Neutral Citation: 2000 ONFSCDRS 217

FSCO A99-000227

BETWEEN:

LEUNG KY PHOU

Applicant

and

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY

Insurer

Before: Anne Sone

Heard: January 25, 26, 27, March 31 and May 26, 2000, at the Offices of the Financial Services Commission of Ontario in Toronto. Written submissions were received on June 9, 2000.

Appearances: Altor Shields for Mr. Phou W. Casey Van Moorlehem for State Farm Mutual Automobile Insurance Company

Issues:

The Applicant, Leung Ky Phou, was injured in a motor vehicle accident on May 7, 1998. He applied for and received statutory accident benefits from State Farm Mutual Automobile Insurance Company ("State Farm"), payable under the Schedule.¹ State Farm terminated weekly income replacement benefits on July 31, 1998. The parties were unable to resolve their disputes through mediation, and Mr. Phou 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. Phou entitled to receive a weekly income replacement benefit from July 31, 1998 to November 6, 1998, pursuant to section 4 of the Schedule?
Is Mr. Phou entitled to receive a medical benefit for physiotherapy expenses claimed pursuant to section 14 of the Schedule?
Is Mr. Phou entitled to receive a medical benefit for travel expenses claimed pursuant to section 14 of the Schedule?
Is Mr. Phou entitled to receive $963 for the cost of an examination and report prepared by Dr. Wong, pursuant to section 24 of the Schedule?
Is State Farm liable to pay a special award pursuant to subsection 282(10) of the Insurance Act, R.S.O. 1990, c. I.8, as amended because it unreasonably withheld or delayed payments to Mr. Phou?
Is State liable to pay Mr. Phou's expenses in respect of the arbitration under section 282(11) of the Insurance Act, R.S. O. 1990, c. I.8?

Result:

Mr. Phou is not entitled to receive a weekly income replacement benefit from July 31, 1998 to November 6, 1998, pursuant to section 4 of the Schedule.
Mr. Phou is not entitled to a medical benefit for physiotherapy expenses claimed pursuant to section 14 of the Schedule.
Mr. Phou is entitled to a medical benefit for travel expenses in the amount of $52 claimed pursuant to section 14 of the Schedule.
Mr. Phou is entitled to $963 for the cost of an examination and report prepared by Dr. Wong, pursuant to section 24 of the Schedule.
State Farm is not liable to pay a special award pursuant to subsection 282(10) of the Insurance Act, R.S.O. 1990, c. I.8, as amended.

EVIDENCE AND ANALYSIS:

Background:

On May 7, 1998, the front of Mr. Phou's car hit the passenger side of a vehicle making a left turn at a "T" intersection. His forehead hit the steering wheel and the seatbelt squeezed his chest. His car, a 1990 Acura was a write-off. He did not go to the hospital. He first felt pain in his neck, lower back and chest two days after the accident. He felt stress and worry as a result of his pain. At the time of the accident, Mr. Phou was 27 years old. He was treated by Dr. A. Donskoy and attended at Advanced Physiotherapy Inc. for therapy. After an insurer's medical examination on July 2, 1998, State Farm terminated Mr. Phou's income replacement benefits on July 31, 1998. After a Medical and Rehabilitation Report from a Designated Assessment Centre ("DAC"), State Farm refused to pay for physiotherapy treatment for Mr. Phou after September 24, 1998.

He returned to his work as an inspector at an office furniture factory on November 6, 1998.

Essential tasks of employment:

Mr. Phou had worked at Knoll, an office furniture manufacturer since October 17, 1993. At the time of the accident he was an inspector in the finishing department.

His job involved inspecting table tops and cabinets as they travelled on rollers along the line. He removed faulty pieces, repaired them with a sprayer where possible and put repaired pieces back on the line. When repair was not possible the pieces were transferred elsewhere using transfer carts.

In removing the pieces from the line, Mr. Phou would slide them across to the edge. The movement of the rollers assisted in this action. Another person on the line could assist with lifting and/or removal of heavy or awkward pieces. Approximately six to ten tabletops were removed from the line during an eight-hour shift.

Dr. Wong stated in his report that Mr. Phou's activities required frequent heavy lifting, pushing, and pulling. On cross-examination, Mr. Phou admitted that this was not true. These activities were infrequent. He did, however, stand all the time.

There was also some question regarding the weight Mr. Phou was required to lift. He told Dr. Lexier his maximum solo lift was about 30 pounds. He told Dr. Wong that most of the pieces he had to lift weighed more than 50 pounds. A letter from Knoll (his employer) dated January 26, 1998 (exhibit 9) indicated that the pieces were never heavier than 55 pounds and if they were more than 25 pounds, he would have assistance. Mr. Lim, Mr. Phou's supervisor stated that the heaviest item he would have to lift would be a 200-pound tabletop that would be carried up to 20 metres. This type of lifting would be done by two people. There was obvious confusion regarding the weight of the pieces that Mr. Phou would have to lift. However, I do not find that anything turns on that. If the pieces were heavier than 25 pounds, I find that Mr. Phou could either ask for assistance or use a trolley.

Mr. Phou suggested that he had to be ready in case there was an emergency and several tabletops had to be moved in a row. Since something like that had only happened two to three times in the nine years Mr. Lim had been there, I do not find that this kind of repetitive task was an essential task of his employment. In any event, if there were several tabletops in a row that were defective, the line could be shut down and they could be moved by trolley.

Mr. Phou stated that he was able to return to work on November 6, 1998, because he was given light-duty work and did not do any lifting. This was directly contradicted by his supervisor, Mr. Lim. Mr. Lim stated emphatically that Mr. Phou never asked for light-duty work after the accident. He stated that Mr. Phou's essential tasks were the same, except now Mr. Phou was a stand-in for the Lead Hand when the Lead Hand was away. Mr. Lim had no motive to lie about this and I accept his evidence on this point. I find that Mr. Phou's essential tasks did not change before and after the accident, except that he was now a stand-in for the Lead Hand.

Medical evidence:

After the accident, which occurred on a Thursday, Mr. Phou stated that he did not feel any pain until Saturday evening. However, he called his supervisor, Mr. Lim on Thursday or Friday to say that he was going to be absent as a result of the accident, even though he was not yet feeling any pain.

The first doctor Mr. Phou saw after the accident was Dr. Donskoy. He said that he happened to pick Dr. Donskoy rather than his family physician, Dr. Nguyen, because it was convenient. Although Dr. Nguyen practiced much closer to where Mr. Phou lived, Dr. Donskoy was in the same building as his lawyer. Mr. Phou said he had arrived early for his appointment with his lawyer on Monday, May 11, 1998, and because he had extra time, he went to see Dr. Donskoy.

It is interesting to note that Mr. Phou did not go to the hospital after the accident. Nor did he go to see his family doctor. Instead, he made an appointment to see his lawyer.

Mr. Phou saw Dr. Donskoy 19 times. Dr. Donskoy did not provide a report, nor were his clinical notes and records in evidence. He also did not testify although subpoenaed by State Farm. His reasons for not attending were set out in a letter dated January 21, 2000. He considered it inappropriate to summon a doctor one-and-a-half business days prior to the beginning of the arbitration. He was totally booked for the week of the arbitration and thought it unfair to his patients to call them one day or so prior to their appointment to cancel them. State Farm asked me to draw an adverse inference from Dr. Donskoy's failure to attend the arbitration. Given the minimal amount of notice he received, I am not prepared to do so. However, it would have been helpful to have his clinical notes and records. Dr. Donskoy was Mr. Phou's treating physician in connection with the accident.

At the hearing, Mr. Phou did provide an Attending Physician's Statement of Disability (Aetna Life Insurance Company of Canada's form — exhibit 5) signed by Dr. Donskoy on August 18, 1998. In it, he states that Mr. Phou has limitations affecting his ability to work with respect to neck, back movements, prolonged standing, walking, lifting and carrying. He does not state whether these limitations relate to pain, range of motion or something else. He also opines that Mr. Phou will be able to return to full-time work on December 1, 1998 and part-time work on November 1, 1998.

Mr. Phou never told Dr. Nguyen, his family physician, about the accident, even though he saw him two times after the accident for other matters. This is highly unusual.

Mr. Phou saw Dr. Lexier, an orthopaedic surgeon, on July 2, 1998 for a insurer's medical examination. Dr. Lexier provided a report of his examination dated the same date and concluded at page 4 in answer to the question:

Does Mr. Phou suffer a substantial inability to engage in his activities as an inspector?

No. Mr. Phou does not suffer at this time a substantial inability to engage in his activities as an inspector. I would consider him fit for these duties effective the week of Monday, July 6.

Dr. Lexier conducted an examination of Mr. Phou; however he does not provide the basis for his conclusion in the report.

At the request of his counsel, Mr. Phou saw Dr. Wong, a physiatry consultant on August 13, 1998. Dr. Wong provided a report to Mr. Phou's lawyer dated the same day. He provided the following Medical Diagnosis at page 5:

Mild left chest wall myofascial injury.
Moderate myofascial injury of the cervical spine due to disruption and tearing of muscle and ligament tissues that support the cervical spine.
Moderate myofascial injury of the lumbar spine due to disruption and tearing of muscle and ligament tissues of the lumbar spine paraspinal muscles.
Post-traumatic anxiety.

At page 6, he states:

In my medical opinion, Mr. Phou continues to suffer a substantial inability to perform the essential tasks of his employment as a furniture inspector.

Dr. Wong criticizes that lack of diagnosis in Dr. Lexier's report. This criticism was provided to Dr. Lexier, who stated in a letter dated September 4, 1998 that "I have read this report in its entirety and it does not change my opinion." Since Dr. Lexier fails to respond to this criticism in any meaningful way, I give Dr. Lexier's report little weight.

I also have concerns regarding Dr. Wong's report. It is based on statements made by Mr. Phou who has admitted they were inaccurate. For example, in describing Mr. Phou's employment activities, Dr. Wong states at page 5 of his report:

The furniture is very heavy and he said that most weigh more than 50 pounds. His job requires him to stand all the time and there are frequent activities which require heavy pushing, pulling, bending and lifting. (My italics.)

Mr. Phou has admitted that the activities described above were infrequent. In addition, although there was some confusion regarding the weight of the pieces, the evidence does not support a finding that "most weigh more than 50 pounds." Accordingly, I am inclined to give it little weight. In any event, both these doctors only saw Mr. Phou once.

Credibility:

Mr. Phou is a pleasant young man. However, there were numerous inconsistencies and troubling areas in his evidence, at times showing an attempt to mislead regarding key areas of this case. Since I have given little weight to both Dr. Lexier's and Dr. Wong's reports, Mr. Phou's credibility becomes especially important. The following list reiterates certain areas of Mr. Phou's evidence which lead me to question his credibility considering the extent of his claimed disability.

On the day of the accident or the next day, Mr. Phou told his supervisor that he would not be back to work, even though he had not begun to feel any pain. He did not explain this statement.
Mr. Phou did not tell his family physician about the accident even though he saw him two times after the accident for other matters.
Mr. Phou told Dr. Wong that his work involved frequent heavy pushing, pulling, bending and lifting. Mr. Phou admitted on cross-examination that these activities were infrequent.
Mr. Phou says he asked for and was given light duty work after the accident. His supervisor insisted that Mr. Phou did not ask for light-duty work and his work did not change except that now he was a back-up for the Lead Hand.

There are also some other areas where Mr. Phou's statements or actions are misleading.

Mr. Phou said he gave an application for a long-term disability benefit to his supervisor. His supervisor was adamant on cross-examination that it was never given to him.
There is an inconsistency noted of the DAC's Medical and Rehabilitation Report dated September 17, 1998. It states at page 3:

Of note is Mr. Phou's statement to the Physiotherapist that he struck his head at the time of impact but stated to the Physiatrist that he did not.

Mr. Phou's Declaration of Post-Accident Income and Benefits (exhibit 1, tab 23) was signed December 8, 1998, and shows that he worked from November 16 to November 20, 1998. This is nine days after he gave evidence that he actually returned to work. It also suggests that he stopped work on November 20, 1998, which is not the case.

Given the number of inconsistencies and attempts to mislead as enumerated above, I find that Mr. Phou's evidence lacks credibility. In most instances where there is a conflict between his evidence and that of someone else, I have found that the evidence of the other person is more credible.

Collateral benefits:

Both parties have agreed that if I find that Mr. Phou had a long-term disability policy to which he could apply and that Mr. Phou failed to apply, Mr. Phou will have no further claim to an income replacement benefit beyond September 7, 1998. This is the date upon which Mr. Phou would have been able to start collecting long-term disability benefits.

Mr. Phou testified that he gave an application for a long-term disability benefit to his supervisor, Mr. Lim. Knoll said in a letter dated January 26, 2000 (exhibit 10) that they do not have any record of Mr. Phou applying for this benefit. It is possible that Mr. Lim lost the application or forgot to submit it. However, he had little to lose from admitting this. On cross-examination, Mr. Lim was emphatic that he would not have overlooked this. Mr. Phou does have something substantial to gain from saying that the application was submitted. There was also no evidence that Mr. Phou followed up with Mr. Lim, as would be expected, had he submitted the application to him. Another consideration is that Mr. Phou did not produce his employer's file until it was subpoenaed for the arbitration hearing. In addition, I have other concerns regarding Mr. Phou's lack of credibility which I have set out above. For these reasons, I prefer the evidence of Mr. Lim to that of Mr. Phou on this point. I find that Mr. Phou did not submit an application for a long-term disability benefit to his supervisor. As a result, Mr. Phou has no further claim for an income replacement benefit past September 7, 1998, even if he were found to suffer a substantial inability to perform the essential tasks of his employment beyond this date.

Onus of proof:

Mr. Phou has submitted that the onus of proof is on State Farm regarding entitlement to an income replacement benefit. For this submission, Mr. Phou relies on three cases. I am of the view that all three cases are distinguishable on their facts. All three of these cases, Blackstone v. Mutual Life Insurance Company of New York,² Taafe v. Sun Life Assurance Company of Canada,³ and Renouf v. Standard Life Assurance Company,⁴ deal with private policies of insurance for long-term disability benefits. In the case at hand, we are dealing with statutory accident benefits governed by the Schedule.

These cases suggest that once the insurance company commences paying long-term disability benefits, it gives rise to a presumption in favour of the insured. Before paying, a long-term disability insurer has an opportunity to assess the merits of the insured's claim. As a result, in these cases, the onus is on the insurance company to prove its case for termination.

The difference in cases under the Schedule is that the insurer must rely on a certificate provided by the insured and commence paying within 14 days. At that point, the insurer can take steps as set out in the Schedule to further assess the disability of the insured. If payments are terminated, the insured bears the onus of proving entitlement to the benefits claimed. There are many cases similar to this one at the Commission. Invariably these cases have found that the onus of proof is on the insured.⁵

Conclusion regarding income replacement benefits:

Pursuant to section 5 of the Schedule, an income replacement benefit is payable during the period that insured persons suffer a substantial inability to perform the essential tasks of their employment.

As discussed above, Mr. Phou was not a credible witness. As stated by Arbitrator Makepeace in Quattrocchi and State Farm Mutual Insurance Company,⁶

Where there is no objective evidence of impairment, or the objective evidence does not explain the degree of pain reported by the insured person, the insured's credibility becomes important. In assessing the insured person's subjective pain complaints, Arbitrators consider all of the circumstances, including the consistency of the insured person's complaints and apparent functional level.

I have concerns regarding the failure to produce Dr. Donskoy's clinical notes and records. I also have concerns regarding Mr. Phou's failure to mention his accident to his family physician, Dr. Nguyen. The only other witness who supports Mr. Phou's case for income replacement benefits is Dr. Wong. As set out above, I have given little weight to both medical reports. Dr. Wong's report is largely based on subjective information supplied by Mr. Phou who has admitted that key elements of the information he provided to Dr. Wong were inaccurate. Dr. Lexier's report did not provide a basis for his conclusion that Mr. Phou does not suffer at this time a substantial inability to engage in his activities as an inspector.

Mr. Phou testified that when he saw Dr. Lexier at the beginning of July that he was not able to go to work because he still had a lot of pain in his lower back and neck. Based on my concerns regarding Mr. Phou's evidence as set out above, I do not find this evidence credible.

Accordingly, I find that Mr. Phou has not proven, on a balance of probabilities, that he suffered a substantial inability to perform the essential tasks of his employment after July 30, 1998. In addition, as set out above, due to my finding that Mr. Phou failed to apply for a long-term disability benefit, Mr. Phou would not be entitled to income replacement benefits beyond September 7, 1998, in any event.

Physiotherapy expenses:

Pursuant to section 14 of the Schedule, the insurer is liable to pay for all reasonable and necessary expenses incurred by or on behalf of the insured person as result of the accident for physiotherapy services.

State Farm paid for physiotherapy treatments at Advanced Physiotherapy Inc. for Mr. Phou up to and including September 24, 1998. There are six treatments between September 29 and October 23, 1998 which remain unpaid. State Farm terminated payments upon receipt of a DAC's Medical and Rehabilitation Summary Report dated September 17, 1998. It stated at page 3:

In the opinion of Dr. M. Devlin, Physiatrist, the physical examination did not reveal any evidence of musculoskeletal impairments and any further treatment is not reasonable or necessary.

In the opinion of Ms. D. Westbrook, Physiotherapist, no further therapeutic intervention is indicated as a result of the assessment. Mr. Phou can continue with his home program of stretching exercises. No muscle weakness that would indicate a need for strengthening exercises was found as a result of the assessment.

At the time of the DAC assessment, Mr. Phou reported that his current therapy consisted of using the gym equipment, the bicycle for 20 minutes, and the treadmill for 25 minutes. He also reported that he had a few exercises written on a sheet, which he did at home. These included lumbar spine and thoracic spine stretches.

State Farm continued to pay for treatments up to the time the DAC report was provided and sent to opposing counsel.

Mr. Phou stated that the reason he continued going to physiotherapy after he received notice dated September 25, 1998 (exhibit 3, tab 22) from State Farm terminating this benefit was that he thought this treatment was covered by insurance supplied by his employer. The unpaid treatments were not the subject of a treatment plan.

Dr. Wong in his report dated August 13, 1998 (exhibit 3, tab 15) stated at page 7:

I believe that Mr. Phou would benefit from a work hardening type of program in order to concentrate on stretching and strengthening exercises involving his cervical and lumbar spine. I believe a six to eight week program is reasonable.

Six weeks expired on September 24, 1998. State Farm paid until September 24, 1998.

Mr. Phou testified that his pain returned up to three hours after the treatment finished. He stated that the Chinese medicine and massage performed by his family provided the same amount of relief.

Mr. Phou testified that there was a change in the intensity of his pain when the physiotherapy stopped on October 23, 1998. He felt more and more pain, especially at night, when his body was tossing in pain. Despite this increase in pain, he was able to return to work two weeks later. He argued that this additional treatment was necessary to get him back to work.

I do not find Mr. Phou's evidence on this point credible. It is hard to believe that two weeks after the treatments stopped, he could manage to return to work, despite his increased pain. In view of the findings of the DAC Medical and Rehabilitation Assessment report, and even Dr. Wong's report which recommends only six to eight weeks of further treatment, I find that the physiotherapy expenses that Mr. Phou is claiming are not reasonable or necessary.

Transportation expenses:

In his Application for Arbitration, Mr. Phou claimed travel expenses of $64. He was originally claiming for a round trip bus fare of $4 for 16 trips to Advanced Physiotherapy. However, his Travel Account Expense Form (exhibit 4, tab 6) only shows claims for 13 trips from May 11, 1998 to May 29, 1998. State Farm questioned why he took a bus when he could rent a car. Mr. Phou explained that at the time he was not aware that his insurance would cover a rental car.

Pursuant to paragraph 14(2)(g) of the Schedule, the insurer is to pay for transportation for the insured person to and from treatment sessions, provided the expenses are reasonable and necessary. State Farm paid for these treatment sessions. It did not argue about whether these sessions were reasonable and necessary. I find that it was reasonable and necessary for Mr. Phou to take a bus to his treatment sessions until he rented a car. Accordingly, he is entitled to transportation expenses for 13 trips in the amount of $52.

Dr. Wong's report:

Mr. Phou is claiming the cost of Dr. Wong's report in the amount of $963. Pursuant to section 24 of the Schedule, the insurer shall pay for all reasonable expenses incurred by or on behalf of an insured in obtaining and attending an examination or assessment or in obtaining a certificate, report or treatment plan.

The expense must be reasonable.

As Director Delegate McMahon states in Tsimidis and Liberty Mutual Insurance Company,⁷ where scrutinizing a report in the context of a demand for payment of an assessor's account, the focus should be on the process rather than on the value of the ultimate opinion. Arbitrators should look at whether sufficient time, care and expertise went into the conduct of the assessment and preparation of the report.

State Farm admits that the parts of the report where Dr. Wong does physical testing and makes findings should be paid for. Given that State Farm had terminated Mr. Phou's benefits on July 30, 1998, it was reasonable for Mr. Phou to obtain a report. Dr. Wong has extensive qualifications as a physiatry consultant and State Farm did not question this. Rather State Farm objected to Dr. Wong's qualifications and foundation to make a diagnosis of post-traumatic anxiety, which is not in the Diagnostic Manual for Mental Disorders of the American Psychiatric Association ("DSM IV"). It argues that his fee should be reduced because these comments should not be in the report.

In my view, Dr. Wong was simply commenting on concerns Mr. Phou had regarding stress, irritability and depression. He refers him to a psychologist. Mr. Phou's OHIP Summary (exhibit 4, tab 4) shows that Dr. Donskoy provided psychological treatment on five occasions between June 23 and November 11, 1998. As a result of these treatments, I find that Dr. Wong's comments were justified. After examining the time, care and expertise that went into Dr. Wong's assessment and report, I find that $963 was a reasonable expense, pursuant to section 24 of the Schedule.

Special Award:

Mr. Phou claims a special award. Pursuant to subsection 282(11) of the Insurance Act R.S.O. 1990 c. I.8, as amended, a special award may be granted if benefits are unreasonably withheld or delayed.

Mr. Phou argued that State Farm's failure to pay the transportation expenses and the cost of Dr. Wong's report entitled him to a special award.

In view of my finding regarding credibility as set out above, I find it reasonable for State Farm to view Mr. Phou's claims cautiously. Even in the case of the transportation expenses, which I have awarded to Mr. Phou, he claimed for 16 bus trips rather than the 13 trips which he admitted he took. In the case of Dr. Wong's report, State Farm raised enough concerns to justify its failure to pay.

EXPENSES:

I thank counsel for their assistance in this case. If the parties cannot decide on expenses, I may be spoken to.

December 5, 2000

Anne Sone Arbitrator

Date