Neutral Citation: 2000 ONFSCDRS 135

FSCO A98-001467

BETWEEN:

ALLAN L. MOODY

Applicant

and

JEVCO INSURANCE COMPANY

Insurer

REASONS FOR DECISION

Before:

David J. Evans

Heard:

January 25, 26 and 27, 2000, in London, Ontario

Appearances:

Robert W. Vitols for Mr. Moody

David Murphy for Jevco Insurance Company

Issues:

The Applicant, Allan L. Moody, was injured in a motor vehicle accident on June 26, 1993. He applied for and received statutory accident benefits from Jevco Insurance Company ("Jevco"), payable under the Schedule.¹ Jevco terminated weekly income benefits on December 19, 1996. The parties were unable to resolve their disputes through mediation, and Mr. Moody applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

The issues in this hearing are:

Is Mr. Moody entitled to receive weekly income benefits pursuant to paragraph12(5)(b) of the Schedule from December 20, 1996, on the basis that his injury continuously prevents him from engaging in any occupation or employment for which he is reasonably suited by education, training or experience?
Is Jevco liable to pay Mr. Moody's expenses in respect of the arbitration under section 282(11) of the Insurance Act?
Is Mr. Moody liable to pay Jevco's expenses in respect of the arbitration under section 282(11) of the Insurance Act?
Is Mr. Moody entitled to a special award?

Mr. Moody also claims interest on any amounts outstanding.

Result:

Mr. Moody is entitled to weekly income benefits for an additional 52 weeks from December 20, 1996, under section 12(5)(b) of the Schedule, together with interest in accordance with the Schedule.
Mr. Moody is not entitled to a special award.
The issue of expenses was deferred.

EVIDENCE AND ANALYSIS:

Brief Chronology:

On June 26, 1993, Mr. Moody lost control of his motorcycle, which resulted in a severe fracture of his left leg. Dr. W. Harvey Bailey, orthopaedic surgeon, inserted a metal rod to repair Mr. Moody's left tibia. The rod was replaced during a second surgery in October 1993.²

In June 1994, Dr. Bailey surgically removed some bone in the fibula to enable the tibia to properly heal. In a fourth surgical procedure on October 26, 1995, Dr. Bailey removed the tibial rod from Mr. Moody's leg.

At the time of the accident, Mr. Moody worked in Exeter as a psychotherapeutic job coach at the Western Ontario Therapeutic Hostels ("WOTCH"). He earned approximately $26,000 per year.

Mr. Moody has not returned to his pre-accident work. He claims he cannot meet the physical demands of that job,³ and it cannot be modified for him.⁴ Mr. Moody claims that his post-accident sales work is not profitable, nor is he able to resume any other suitable employment.

Since the accident, Mr. Moody has begun a small business, selling his own garlic spread at markets around southern Ontario.

Jevco claims that Mr. Moody's sales experience since the accident should enable him to obtain other suitable employment, and that his successful completion of a work trial in 1996 establishes that he could resume his pre-accident job.⁵

Under subparagraph 12(5)(b) of the Schedule, Mr. Moody must establish that his accident injuries continuously prevent him from engaging in any occupation or employment for which he is reasonably suited by education, training or experience:

The appropriate approach is a flexible, fact-based one, in which, while the legal onus always remains on the insured, the sufficiency of the proof depends on what is reasonable in the circumstances. This involves consideration of the evidence presented by both parties, including the nature of the individual's condition and extent of the disability, the efforts the insured has made to position himself or herself to return to the workforce, the vocational assistance made available by the insurer and the options for alternative work that have been put forward.⁶

Mr. Moody's Condition and Extent of Disability:

The medical records show that the bones in Mr. Moody's leg have essentially healed. Mr. Moody claims to be limited in function due to ongoing pain. His treating physicians have diagnosed him with chronic pain.

Mr. Moody testified that after his initial release from hospital his home activities were greatly reduced due to pain. His ankle pain⁷ led to the second surgery to replace the rod in his leg. He endured increasing sensitivity and numbness in his leg until after the 1995 surgery to remove the rod.

Mr. Moody testified about his difficulties standing, sitting, walking and driving. He is able to stand on one leg (what he called a "stork position") with his left leg tucked up to the back of the right leg, cushioned and elevated. After 10 minutes he has to look for something to lean on as the leg starts to throb. He can sit in a chair 5 to 15 minutes or sit flat on the floor with his leg elevated over a pillow for a longer time. He is limited with regard to lifting, climbing ladders and walking on uneven ground. His walking and driving endurance have, however, increased over time, and he continued to improve in the last six months before the hearing.

Mr. Moody testified that his ability to conduct household activities has also increased during the six months prior to the hearing. Although he is still not back to pre-accident levels, he does laundry three times a week, sweeps, and vacuums the house twice a week. He cleans the kitchen and bath counters and part of the shower stall. He cooks every day, but still needs help removing snow and mowing the lawn.

Mr. Moody testified that around the end of 1995, or the beginning of 1996, he began to notice a new sharp pain originating in the ankle and ending in the thigh. He testified that the frequency and intensity of this pain have continued to increase. The sharp pain in his ankle shoots up his leg and then just "floors" him.

Jevco suggested that this new pain arose from an unrelated incident. Mr. Moody fell in the spring of 1994, which may have broken one of the screws holding the tibial pin, refractured the leg or injured the ankle.

The evidence is that the screw was already broken before his fall.⁸ New bone grew after surgical restoration of Mr. Moody's fibula in 1994. The broken screw was left in place near the ankle, which explains growth around it.⁹ Furthermore, Dr. Gail Delaney, Mr. Moody's treating physiatrist, testified that chronic pain patients often develop new pains after this type of surgery.

I accept Dr. Delaney's opinion that Mr. Moody's ankle and shooting leg pain results from the accident, and her diagnosis that Mr. Moody suffers from chronic pain that restricts him to sedentary or light work.

I also accept Mr. Moody's complaints about his leg pain and numbness based on his treating physicians' testimony that he has made consistent complaints over the years. His inability to stand for more than a few minutes without a rest was documented at the work trial. Mr. Jackson, the rehabilitation consultant, observed Mr. Moody adopting the "stork position," supporting his left leg on his right.

Mr. Jackson's report that Mr. Moody told him he was lifting "71-pound pails" does not undermine Mr. Moody's credibility. My review of Mr. Jackson's interview notes show that Mr. Jackson wrote "7lbs. pails" - that is, seven-pound pails.

Mr. Moody is less credible on the actual extent of his disability and current business activities.

Mr. and Mrs. Moody contradicted each other regarding the business start-up date. Mr. Moody testified that he has a background as a chef, and that for years he made a soya-based garlic spread for the enjoyment of family and friends. Mr. Moody testified that he decided to start selling the "Incredible Edible Spread'Em" approximately nine months to a year after the termination of his benefits, taking the start date to approximately the end of 1997. Mrs. Moody testified that the business started in February 1997. I find that the business started in February 1997, as Mrs. Moody's testimony is consistent with the financial records.

Mr. Moody testified that he makes the product in his kitchen, packaging it in 8-ounce margarine tubs. He drives to three nearby markets, and sells them out of the back of his van. He sleeps overnight in the van between markets. Mr. Moody also has a few distributors and promotes the product on his website.

Mrs. Moody confirmed her husband's evidence and the financial records, that the business started slowly in 1997 and expanded in 1998. She initially drove Mr. Moody to the markets, but when she began working full time in March 1999, he carried on alone and sales declined. Mr. Moody testified that the business, as it relates to the summer markets, is highly seasonal, lasting only six to twelve weeks, ending around Labour Day. However, there is unrefuted evidence from an April 1998 visit to his family physician that he fell while packing the product at the Stratford market. Mrs. Moody testified about a number of other markets that they attended as well. I find that at least in 1998, the summer market business extended for considerably more than 12 weeks, namely from at least early April to early September.

Mr. Jackson, the rehabilitation consultant who assessed Mr. Moody for Jevco, also testified that Mr. Moody cancelled a medical examination because he was attending a market in Chatham in December 1998. Mrs. Moody testified that they attended one winter market. Mr. Moody testified that he continues to market the product through the year by means of his website and distributors, and he continues to make the product. Therefore, I find that the business is active year-round, although it may be less active in the winter months.¹⁰

Mr. Moody contradicted himself regarding the estimated numbers of hours he spends working. He testifed that he works at most 15 to 20 hours per week between Monday and Thursday. He leaves for Keady around 1:00 p.m. on Monday. After sleeping in the van, he arrives at the market at 5:00 a.m. on Tuesday to set up the stall. Most sales activity occurs between 10:00 a.m. and 12:00 p.m.. Mr. Moody packs up shortly after noon, and drives 30 to 45 minutes to the next market in Port Elgin. He repeats the pattern and heads for Sauble Beach. He returns from the Sauble market on Thursday afternoon.

According to Mr. Moody's evidence, he actually works 8 hours per day, a total of 24 hours over the three markets. In addition, he has to prepare and package the product on the weekend. Even if he does not do that every weekend, the number of hours Mr. Moody works greatly exceeds his estimate, and is at or close to that of a full-time work week at least during the summer market season.

Mr. Moody testified that he drives the van roughly 300 to 400 kilometres over 10 days, totalling 15,000 to 20,000 kilometres per year. Although he testified that friends and family increased the odometre reading by borrowing the van to travel out west and to Halifax, Mrs. Moody testified that the van has never left Ontario. Mr. Moody testified before Mrs. Moody, and I had specifically ordered that he not discuss his evidence with anybody else, including his wife. Mrs. Moody testified that he told her about his testimony, explaining to her that he was making a "joke." In light of this breach, I prefer the evidence of others regarding his abilities and activities. I prefer Mrs. Moody's evidence on the van usage. Therefore, I impute more of the increased mileage on the van to business use.

Dr. Delaney remembers that Mr. Moody told her on December 17, 1997 that he believed he could resume work full time with the appropriate restrictions. Dr. Delaney testified that when she first saw Mr. Moody in June 1997, she thought he could only work part time. He has shown improvement since then.

It is Dr. Delaney's opinion that Mr. Moody can currently work full time within his restrictions. He requires a sedentary non-weightbearing job involving little walking around and must be able to sit with his leg elevated and move around every 15 minutes due to numbness in his leg. His job "would probably have to be a task-completion oriented job rather than a time-dictated job"¹¹: she testified that this meant a job with a flexible daily schedule where the work could be performed when it suited him.

I find that Mr. Moody worked the equivalent of full-time hours for a considerable portion of 1998 on the basis of his testimony, that of Mrs. Moody about the additional markets they attended, and the evidence of the financial records of the business.

In addition to the three markets about which Mr. Moody testified, Mrs. Moody testified that they also sold the product at several other markets. She testified that they attended fewer markets in 1997 than in 1998; she remembered the Mitchell market in 1997. She testified that they sold in Grand Bend in 1997 and, for a month in 1998, but the market wanted them to stay to 6:00 p.m., which Mr. and Mrs. Moody thought was pointless when they run out of the product. They also sold in Chatham and Aylmer for a couple of weeks in each case, but they did not make enough sales to cover the cost of the space rental. They sold the product in St. Jacobs, the winter market. I have already noted the evidence of his family physician, Dr. Steele, that Mr. Moody injured himself while packing for the Stratford market.

Regarding the financial records, Mrs. Moody testified that she looked after them, although she did not prepare the financial statements. These records show that they were spending over $1,000 a month on fuel in 1997. She testified that the van was very heavy, carrying a freezer in the back. Although Mrs. Moody testified that Mr. Moody only contributed 30 percent to the effort of running the business in 1997 and 1998, nonetheless he was either driving, or being driven to the markets and was at the markets helping to sell the product. He was also helping to prepare the product.

Efforts to Return to the Workforce and Vocational Assistance:

Mr. Moody's benefits were terminated at the end of the work trial, which ran from mid-October to mid-December 1996. The work trial was arranged by Ms. Barbara Mills, occupational therapist. She wrote in her concluding report that Mr. Moody's goal had been to own and operate a rural business, such as a restaurant with crafts and a bakeshop, where he could hire disadvantaged people and provide them with life skills.

Ms. Mills suggested that Mr. Moody prepare a business plan with the help of small business facilities. She also recommended that the vocational rehabilitation consultant continue to be retained for one to two months to assist Mr. Moody in defining these goals.¹² Ms. Debra Miller, the vocational rehabilitation consultant, closed the file on January 17, 1997,¹³ suggesting funding to help develop Mr. Moody's job search skills and repeating Ms. Mill's recommendation. Jevco terminated its rehabilitation on the advice that the work trial was a success.

Mr. Moody testified that he considered other businesses. He knew he could not drive a truck for eight hours a day nor does he have personal connections to re-enter the music business. Mr. Moody completed a correspondence course in forestry for a year, obtaining a diploma in 1994 or 1995. but the occupation involved too much walking on uneven ground.

Options for Alternative Work:

Mr. Moody has a Grade 12 education. He has some experience as a chef but performed only very minor sales work before working in a variety of physically-intensive jobs.

Around 1985, Mr. Moody began working for WOTCH. He taught clients with physical or mental disabilities such day-to-day tasks as shopping, cooking, cleaning and general maintenance. He had to physically control clients if they became violent.

Ms. Barbara Mills, the occupational therapist retained by Medex to assess Mr. Moody in 1996, determined that the walking, carrying and climbing aspects of this job were beyond him.¹⁴ She then arranged the work trial in a similar therapeutic environment, assisting people in a facility in the town of Dashwood.

Mr. Moody testified that he socialized a great deal of the time during the work trial. He prepared vegetables, made sandwiches, cleared tables and talked with the clients.

Although Mr. Moody enjoyed the work trial, it aggravated his leg pain, and the amount of walking and sitting prevented him from working full days. Ms. Mills concluded that Mr. Moody could not do a full day's work due to the "primary limiting factor" of his "pain perception."

Dr. Delaney testified on the other hand that the problems of pain and numbness in his leg have an organic origin, arising both from continued bone growth and from the effect of the fracture on the nerves in his leg. I accept her testimony.

Aside from the question of the work trial's success, I find two other aspects of work similar to that he performed before the accident to be unsuitable: the amount of cooking involved and the extremely limited job prospects. Both of these aspects arise out of the reports prepared by Mr. Christopher Jackson, the rehabilitation consultant retained by Jevco.

Mr. Jackson testified that on November 27, 1998 he was asked to perform a vocational assessment and arrange various examinations of Mr. Moody. He prepared a 20-page report dated March 26, 1999 ("Report 1"). He determined that occupations similar to the pre-accident occupation were "not considered viable." He forwarded it to his supervisor and to Mr. Moody's counsel, Mr. Vitols. However, after his supervisor told him to "take a closer look at the garlic business," he faxed a request to Mr. Vitols to ignore the first report. He then prepared a second report dated April 6, 1999 ("Report 2"). In Report 2, he concluded that Mr. Moody "would be capable of working in some occupations related to his pre-disability job, which had a fairly high skill level (NOC 421)."¹⁵

However, Mr. Jackson reached that conclusion despite noting that Mr. Moody "would have a more limited spectrum of job opportunities available to him based on his permanent physical limitations and his geographical location." On those same grounds he had concluded in Report 1 that this occupational group was "not considered viable" for Mr. Moody. In Report 1, he had excluded food-processing related occupations such as Kitchen Helper/Dishwasher or Cook because they exceeded the sedentary to light categories of work set by Dr. Delaney (whose restrictions I have accepted). I find that this exclusion was correct. Mr. Jackson had also considered the job market for employment similar to Mr. Moody's at WOTCH, which is now very limited after government cutbacks. Finally, he testified that the phrase "more limited spectrum" in Report 2 was the same as "not considered viable" in Report 1.

I find that a job similar to his previous occupation is not suitable for Mr. Moody on the following grounds: he was not able to attain a full working day during the work trial; his physical limitations would be exceeded by the large food processing element of the job; such jobs are virtually nonexistent according to Mr. Jackson's own research.

In his conclusion to Report 2, Mr. Jackson wrote about Mr. Moody as follows: "He could also work at a job that builds on the transferrable skills he has acquired through the operation of his current business (NOC 641)." The transferrable skills he identified included knowledge of food processing and preparation and knowledge and experience in marketing and sales.

Dealing with the question of food processing and preparation first, I have already found that occupations such as Kitchen Helper/Dishwasher or Cook are unsuitable for Mr. Moody. On the other hand, I find that his background as a chef did prepare him for his current business. Mr. Moody testified that he had been making the spread for a number of years and it was popular with family and friends. In addition, Mr. Moody testified that when he started the business he knew the rudiments of the food business, such as labeling and packaging requirements. (I do not find any contradiction regarding Mr. Moody's physical limitations and this business, since he testified that he can prepare the spread when he feels like it and can take breaks as needed, and msince Dr. Delaney testified that she considers this business to fall in the sedentary to light category.)

However, dealing with the other skills identified by Mr. Jackson, I find that Mr. Moody's knowledge and experience in marketing and sales provides a quandary for both Jevco and Mr. Moody. I find that any limited experience Mr. Moody might have had 25 or 30 years ago selling radio spots for a high school project or selling soap door to door is irrelevant. Any knowledge and experience in marketing and sales which he has now could only have been gained through the operation of his business - after Jevco terminated benefits. On the other hand, Mr. Moody denies that he has developed knowledge and experience in marketing and sales, a position I find untenable after all this time running his own business.

Mr. and Mrs. Moody testified that the business started slowly in 1997, but sales increased greatly in 1998: the 1997 financial statement for A & M Home Products¹⁶ shows a gross revenue of $5,909, while 1998 shows almost $23,400. Mr. Moody testified that when he started the business he was hoping to earn enough to at least pay the mortgage. He did not know where to sell the spread. One suggestion was grocery stores, and the store in their town sold a bit. A friend let him put up a dozen for sale. He was happy to sell 25 units over two months at the beginning. The stores would pick it up from him or a friend would deliver it. Most stores had perhaps a dozen of the small units. Originally, he made the product during the week and sold it on weekends. However, he discovered that the product did not sell very well in stores, so he had to start attending markets. He later had a website through which he obtained a few distributors. He also prepared a flyer and sent it to the customers who signed his guest book at the markets.

Mrs. Moody testified that they did not do a lot of research and development before starting the business. As for knowing the market, she testified that they had a survey done one year and were given a low-to-medium chance of success. She testified that they sold at very few markets in 1997, mentioning Mitchell and Grand Bend. Mr. Moody testified that at the Mitchell market they sold 3 or 4 units on a Friday. Mrs. Moody testified that it also took them some time to learn that in order to sell the product, they had to offer free samples; that is why Mr. Moody now offers customers pieces of toasted bagel with the spread on them.

I find that Mr. Moody lacked knowledge and experience in marketing and sales when he started his business. However, I find that he has since developed such skills. Thus, he has also developed the transferable skills mentioned by Mr. Jackson that could allow him to work in a sedentary sales occupation.

Another factor to consider regarding the suitability of an occupation is remuneration. Certainly, even the gross revenues in what I consider the initial learning phase would not constitute a reasonable salary in comparison with his former employment. Gross revenues increased greatly in 1998, although Mr. Moody testified that his business has continued to lose money even as sales increased. However, I find that Mr. Jackson identified sales occupations that would pay as much as or more than what Mr. Moody was earning at his former occupation.

Conclusion:

I have found that Jevco has identified a reasonably suitable occupation for Mr. Moody: work at a sedentary sales occupation such as his self-started home business of developing a sandwich spread. This meets Mr. Moody's physical restrictions. He has gained experience in the business, and based on the skills he has developed, he could earn an amount comparable to the salary of his previous job.

However, I find that this occupation only became reasonable for Mr. Moody after he gained experience running his business. The question of when he had enough experience is necessarily somewhat arbitrary. He had no experience starting out, but by December 1998, I find that he was running the business essentially full time. In light of the fact that he told Dr. Delaney in December 1997 that he believed he could work full time then, I find that would be an appropriate point to end his benefits.

I find that Mr. Moody is entitled to an additional 52 weeks of benefits after December 20, 1996. I find that he was capable of working full time at the end of that period, namely by December 1997. This is borne out by the fact that he did work full time for a considerable portion of 1998. I find that he had developed skills by the end of 1997 that resulted in much greater sales in 1998. I find that his decision to continue with the garlic business was essentially a personal decision, as he had developed skills that he could have used in an appropriate employment after December 20, 1997.

Additional Issues:

Mr. Moody sought a special award based upon Mr. Jackson's Report 2 on the basis that it was a fundamentally unfair report that was produced only after Mr. Jackson's supervisor requested revisions. Mr. Moody's counsel did not allege that Jevco knew of the first report nor requested the second report. Even if the second report were unfair, I am not certain that a special award is warranted in such circumstances where there is no evidence that Jevco had any part in its production or knew anything about it. However, since I have found that Mr. Jackson raised a valid point in that report, I find that the report was not unfair.

Jevco claimed that it should be entitled to reduce the outstanding benefits by some portion of A & M's revenues. This issue was raised at the very end of Jevco's submissions. I find that this issue was raised too late and with too little notice in order to be considered.

EXPENSES:

The issue of expenses was deferred. If the parties cannot agree upon entitlement to expenses, an expenses assessment may be arranged in the usual manner.

July 24, 2000

David J. Evans Arbitrator

Date