this case. Arbitration hearings often take place without a court reporter. Although the parties can arrange for the hearing to be recorded, it is not the practice of the Ontario Insurance Commission to provide or pay for a reporter. As a result, arbitrators are used to listening to witnesses and taking notes at the same time.

Mr. Schneider also objects to the fact that Dr. Bartol was not called as a witness. The difficulty with this submission is that there is no indication it was raised at the arbitration hearing. Both parties relied on medical reports without calling the doctors. The appeal record provides no evidence that Mr. Schneider objected to the absence of Dr. Bartol, or that State Farm was asked to produce him for cross-examination. In the circumstances, I have no basis for concluding that the hearing was unfair.

Finally, Mr. Schneider objects to the arbitrator expressing medical opinions when he is not a doctor. None of the arbitrators are medical doctors. Their job, however, is not to diagnose or decide on treatment. It is to determine the person’s entitlement to accident benefits by weighing conflicting evidence, including medical evidence. I am satisfied that is what the arbitrator did here and, therefore, there is no reason to interfere.

B. Entitlement To Accident Benefits

Mr. Schneider made it difficult for both State Farm and the arbitrator to evaluate his entitlement to accident benefits. Not only did he pursue compensation not available under his policy, some of his claims were clearly unreasonable. For example, his claim for housekeeping expenses included the cost of sending one of his housekeepers to his holistic chiropractor.

The other troublesome aspect of this case is the lack of medical evidence supporting the degree of disability claimed by Mr. Schneider. Throughout the appeal hearing, he referred to himself as having a “broken back,” a “paralyzed shoulder,” ankle problems that cause him to walk on his ankle bone, and a brain injury. The medical evidence, however, simply does not support injuries of that severity.

Mr. Schneider submits that x-rays done in August 1995 finally confirm what he has been saying all along, that he suffered a serious back injury in the accident. Although these x-rays were done just before the arbitration hearing, they were not introduced at the hearing. With respect to his lumbar spine, the report states:

There is a straightening of the lumbar lordosis. The vertebral bodies are normally formed and mineralized.

There is loss of the intervertebral disc spacing at L5-S1. There are sclerotic changes in the contiguous vertebral body margins and there are marginal osteophytes projecting anteriorly and postero-laterally into the foramina.

There is also a bony defect in the pars articularis at L5. There is no forward slipping of L5 on S1.

COMMENT: Spondylolysis without spondylolisthesis L5-S1. Degenerative disc disease with secondary osteoarthritis L5-L1.

[emphasis added]

Mr. Schneider argues that these findings, particularly the highlighted portion, show that his back was broken in the accident. However, the cause of spondylolysis and its effect on the person can be difficult to determine. Dr. Durnin, who ordered the x-rays, does not seem to regard the findings as particularly significant. He simply states that the “x-rays do show degenerative changes in the neck and lower back with a spondylolysis at L5-S1,” and reports showing Mr. Schneider methods to use at home to relieve the pain. Dr. Durnin does not state that the spondylolysis was caused by the accident, or that it significantly restricts Mr. Schneider’s activities.

Mr. Schneider’s explanation for Dr. Durnin’s lack of support is that he is covering up for Dr. Bartol, who should have found the broken bone in his back. There is no basis for this assertion. The record is full of instances where Mr. Schneider accuses those who disagree with him, including his own doctors, of acting unprofessionally. He was referred to Dr. Durnin by his own doctor, and there is no reason to doubt Dr. Durnin’s objectivity.

I also agree with State Farm’s submission that Mr. Schneider tends to diagnose himself and decide on his own treatment. His written submissions about “candidas” are one example:

The “skin condition” Mr. Evans refers to is called candidas, a fungus/yeast infection problem 4 out of 5 people have with some never having any symptoms as it is controlled, or kept in check, by your immunity system. In 1985 I had an attack and saw Dr. Wan about it. He had never heard of it and consulted his medical book. Nystatin is the prescription drug to treat the symptoms and is not a cure.

If an existing condition is made worse due to an accident injury, the cost associated with it becomes an expense that is covered in the insurance policy. In my case, the last outbreak in May/92 was the direct result from injuries sustained in the accident. My immunity system trying to heal the injuries as well as dealing with the physical and emotional stress relating to the accident, the single most frequent cause of an outbreak of candidas.

After reviewing the record and hearing Mr. Schneider’s submissions, I am left with the impression that rather than taking the advice of the doctors, he has attempted to persuade them to accept his own views about his injuries and treatment needs. He even challenges Dr. Steel, the doctor he holds in highest regard. In a letter to Dr. Steel, he says the following:

Also, they [State Farm] will want to know how the injuries would affect my function as an accountant and in other ways, i.e., housework, which I had hired out because I was unable to do the necessary chores. We discussed this at one time and I mentioned that I thought taking a month or two off from work for complete rest would benefit my recovery. Your response was that you could not recommend that, I could still work. I thought that was extremely insensitive, inconsiderate and unkind, but I did not say anything. I don’t beg or argue.

Somehow I had the feeling that you didn’t believe me when I told you that I thought that I might have had a head injury-concussion and lost consciousness. There is a time gap for which events I have no memory of and it was the first time I saw stars (as they say) with black background, like fire works. At times when I bend over I will see sparkles floating by.

The arbitrator did not completely reject Mr. Schneider’s evidence. He accepted that he was injured in the accident and needed some treatment. In my opinion, however, there was ample basis for the arbitrator’s unwillingness to accept that the accident-related injuries were as disabling as Mr. Schneider claimed.

C. Specific Claims

(i) Housekeeping expenses

The arbitrator’s primary reason for rejecting this claim was that the medical evidence did not support Mr. Schneider’s need for help with his housekeeping. This finding is supported by the evidence and, therefore, it should not be disturbed on appeal. As set out above, I find that there was ample evidence that Mr. Schneider was not as disabled as he claimed.

(ii) Prescriptions and other medications

As I understand it, the first part of this claim is for $199.64 for medication to treat a skin condition that Mr. Schneider refers to as “candidas,” a fungus/yeast infection. According to the arbitrator, Mr. Schneider’s lawyer conceded that there was no medical basis to support this claim. There is no reason to doubt this statement and, in my view, it is a sufficient basis for rejecting this part of the appeal.

Even without the concession, however, this claim illustrates the problem with Mr. Schneider’s approach. It was up to him to prove he needed this medication as a result of the accident. The fact that he believed he had an outbreak of candidas because of the accident’s effect of his immune system is not enough. His failure to provide supporting medical evidence is fatal to this claim.

Mr. Schneider also claimed $2,998.00 for Naim-Barley Green, a product that he used for reasons set out in his written appeal submissions:

The accident devastated my health and my immune system. Everybody needs one or they are dead. To heal the body and restore the immune system, it needs the right tools and materials which are vitamins and minerals and live enzymes. . . . Many of the different herbs were for the purpose of reducing backpain and promoting healing of my back and pinched nerves. Many were for dealing with my headaches, my total lack of energy and boosting my mental functions to a point where I at least could do some work with – Meyer’s assistance.

The problem, again, is that Mr. Schneider’s own opinion is not enough to establish his claim. I am not prepared to interfere with the arbitrator’s conclusion that there was no medical evidence to establish that this was a reasonable expense resulting from the accident.

(iii) Treatment by Dr. Steel, including transportation expenses

The arbitrator allowed this claim in part. He accepted that it was necessary and reasonable for Mr. Schneider to travel to Dr. Steel’s clinic until the end of 1992, when the arbitrator found he had substantially recovered. Mr. Schneider submits, however, that the arbitrator misinterpreted Dr. Steel’s invoices. The arbitrator specifically deals with the invoices at page 14 of his decision:

I find the figures claimed for the treatments problematic. Mr. Schneider testified that he obtained the annual figures by looking at the running total on the last invoice of each year. Several invoices for later periods show amounts for homeopathic drops or miscellaneous vitamins and herbal remedies in addition to treatment. The invoice for December 30, 1992, indicates the treatment cost $17.00. At 23 visits in 1992, that would total $391.00, of which it appears OHIP paid $204.75, yet Mr. Schneider’s claim is for $804.40.

As a result, the evidence is unclear as to what amounts were paid for chiropractic treatments and what amounts were paid for various drops, vitamins, and herbal remedies. I find that the Insurer is responsible for paying the difference between the cost of 23 treatments in 1992 at $17.00 per treatment ($391.00) and what OHIP paid ($204.75), which totals $186.25.

I agree that the invoices are confusing. However, the arbitrator was in a better position to assess the evidence, including the examination and cross-examination of Mr. Schneider. As it is not clear to me that he erred, his findings should be allowed to stand.

(iv) Whirlpool spa

There was conflicting medical evidence on Mr. Schneider’s need for a whirlpool spa. More than two months before the purchase, Dr. St. Louis, a chiropractor, stated that a whirlpool “could be beneficial.” I agree with the arbitrator that this is weak support for an expenditure of approximately $4,000. In contrast, Dr. Bartol, the orthopaedic surgeon retained by State Farm, did not see any need for a home whirlpool, suggesting that a hot bath or shower would serve the same purpose. The arbitrator preferred Dr. Bartol’s opinion, as he was entitled to do.

(v) Weekly income benefits

Weekly income benefits are paid under section 12 of the Schedule if as a result of the accident, the insured person is substantially unable to perform the essential tasks of his or her pre-accident work. Mr. Schneider continued to work after the accident, but claimed he should be compensated for his business losses and the cost of replacement labour.

The arbitrator held that this type of claim does not fit under either section 12, or section 6(1)(f) as a rehabilitation expense. His interpretation has been accepted in the recent appeal decisions in Oliviera and Zurich Insurance Company, (September 12, 1996, OIC P-002691) and Saini and Wellington Insurance Company, (April 3, 1997, OIC P-001515). I see no reason to take a different approach.

(vi) Special award

The arbitrator’s refusal to order a special award follows logically from his other findings. As I have found no reason to disturb those findings, there is no basis for a special award.

(vii) Arbitration expenses

Section 282(11) of the Insurance Act gives the arbitrator a discretion to award expenses, without giving any further guidance. Because it is a discretionary power, I am not prepared to interfere unless it is shown that the arbitrator exercised the discretion on some improper basis. That is not the case here. The factors considered by the arbitrator are appropriate, providing a reasonable basis to deny expenses.

V. Appeal Expenses

Although I accept that Mr. Schneider genuinely believes the arbitrator’s decision is wrong, that is not a sufficient basis for awarding appeal expenses. Previous appeal decisions have consistently held that expenses will not be awarded to an unsuccessful appellant whose appeal is based on the arbitrator’s assessment of the evidence. This is such a case. I find no reason to depart from the usual approach and, therefore, State Farm is not required to pay Mr. Schneider’s appeal expenses.

State Farm submits that Mr. Schneider should be ordered to pay an assessment under section 282(11.2) of the Insurance Act. Although his appeal was misguided, I am not convinced that it was “frivolous, vexatious or an abuse of process,” as required by the legislation. Therefore, State Farm’s request is denied.

June 12, 1997

David R. Draper
Director’s Delegate

Date