Neutral Citation: 1999 ONFSCDRS 9

FSCO A98-000676

BETWEEN:

JARROT A. ZEHR

Applicant

and

CANADIAN GENERAL INSURANCE GROUP

Insurer

REASONS FOR DECISION

Before: Lawrence Blackman

Heard: December 11, 1998, in London, Ontario

Appearances:

Barbara Legate for Mr. Zehr

Doug Wright for Canadian General Insurance Group

Issues:

The parties agree that the Applicant, Jarrot A. Zehr, sustained significant injuries in a July 16, 1994 motor vehicle accident, including brain and orthopaedic injuries. Mr. Zehr was 17 years old at the time of the accident and had just completed Grade 12 with an 82 per cent final average. Following the accident, Canadian General Insurance Group ("Canadian General") paid Mr. Zehr weekly Education Disability Benefits ("EDBs") pursuant to section 15 of the Schedule¹Canadian General terminated payment of EDBs on July 11, 1996, just short of 104 weeks after the accident. However, in accordance with the Schedule, EDBs continued to be paid pending an assessment by a Designated Assessment Centre ("DAC").

The parties dispute whether Mr. Zehr qualifies for weekly EDBs after July 11, 1996. The parties were unable to resolve their disputes through mediation and Mr. Zehr applied for arbitration at the Financial Services Commission of Ontario² under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

Part VI of the Schedule requires an insurer to deliver a written offer with respect to Loss of Earning Capacity Benefits ("LECBs") to an insured who qualifies for weekly EDBs "104 weeks after the onset of the disability in respect of which [the insured] first qualified" for EDBs. The parties seek a preliminary ruling on whether Mr. Zehr is entitled to EDBs from July 12 to July 15, 1996 (the latter being 104 weeks after the onset of Mr. Zehr's disability). An insured may be entitled to EDBs for different reasons. Mr. Zehr seeks weekly benefits for the said period on two alternate grounds, namely that he continues to suffer a substantial inability to continue his education and that he suffers a "partial inability to carry on a normal life." Whether Mr. Zehr suffers a "complete inability to carry on a normal life" will be the subject of a further hearing.

If Mr. Zehr is found to meet the "partial inability" test, there is a further question of whether he is then entitled to an LEC offer, or whether he must be suffering a "complete inability" at 104 weeks to be entitled to the said offer.

The issues in this preliminary issues hearing therefore are:

Did Mr. Zehr suffer a substantial inability to continue his education pursuant to paragraph 15(2)(a) of the Schedule from July 12, 1996 until July 15, 1996?
Did Mr Zehr suffer a partial inability to carry on a normal life, pursuant to paragraph 15(2)(c) of the Schedule from July 12, 1996 until July 15, 1996?
If the answer to issue #2 is in the affirmative, does the Insurer's obligation to deliver an LEC offer pursuant to paragraph 21(1)(4) of the Schedule require Mr. Zehr to be suffering a complete inability to carry on a normal life?
Is Mr. Zehr entitled to his expenses of the arbitration proceeding?
Is the Insurer entitled to its expenses of the arbitration proceeding?

Result:

Mr. Zehr suffered a substantial inability to continue his education pursuant to paragraph 15(2)(a) of the Schedule from July 12, 1996 until July 15, 1996.
Mr. Zehr suffered a partial inability to carry on a normal life, pursuant to paragraph 15(2)(c) of the Schedule from July 12, 1996 until July 15, 1996.
The Insurer’s obligation to deliver an LEC offer pursuant to paragraph 21(1)(4) of the Schedule requires Mr. Zehr to be suffering only a partial inability to carry on a normal life.
Mr. Zehr is entitled to his expenses incurred in respect of this arbitration proceeding up to and including this preliminary issue hearing, in accordance with the Expense Regulation, Ontario Regulation 664, R.R.O. 1990, as amended.

EVIDENCE AND ANALYSIS:

The Applicant claims entitlement to EDBs from July 12 to July 15, 1996, pursuant to the following two alternate provisions of subsection 15(2) of the Schedule, which provide that EDBs are payable during the period that the insured person suffers:

(a) a substantial inability to continue his or her education, in the case of an insured person who qualifies under subparagraph i of paragraph 2 of subsection (1);

... or

(c) a partial or complete inability to carry on a normal life, in the case of an insured person who qualifies under subparagraph iii of paragraph 2 of subsection (1).

There is no dispute that Mr. Zehr initially qualified for EDBs under both subparagraphs 15(1)(2)(i) and (iii). It is disputed whether Mr. Zehr continues to qualify under these provisions. These alternate claims will be dealt with in turn.

1) Substantial inability to continue his education

The parties first dispute whether paragraph 15(2)(a) of the Schedule speaks to an insured person's individual education path or whether the provision requires the insured to be unable to continue with any education. The Insurer submits that "[p]art of the difficulty that the Applicant is experiencing in school appears to be a result of his insistence on taking course work that is not the most compatible with his deficits."

I find that by using the words "his or her" education rather than "any" education, the Legislature has determined that the inquiry is to be particular to the insured. What is pertinent is whether Mr. Zehr is substantially unable to continue his own particular education direction, not whether he is able to engage in "some" level of education.

This interpretation is consistent with the other weekly disability benefits provisions of the Schedule. Part II, for example, looks to the essential tasks of an insured's own employment. Part IV requires an inquiry into the caregiving activities in which the insured engaged at the time of the accident. Part V requires a determination of an insured's partial or complete inability to engage in activities in which the insured ordinarily engaged before the accident. It would be inconsistent and illogical to have the Part III EDB provisions require a non-individualistic approach, in the absence of clear and unambiguous language to the contrary, which is not the case. Hence, Mr. Zehr should not be denied benefits because he has refused to abandon his pre-accident educational goals in favour of a less demanding or different educational path.

The Insurer submits that the medical evidence indicates that Mr. Zehr did not demonstrate "a substantial inability" to continue his education for the four-day period ending July 15, 1996. It argues that the test is not whether Mr. Zehr "could have performed [the essential tasks of his education] better or with greater facility but for his injuries," relying on Levenson and General Accident Assurance Company of Canada, (OIC A-000260, February 18, 1992). Citing Jubenville and Allstate Insurance Company of Canada, (OIC A97-000107, August 14, 1998), the Insurer submits that it is not relevant whether Mr. Zehr is unable to pursue a career path that he might otherwise have succeeded in but for the accident.

The Applicant, who has the burden to prove his case on a balance of probabilities, does not rely on the argument that Mr. Zehr's career path has been altered. Rather, his counsel argues that Mr. Zehr suffered a substantial inability to continue his education during the period in question based on the change in his course load, his marks, his inability to engage in extracurricular activities and the considerable assistance he required to attain his limited academic achievement to that date.

It is clear from the medical documentation that as a result of the accident, Mr. Zehr sustained (amongst other injuries), in the words of Dr. Moulton (a neurosurgeon who performed an insurer's medical examination), a "severe diffuse brain injury."

It is further clear from the medical documentation that as a result of this injury, Mr. Zehr suffers impaired speech (resulting in reduced voice volume and slurring of sounds), impaired word selection, reduced reading comprehension, impaired written expression (with respect to spelling, sentence formulation, fluency and accuracy) and an impaired ability to plan, organize and self-evaluate. Even though English was a weaker subject for Mr. Zehr before the accident, the medical evidence is that the effects of this accident have significantly adversely affected his abilities in this area.

Consistent with his impaired self-awareness, Mr. Zehr lacks insight into the extent of his cognitive and comprehension deficits secondary to the accident and tends to downplay the effects of his brain injury. To his significant credit, he has remained highly motivated and determined. He has, however, tended to be overly optimistic as to his continuing abilities.

The medical experts concur that Mr. Zehr's accident-related deficits make the university business course of study intended pre-accident by Mr. Zehr and now being pursued by him, an inappropriate educational choice. Courses emphasising non-verbal abilities are recommended.

Notwithstanding the foregoing, a DAC examination ultimately concluded that Mr. Zehr was not disabled from pursuing his education. Drs. Brandys and Moulton wrote on September 4, 1996 that:

Substantial inability to continue one's education requires that the individual be severely disabled cognitively, communicatively or physically. While Mr. Zehr presents with some impairment in each of these areas, none are sufficient, in our opinion, to warrant that he remain off school entirely.

"Substantial inability" has not been defined by arbitrators to mean total disability or severe disability. Nor does it require that an insured stay off school or away from work (in the case of a claim under Part II) entirely. Rather, "substantial inability" has been defined to mean "significant inability,"³ "sizeable inability,"⁴ or a "large and important impairment."⁵

Regarding Mr. Zehr's abilities, Dr. Moulton comments in an earlier April 3, 1996 report that:

Prior to his accident, Mr. Zehr was capable of full time academic studies. Since the time of the motor vehicle accident, he has been only capable of part time studies. Given that his university studies will be even more complex than his current studies, Mr. Zehr continues to remain unable to return to his status as a full time student.

Dr. M. Piskopos, whose practice is in neuropsychology and rehabilitation, comments in her January 2, 1996 report that Mr. Zehr's impairment was "compatible to an aphasic disorder"⁶ and that Mr. Zehr's difficulties:

were in the form of interjecting words, misreading words, having reading hesitations, and difficulty in comprehension as the complexity of the written material increased. Auditory comprehension showed difficulties in comprehension of auditory commands and complex ideational material . . . Academically, anything which will have extensive and complex language requirements will present a great challenge for him. Current intellectual functioning suggest [sic] that he would be better with non-verbal compared to verbal requirements.

The psychologist, Dr. Brandys, in her June 19, 1996 report, states that Mr. Zehr's impairment included:

disability to participate fully in a program of higher education . . . Regarding future education, a discrepancy exists between (a) his pre-injury educational plans and unimpaired capacity to pursue these plans, and (b) his ability to pursue these plans currently.

Dr. Brandys concurred that it was best that Mr. Zehr initially attend university on a part-time basis to allow additional time for language therapy, tutoring and alternate methods of course work and exam taking.

Another psychologist, Dr. Finlayson, comments in a December 30, 1997 report that Mr. Zehr's:

present academic performance was likely affected by his memory difficulties, slowness while processing more complex academic material, self-monitoring difficulties, and carelessness. Mr. Zehr has had severely increased difficulty in language based subjects such as reading, reading comprehension, and English, which has been associated with left side brain function. This finding appears to be evidence of Mr Zehr's continuation of impairment in the left hemisphere secondary to the MVA. Mr. Zehr appears to continue to having [sic] strengths in mathematics and science. Also, our supplementary and brief cognitive testing suggest evidence that before the accident, he functioned at a higher level . . . his present cognitive/communicative deficits will cause him difficulties at school . . . It is clear that Mr. Zehr's higher educational goals are not consistent with his neuropsychological findings.

Prior to this accident, Mr. Zehr was able to handle a full course load in high school. In 1991, 1992 and 1993, his final averages were in the "B+" range. In 1994 (Grade 12), he obtained an "A" average. Concurrently, Mr. Zehr was able to participate in a variety of extracurricular activities. His pre-accident goal was to complete his OAC year and continue his education at university in business and finance. The parties agree that if Mr. Zehr "worked diligently and hard on a subject, he achieved high marks and an exceptional result."

Following this accident, Mr. Zehr did not return to school for six months. In January 1995, he was only able to take one OAC course, Calculus, in which he obtained 76%. This was the first time that he had achieved less than the class median in a mathematics course. He started the Fall term of 1995 with five OAC courses, but had to drop two of them. Of the remaining courses, one was a repeat of Calculus. With the assistance of a tutor, he obtained 73% in Algebra and Geometry, 69% in English and 88% in Calculus.

In the Fall of 1996, Mr. Zehr enrolled at Sir Wilfred Laurier University. In his first year, Mr. Zehr took one full-credit course and seven half-credit courses. With the exception of one B-, his marks were either Cs or Ds (including a D+ in Algebra). After taking a summer course, Mr. Zehr enrolled in the Fall of 1997 in one full-credit course and three half-credit courses. Despite having not engaged in any extracurricular activities since returning to school after the accident and being given extra time to complete tests and examinations, Mr. Zehr's marks continue to be generally C's and D's. The parties agree that Mr. Zehr found that his extra effort and work still yielded poor grades.

These university results are consistent with the comments and predictions of the experts noted above. However, I agree with Dr. Finlayson's opinion that one should be hesitant in destroying Mr. Zehr's academic dreams. Mr. Zehr is to be congratulated for his efforts in completing one and a half years of university.

Nonetheless, it is obvious that in terms of the effort required, the marks obtained and his inability to engage in other university activities, which all of the experts attribute to his brain injury, Mr. Zehr is suffering a "large and important impairment" in pursuing his pre-accident educational goals, a path in which it was reasonable to presume Mr. Zehr would have succeeded with respectable results (even assuming that one's marks may be somewhat lower in university than in high school).

In this preliminary hearing, however, I am only concerned with the period July 12 to July 15, 1996. I am persuaded that Mr. Zehr did continue to suffer a substantial inability to continue his education during those four days. Prior to this accident, Mr. Zehr was able to take a full course load. However, in his final high school semester in the spring of 1996 (which was shortly before the period in question), Mr. Zehr was only able to handle three courses (one being a repeat).

Mr. Zehr did take a full complement of courses when he enrolled in university the following semester, but with the result that his marks were significantly lower than one would have expected from his pre-accident academic performance. There is simply no "reasonable comparison" between Mr. Zehr's pre- and post-accident marks.

Nor, to cite Arbitrator Jones in J.P. and Wawanesa Mutual Insurance Company, (OIC A-001312, August 11, 1997), is there any "reasonable comparison between the pre- and post-accident activities" of Mr. Zehr. Director Sachs stated in Levenson and General Accident Assurance Company of Canada, (OIC P-000260, September 29, 1992), that:

Attendance at school is not just the physical act of occupying space in a classroom or lecture hall. Attendance at school encompasses many other activities, including the ability to comprehend and absorb classroom and laboratory instruction, complete assigned work, participate in discussions and projects, study, write or take examinations, meet any physical requirements of the course work, and generally function as a part of the student body with provision for some reasonable extra-curricular activity. This does not mean a person must excel in any of these tasks or be able to function in them as if the accident had not occurred, but be substantially able to perform them.

As a result of his cognitive and comprehension problems arising from this accident, Mr. Zehr has had to sacrifice his extracurricular activities and devote his energies to taking on a course load approaching a full complement, albeit resulting in the modest results noted above.

I agree with Director Sachs that "[w]hat is unfair is to categorically deny a benefit based on the appellant's efforts to mitigate [one's] situation by attempting to participate in student life at the earliest possible time." I further agree that "[t]he appellant's pre-accident performance compared to [his] actual post-accident achievement is an objective and quantifiable assessment of [his] ability to complete examinations" and indicates a significant and sizeable inability to continue what one could reasonably predict Mr. Zehr would have been able to achieve, but for his accident-related impairment.

2. Partial inability to carry on a normal life

It was essentially conceded by the Insurer that Mr. Zehr continues to suffer a partial inability to carry on a normal life. Section 2 of the Schedule enumerates the various alternative impairments that satisfy this disability test.

From the material filed, as set out above, it is abundantly obvious that during the period in question, Mr. Zehr suffered, at the very least, a substantial inability to engage in "activities in which [he] ordinarily engaged before the accident" that require the exercise of cognitive powers and communication abilities. I specifically rely on Dr. Brandys' June 19, 1996 comment that Mr. Zehr "continues on the basis of the March, 1996 assessment, to have a 'Partial inability to Carry on a Normal Life' secondary to the traumatic brain injury sustained in the July, 1994 motor vehicle accident." I also rely on Dr. Moulton's July 3, 1996 statement that Mr. Zehr "continues to have a partial inability to carry on a normal life based on loss of use of his normally dominant right hand and some degree of speech of [sic] language and communication disturbance consequent to his severe left hemisphere brain injury."

As I find that Mr. Zehr met the "partial inability" test at 104 weeks after the onset of his disability, being July 15, 1996, there is the further question of whether this entitles the Applicant to an LEC offer, pursuant to Part VI of the Schedule.

3. LEC Offer

Paragraph 21(1)(4) of the Schedule provides that:

21.—(1) Subject to subsections (7) to (9), an insurer shall promptly deliver a written offer to an insured person with respect to the payment of weekly loss of earning capacity benefits if one or more of the following circumstances occurs:

The insured person qualified for weekly education disability benefits under section 15 and, 104 weeks after the onset of the disability in respect of which he or she first qualified for those benefits or on the date the person attains sixteen years of age, whichever occurs later, continues to qualify for weekly education disability benefits.

[emphasis added]

The question before me is what is the requisite "inability to carry on a normal life" test "104 weeks after the onset of the disability." This question arises because under the Schedule, the "normal life" test initially allows either partial or complete inability. However, pursuant to subsection 15(4) of the Schedule:

(4) If an insured person qualifies for weekly education disability benefits under subparagraph iii of paragraph 2 of subsection (1) and does not qualify under subparagraph i or ii of paragraph 2 of subsection (1), no weekly education disability benefit is payable under this section more than 104 weeks after the insured person first qualified for weekly education disability benefits unless the insured person is suffering a complete inability to carry on a normal life as a result of the accident.

[emphasis added]

The Applicant argues that under subsection 15(4), the "normal life" test changes only at the period "more than" 104 weeks, whereas the entitlement to an LEC offer under paragraph 21(1)(4) speaks to the precise point 104 weeks after the onset of disability, which is still within the period where an insured may qualify for EDBs with a "partial inability."

The Insurer argues that entitlement to an LEC offer requires "complete inability," not "partial inability." It states that the decisions of Gray and Zurich Insurance Company, (OIC A95-000412, August 2, 1996) and Gray and Zurich Insurance Company, (FSCO A97-001660, August 31, 1998) support this position. It submits that the pertinent requirement under paragraph 21(1)(4) is that Mr. Zehr "continues" to qualify for EDBs at 104 weeks, which it submits means continues after 104 weeks. The Insurer submits that this is consistent with the overall scheme of the Schedule which, in its words, provides "that after 104 weeks the Insurer is required to make a LEC [sic] offer to the Applicant instead of paying a weekly education disability benefit" [emphasis added]. The Insurer submits that if "the Applicant's interpretation is accepted he would be entitled to a LEC [sic] offer, even though he would not otherwise be entitled to receive a weekly benefit," (unless he meets the "complete inability" test).

With respect, the Insurer has misread the provisions of Part VI. Nowhere in this Part does the Schedule speak to LEC offers being made "after" 104 weeks; nor does this Part speak at any point to whether an insured person meets the necessary prerequisites "after" or "more than" 104 weeks. I agree with the Applicant that section 21 only requires a determination of whether an insured meets the test precisely at 104 weeks after the onset of the disability in respect of which he or she first qualified for benefits. I further agree that since at that point, the "more than 104 weeks" period (when "complete inability" must be established) had not yet been reached, the "partial inability" test is still available to an insured in order to qualify for an LEC offer.

This is consistent with the overall scheme of the Schedule. LEC benefits can be payable where one is only partially disabled. If an insured was initially receiving income replacement benefits pursuant to Part II of the Schedule, he or she need not be "totally disabled" to be entitled to an LEC offer. Substantial inability to perform the essential tasks of one's own employment is sufficient. Under Part IV of the Schedule, an insured is entitled to an LEC offer if he or she suffers a substantial inability to engage in the caregiving activities engaged in at the time of the accident. Again, total disability is not required. Likewise, under Part III one is entitled to an LEC offer if one is substantially unable to continue one's own education. Total disability is not required.

It is therefore inconsistent that an alternative prerequisite to an LEC offer would require an insured to be continuously prevented "from engaging in substantially all of the activities in which the person ordinarily engaged before the accident," (being the definition of "complete inability to carry on a normal life" in the Schedule).

Rather, in my opinion, the clear and unambiguous words of paragraph 21(1)(4) of the Schedule require Canadian General to "promptly deliver a written offer to [Mr. Zehr] with respect to the payment" of an LECB, which is consistent with the overall intent of the Schedule. I do not find that the Gray decisions cited by the Insurer support its specific argument, as the arbitrator in the second Gray decision appears to have considered both partial and complete inability in determining whether the applicant was entitled to an LECB offer.

EXPENSES:

The Applicant was successful in this preliminary issue hearing. I therefore exercise my discretion to award the Applicant his expenses of this proceeding up to and including this preliminary issue hearing, in accordance with the Expense Regulation, Ontario Regulation 664, R.R.O. 1990, as amended at the time the Application for Arbitration herein was filed with the Commission.

I wish to thank both counsel for their successful efforts in agreeing on the facts of this case and for their well prepared and well argued submissions on the key points in dispute.

January 14, 1999

Lawrence Blackman Arbitrator

Date