Financial Services Commission

Commission des services financiers de l’Ontario

Neutral Citation: 1998 ONFSCDRS 3

Appeal P96-00075

OFFICE OF THE DIRECTOR OF ARBITRATIONS

GEORGE A. KOTA

Appellant

and

WAWANESA MUTUAL INSURANCE COMPANY

Respondent

Before:

Susan Naylor, Director's Delegate

Counsel:

Robert A. Besunder (for George Kota)

Gregory P. Heckel (for Wawanesa Insurance)

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 arbitrator's order dated September 20, 1996 is confirmed.
George Kota is entitled to his reasonable appeal expenses.

July 13, 1998

Susan Naylor

Director's Delegate

Date

REASONS FOR DECISION

I. NATURE OF THE APPEAL

George Kota appeals from an arbitration decision dated September 20, 1996, denying him weekly income benefits after June 11, 1994 based on the post-156 week test set out in paragraph 12(5)(b) of the Statutory Accident Benefits Schedule - Accidents before January 1, 1994, R.R.O. 1990, Reg. 672, ("the Schedule").

II. BACKGROUND

Mr. Kota suffered soft-tissue injuries in an accident on June 4, 1991. His car collided with another vehicle which apparently had driven through a red light at an intersection. According to the medical reports, Mr. Kota suffered a musculo-fascial sprain and strain to his right shoulder and a whiplash injury to his neck. At first, his injuries were expected to resolve to the point he could resume work within a matter of months. However, he has not returned to work since the accident.

Mr. Kota, who is right handed, continues to experience pain in his right shoulder, affecting its use. For some time, he was unable to raise his arm above his shoulder or lift or carry heavy objects. He says there has been some improvement in his condition over time but he still can do only light lifting. Mr. Kota continues to complain about pain and stiffness in his neck, although these symptoms have also gradually improved.

Over time, Mr. Kota developed other complaints which have taken precedence over his initial injuries. He started to complain about low back pain and headaches. He became depressed. He developed insomnia and would stay up most of the night, resting during the day. He lacked energy or motivation. He became frustrated and angry. It is his position that while his physical injuries continued to affect him, the main cause of his continuing disability was his mental and psychological problems.

The arbitrator reviewed Mr. Kota's background in some detail. He was 29 years old at the time, and working as a drywaller, having recently set up his own subcontracting business. He had a varied work history previous to this. Mr. Kota initially dropped out of school at age 15 or 16 and learned the drywalling trade by working for his father. After a couple of years, he returned to complete his education. He graduated from high school with the equivalent of Grade 13, and completed a two-year program in business administration at a college. He originally planned to transfer his credits to complete a university degree, but decided to join the work-force instead.

After leaving college, Mr. Kota worked as a computer operator for several companies over the next few years, then decided to pursue a career in the music industry. He continued to supplement his income with the odd drywalling job. He formed, managed and played in a rock band for several years until about 1988. The venture was not financially viable and Mr. Kota decided to make his living as a drywalling subcontractor. He was in the process of building up the business when the accident intervened.

Mr. Kota received weekly income benefits for three years because he was unable to resume work drywalling, which is physically strenuous. Under the Schedule, benefits are paid initially if the person is unable to do the type of work he or she was doing at the time of the accident. After 156 weeks, however, a more stringent test applies. Benefits then depend on it being established that "the injury continuously prevents the insured from engaging in any occupation or employment for which he or she is reasonably suited by education, training or experience. (See the Schedule, paragraph 12(5)(b)).

Based on this provision, Wawanesa Mutual Insurance Company ("Wawanesa") stopped payments effective June 11, 1994. Mr. Kota's position is that there is no suitable work within his present capabilities and he requires retraining before he can return to the work-force in an appropriate position. Wawanesa argues that there is a range of other jobs suited to Mr. Kota's background that he can do without retraining.

The termination of benefits was upheld at arbitration. The arbitrator held that, even if Mr. Kota could not return to drywalling, he had not shown that he was prevented from doing other less strenuous work suited to his background. She did not find his testimony credible and preferred the medical evidence where it differed from Mr. Kota's testimony. She also concluded, based largely on the late development of his symptoms and the absence of medical confirmation of a relationship, that there was insufficient evidence linking Mr. Kota's depression and associated symptoms to the accident. The arbitrator dismissed Mr. Kota's claim for a special award but awarded him his arbitration expenses. Mr. Kota appeals the denial of benefits. He argues that the evidence does not support certain crucial findings of fact and that the arbitrator applied the wrong legal standard. He seeks a reversal of the arbitrator's order, and substitution of a new order for benefits. Alternatively, he asks that the order be vacated and a re-hearing ordered.

A transcript of Mr. Kota's testimony (he was the only witness) was filed on the appeal. I also received extensive written and oral submissions from the parties.

III. ANALYSIS AND FINDINGS

As stated in other appeal decisions, it is not my role to second-guess the arbitrator's assessment of the evidence. She had the advantage of hearing Mr. Kota's own testimony and of evaluating the medical documents in light of the overall evidence. The question on appeal is not whether I would have reached a different conclusion but whether the arbitrator has made some serious error such that the decision cannot stand.

In my view, the evidence that Mr. Kota was continuously unable to engage in any suitable occupation or employment by reasons of injuries he sustained in the accident is slim. The arbitrator had ample basis for concluding that he did not meet the requirements for continued benefits.

Mr. Kota was examined by Dr. Michael Kronby, a neurologist retained by Wawanesa. In his report of October 23, 1991, Dr. Kronby anticipated a return to work after one or two months of active rehabilitation. The rehabilitation program took place, but Mr. Kota remained off work. Mr. Kota saw Dr. Raphael Chow, a specialist in physical medicine and rehabilitation, several times in 1992. Dr. Chow's report provides only limited support for Mr. Kota's position. In April 1992, he recommended a light sedentary job "at this stage" but anticipated gradual improvement over the next year. Five months later, in September, 1992, Dr. Chow recommended a functional abilities assessment and agreed with a proposal that Mr. Kota attend a rehabilitation program at the FIT for Work Centre. The FIT program, which took place in the Spring of 1993, was discontinued because of lack of progress.

Mr. Kota was then referred for a physical capacities assessment at the Ontario March of Dimes. The results of the assessment do not assist Mr. Kota. The March of Dimes concluded that although there were some discrepancies between Mr. Kota's measured capabilities and his job requirements, he could probably return to full-time work as a drywaller if he co-operated in a continuing fitness program and participated in a work hardening or a graduated return to work program. The report cautioned however that this depended on Mr. Kota's desire to return to work and his compliance with the program. Mr. Kota's rehabilitation consultant ultimately recommended putting an end to further attempts at rehabilitation, because of compliance problems. Given the evidence to that point, this was an understandable decision.

The assessment results are consistent with the records of Dr. George Farago, Mr. Kota's family doctor for the first three years after the accident. They show that well before the 156 week mark he encouraged Mr. Kota to return to lighter duties. The company Mr. Kota worked for appeared open to the possibility of a modified work arrangement, but Mr. Kota was adamant that he could not resume his former occupation and needed retraining.

Mr. Kota relies on the opinion of Dr. Jacques Dubins, who became his family doctor in early 1994. Dr. Dubins listed Mr. Kota's back pain and headaches as the reason he could not return to his previous line of work. However, he is alone in this view. Even on Mr. Kota's own testimony, his headaches were only occasional.

Although the arbitrator recognised that Mr. Kota's physical injuries continued up to June 11, 1994, she found the evidence "less convincing" beyond that point. Mr. Kota argued that the 156 week mark was arbitrary, and that the arbitrator's finding is unsupported on the evidence as well as inconsistent with her acknowledgement that his injuries were painful as of the date of the hearing, two years later.

The Schedule requires the arbitrator to focus on the 156 week mark, itself an arbitrary but legislated point in time. Mr. Kota himself testified that his condition had gradually improved. With some prompting from his counsel, he qualified this by agreeing that "because you said it's gotten better, one might be able to infer it was worse back in June 1994."¹ However, the arbitrator did not have to determine the precise extent to which Mr. Kota's condition had resolved or the exact point in time when he became capable of performing suitable work. She had to determine only whether his condition had reached that stage as of June 11, 1994.

In numerous decisions it has been held that pain does not equate to disability. Entitlement to benefits ends not when the claimant is symptom-free but when the person's symptoms have resolved to the point he or she can resume work - the pre-accident job or, after 156 weeks, alternative work suited to the person's background. The arbitrator was sympathetic to Mr. Kota's position. She recognised that he continued to experience pain, but was not persuaded that the pain limited his activities to the point he was unable to return to work for which he was qualified. Paragraph 12(5)(b) of the Schedule has been considered in a many appeal and arbitration decisions.² The onus of establishing disability within the meaning of the provision rests on the claimant but the standard must be realistic. As noted in other decisions, a claimant is not required to prove that he or she is unable to do each and every potentially suitable type of work.³ In determining whether the claimant has met the onus, the options for alternative work presented by the insurer and the applicant's own efforts in positioning himself or herself to return to the work-force are factors in the analysis.⁴ The cases emphasize that the question of suitable employment is a question of fact, based on the individual circumstances: the work must be suitable for that applicant, viewed fairly and realistically in the context of his or her educational and employment background. The person must be capable of doing a real job involving real work, not a notional position or "make-work" activity.⁵ This includes the ability to do work to a reasonable standard and level of productivity, within reasonable time-frames. However, the cases do not go so far as to require proof of an actual job opening.

I am satisfied that the arbitrator gave consideration to the appropriate factors here. Provided she did so, the weight to be attributed to the evidence is a matter for her own judgement. The focus of the medical reports was almost entirely on Mr. Kota's ability to perform his drywalling job. There is little evidence about his ability to do other types of work that might be suitable.

The arbitrator's decision took into account Mr. Kota's varied work history, the early stage of his drywalling business and his earnings level. Mr. Kota is a relatively young man. In addition to drywalling, he also has experience in other areas of the renovation business. Wawanesa introduced evidence of other possible employment areas which might be suitable and within Mr. Kota's capabilities.⁶ However, Mr. Kota did not follow up with the rehabilitation consultant in her efforts to help him return to the work-force.

Mr. Kota's background also allowed him to obtain work as a computer operator in a variety of positions after leaving college. While his computer skills likely needed upgrading, the rehabilitation company that performed the Transferable Skills Analysis concluded that, given his experience, this could be accomplished quickly.

This was not a case in which the claimant had spent much of his working life in a single line of work, making a change of direction more difficult. Although Mr. Kota learned the skills of drywalling by working for his father for about two years after initially dropping out of school, after that, his drywalling work was limited to the odd job to supplement his income. It was not until 1988 or 1989, at least, that he decided to make a living for himself as a drywaller and, on his own testimony, not until several months before the accident that business started to pick-up.

Mr. Kota's view of the range of suitable work open to him was also coloured by his earnings expectations, which were not supported on the evidence. Mr. Kota reported earning $1,000 a week from his drywalling business and the vocational rehabilitation consultants drew up a profile of comparable work based on this information. Mr. Kota may have earned this amount in the month before the accident, but there was no history of his having come close to this figure for any length of time, and, except as an expression of optimism, little basis in the evidence to conclude that this represented his probable future earnings picture. Mr. Kota's 1991 income tax return showed employment income for the five months before the accident of $3,700. Details of his earnings for prior years in drywalling were not provided, but, on his own testimony, those years were less successful. His previous venture in the music business had failed to make money and ended after the musicians' equipment was repossessed.

The arbitrator took into account Mr. Kota's failure to explore alternative jobs. The record supports the view that Mr. Kota had a fixed impression of his own capabilities and of the need for retraining. The medical evidence was by no means clear that it was the persistence of his injuries, rather than a lack of activity and conditioning, that prevented him from resuming his drywalling work. While the arbitrator gave him the benefit of the doubt in this regard, the evidence fell well short of establishing an inability to do other work for which he was qualified.

Mr. Kota's participation at FIT and the March of Dimes was marred by attendance and punctuality problems and his rehabilitation worker ultimately put an end to further attempts to help Mr. Kota return to work because of problems with compliance.

Mr. Kota argues that his lack of motivation, insomnia and other problems were symptomatic of an underlying, serious depression, related to the accident, that was not identified until he went to see a psychiatrist much later on. He argues that the arbitrator wrongly concluded that his depression, headaches and psychological problems were not related to the accident. He submits further that the arbitrator accepted, at least implicitly, that his depression and associated problems were enough to disable him from any work that might be suitable and that I must either accept this finding or remit the case for a new hearing.

Although the arbitrator's decision leaves some doubt on the matter, I do not read it in this way. She clearly recognised that Mr. Kota experienced mental or psychological problems and preferred Dr. John's opinion to that of Dr. Margulies, who concluded that Mr. Kota's depression was based on a pre-existing personality disorder. However, in the final analysis, she made no findings as to whether his depression and associated problems precluded him from engaging in suitable work, because she did not need to do so.

While FIT reports record Mr. Kota as reporting a lack of motivation, it was only in September 1994, when he started to see Dr. John, a psychiatrist, on his own initiative, that he was found to be suffering from significant psychological problems.

Mr. Kota relies heavily on Dr. John's brief report dated August 24, 1995 and on his clinical records. In his report, Dr. John gave an opinion as to disability, stating:

It is my opinion that Mr. Kota has suffered from major depression. This has been a significant factor in his continued inability to function adequately. The consultation report and clinical notes that I have provided ...would indicate that this patient had a variety of symptoms suggesting depression. These included headaches, feelings that life was not worth living, inability to sleep and suicidal thoughts. The depression has also affected his motivation resulting in diminished interest and energy. From a psychiatric point of view, his condition would have prevented him from engaging in an occupation or employment for which he is reasonably suited by education, training and experience. Physical findings and factors should be determined by consulting other physicians who are looking after him.

Dr. John also supported Mr. Kota's application for benefits under the Family Benefits Act, which was successful. In his supporting medical report of November 15, 1994, he stated that Mr. Kota was unlikely to be able to return to gainful employment in the near future.

Mr. Kota also relies on Dr. Dubins' evidence. In a report dated August 15, 1996, he attributed Mr. Kota's poor motivation, tardiness and insomnia to his continuing pain and headaches and to depression related to the accident. He also provided a report dated October 26, 1994, for the purposes of Mr. Kota's Family Benefits Act claim, in which he stated that he had been treating Mr. Kota with hypnotherapy for insomnia and headaches, and listed as impediments to participating in training or employment that Mr. Kota seemed unable to get into a routine because of these problems or to get up in the morning.

Until Dr. John, none of Mr. Kota's medical or rehabilitation professionals appears to have detected a significant psychological component to his condition. In fact, this appeared to have been explored and largely discounted. Although Mr. Kota mentioned he was having problems motivating himself, the FIT team found no evidence of depression. Mr. Kota's test results on the Beck Depression Inventory Scale did not suggest a problem with depression and he reportedly denied cognitive or behavioural changes since the accident. The consultants at the March of Dimes likewise did not identify depression as an impediment to his rehabilitation. There is no evidence that Dr. Farago or Dr. Dubins found evidence of significant psychological problems in the intervening time.

It is possible that all these professionals missed signs of serious psychological distress. However, there are other deficiencies in the evidence in support of a psychologically-based claim.

As the arbitrator pointed out, Dr. John, Mr. Kota's treating psychiatrist, provides no opinion as to a relationship between Mr. Kota's depression and the accident, although he provides a brief opinion as regards disability. It is left to Dr. Dubins to make the causal connection, even though he did not identify, or treat, Mr. Kota's depression. In his report of August 1, 1995, Dr. Dubins restricts his opinion on disability to Mr. Kota's chronic back pain and headaches.

Dr. John's silence on the issue of causality is puzzling. Given that Mr. Kota's case rested to a significant extent upon his psychological problems, one would expect a probable connection to be made by the treating psychiatrist. I agree with the arbitrator that Dr. Dubins' report linking Mr. Kota's depression to the accident is of little value.

Mr. Kota argues that there was no evidence of any cause other than the accident, and that the arbitrator's finding was speculative. However, the timing of the development of Mr. Kota's clinical depression coincides with the termination of his benefits. If benefits have been terminated in a proper manner and on proper grounds, depression arising from the cessation of benefits, of itself, cannot provide the causal underpinnings of a claim. In many cases, the lines may be difficult to draw. Given the timing of Dr. John's intervention, the connection is less difficult.

Regardless of the question of causality, the evidence that Mr. Kota's depression and associated symptoms are so significant as to prevent him from engaging in suitable work is not strong. No medical evidence confirms that Mr. Kota's lack of motivation up to eighteen months before Dr. John's intervention was the result of a disabling, depressive illness and beyond his control. The evidence that Mr. Kota's depression ruled out any suitable work even after September 1994 was insubstantial.

Dr. John's brief report of August 24, 1995, simply echoes the language of the Schedule. His clinical notes do not assist much. While Mr. Kota's condition was serious enough to require supportive counselling and antidepressant medication, the basis for Dr. John's conclusion that Mr. Kota's mental or psychological condition was so serious as to preclude him from any suitable work is unclear. Although Dr. John reviewed Mr. Kota's employment history briefly in his first report dated September 21, 1994, it is not clear what type of jobs were ruled out by Mr. Kota's psychological condition and what Dr. John understood to be suitable work in his case.⁷

The Insurance Act confers wide-ranging powers on appeal.⁸ Where a significant error is found, there are a number of options available. They include remitting the case for a fresh hearing or substituting a new order for that of the arbitrator. An appeals adjudicator is not required to remit the case back for a new hearing unless the evidence warrants it. Given all the problems in the evidence, even aside from the arbitrator's adverse credibility findings, I conclude that Mr. Kota has failed to prove his claim on the balance of probabilities. The appeal is therefore dismissed.

IV. Expenses

An award of expenses does not necessarily follow the result of the appeal. Unsuccessful appellants have been awarded their expenses where their appeal raised an important or substantive issue, or was reasonable in some other respect. However, expenses have been denied where the appeal simply involves a disagreement with the weight the arbitrator attributed to the evidence. While Mr. Kota's appeal rests to some extent on that footing, I am satisfied that there was merit to his bringing it.

There were legitimate grounds to question the arbitrator's finding on causation, and the remedy in this case, given the absence of a clear finding on disability. Given the nature of the appeal, and the manner in which it was argued, an award of expenses in favour of Mr.Kota is justified.