Neutral Citation: 1998 ONFSCDRS 72

FSCO A98-000161

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

SANDRA LOPEZ

Applicant

and

ALLSTATE INSURANCE COMPANY OF CANADA

Insurer

DECISION ON PRELIMINARY ISSUE

Issue:

The Applicant, Sandra Lopez, was injured in a motor vehicle accident on February 3, 1997. She applied for and received income replacement benefits from Allstate Insurance Company of Canada ("Allstate") payable under the Schedule¹ from February 10, 1997 until June 24, 1997. At that time, Allstate terminated her benefits for failure to attend at a disability assessment. At mediation, the parties entered into a procedural agreement whereby the Applicant agreed to attend at a disability assessment. The Applicant failed to attend at the rearranged disability assessment and Mrs. Lopez applied for arbitration of the income replacement benefit issue under the Insurance Act R.S.O. 1990 c. I.8, as amended. Allstate took the position that Mrs. Lopez could not proceed in light of her failure to attend at the disability assessment.

The preliminary issues are:

1. Did the Applicant make herself reasonably available for a disability assessment on June 24, 1997?

2. Did the Applicant make herself reasonably available for a disability assessment on October 9, 1997?

3. If not, what are the consequences of her failure to attend?

Result:

1. The Applicant's failure to attend at the disability assessment of June 24, 1997 was reasonable.

2. The Applicant's failure to attend at the disability assessment of October 9, 1997 was not reasonable.

3. As a result of her failure to attend at the disability assessment, Ms. Lopez is precluded from proceeding with her application for income replacement benefits.

Hearing:

The hearing on the preliminary issued was held at the offices of the Financial Services Commission of Ontario in North York, Ontario, on October 16, 1998, before me, M. Guy Jones, Arbitrator.

Present at the Hearing:

Applicant:

Sandra Lopez

Ms. Lopez'

Cesar Carranza

Representative:

Barrister and Solicitor

Allstate's

Todd J. McCarthy

Representative:

Barrister and Solicitor

Allstate's

Mr. Mark Potts

Officer:

Witnesses:

Ms. Sandra Lopez

Ms. Barbara Murray

The proceedings were recorded by Ms. Cheryl Aylward.

The Facts:

Ms. Sandra Lopez was injured in a motor vehicle accident on February 3, 1997. She applied for and received income replacement benefits from February 10 to June 24, 1997. The Insurer terminated her benefits on that date as they took the position that she had unreasonably failed to attend at a disability assessment (DAC) set up for that date at MEDI-DAC.

Ms. Lopez had previously been seen by a number of doctors at the request of the Insurer, and the Insurer advised Ms. Lopez that they intended to terminate her benefits as a result of the medical reports. Ms. Lopez requested, as is her right, a disability DAC pursuant to section 43 of the Schedule. The Insurer set up a disability DAC with Dr. Sheffman of MEDI-DAC Services Limited for June 24, 1997 at 12:45 p.m.

A question arose as to whether or not the Insurer sent the required notice to Ms. Lopez advising her of the DAC. Ms. Barbara Murray, Dr. Sheffman's secretary testified that she mailed a proper notice on June 12, 1997.² She also testified that she faxed a copy of this notice to Karla Rumaldo, an employee at Ms. Lopez' solicitor.³ Counsel for the Insurer filed a confirmation of the fax being received at the fax number for Ms. Lopez' lawyer, which states that it was received on June 12, 1997 at 11:51 a.m. The solicitors for Ms. Lopez were unable to find any trace of the letter. Ms. Lopez testified that she first learned of the DAC when she was contacted by telephone by Mrs. Murray on the morning of June 24, 1997, the day of the appointment. Ms. Lopez explained to Mrs. Murray that she had something else to do that day and could not make the designated time. While she did not tell Mrs. Murray, it turned out that she had an important meeting that afternoon with a team of doctors to discuss the results of some neurological testing that had been conducted on her husband.

Ms. Lopez testified that she did not receive the letter notifying her of the disability DAC until June 25, 1997, the day after the scheduled DAC. I accept Ms. Lopez' evidence that she did not receive the letter until the day after the scheduled DAC. There is no proof to the contrary and late arrival clearly irritated her, as she mentioned it to numerous doctors, who noted it in their reports.

I also accept that the earliest Ms. Lopez was aware of the appointment was sometime in the morning of June 24, 1997 when Mrs. Murray called her. By that time, however, Ms. Lopez had already arranged to meet with the doctors about her husband's serious neurological condition. I find that it was reasonable for Ms. Lopez to attend at the pre-arranged meeting regarding her husband's health problem rather than attend at the disability DAC on such short notice.

On August 14, 1997, following the missed DAC appointment, Ms. Lopez' lawyer filed an application for mediation in order to achieve reinstatement of the income replacement benefits. This was done despite section 50(c) which states:

An insured person shall not commence a mediation proceeding under section 280 of the Insurance Act unless,

(c) he or she made himself or herself reasonably available for any assessment under section 43 and he or she complied with subsection 43(2) in respect of the assessment.

When the issue of the failure to attend the disability DAC was raised at mediation, the Applicant agreed to attend at a disability DAC. A "procedural agreement" was entered into for Ms. Lopez to attend, as noted in the Mediator's Report of September 24, 1997.

The Insurer followed this up by having Dr. Sheffman's secretary at MEDI-DAC mail a notice of a disability DAC with Dr. Sheffman for October 9, 1997, to Ms. Lopez.⁴ This letter was mailed to Ms. Lopez on September 25, 1997 and a copy of the letter was successfully faxed to Ms. Lopez' solicitor's office the same day. In addition, a staff claim representative of Allstate wrote a confirming letter regarding the "procedural agreement" as well as the date of the new DAC, dated September 29, 1997.⁵

Ms. Lopez' lawyer's office responded to the appointment notice on September 26, 1997, stating:

Please by advised that we are insisting that our client be assessed by a DAC qualified to assess musculoskeletal as well as neurological impairment. Accordingly, we ask that you cancel the above appointment.⁶

Ms. Lopez did not attend, and on January 30, 1998, she applied for arbitration regarding the non-payment of the income replacement benefits.

Reasonableness of non-attendance at October 9, 1997 disability DAC:

The critical issue before me in this hearing is whether it was reasonable for Ms. Lopez not to attend the October 9, 1997 DAC. As noted above, section 43(3) of the Schedule requires that the Applicant must make herself reasonably available for a disability assessment. Numerous arbitration cases have held that the onus is on the Applicant to show that she made herself available or that the request was unreasonable.

Counsel for the Applicant argued that it was not reasonable for the Applicant to attend a disability DAC being conducted by a chiropractor in light of the fact that her injuries included not only complaints about her back and neck muscles, but also headaches. He maintained that she would also have to be seen by a neurologist as part of the DAC.

In order to determine the appropriateness of this position, it is first necessary to look at the DAC process. Assessments by Designated Assessment Centres were introduced into the statutory accident benefit regime in 1994. The centres provide opinions on specific issues, including whether a person continues to be disabled from working as a result of the accident. It was the expectation that both insurers and insureds would perceive the assessors as neutrals and thereby provide a useful basis for the parties to resolve their differences. In order to make the system work, Guidelines for Designated Assessment Centres were issued. The guidelines applicable to this case are the "Guidelines for Designated Assessment Centres to Conduct Assessments for Accidents on or after November 1, 1996." While the term "Guidelines" suggests that the provisions are discretionary, section 52 of the Schedule provides that the Guidelines "shall" be used by the Designated Assessment Centres in conducting the assessments.

The Guidelines set up an assessment process which has four distinct stages: referral, intake, assessment and reporting. As part of the intake stage, it is necessary for the applicant to participate in the referral to the DAC. While it may have been questionable whether this occurred with regard to the June 24, 1997 appointment, there is little doubt but that the Applicant did agree at mediation to attend at a disability DAC assessment.

The Guidelines specify that DACs are authorized to conduct assessments covering four specific ranges of impairments: musculo-skeletal, brain, spinal cord and psychological impairments.⁷

The Insurer is bound by the Guidelines and once a specific range of impairment has been determined, they must have the Applicant attend at the nearest DAC to where the Applicant lives. In this particular case, the Insurer decided that the Applicant's disability was musculo-skeletal in nature and set up the appointment with Dr. Sheffman of MEDI-DAC. Dr. Sheffman is a chiropractor who has been properly certified to perform musculo-skeletal disability assessments. The parties agree that Dr. Sheffman is the DAC closest to where the Applicant resides. I note that Dr. Sheffman is the same doctor who was to conduct the initial disability DAC in June 1997.

The real issue is whether it was necessary to send Ms. Lopez to a musculo-skeletal DAC that included a neurologist as suggested by the Applicant's counsel. In order to determine this question, it is important to see what information was available to the Insurer when it set up the assessment with the musculo-skeletal DAC.

The second DAC appointment was set up on September 25, 1997. By that time, the Insurer basically knew that the Applicant was complaining of a sore back, sore neck and headaches. The Insurer had Ms. Lopez seen by Dr. Soric, a physiatrist, in April 1997, who concluded that Ms. Lopez had essentially suffered "soft tissue" injuries.

At the request of the Insurer, Ms. Lopez was seen by Dr. Corin, a neurologist, in April 1997. Counsel for the Applicant cites this as some proof that the Insurer was aware of the Applicant's headache problems at that time and the DAC should have included someone who could conduct a neurological assessment. My reading of Dr. Corin's report, however, suggests that while Dr. Corin was aware of the headache problem, he found no neurological reason for them and concluded that Ms. Lopez was suffering from soft tissue strains.

Ms. Lopez had also been seen by Dr. Peter Parker, a physiatrist, in August 1997. He too refers to neck, back and headache complaints. He concluded that she had myofascial injuries.

While the Insurer did have other medical documentation before the time the DAC on September 25, 1997, I am satisfied that the totality of that evidence suggests that Ms. Lopez was suffering from a sore back, sore neck, and headaches that were musculo-skeletal in nature.

I note that it was not until at least October 10, 1997, after the second DAC had already been scheduled to be held, that there was any suggestion of a neurological problem. At that time Dr. Weber, a neurologist retained by Ms. Lopez' lawyer suggested there could be a neurological base to the headaches.

I also note that at the hearing, the Applicant admitted that she was not suffering from a brain injury, a psychological impairment or a spinal cord injury - the only areas of potential DAC assessment.

I further note that the Guidelines provide that the DAC must review each case that is referred to them, and if the DAC concludes that it does not have the necessary resources to properly assess the applicant's impairment, it must notify the parties and the applicant will be referred to another DAC. There is no suggestion that Dr. Sheffman had come to this conclusion at the time of the first DAC or by the time the second was scheduled.

Counsel for the Applicant drew my attention to a number of cases which he submitted applied to this situation. In Janice Dawson vs. Kingsway General Insurance Company (OIC A96-000413, October 31, 1996), a chiropractor was conducting a DAC and in his report conceded that his expertise did not allow him to deal with a TMJ problem that the Applicant had. He nonetheless concluded that the Applicant was capable of working. The Arbitrator found that the DAC chiropractor went beyond his area of expertise and found against the Insurer. The facts of the case at hand, however, are far different. Here the evidence at the time of the first DAC appointment and when the second DAC appointment was set up, was that the Applicant was suffering from musculo-skeletal problems and there was no medical suggestion that Dr. Sheffman could not properly assess them.

In Amy Levey and Traders General Insurance Company (OIC A96-001590, June 30, 1998), the Applicant was suffering from soft tissue injuries and also spasmodic torticollis, an involuntary repetitive movement disorder. The orthopaedic specialist who conducted the DAC indicated that the Applicant was not disabled for orthopaedic reasons but that the spasmodic torticollis was more appropriately assessed by a neurologist. Once again the fact situation is significantly different in Mrs. Lopez' case. Here the medical evidence up to the time of the second appointment suggested that the Applicant was suffering from musculo-skeletal injuries, which Dr. Sheffman was certified to assess. If Dr. Sheffman had actually done the assessment and commented on an area outside of his expertise, then Ms. Lopez' case might be more similar to that of the Dawson case.

Counsel for the Applicant also referred to the case of Coutu and Wawanesa Mutual Insurance Company (OIC A97-001916, June 5, 1998). In that case, Arbitrator Alves dealt at great length with the duties and obligations of both parties in assessment situations. I agree with her comments as they relate to the duties and obligations of the parties and her interpretation of the Guidelines. I accept that the Applicant has an important role to play in the DAC process and indeed their participation is vital if the process is to be successful. The problem that I have in this case is that the evidence suggests that the Insurer did act properly but the Applicant failed to follow the proper procedures.

Once the first DAC was missed, counsel for Ms. Lopez did not object to the qualifications of the DAC. He did not attempt to set up another appointment. He simply brought the income replacement benefit issue to mediation despite the fact that section 50(c) clearly states that an Applicant cannot commence a mediation without first making oneself reasonably available for an assessment.

Although Ms. Lopez nonetheless got to Mediation, in order to be allowed to proceed, her counsel agreed to a disability DAC. It was only later that he objected to the particular DAC, which was the same one that he had not objected to earlier.

In light of the above, I am satisfied that Ms. Lopez did not make herself reasonably available for an assessment prior to mediation. Accordingly she cannot proceed to arbitration for income replacement benefits.

Ms. Lopez returned to work on October 14, 1997. As counsel for the Insurer pointed out, disability DACs can comment only an applicant's ability to work at the time of the examination and not in the past. Counsel for the Insurer therefore argued that they had lost a fundamental right to have a disability assessment done and therefore the Applicant ought not to be allowed to have a disabililty DAC now and then proceed to arbitration.

Disability assessments are not simply a right for the Insured. They are assessments conducted for the benefit of both parties. Had the DAC been completed, it might have benefited either party.

I am, nevertheless, very concerned with what seems to have been a total disregard for the DAC system by counsel for the Applicant. As a result of those actions, a disability DAC cannot now be performed, and accordingly, based on the facts of this case, I find that Ms. Lopez is barred from proceeding to arbitration for income replacement benefits as a result of this accident.

Expenses:

If the parties are unable to agree as to the disposition of expenses, I may be spoken to.

Order:

1. Ms. Lopez' failure to attend at the disability DAC of June 24, 1997 was reasonable.

2. Ms. Lopez' failure to attend at the disability DAC scheduled for October 19, 1997 was not reasonable.

3. Ms. Lopez is barred from proceeding to arbitration for income replacement benefits arising from an accident which occurred on February 3, 1997.

November 6, 1998

Guy Jones Arbitrator

Date

Footnotes

1. 1The Statutory Accident Benefits Schedule —Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended by Ontario Regulations 462/96, 505/96 and 551/96.
2. 2Exhibit 2, tab 2
3. 3Exhibit 1, tab 1
4. 4Exhibit 1, tab 2
5. 5Exhibit 1, tab 3
6. 6Exhibit 2, tab 4
7. 7Exhibit 4, page 10 – Guidelines