Ontario Insurance Commission
Commission des assurances de l’Ontario
Neutral Citation: 2000 ONFSCDRS 59
Appeal P-003502
OFFICE OF THE DIRECTOR OF ARBITRATIONS
RICHARD MARK PLOWS
Appellant
and
JEVCO INSURANCE COMPANY
Respondent
Before:
David R. Draper, Director’s Delegate
Counsel:
Lawrence J. Abey (for Richard Mark Plows)
Lori Visconti (for Jevco)
APPEAL ORDER
Under section 283 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:
The appeal is dismissed and the arbitration order, dated January 25, 1994, is confirmed.
No appeal expenses are payable.
March 22, 2000
David R. Draper
Director’s Delegate
Date
REASONS FOR DECISION
I. NATURE OF THE APPEAL
This is an appeal by Richard Mark Plows from an arbitration decision dated January 25, 1994. The arbitrator ordered Jevco Insurance Company (“Jevco”) to pay Mr. Plows some of the expenses he claimed under section 6 of Ontario Regulation 672, the Statutory Accident Benefits Schedule - Accidents Before January 1, 1994 (the “Schedule”). He claims the arbitrator erred in refusing a number of his other expenses.
II. BACKGROUND
This appeal reaches me after a long history of disputes between the parties. Mr. Plows is paralyzed and confined to a wheelchair as a result of a motorcycle accident on October 27, 1990. While his disability is obvious, there have been persistent disagreements about the rehabilitation expenses Jevco should pay.
The first arbitration hearing took place in September 1991. Just before the hearing, the parties reached an agreement about modifying the Plows’ family home to make it wheelchair accessible. Jevco agreed to pay for an addition to the home that would create a living area for Mr. Plows. Jevco also agreed to pay for an accessible apartment pending completion of the addition.
As a result, the first arbitration hearing did not deal with any renovation costs. However, it went ahead on another issue. Mr. Plows claimed the cost of a modified van. Jevco agreed to pay for the modifications, but argued that it was not responsible for purchasing the van.
The arbitrator ordered Jevco to provide a suitably modified minivan.1 Jevco appealed this decision, claiming that the arbitrator erred in awarding a van under section 6(1)(f) of the Schedule. Mr. Plows also appealed, arguing that Jevco should have been ordered to pay for a full-sized van, not a minivan. After hearing oral submissions, Director’s Delegate Richardson dismissed both appeals, except for one issue. She ordered that Mr. Plows’ claim for auxiliary air conditioning in the minivan be reheard.2
Mr. Plows did not get the minivan until February 1993, eight months after the appeal decision. In the interim, he used a rental car modified with hand controls. Mr. Plow’s father, Robert Plows, arranged the lease. For the sake of clarity, I will refer to the Appellant as “Mr. Plows” and his father as “Robert Plows.”
Robert Plows leased a Nissan Maxima for 48 months, with an option to purchase the vehicle at the end of the term. The initial payment was $6,744.53, with monthly payments of $367.98. After the minivan was delivered, 17 months into the 48-month lease, Robert Plows removed the hand controls and took over the use of the Nissan as the family car.
The parties were unable to agree on a long list of claims by Mr. Plows, including the additional renovation expenses and the cost of the rental car. As a result, a second arbitration hearing was held in August 1993 before the same arbitrator. The parties filed exhibits and called four witnesses during the two-day hearing. In a decision dated July 25, 1994, the arbitrator ordered Jevco to pay some of the expenses, but refused others.
The following is a summary of the arbitration decision, with the items under appeal highlighted:
Expenses to equip Mr. Plows temporary apartment
Window blinds
$ 45.96
Allowed
Table and chairs
$ 413.94
Allowed
Electric kettle
$ 37.94
Allowed
Hand held shower attachment
$ 65.05
Allowed
Vacuum
$ 144.29
Refused
Miscellaneous kitchen equipment
$ 144.25
Refused
Ironing board
$ 69.00
Refused
Extra expenses for the renovations to the Plows’ home
Changes to heating and air conditioning
$ 4,000.00
Refused
Removal of tree stump to build ramp
$ 187.25
Refused
Landscaping following renovations
$ 75.00
Refused
Window blinds
$ 162.10
Allowed
Wire basket system
$ 149.49
Allowed
Expenses for leasing the Nissan Maxima
Initial and monthly payments
$13,000.00
Allowed in part
Hand controls
unspecified
Refused
Expenses related to the minivan
Interior stain guard
$ 88.75
Allowed
Rustproofing and undercoating
$ 925.00
Refused
Exterior paint sealer
$ 396.75
Refused
Extended warranty
$ 799.25
Refused
Premium stereo
$ 554.00
Refused
Miscellaneous expenses
Dr. Scholl footbath
$ 40.24
Refused
High-top boots and shoes
unspecified
Refused
Portable telephone
unspecified
Refused
Membership in the Canadian
Paraplegic Association
$ 20.00
Refused
The arbitrator also ordered Jevco to pay Mr. Plows’ reasonable arbitration expenses.
III. ANALYSIS
Mr. Plows acknowledges my limited role on appeal. As stated in many previous decisions, my function is not to second-guess the arbitrator’s assessment of the evidence. She had the advantage of hearing the witnesses and assessing the documentary evidence in light of their testimony. The issue, therefore, is whether she erred in some sufficiently serious manner that the decision should not be allowed to stand.
Although Mr. Plows’ appeal submissions are framed as questions of law, I find that he is asking me to reassess the evidence. My conclusion is much like that expressed by Director’s Delegate Richardson in response to his first appeal:
Section 6(1) of the No-Fault Benefits Schedule states that the insurer will pay all "reasonable" expenses resulting from the accident. The use of the word "reasonable" implies some limitation on the amount that may be awarded under section 6(1). The section requires that the Arbitrator make a determination as to what is reasonable in the circumstances, a determination necessarily involving the exercise of judgment by the Arbitrator. I cannot find that the Arbitrator exercised this judgment on improper principles or in disregard of the evidence. (p.19)
For the reasons set out in more detail below, I find the arbitrator’s decision supported by the evidence and, therefore, have no basis for interfering.
A. Apartment expenses
Mr. Plows shared an apartment with his sister from the time he left the hospital until he moved back to the family home. Although this was a temporary situation, the arbitrator accepted that it was reasonable for him to incur some expenses to furnish it. She ordered Jevco to pay for window blinds, a table and chairs, an electric kettle and a hand held shower attachment. However, she was not persuaded that his other apartment-related claims were reasonable or necessary.
On appeal, Mr. Plows submits that the arbitrator erred in reaching inconsistent conclusions. He argues that if an electric kettle and a table and chairs are reasonable and necessary expenses, so is a vacuum. I do not agree. These items differ in many respects, including cost and the extent to which they are essential items in a temporary housing arrangement.
A kettle is an inexpensive item that may have contributed to Mr. Plows’ independence. Although a table and chairs are more expensive, they are basic furnishings for an apartment, even a temporary one. In contrast, the arbitrator found no evidence that a vacuum would contribute to Mr. Plows’ rehabilitation, or that there were no less expensive options for cleaning the apartment. There is nothing in the appeal record to contradict her findings and, in my opinion, her decision reasonably follows.
B. Renovation expenses
As stated above, the parties agreed on modifications to the Plows’ home just before the first arbitration hearing. They signed a “Consent Order,” although it was not included in the arbitrator’s order. It set out Jevco’s agreement to pay for the renovations, but also included a tendering process and gave Jevco the right to arbitrate any particular expenses. The arbitrator described the agreement in her second decision as follows:
The parties' agreement included an understanding about the cost of the renovations, and a clause that provided that the Insurer had the right to take to arbitration any particular expenditure disputed (Exhibit 2, Tab 1). It was agreed that the renovations were to be performed according to specifications developed by Richardson Access and Mobility, set out in a report dated March 1991 (Exhibit 2 Tab 3). Winmar Industries Inc. ("Winmar") was awarded the contract for the home renovations. Winmar was to perform all the work called for in the job specifications for $74,586, as agreed by both parties. (p.12)
On February 5, 1992, Robert Plows, signed an agreement with Winmar Industries to do the work set out in the job specifications for $74,586. Although this was higher than the $65,000 contemplated in the Consent Order, the arbitrator found that the parties agreed to it.
The problem is that Robert Plows authorized contract changes without consulting Jevco. Just two weeks after signing the agreement with Winmar, he signed a change order involving modifications to the heating and cooling systems. This included extending the air conditioning to the rest of the house. Mr. Plows conceded that Jevco was not responsible for the cost of air conditioning the second floor because he had no access to it, but claimed $4,000 of the $6,090.97 additional cost. The arbitrator found that Jevco had no notice of the change order until it received an invoice approximately eight months later.
The arbitrator criticized Robert Plows for contravening the agreement. In my opinion, her criticism is justified. Where, as here, the relationship between the parties becomes adversarial, it is particularly important that claims are clearly presented and agreements respected. I am inclined to agree with Jevco that the arbitrator could have refused Mr. Plows’ claim simply on the basis that it was not included in the agreement. However, that is not what she did.
The arbitrator considered whether the modifications to the heating and cooling system were necessary and reasonable, concluding they were not. She accepted that Mr. Plows had accident- related problems with temperature control, but found that he was reasonably served by air conditioning in his unit. There is ample evidence to support this conclusion.
Mr. Plows complains that the arbitrator made assumptions, not based on any evidence, about the weather in Southern Ontario and the extent to which he would be using the main floor of the family home. However, the onus was on him to prove that these expenses were necessary and reasonable. The arbitrator’s decision reflects the fact that she found no evidence that his temperature sensitivity was so severe, or his use of the areas outside his unit would be so extensive, that air conditioning was either necessary or reasonable. This was within her authority and I find no reason to interfere with this conclusion.
I also find little merit in Mr. Plows’ claims for the cost of removing a tree stump to build the ramp into his unit and landscaping the property after the renovations were done. It is not clear why a contract to install a ramp would not include removing any obstacles and reasonable clean-up. In fact, the arbitrator refers to testimony from the contractor that his company put in the ramp and removed the tree stump as part of the work called for in the renovation plans. Even if these relatively minor amounts were not covered, however, they were more than offset by the contract work that was not done. In particular, the arbitrator found that although the kitchen renovations did not go ahead, there was no reduction in the contract price.
C. Automobile leasing expenses
The arbitrator found that Robert Plows investigated various options and decided that a Nissan Maxima would be a suitable interim vehicle for his son. Two months before the first arbitration hearing, without consulting Jevco, he went to one dealership and leased one for 48 months, with an option to purchase the vehicle at the end of the term. He made an initial payment of $6,744.53, representing a down payment of $5,000 plus applicable taxes, licencing and administration expenses, a security deposit of $375.00, and an initial monthly payment. The monthly payments, including taxes, were $367.98.
Mr. Plows drove the Nissan Maxima for 17 months. Once his minivan was available, he did not need it anymore. However, most of the 48-month lease still remained. Rather than return the car, Robert Plows kept it, assuming responsibility for the monthly payments. He removed the hand controls and sold the car the family had been using.
Mr. Plows claimed all the expenses for the first 17 months of the lease, including the down payment. According to the arbitrator, Jevco acknowledged that it was responsible for paying Mr. Plows’ reasonable transportation costs until he received the minivan. It argued, however, that his claim was unreasonable.
The arbitrator accepted Mr. Plows’ claim for the monthly payments of $367.98 for 17 months, but rejected his claim for the initial payment of $6,744.53. Not only do I find no error in the arbitrator’s conclusion, I have trouble understanding Mr. Plows’ position. While it might be argued that the down payment reduced the monthly payments, I see no reason that Jevco should pay him the full amount. If the down payment reduced the monthly payment, Robert Plows also benefitted for the 31 months remaining on the contract when he assumed responsibility. I would also assume that if Robert Plows exercised the option to purchase the vehicle, the down payment reduced the price. Therefore, I agree with Jevco that Mr. Plows is asking it to subsidize the cost of the family car.
D. Additional minivan expenses
Mr. Plows submits that the arbitrator erred in failing to order Jevco to pay the following expenses related to the minivan: premium stereo, rustproofing and undercoating, exterior paint sealer and extended warranty.
Mr. Plows acknowledges that a premium stereo is not a necessity, but argues that the only minivan for sale included one. Therefore, he claims he had no real choice.
The arbitrator considered Mr. Plows’ argument, but was not persuaded that he was without options. In her decision, she says that she was given no reasonable explanation for the urgency in purchasing the van. Mr. Plows acknowledged that he could have continued to drive the Nissan. In fact, he did while the minivan was being modified.
I find no basis for second-guessing this part of the decision. While Mr. Plows may have wanted the minivan as soon as possible, the record shows no reason that it the purchase had to be done that day from that particular dealer. Further, Mr. Plows was not surprised by Jevco’s position. A representative was at the dealership when he purchased the minivan. She told him that Jevco would not be willing to pay for a premium stereo.
Without Jevco’s agreement, Mr. Plows purchased other options designed to extend the life of the vehicle. The arbitrator allowed his claim for interior stain guard because it was required due to his disability. However, she found that the other items were not required to meet his treatment or rehabilitation needs. I agree with her analysis. Mr. Plows can use the minivan without rustproofing and undercoating, exterior paint sealer and an extended warranty. If it becomes unusable while he still needs a minivan, he can make a further claim, subject only to the $500,000 limit in subsection 6(8) of the Schedule.
IV. APPEAL EXPENSES
While I am not persuaded that this appeal was frivolous, vexatious or an abuse of process, as suggested by Jevco, I do not believe that Jevco should be required to fund it. As stated in previous appeal decisions, the criteria for granting appeal expenses are different from arbitration expenses. Unsuccessful appellants are generally denied their appeal expenses unless the appeal raises some important issue. Rather than raising any significant issues, I find that this appeal was based on Mr. Plows’ dissatisfaction with the arbitrator’s assessment of the evidence. Therefore, no appeal expenses are payable.
March 22, 2000
David R. Draper
Director’s Delegate
Date