minicounsel

Neutral Citation: 2000 ONFSCDRS 21

FSCO A98-000643

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

SHARON A. MORABITO

Applicant

and

LIBERTY MUTUAL INSURANCE COMPANY

Insurer

REASONS FOR DECISION

Before: William J. Renahan

Heard: October 12, 13 and 14 and November 22 and 26, 1999, in St. Catharines, Ontario.

Appearances:

Brian A. Banfield for Mrs. Morabito

Deborah G. Neilson for Liberty Mutual Insurance Company

Issues:

The Applicant, Sharon A. Morabito, was injured in a motor vehicle accident on June 13, 1995. She applied for and received statutory accident benefits from Liberty Mutual Insurance Company ("Liberty"), payable under the Schedule.¹ Liberty terminated weekly income replacement benefits (IRBs) on July 16, 1997. The parties were unable to resolve their disputes through mediation, and Mrs. Morabito 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 the Applicant entitled to income replacement benefits pursuant to section 7 of the Schedule after July 16, 1997?
Is the Applicant entitled to a loss of earning capacity assessment offer pursuant to section 21 of the Schedule, and if so, what are the consequences flowing from the Insurer's failure to make an offer?
Is the Applicant entitled to payment of expenses for massage therapy pursuant to paragraph 36(1)(h) of the Schedule?
Is the Applicant entitled to the cost of a Sebring convertible vehicle, less trade-in, pursuant to subsection 42(1) of the Schedule?
Is the Applicant entitled to payment of chiropractic expenses pursuant to paragraph 36(1)(a) of the Schedule?
Is the Applicant entitled to the cost of a medi water pillow pursuant to paragraph 36(1)(h) of the Schedule?
Is the Applicant entitled to the cost of a canvas top for her boat pursuant to paragraph 40(1)(b) of the Schedule?
Is the Applicant entitled to payment of $803 for a hard bite plate pursuant to paragraph 36(1)(e) of the Schedule?
Is the Applicant entitled to a special award pursuant to subsection 282(10) of the Insurance Act?

Result:

Liberty shall pay Mrs. Morabito income replacement benefits after July 16, 1997.
Liberty shall deliver to Mrs. Morabito a written loss of earning capacity offer in accordance with Part VI of the Schedule and shall continue to pay income replacement benefits pending compliance with the provisions of Part VI of the Schedule.
Liberty shall pay Mrs. Morabito $4,000 for massage therapy.
Mrs. Morabito is not entitled to the cost of a Sebring convertible automobile, less trade-in.
Mrs. Morabito is not entitled to payment of chiropractic expenses.
Liberty shall pay Mrs. Morabito $63 for a medi water pillow.
Mrs. Morabito is not entitled to the cost of a canvas top for her boat.
Mrs. Morabito is not entitled to payment of $803 for a hard bite plate.
Liberty shall pay Mrs. Morabito a special award of $15,000, inclusive of interest.
Liberty shall pay Mrs. Morabito interest on overdue payments in accordance with section 68 of the Schedule.
The issue of entitlement to expenses is deferred.

EVIDENCE AND ANALYSIS:

Sharon Morabito was involved in a motor vehicle accident while stopped behind a line of traffic. Her Corvette automobile was struck from behind and forced into a vehicle in front of her. She was taken to hospital on a stretcher board and released to her home the same day. The next day she visited her chiropractor complaining of pain all over her body.

Mrs. Morabito claimed that the accident caused disabling pain, the most serious of which was headaches, neck pain and tempo mandibular joint ("TMJ") pain.

At the time of the accident Mrs. Morabito was 34 years old. She and her husband operated two gas stations. She claimed that at the time of the accident she had recovered from an ankle injury and had worked full-time the previous six work days at one of the gas stations. Since the motor vehicle accident, she has returned to work occasionally, but she has not returned to full-time work.

Liberty paid income replacement benefits for more than 104 weeks and did not make a loss of earning capacity offer ("LEC"). The first issue deals with whether Liberty failed to comply with the Schedule, and if so, the consequences.

Payment of weekly benefits beyond 104 weeks:

Mrs. Morabito claimed that since Liberty paid weekly income replacement benefits beyond 104 weeks, it was required to continue paying such benefits until it had complied with the provisions dealing with loss of earning capacity benefits under Part VI of the Schedule.

Section 21 provides:

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 income replacement benefits under Part II and continues to qualify for those benefits 104 weeks after the onset of the disability in respect of which he or she first qualified for those benefits.

The 104 week mark occurred on June 13, 1997. I heard no evidence or argument that Mrs. Morabito did not qualify for income replacement benefits on June 13, 1997. At the outset of the hearing the parties agreed that the issue was her entitlement to income replacement benefits after July 16, 1997. Liberty did not promptly, or at any time, deliver a written loss of earning capacity offer to Mrs. Morabito as required by the mandatory words of subsection 21(1).

Nonetheless, Liberty argued that it did not have to make a loss of earning capacity offer under Part VI because the independent medical examination process was not complete at the time 104 weeks of disability had passed.

Liberty arranged an independent medical examination with Parallel Medical Services which Mrs. Morabito attended on April 2, 1997. That same day, Parallel faxed to Liberty a summary indicating that Mrs. Morabito was "able to do sedentary office type activities on a part-time basis." An undated formal report followed. This report does not express an opinion on Mrs. Morabito's ability to return to work at the gas stations. The neurosurgeon, Dr. J. Mayer, noted that Mrs. Morabito was pain focussed and that "x-rays show that there is persistent reversal of the normal lordotic curve in the cervical spine, indicating that there has been a significant injury to the cervical spine, aggravating the pre-existing degenerative disc disease." Dr. V. Sennik, an orthopaedic surgeon, agreed that the accident caused significant spasm in the cervical spine and he, together with Dr. Mayer, recommended that Mrs. Morabito undergo extension/flexion x-rays of her cervical spine. Liberty submitted that Mrs. Morabito was at fault for not undergoing extension/flexion x-rays until June 13, 1997, however, I heard no evidence in that regard.

Further, Liberty did not invoke any of the procedural mechanisms available to it when an insured fails to comply with her obligations.

By typed letter dated June 18, 1997, Dr. Mayer commented on the extension/flexion x-rays. A handwritten sentence initialled by him read "These changes do not prevent Ms. Morabito from resuming employment and resuming all regular activities of daily living."

On the basis of this letter, Liberty sent by courier to Mrs. Morabito a letter dated June 30, 1997 in which it advised Mrs. Morabito that it was terminating benefits pursuant to section 64 of the Schedule effective July 16, 1997. It also advised her that she had the right to "appeal" the decision to a designated assessment centre.

This is not a case such as Fox and Economical Mutual Insurance Company, (OIC A96-002040, February 17, 1998) where the insurer terminated income replacement benefits and raised the issue of the insured's entitlement to income replacement benefits before the 104 week point. I find that Liberty conceded that Mrs. Morabito qualified for weekly benefits at the 104 week point by its failure to raise the issue before 104 weeks. Since Mrs. Morabito qualified for weekly benefits at 104 weeks, she was entitled to a loss of earning capacity offer from Liberty.

In Gan Canada Insurance Company and Pasquale Rocca, (FSCO, P99-00003, July 20, 1999) the Director's Delegate considered whether the insurer was allowed to replace IRBs with its own assessment of the insured's loss of earning capacity benefit pending resolution of the dispute. She decided that the insurer had to either continue paying IRBs or replace them with LECs based on the REC-DAC's² determination. I do not see why an insurer should be in a better position and not continue to pay IRBs where it has failed to comply with its statutory duty to make a loss of earning capacity offer. I find no reason or justification to excuse Liberty from its statutory duty. Accordingly, Liberty shall continue to pay IRBs after July 16, 1997 pending compliance with Part VI of the Schedule.

Although not necessary for the determination of Mrs. Morabito's entitlement to income replacement benefits, for the sake of completeness, I now deal with whether Mrs. Morabito satisfies the criteria for entitlement to income replacement benefits set out in section 7 of the Schedule.

Legal test:

Under section 7 of the Schedule, Mrs. Morabito is entitled to an income replacement benefit after July 16, 1997 if as a result of the impairments she sustained in the accident she suffered a substantial inability to perform the essential tasks of her employment.

Essential tasks of employment:

At the time of the accident, Mr. and Mrs. Morabito operated two gasoline service stations. It was not initially clear what work Mrs. Morabito did at the time of the motor vehicle accident because she had just returned to work from an ankle injury. Mrs. Morabito claimed that she had recovered from her ankle injury and returned to full-time work and normal duties at the gas station. However, I heard evidence that the ankle injury still affected her work. I found that Mr. and Mrs. Morabito mixed together the duties she performed before the ankle injury with the duties she performed when she returned to work. Since Mrs. Morabito had not worked fulltime since she fractured her ankle 11 months earlier, I find that her essential tasks were those she performed in the days before the accident.

Duties:

Mr. and Mrs. Morabito operated two service stations at the time of the accident; a self-serve station with a car wash and a full-service station. The self-serve station was open 24 hours a day. It required two people during the day shift; one to deal with the gasoline sales and one to operate the car wash. At the time of the accident, Mr. and Mrs. Morabito worked at the self-service station together. Mrs. Morabito said that she returned to work at the self-service station, rather than her own full-service station, because she could not do the running around necessary at the full service station as she had in the past because she had not fully recovered from her ankle injury. She said that she worked with an ankle brace because she did not want to aggravate her ankle. Mr. Morabito said that he tried to keep his wife off her foot after she reinjured it. He said that when his wife returned to work she was seldom alone and when he was away he was accessible by cell phone and pager. Mr. Morabito attended many medical appointments with his wife and I find that he was protective of her.

The testimony of both Mr. and Mrs. Morabito on Mrs. Morabito's essential tasks mixed together what she did before she fractured her ankle in July 1994 with what she did at the time of the accident. For example, in one list of tasks Mrs. Morabito included snow shovelling. She was not shovelling snow at the time of the accident. Similarly, in one list of tasks Mr. Morabito described Mrs. Morabito going into the car wash to fix broken machinery. Just before the motor vehicle accident, her ankle injury prevented her from operating the car wash, let alone repairing it.

Mr. Morabito conceded that the largest component of Mrs. Morabito's work in terms of hours was operating the cash register and processing credit card sales. Their daughter, Mellisa, started working at the gas station when she was 13 and started the cashier work when she was 15. Mrs. Morabito testified that working at one position was monotonous. I find that the work at the gas station placed few demands on Mrs. Morabito other than attending work and that her essential task at the time of the accident was acting as cashier and that Mr. Morabito took care of any lifting or moving that was required at the gas station. I also find that Mrs. Morabito worked one or two hours a night at home doing paper work and accounting for the business.

Hours of work:

Mrs. Morabito said that she had worked six days; Monday to Friday of the week before the accident and Monday of the week of the accident. The accident occurred on Tuesday, June 13, 1995. Mr. Morabito said that she had returned to full time work for one to two weeks. Mrs. Morabito's pay cheque was dated June 2, 1995 and was deposited on June 16, 1995. The gas station pay period was every two weeks and paid two weeks in arrears. Mrs. Morabito explained that this cheque was for the six days she worked before the accident and was issued after the accident out of the normal routine as a "quick pay" because she knew she was not going to work any more.

Mr. and Mrs. Morabito testified that Mrs. Morabito worked full-time hours at the time of the accident. Mrs. Morabito said that she worked from 7 a.m. to 3 p.m. Mr. Morabito said that sometimes she stayed until 4, 5 or 6 p.m. The accident occurred at 8:30 a.m. on a work day. Again, in referring to hours, I believe Mr. and Mrs. Morabito were referring to the hours Mrs. Morabito worked before she fractured her ankle. Mr. Morabito testified that the more he and his wife worked, the more they made because they paid less to casual and part-time help. I heard no evidence of how much they paid for casual and part-time help in the period leading up to Mrs. Morabito's return to work and after her return to work. Dr. L. Flores was Mrs. Morabito's family doctor since December 1994. He reported that he saw Mrs. Morabito on June 6, 1995 and that she had returned to work but could not stand for more than four hours. After the motor vehicle accident, the physiotherapy clinic which had treated Mrs. Morabito for her ankle injury reported that she had stopped regularly attending treatments after May 26, 1995 because her insurance company had forced her to return to work on 12 hour shifts.³ Liberty did not seriously contest Mrs. Morabito's claim that she worked full-time at the time of the accident. I accept the sworn testimony of Mr. and Mrs. Morabito that Mrs. Morabito worked fulltime hours at the time of the accident.

I therefore find that Mrs. Morabito's essential task of employment at the time of the accident was processing cash and credit card sales and doing paper work and accounting 40 hours per week.

Disability:

Mrs. Morabito said that she was still disabled from working after Liberty terminated income replacement benefits in the summer of 1997 on account of headaches, neck pain, TMJ pain and low back pain.

Dr. Klimek is a neurologist who examined Mrs. Morabito for Liberty on January 9, 1996. He suspected a disc herniation in the cervical spine and suggested a high cervical myelogram. The myelogram ("MRI") was performed and Dr. Klimek reported that the films demonstrated disc disease at C4/5, C5/6 and C6/7 with the discs protruding at all three levels. He suspected this problem because of Mrs. Morabito's credible presentation on examination and because of the abnormal curvature demonstrated in her routine cervical spine x-ray. The MRI confirmed his conclusion that she was substantially disabled from performing the essential tasks of a service station operator.

Liberty referred Mrs. Morabito to Parallel Medical Services for assessment. On April 2, 1997 she was assessed by a neurosurgeon, an orthopaedic surgeon, a chiropractor, a physiotherapist, two dentists and an occupational therapist. In a note of the same date to Liberty entitled "Preliminary Consensus Summary", a registered nurse wrote that Mrs. Morabito was able to do sedentary office type activities on a part-time basis. In the final report, the psychologist and dentists expressed the opinion that Mrs. Morabito was not disabled from performing the essential tasks of her pre-accident employment. The others did not express an opinion. The neurosurgeon and orthopaedic surgeon recommended that Mrs. Morabito undergo x-rays of the cervical spine in flexion and extension. Mrs. Morabito underwent those x-rays and on June 18, 1997, Dr. Mayer, the neurosurgeon, wrote:

The x-rays of the neck in neutral position shows angulation at C4-5. On extension the angulation disappears. On forward flexion the angulation reappears however there is no subluxation or instability. In addition degenerative changes are noted in the discs at C4-5, C5-6, C6-7.

The typed letter contains a handwritten and initialled sentence which reads:

These changes do not prevent Ms. Morabito from resuming employment and resuming all regular activities of daily living.

I heard no evidence on the circumstances of this addition. I find it likely that Liberty returned the letter to Dr. Mayer and he wrote in the sentence.

This is the only reported opinion up to the date when Liberty terminated income replacement benefits that Mrs. Morabito could return to work. I do not find it reliable evidence that she could return to full-time work. I find it likely that the registered nurse who filled out the "Preliminary Consensus Summary" talked to the assessors before she reported to Liberty that Mrs. Morabito could engage in part-time sedentary employment and that was the consensus opinion of the assessors. Mrs. Morabito worked full-time at the time of the accident and therefore Liberty could not rely on this opinion that Mrs. Morabito could return to work. The one handwritten sentence by Dr. Mayer is not clear. If it refers to Mrs. Morabito's ability to return to work, it contradicts the original preliminary consensus and requires explanation. If it refers to the changes in the x-rays, then the opinion is limited to just that, and does not address Mrs. Morabito's complaints that she is disabled by headaches and neck pain.

Dr. M. Wheeler is a psychiatrist who saw Mrs. Morabito in April 1997 at the request of her family doctor. He found her genuine and pre-occupied with her physical symptoms and pains and disability. Dr. D. Belicki is a psychologist who participated in a medical/rehabilitation assessment at a Designated Assessment Centre ("DAC") in June 1997. Psychometric testing indicated to him that Mrs. Morabito was very attentive to and spent a great deal of time thinking about how her body malfunctioned. He concluded that although Mrs. Morabito's personality may have predisposed her to be more aware of somatic factors, it was likely that the accident caused her to be somatically-focussed and depressed. Other treatment providers and assessors, such as Dr. Klimek, also noted that Mrs. Morabito perceived herself to be severely disabled.

Dr. P. Rosebush is a psychiatrist who saw Mrs. Morabito at the request of Liberty in September 1999. Although she found that Mrs. Morabito was psychiatrically well and not suffering from any psychiatric disorder, she did not express a clear opinion as to whether Mrs. Morabito was disabled from full-time work. She noted that "her inability to work has been secondary to the development of a chronic pain syndrome that has persisted."

Liberty contended that Mrs. Morabito was not a credible witness. Among other things, it relied on Mrs. Morabito's failure to tell every doctor about every compensable injury she had going back to 1981. Mrs. Morabito was examined by a number of doctors. I did not find a deliberate attempt to deceive in the history she related to the various doctors. I find that any omission she may have made was not significant, particularly in view of my finding that when she returned to work, her only significant problem was ankle pain and weakness. Liberty also argued that the evidence on Mrs. Morabito's essential tasks was inconsistent. I found the problem with that evidence was that Mr. and Mrs. Morabito tended to group together what Mrs. Morabito did before her ankle injury with what she did before the motor vehicle accident. Their confusing testimony was partly due to imprecise questions.

Mr. Morabito said that since the accident he has worked longer hours to make up for his wife's absence and hired more part-time help, which cuts into the family income. Mr. Morabito said that since the accident, Mrs. Morabito stopped preparing meals and he and his two daughters make their own meals. He testified that he is exhausted from the extra work he now does to make up for his wife's absence. Mrs. Morabito said that if she is lucky she can work three or four hours a week. Mr. Morabito said that she continues to try to work and comes in "maybe twice a week" and sometimes four days in a row. Dr. Savelli, a neurologist, noted in June 1998 that Mrs. Morabito was working up to two hours daily. Mellisa testified that she does not like to visit home now because her mother is either upset or in bed. I found the Morabitos generally credible when they testified about Mrs. Morabito's ability to work and level of function.

Many of the doctors who examined Mrs. Morabito found her presentation of disability believable. Dr. Fulton is a physiatrist who examined Mrs. Morabito for Liberty on May 12, 1999. I find his assessment of Mrs. Morabito's condition reasonable and consistent with my view of the evidence. He reported:

Conceptualizations of disability are predicated upon one's thoughts, feelings and beliefs about life. Essentially we are dealing with belief, confidence and conviction processed into a kind of "faith" which allows one to view one's particular situational state in a personal private way and to respond to life's situation according to such beliefs, confidences and convictions. Ms. Morabito believes that she is very, very seriously disabled. She believes that she is in essence "crippled." Accordingly her performance is similarly dedicated to being a reflection of that belief. She has offered the impression to a number of examiners that there is an important psychogenic magnification of her symptomatology and that she equally and probably more importantly believes herself to be very, very significantly disabled.

In July 1999, he opined that Mrs. Morabito could not work for more than two hours a day at any one task.

I accept the testimony of Mr. and Mrs. Morabito that Mrs. Morabito tried to work from time to time after the motor vehicle accident but was unable to work full-time hours and I find that since July 16, 1997 Mrs. Morabito has been disabled from engaging in the essential tasks of her employment.

Causation:

Liberty argued that if Mrs. Morabito was disabled, her disability was caused by medical conditions apart from those attributable to the motor vehicle accident.

In May 1981 Mrs. Morabito was involved in a motor vehicle accident. She was off work 15 months with a cervical strain. She returned to work in September 1982. In July 1987, a plastic sign fell on her while she worked at Bargain Harold's. She received workers' compensation benefits for a few months on account of a sore shoulder. In January 1990, Mrs. Morabito fell off a chair while working at a gasoline service station. She received workers' compensation benefits for a sore elbow. After five months she returned to work. For the next four years, she worked full time at the service station until she fractured her ankle in July 1994 when her foot got stuck in an opening in a dock at a marina. She returned to part-time work that winter and sprained the same ankle in January 1995 when she slipped on ice at work. I heard very little evidence of how much work Mrs. Morabito did leading up to the motor vehicle accident on June 13, 1995. She testified that she worked the six working days before the motor vehicle accident full time. Mr. Morabito, testified that she did a little work part-time after she sprained her ankle and returned to full time work one or two weeks before June 13, 1995.

I find that Mrs. Morabito's ankle injuries changed her life. I accept the testimony of John Painter, a family friend, that Mrs. Morabito was very active and outgoing before the ankle fracture. The ankle fracture in July 1994 and the subsequent sprain in January 1995 significantly curtailed Mrs. Morabito's activities. As well, she was taking physiotherapy treatment and massage therapy for the ankle at the time of the accident and she continues to complain of ankle pain and the ankle "giving out." However, I find that ankle pain and a tendency for the ankle to "give out" did not prevent Mrs. Morabito from working as a cashier. She was working fulltime at the time of the accident as a cashier and I heard no evidence that the ankle injury would have prevented her from working fulltime after July 16, 1997.

In the 24 months before the accident, she saw her family doctor, Dr. J. Wakil, nine times, mostly for headaches. Dr. Wakil testified that Mrs. Morabito had a history of neck and back pain but that she was not disabled by these conditions.

She received treatment for headaches from a neurologist, Dr. D. Savelli, in May 1991. At that time, Dr. Savelli recorded that Mrs. Morabito had "headaches which at times are disabling, almost twice weekly." This is the last record I found of Dr. Savelli treating Mrs. Morabito for headaches before the motor vehicle accident. Dr. Savelli saw Mrs. Morabito for headaches after the accident and reported that Mrs. Morabito's headaches were under control at the time of the accident and became more frequent and severe after the accident. Mr. and Mrs. Morabito testified to the same effect. I received no evidence that Mrs. Morabito's headaches after July 16, 1997 were attributable to anything other than the injuries she sustained in the motor vehicle accident and I find that the injuries she sustained in the motor vehicle accident significantly contributed to the increase in the severity and frequency of her headaches.

Dr. D. Belicki, the psychologist at the medical/rehabilitation DAC, concluded that "if the accident had not happened there is no reason to assume that she would have become as somatically-focussed and depressed as she now is." Dr. Wheeler found in April 1997 that Mrs. Morabito was psychologically and physically normal until the motor vehicle accident. These views conform with my view of the evidence and Mrs. Morabito's activity level before and after the accident.

The difficulty with Liberty's argument is that Mrs. Morabito was working fulltime at the time of the accident, and although it was only for six days, I heard no expert opinion that her disability was caused by factors other than the injuries she sustained in the accident. Nor did I hear any expert opinion that Mrs. Morabito would have recovered from her motor vehicle accident related injuries within a certain period and that any continuing disability was due to pre-existing conditions.

I find that the motor vehicle accident significantly contributed to Mrs. Morabito's neck pain and the frequency and severity of her headaches and her consequent inability to perform the essential tasks of her employment.

Supplementary Medical and Rehabilitation Benefits:

A medical and rehabilitation assessment at a Designated Assessment Centre was conducted by a rheumatologist, chiropractor, psychologist and physiotherapist on May 21, 1997. The assessors recommended four to six weeks of chiropractic treatment with a transition to home exercise and the discontinuance of massage therapy. They noted that Mrs. Morabito said that the benefits of massage therapy were short-lived. They also noted that continued chiropractic treatment of the low back was unnecessary because they found no evidence of restriction or radiculopathy affecting the lower extremities. In July 1999, Dr. Fulton noted that Mrs. Morabito told him that the only program which Mrs. Morabito felt was beneficial was the treatment administered by Dr. Savelli.

Chiropractic treatment:

Dr. Mizel provided chiropractic treatment to Mrs. Morabito's low back. He did not treat her neck because of the risk the treatment might make her neck worse. Liberty stopped paying for chiropractic treatment on July 24, 1997. Dr. Mizel continued to provide approximately 23 treatments for the period August 27, 1998 to March 10, 1999 in the amount of $859.46. Mrs. Morabito's main problems caused by the accident were headaches and neck pain. I do not find that back pain was a significant problem and I agree with the medical/rehabilitation DAC's assessment that the chiropractor should have weaned her off treatment. Dr. Mizel provided treatment for more than a year and a half after the weaning off period recommended by medical/rehabilitation DAC. I find that treatment was unnecessary.

Massage therapy:

Liberty stopped paying for the massage treatment provided by Ms. Enns-Chin on July 24, 1997. It did not dispute Ms. Enns-Chin's testimony that the total outstanding account was for $4,550. The invoices indicate that Ms. Enns-Chin treated Mrs. Morabito about three or four times a month. Dr. Savelli recommended massage treatment and Mr. Morabito testified that he continued to pay for massage treatment because it helped relieve Mrs. Morabito's stress. The massage therapist testified that part of the treatment was for Mrs. Morabito's ankle. Treatment which provides short-term relief of pain caused by a motor vehicle accident may be reasonable. I find that the treatment was not excessive or foster dependency and that it helped relieve Mrs. Morabito's pain. I find that about ten per cent of the treatment was for the ankle injury and was unrelated to the accident. I therefore allow $4,000 for massage treatment.

Medi flow pillow:

The massage therapist recommended a "medi flow pillow." Both Mr. and Mrs. Morabito testified that the pillows helped relieve stress. I find that the cost of $63 is a reasonable amount to pay to attempt to alleviate neck pain caused by the accident.

Replacement vehicle and canvas top for boat:

Mrs. Morabito drove a 1986 Corvette automobile at the time of the accident. One year after the accident Mr. and Mrs. Morabito bought a nearly new 1996 Chrysler Sebring convertible. Mrs. Morabito claims the additional cost, after trade in allowance for the Corvette, of $22,638 under section 42 of the Schedule.

Section 42 provides:

42.—(1) If it is more reasonable to purchase a new vehicle to accommodate the needs of an insured person than to modify an existing vehicle, the insurer shall contribute to the cost of a new vehicle in an amount equal to the cost of the new vehicle, less the trade-in value of the existing vehicle.

The Morabitos own a 32-foot cabin cruiser which they used extensively during the boating season. Three years after the accident, Mr. Morabito purchased a removable canvas top to enclose the rear deck and flybridge of the cabin cruiser at a cost of $3,910. Mrs. Morabito claims the cost of the canvas top under section 40 of the Schedule. The relevant parts of section 40 are as follows:

40.—(1) If an insured person sustains an impairment as a result of an accident, the insurer shall pay for reasonable measures,

(a) to reduce or eliminate the effects of any disability resulting from the impairment; and

(b) to facilitate the insured person's reintegration into his or her family, the labour market and the rest of society.

(4) The payments required by subsection (1) for the purpose of facilitating the insured person's reintegration into his or her family and the rest of society include payment for social rehabilitation measures that are reasonably necessary to,

(a) return the insured person as much as possible to the family and social situations in which he or she lived before the accident;

(b) assist the insured person to adjust to family and social situations as a result of the accident; and

Mrs. Morabito and her chiropractor testified that she needed a new vehicle because her injuries made it difficult to get into and out of the Corvette and because the harsher ride of the Corvette aggravated her neck. Mr. Morabito testified that he installed the canvas top on the boat because Mrs. Morabito's pain and headaches were aggravated by the wind and sun. John Painter, a friend, testified that Mrs. Morabito always complained about the sun on the boat. I found the two claims incompatible. On the one hand, Mrs. Morabito chose a convertible vehicle which exposes her to the wind and sun and on the other hand she put a canvas top on her boat to protect her from the wind and sun.

Other factors which lead me to conclude that the convertible was not a reasonable replacement vehicle is that the new vehicle price of $30,966 greatly exceeded the $11,289 value of her old vehicle and Mrs. Morabito testified that she does not drive that much.

I do not find that the cost of the convertible is reasonable to accommodate the needs of Mrs. Morabito. Nor do I find that the canvas top for the boat is reasonable within the meaning of section 40.

Hard bite plate:

Dr. Marotta is a dentist and TMJ specialist. He recommended a diagnostic hard maxillary appliance in December 1996 to see if it relieved Mrs. Morabito's TMJ pain. In 1990, Dr. K. Sinclair, Mrs. Morabito's dentist, made a soft plate for Mrs. Morabito to wear at night to prevent her from clenching her teeth. Dr. Sinclair reported that she did not sleep well with the night guard and that she said that it was not helpful. Dr. Sinclair testified that the hard bite plate was similar to the soft guard he prescribed except for the consistency of the material. I am not satisfied that the hard bite plate would help Mrs. Morabito when she had difficulty with a soft plate and received no benefit from the soft plate. I therefore do not allow the cost of $803 for the hard bite plate.

SPECIAL AWARD:

Subsection 282(10) of the Insurance Act requires that I award a special award of up to 50 per cent of the amount to which the insured is entitled where I find that the insurer has unreasonably withheld or delayed payments.

Liberty paid income replacement benefits on the basis that Mrs. Morabito worked full time at the time of the accident. At the time Liberty terminated income replacement benefits, all the evidence indicated that Mrs. Morabito was disabled from full-time work. Liberty did not produce any evidence that she could work fulltime. Liberty argued that if Mrs. Morabito was disabled, her disabilty was due to pre-existing conditions. No expert expressed such an opinion and the evidence that she was working fulltime at the time of the accident refutes such a position. Further, Liberty offered no reasonable explanation for failing to comply with the Schedule and make a loss of earning capacity offer. Even if Liberty had assessed Mrs. Morabito's loss of earning capacity at zero, Mrs. Morabito would have been entitled to elect an assessment at a RECDAC and would have been entitled to income replacement benefits until Liberty elected to replace IRBs with any LEC assessed by the DAC.

On the other hand, as a mitigating factor, Liberty offered Mrs. Morabito a stress management program at the Chedoke-McMaster Hospital pain clinic and accounting assistance and it paid for chiropractic treatment long after the medical/rehabilitation DAC recommended termination.

I find that Liberty acted unreasonably in withholding income replacement benefits. The supplementary medical and rehabilitation benefits in issue were a question of judgment and I do not find that Liberty acted unreasonably in withholding the benefits I have awarded.

Liberty has withheld income replacement benefits of $239.31 per week for approximately 130 weeks. I am required to award a lump sum of up to 50 per cent of the amount Mrs. Morabito is entitled to, together with interest (including unpaid interest) at the rate of 2 per cent per month, compounded monthly, from the time the benefits first became payable under the Schedule. I find that a special award of $15,000, inclusive of interest, is appropriate.

EXPENSES:

If the parties cannot agree on the issue of entitlement to expenses of the arbitration proceeding, they may make written submissions to me within 60 days of the date of this decision.

EXHIBITS:

The parties tendered a number of documents during the proceeding, including a number of briefs. I made some of those documents exhibits. The parties prepared compendiums which identified and summarized what the parties submitted were relevant parts of the briefs. The parties agreed that I should decide which documents to read and make exhibits on the basis of those summaries. I now identify those parts of the briefs which I considered in this proceeding and which were not made exhibits earlier. Those parts are as follows:

Medical Brief I: Tabs 17; 21 and 22.

Medical Brief II: Tabs 9; 12; 13; 21 and 24

Medical Brief IV: Tabs 7; 12; 17 and 19.

Document Brief I: Tab A letter of June 30, 1997; Tabs 16; 17, 19 and 20.

January 31, 2000

William J. Renahan Arbitrator

Date