Mario Aloise v. Lombard General Insurance Company of Canada, 2000 ONFSCDRS 176

Financial Services Commission of Ontario

Neutral Citation: 2000 ONFSCDRS 176 Appeal: P00-00031 Office of the Director of Arbitrations

Mario Aloise Appellant

and

Lombard General Insurance Company of Canada Respondent

Before: David R. Draper, Director's Delegate

Counsel: Renato P. Fellin (for Mario Aloise) Albert M. Conforzi (for Lombard)

APPEAL ORDER

Under section 283 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:

1. The appeal is dismissed and the arbitration order dated March 27, 2000 is confirmed.
2. Mario Aloise shall pay the appeal expenses of Lombard General Insurance Company of Canada, fixed at $1,000.

September 27, 2000

David R. Draper Director’s Delegate

REASONS FOR DECISION

I. NATURE OF THE APPEAL

Mario Aloise appeals from an arbitration order dated March 27, 2000, dismissing his claims for accident benefits and ordering him to pay arbitration expenses fixed at $4,000. He submits that the arbitrator erred in rejecting his argument that Lombard General Insurance Company of Canada ("Lombard") should be required to continue paying income replacement benefits ("IRBs") because it referred him to a Designated Assessment Centre ("DAC") that was not qualified to assess his psychological condition.

II. BACKGROUND

Mr. Aloise was involved in an automobile accident on June 6, 1995. Although Lombard initially paid accident benefits under the SABS-1994,¹ the parties were unable to agree on Mr. Aloise's entitlement to IRBs beyond September 18, 1997, the proper amount of the IRBs and some physiotherapy expenses. These issues went to arbitration in January 2000, with the hearing taking three days. On March 27, 2000, the arbitrator released his decision, dismissing Mr. Aloise's claims and ordering him to pay Lombard's expenses, fixed at $4,000.

The arbitrator found serious weaknesses in Mr. Aloise's case. Not only did he fail to produce documents needed to determine the issues in dispute, and not call any evidence to establish his disability and its relationship to the accident, he also was not a credible witness. This led the arbitrator to various findings that completely defeated Mr. Aloise's claims.

Although Lombard initially paid IRBs based on Mr. Aloise's reported pre-accident income, the arbitrator was not even convinced that he was employed before the accident. Even if he was employed, however, the arbitrator found that his duties were primarily in sales and design, not the kind of heavy tasks he claimed.

In evaluating Mr. Aloise's ability to perform these duties, the arbitrator had to deal with Lombard's contention that any ongoing problems were unrelated to the accident. He accepted that Mr. Aloise suffered soft-tissue and associated neuromuscular injuries in the accident, but found they had resolved by the time IRBs were terminated in September 1997. With respect to his other problems, including depression, he found that Mr. Aloise failed to prove their relationship to the accident and, as a result, was not entitled to any further IRBs.

At the arbitration hearing, Mr. Aloise also made submissions about the termination process. He argued that Lombard failed to follow the procedure in Part XV of the SABS-1994 because it did not arrange an assessment at a DAC qualified to assess his psychological condition. The consequence, he argued, was that Lombard should be required to pay IRBs until a proper assessment was done. The arbitrator rejected this argument, finding that Mr. Aloise presented his claim based on physical injuries. As a result, he concluded that the DAC referral was appropriate and Lombard was entitled to rely on its report.

III. THE APPEAL

The Commission received a Notice of Appeal signed by Mr. Aloise's lawyer on May 9, 2000, approximately 10 days beyond the 30-day appeal period. It focusses on the DAC issue, listing the following grounds for rescinding the arbitrator's order:

1. The Arbitrator erred in stating that the psychological claim is a prerequisite to an obligation by an insurer to order a psychological DAC.
2. The Arbitrator erred in stating that it is a prerequisite to advance a claim before an insurer will consider a psychological DAC.
3. The Arbitrator erred in stating that it was necessary to establish the existence of a disabling emotional condition in order to obligate the insurer to provide the insured with a psychological DAC.
4. The Arbitrator erred in stating that the notice supplied to the insurer prior to the DAC and shortly after the DAC that a psychological element existed was insufficient to put the insurer on notice that a psychological claim was present.
5. The Arbitrator erred in his decision to award costs in the amount of $4,000.00 to the insurer.

Lombard argued that the appeal should not be accepted because it was out-of-time and without merit. Despite these submissions, I accepted the appeal and stayed the expense order on the condition that Mr. Aloise proceed in a timely manner. The letter to Mr. Aloise's lawyer specifically warned that if the time periods in the Dispute Resolution Practice Code were not met, the stay order could be revisited.

On July 7, 2000, I wrote to Mr. Aloise's lawyer noting that his submissions were overdue and asking for a status report by July 14, 2000. This time line was not met, but the Appeals Administrator was informed that written submissions would be filed by July 31, 2000. She confirmed this in a letter dated July 28, 2000. When nothing was received, I wrote to counsel on August 8, 2000, revoking the stay order, but giving Mr. Aloise a final chance to make submissions:

Mr. Aloise's written submissions are due by August 28, 2000. If they are not received by that date, he will not be entitled to file any submissions and the hearing will proceed on the record with no oral submissions.

The deadline passed without any contact. As a result, I wrote to counsel on August 30, 2000, advising that the appeal would proceed on the record with no submissions from Mr. Aloise. Lombard was given 20 days to file written submissions, which it did. It asks that the appeal be dismissed with expenses payable by Mr. Aloise in the sum of $1,500.

IV. ANALYSIS

I am unable to find any merit in this appeal. The arbitrator found that Mr. Aloise's claims were based on physical, not psychological injuries. This finding is supported by the evidence. In particular, the original Health Practitioner's Certificate provided to Lombard lists physical symptoms. This is how the claim was treated.

In May 1997, Lombard wrote to Mr. Aloise, advising him that his IRBs would be terminated the following month because he no longer met the disability test. He challenged this decision by asking to be assessed at the nearest DAC. As the arbitrator notes, his letter did not mention any psychological issues. Lombard met its obligations by continuing to pay IRBs pending the results of the DAC assessment.

Prior to the DAC assessment, Mr. Aloise sent a number of letters to Lombard. The only reference to psychological issues came in a letter dated June 2, 1997. This short letter concluded with the following paragraph:

I am also enclosing a business card from my psychiatrist, Dr. Seymour Tozman, should you wish to contact him for any information that you may require.

The arbitrator held that this was not sufficient to alert Lombard to a change in the nature of his claim, or the need for the DAC to address psychological issues. I agree with the arbitrator that "the mere mention that a person is seeing a psychiatrist is not sufficient notice that a claim is being made for a psychiatric disability arising from an accident."

As it turns out, Dr. Tozman had diagnosed Mr. Aloise prior to the DAC assessment as suffering from depression. This was set out in his letter to another insurer dated July 11, 1997. Unfortunately, this was not communicated to Lombard until some time after the DAC was completed. Although Lombard can hardly be criticized for failing to act on information it did not have, this situation might have raised some concerns if matters stopped there. The arbitrator found, however, that Lombard subsequently indicated its willingness to arrange a psychological examination, but it never took place because Mr. Aloise failed to provide the necessary background information.

Finally, Mr. Aloise was not prevented from presenting evidence about his psychological condition at the arbitration hearing. However, as set out above, he was unable to convince the arbitrator that his psychological problems resulted from the accident.

For these reasons, I am not persuaded the arbitrator erred in rejecting Mr. Aloise's claim for further IRBs. I also find no reason to disturb his expense order. He took into account appropriate considerations, including Mr. Aloise's lack of success, his failure to produce documents and his role in delaying the hearing process. Recognizing that his lawyer was responsible for many of these problems, the arbitrator reduced the expenses payable to avoid punishing him too severely for the actions of his lawyer. In my view, this was, if anything, on the generous side. Therefore, the order is confirmed.

V. APPEAL EXPENSES

I have no hesitation in ordering Mr. Aloise to pay Lombard's appeal expenses. His appeal had little merit and was not pursued with any reasonable diligence. The only question is the amount. Lombard asks for $1,500. In my opinion, that is too high given the limited work involved. I conclude that Lombard should recover its assessment of $500, plus a modest amount for preparation of its Response to Appeal, a couple of letters and brief written submissions. As a result, expenses will be fixed at $1,000.

September 27, 2000

David R. Draper Director’s Delegate

Footnotes

1. 1Ontario Regulation 776/93, as amended, the Statutory Accident Benefits Schedule—Accidents after December 31, 1993 and before November 1, 1996.