Ragir Murtty v. Security National Insurance Company, 1999 ONFSCDRS 75

Neutral Citation: 1999 ONFSCDRS 75

FSCO A98-001469

BETWEEN:

RAGIR MURTTY

Applicant

and

SECURITY NATIONAL INSURANCE COMPANY

Insurer

DECISION ON A PRELIMINARY ISSUE

Before:

Deena Baltman

Heard:

April 13, 1999, in Windsor, Ontario

Appearances:

Arnand Murtty for Mrs. Murtty

Richard F.L. Rose for Security National Insurance Company

The issue in this case is whether the Applicant, Ragir Murtty, is barred from arbitration because she failed to bring her arbitration proceeding within the two-year limitation period set out in section 72(1) of the Schedule.¹

Mrs. Murtty's application for arbitration was filed out of time, and she therefore cannot proceed to a hearing.

Background

Ms. Murtty was involved in a car accident on November 17, 1995. Security National Insurance Company (Security) paid her income replacement benefits (IRBs) on the basis that she could no longer work as a self-employed individual because of injuries sustained in the accident.

By letter dated May 21, 1996, Security advised Ms. Murtty that it intended to terminate weekly benefits because of medical evidence suggesting that she was no longer disabled. Ms. Murtty elected to be assessed by a Designated Assessment Centre (DAC), which completed its report on June 11, 1996. Because the DAC determined that Ms. Murtty was not disabled, Security terminated benefits on June 28, 1996, and confirmed its decision by a letter to Ms. Murtty dated July 3, 1996.

By an Application for Mediation dated September 9, 1996, Ms. Murtty applied for mediation with respect to the denial of IRBs. She later withdrew this application, as confirmed by a letter from the Commission dated October 24, 1996. This letter emphasized that should Ms. Murtty wish to re-apply for mediation, she must do so within two years of the Insurer's refusal to pay. On January 31, 1997, Ms. Murtty again applied for mediation with respect to the denial of IRBs. This mediation was held on March 3 and April 25, 1997. The Report of Mediator, dated April 25, 1997, confirmed that the issue of IRBs remained in dispute and that the mediation had failed.

During the mediations in March and April 1997, Ms. Murtty asked Security to reconsider its refusal of further IRBs. Security agreed to do so if Ms. Murtty provided updated medicals, which she later did. Security reviewed the further medical information and reimbursed an outstanding medical expense, but maintained its refusal of IRBs.

On November 25, 1998, Ms. Murtty filed an application for arbitration.

The relevant provision, section 72(1) of the Schedule, states:

A mediation proceeding under section 280 of the Insurance Act or an arbitration or court proceeding under section 281 of the Act in respect of a benefit under this Regulation shall be commenced within two years from the insurer's refusal to pay the amount claimed or...within two years of the insurer's refusal to pay further benefits. [emphasis added]

Security argues that because it notified Ms. Murtty on May 21, 1996, that it was refusing to pay any further benefits, and she did not file for arbitration until November 25, 1998, she missed the two-year time limit and is therefore precluded from arbitration.

Discussion:

At the hearing, Ms. Murtty acknowledged that she received Security's notice of May 21, 1996, refusing to pay further benefits, as well as its letter of July 3, 1996 (following the DAC assessment) which confirmed the termination of benefits. She also admitted that both notices were clear and unequivocal, and that she was aware of the two-year limitation period.

She argues, however, that she successfully reactivated the limitation period during the mediations of March and April 1997, when she asked Security to reconsider its termination of IRBs. She states that by agreeing to reassess her entitlement to IRBs, Security gave her a further two-year period within which to file an application for arbitration.

I disagree. Ms. Murtty admitted that although Security agreed to reassess her claim, it never suggested that it would waive any time limits for proceeding to arbitration. Nor did Security mislead Ms. Murtty into believing a reinstatement was likely; it merely agreed, upon provision of updated medicals, to reconsider her claim. This is consistent with an insurer's obligations under the policy and does not, in itself, suggest that the Insurer has waived any time limits. Arbitrators have previously noted that neither ongoing negotiations, nor an applicant's attempt to persuade an insurer to reinstate benefits, will stop the time period from running.²

Ms. Murtty's alternative argument is that neither she nor her husband, who represents her, was able to prepare her application for arbitration in time because they were suffering from injuries sustained in this accident. There are two difficulties with this argument. First, I received no compelling evidence that their injuries prevented them from filing an application for arbitration. On the contrary, a Functional Abilities Evaluation, a DAC assessment and an orthopaedic assessment all concluded that Ms. Murtty could return to work as of May 1996. It was not until October 1998, long after the limitation period had passed, that Ms. Murtty submitted any medical opinions to the contrary. Second, even if reliable evidence of disability exists, numerous Commission decisions have stated that an arbitrator has no discretion to extend the two-year time limit because of an applicant's distress.³

For these reasons, I find that Ms. Murtty failed to comply with the two-year time period, and is thereby precluded from proceeding to arbitration.

April 30, 1999

Deena Baltman Arbitrator

Date