Neutral Citation: 2000 ONFSCDRS 65

FSCO A99-000535

BETWEEN:

DOMENIC Di SANTO

Applicant

and

LIBERTY MUTUAL INSURANCE COMPANY

Insurer

REASONS FOR DECISION

Before: David J. Evans

Heard: January 19, 2000, at the Offices of the Financial Services Commission of Ontario in Toronto.

Appearances: Michael J. Gillen for Mr. Di Santo Pamela A. Brownlee for Liberty Mutual Insurance Company

Issues:

The Applicant, Domenic Di Santo, was injured in a motor vehicle accident on July 29, 1995. He applied for and received weekly income replacement benefits from Liberty Mutual Insurance Company (Liberty Mutual), payable under the Schedule.¹ Liberty Mutual initially paid income replacement benefits (IRBs) and has been paying loss of earning capacity benefits (LECBs) since April 1998. Mr. Di Santo disputes the amount of the residual earning capacity on which his LECBs are based. The parties were unable to resolve their dispute through mediation, and Mr. Di Santo 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:

What is Mr. Di Santo's residual earning capacity pursuant to section 30 of the Schedule?
Is Liberty Mutual liable to pay Mr. Di Santo's expenses in respect of the hearing under subsection 282(11) of the Insurance Act, R.S.O. 1990, c. I.8?
Is Mr. Di Santo liable to pay Liberty Mutual's expenses in respect of the hearing under subsection 282(11) of the Insurance Act, R.S.O. 1990, c. I.8?

Mr. Di Santo also claims interest on outstanding benefits.

Result:

Mr. Di Santo's residual earning capacity is $25,301.00 annually.
No interest is owing.
The issue of expenses is not yet determined.

EVIDENCE AND ANALYSIS:

Mr. Di Santo testified that he was born August 24, 1968. He was generally an average student in high school and later at Seneca College, where he studied marketing administration. However, halfway through the three-year course, the Seneca teaching staff went on strike. He returned to the construction work he had performed in previous summers. After the strike, he preferred earning a good weekly construction income over remaining in school, and he left the Seneca programme in early 1990.

Mr. Di Santo testified that starting the summer he turned 16, he worked at various construction job sites, first as a "coffee boy," and then as an assistant to the tradesmen. By the time of the accident he was working as a labourer (carpenter-apprentice) at Northtown Structural Limited as described in the Worksite Analysis Report performed December 29, 1995:

Constructs wooden forms for molding concrete mixtures in the manufacturing of concrete structures and perform general carpentry duties such as lay outs and measurements; shape materials to size with various handtools or power saws. Assist other workers as time permits.

The report describes how the workers carried sheets of plywood into place and constructed forms for lifting into place by a crane. Other duties included reshoring floors, manipulating 60-pound steel jacks and building scaffolding.

Mr. Di Santo testified that the best part of his job was the sense of achievement he felt at the end of the day, when he could stand back and see what he had accomplished. He also enjoyed the sense of freedom he had from working outside.

Mr. Michael Di Santo, Mr. Di Santo's father, testified that he has been a construction foreman for 25 years at Northtown Structural where he supervised his son. His son had started as a labourer, but by the time of the motor vehicle accident, he had started to read architectural drawings and was learning "everything." He saw that his son wanted to learn and do something with his life and that he liked to work in construction.

Mr. Michael Di Santo testified that although he was able to read some blueprints, this was not a regular part of his job and he agreed with the following description: "His knowledge of the construction industry was confined to that of a form carpenter who exclusively followed supervisor directions. . ."²

Mr. Di Santo did not testify to any great extent about his accident, as there was no dispute that he could not return to his former work. I find that the history set out in the FIT Rehabilitation and Assessment Centres Inc. report dated March 27, 1998, adequately sets out the circumstances and sequelae of the accident:

Mr. Di Santo reports that on July 29, 1995, he was driving, wearing a three-point seatbelt, in his 1989 GMC van. While travelling through an intersection, he was hit by a second car and subsequently his van flipped over. The medical documentation reports that Mr. Di Santo did not know where his left hand was but that it was crushed. He was transferred from the scene to Etobicoke General Hospital and was subsequently referred to the Toronto General Hospital for repair of his hand.

Mr. Di Santo had open reduction and internal fixation of his proximal phalanges on the index, middle and ring fingers. He had amputations of the third, fourth and fifth digits and had surgical wires in these fingers for six weeks.

Mr. Di Santo went on to develop a neuroma in the hand which was surgically removed after removal of the hardware.

Mr. Di Santo has undergone significant occupational and physical therapy to rehabilitate him since the time of the accident. He has completed psychological counselling and continued support from a variety of practitioners.

Mr. Di Santo testified that the first time he saw his hand after the bandages were removed, he realized he could not return to his former work, and he had no idea what else he could do or how he would manage.

Dr. V. Sennik, orthopaedic surgeon at Parallel Medical Services Ltd. (Parallel), examined Mr. Di Santo for an Insurer's Examination on July 30, 1997, as he had earlier on August 21, 1996. On both occasions, Dr. Sennik concluded that Mr. Di Santo could not perform the essential tasks of his former work as a carpenter. In the later report, he calculated the total percentage of permanent disability for the left hand at 22 percent, which works out to about 20 percent disability for the arm and 12 percent permanent disability for the whole person. The ongoing physical disability prevented him from working as a carpenter or cement finisher, and participating in a gradual return to work would not benefit him.

Kathryn Sinden, kinesiologist at Parallel, performed a Key Functional Assessment, also on July 30, 1997. She concluded that Mr. Di Santo did not have the strength nor the gross motor functions required for his pre-accident work, as his finger amputations prevented him from forming the complete grasp required to perform manual tasks.

Mr. Di Santo also suffered psychologically from the accident. Details of Mr. Di Santo's psychological problems are set out in Parallel's psychological assessment conducted by Dr. Larry Tuff, psychologist, and Daniel Bird, an accredited rehabilitation professional, on July 30, 1997. Their report indicates that after the accident, Dr. Shelley Gorman, psychologist, diagnosed Mr. Di Santo as suffering from post-traumatic stress disorder (PTSD). Rehabilitation modalities included psychotherapy involving a relatively new form of therapy for PTSD known as Eye Movement Desensitization and Reprocessing (EMDR). A DAC psychological report by Dr. Carolee Orme, psychologist, dated November 26, 1996, noted that Mr. Di Santo was experiencing significant psychological difficulties as a result of the accident, that he met the DSM-IV criteria for a diagnosis of post-traumatic stress disorder, and that he was demonstrating depressive symptoms. He was sub-threshold for a formal diagnosis of major depressive disorder. While Mr. Di Santo felt that the treatment, including the EMDR, had been beneficial, Dr. Orme was not satisfied that there had been significant improvement and recommended a more directive therapy. She recommended eight more treatments with Dr. Gorman as well as a separate exposure-based treatment program for Mr. Di Santo's driving phobia. Dr. Gorman indicated in her report of November 30, 1999, that she provided Mr. Di Santo with psychotherapy sessions 24 times from June 1996 to May 1997 and three times in October 1997. (Mr. Di Santo testified that he needed further EMDR therapy as a result of seeing a near-fatal bicycle-bus collision in July 1997.)

Dr. Tuff and Mr. Bird concluded that Mr. Di Santo had PTSD with secondary anxiety and depression as well as specific phobias related to driving and blood and that he met the criteria for reactive depression. They recommended short-term psychotherapy to address issues such as career planning and vocational rehabilitation, as the loss of his job and professional identity eroded his self-esteem and contributed to his low mood. They believed a return to employment would improve his mental health.

Mr. Di Santo testified that he discovered a programme close to home at Humber College. This was the three-year architectural technology course that seemed appropriate for him, as it had some connection to his background. His mathematics scores for the entrance exams in the summer of 1998 were weak, so he took math prerequisites. He started the course in September 1999, funded by Liberty Mutual. He hopes that the degree will lead to work with his old contacts in the construction industry. If he has to start work with a drafting firm, he hopes that his background will assist him. He estimated that his annual income in the first year after graduation would be in the low $20,000 range.

Liberty Mutual, having determined that Mr. Di Santo could not perform the essential tasks of his earlier work, took steps to change his IRBs to LECBs. On that point, the parties filed an Agreed Statement of Fact,³ of which I reproduce paragraphs 2 to 7:

On September 22, 1997, Liberty Mutual made a loss of earning capacity benefit offer to Mr. Di Santo based on a pre-accident earning capacity (PEC) representing a gross income of $61,638.98 and a net income of $39,793.48 or $765.26 weekly. The offer was based on a residual earning capacity (REC) of $479.23 weekly representing that of lumber grader or other wood-processing inspectors.

Mr. Di Santo disputed the calculation of his REC by correspondence dated November 5, 1997.

A REC DAC assessment was conducted by FIT Rehab who generated a report dated March 27, 1998. This report identified Mr. Di Santo's REC as $25,301.00 annually based on an entry level wage for an occupation listed as [NOC 1453] customer service, information and related clerks.

Liberty Mutual began paying loss of earning capacity benefits to Mr. Di Santo in the amount of $357.08 per week, based on the REC DAC assessment, commencing April 15, 1998.

Liberty Mutual agreed to fund a re-training program for Mr. Di Santo through the architectural technology department at Humber College and paid the Fall 1999 tuition fee associated with same.

Mr. Di Santo disputes the calculation of REC made by the REC DAC assessment on the basis that it does not have regard to his personal and vocational characteristics.

Regarding the occupation identified in paragraph 4, Mr. Di Santo testified that he has not performed clerical work before. In the construction trade, although he had to prepare the panels in a certain place by a certain time, he used his own initiative to construct them. He considers a regular clerical job somewhat menial, as he could be sitting in a cubicle with a telephone answering the same questions or filling out the same forms every day. When he worked on the construction sites, every day was different. He is not used to the kind of complaints he would have to deal with if he were in customer service. He enjoyed the outdoors environment, so a clerical environment would make him uneasy. However, he would be physically capable of and qualified for the job.

Mr. Di Santo testified that the earnings from a clerical job were a factor for him as well, as an annual salary of $25,000 would be considerably less than what he earned before the accident. However, he was aware that if he took such a job, then its income combined with his present level of benefits would provide him with his pre-accident income. He is also prepared to accept a starting annual salary of $20,000 to $22,000 as an architectural technologist following his training at Humber. Most people who get their diploma start working with a drafting firm helping in the design of a building or structure. He could also be eligible for work as an estimator, pricing the cost of a job, or possibly, as a project manager.

Several examples of NOC 1453 jobs were filed, such as occupation 1453.1: "Customer Service Clerks in Retail Establishments," who "answer questions and investigate complaints regarding establishments' goods, services and policies, and provide services such as receiving payments and processing requests for services." Occupation 1453.3 is Information Clerks, who "provide information to the public about goods, services, schedules, rates, regulations and policies in response to telephone and in-person questions." Mr. Di Santo testified that in 1991 or 1992 he had briefly tried a career in door-to-door sales, but he only followed one salesman door to door to see how it was done before quitting. When he was still in school, a friend tried to start up a company selling paper and related products, and Mr. Di Santo helped him for two or three weeks. Mr. Di Santo testified that, including these two experiences, sales had interested him in the past and was an occupation in keeping with his marketing administration program at Seneca College.

Mrs. Lucy Di Santo testified that her husband would be able to perform the job of customer service clerk, but he would not enjoy it as much as working with his hands. She felt that if he worked at a customer service job, he would see himself as a failure. She would like to see him return to work, as he is young and smart with a good personality and strong interpersonal skills.

Regarding paragraph 6, the college funding, Mr. Di Santo testified that in fact he temporarily dropped out of the architectural technology course. He found the full course load more difficult than the other students who had just left high school. He also had the closing of a new home at the same time as the courses began, which was then delayed, causing problems in getting to class, and his wife was not feeling well, as she was seven months pregnant. He was allowed to try the courses for a few weeks and then drop out without penalty. The admissions officer told him he could also try a part-time schedule, or the college could rearrange his schedule to help him during the day. He started the course again in January 2000. Liberty Mutual only learned of this course of events at the hearing.

Regarding paragraph 7, the REC calculation, I was advised during the opening statements that Mr. Di Santo disputes the REC calculation on the additional criterion of the possibility of deterioration in his impairment. Section 30 of the Schedule provides that the REC is to be determined using the gross annual income that "the person could earn from the type of employment that best satisfies the criteria set out in subsection (2)." There is no dispute that the proposed employment in entry-level clerical positions meets the criteria of paragraph 1 (he is able and qualified to perform the essential tasks of the employment) and paragraph 2 (the employment exists in the area in which he lives and is accessible to him) of subsection (2). Paragraph 3 reads as follows:

It would be reasonable to expect the person to engage in the employment having regard to the possibility of deterioration in the person's impairment and to the person's personal and vocational characteristics.

Liberty Mutual objected to this additional ground on the basis of its understanding that the dispute had only turned on the issue of Mr. Di Santo's personal and vocational characteristics. I ruled that Liberty Mutual could call additional evidence at the end of the hearing if necessary to address the issue of the possibility of deterioration in Mr. Di Santo's impairment. Liberty Mutual chose not to do so.

I turn to the two key psychological assessments regarding the possibility of deterioration, as there was no suggestion that working as a clerk would worsen Mr. Di Santo's physical condition.

As part of FIT Rehab's assessment, Dr. Ruth Berman, psychologist, conducted a psychovocational assessment, as set out in her report of March 17, 1998. The report, along with the other reports, was then considered by Dr. Shelley Gorman, who had provided psychotherapy to Mr. Di Santo, as set out above. Dr. Gorman wrote in her report of November 30, 1999, as follows:

I am very favorably impressed with the assessment findings from previous medical and psychological investigations. . . Mr. Di Santo has received very thorough and comprehensive assessments over a significant period of time, so that I would anticipate that the findings are representative of his current functioning. Dr. Berman's summary of both his vocation and personality strengths and problems (March 17, 1998) appears to be an accurate and valid appraisal of his current situation. He is very motivated to return to the workforce, and I am sure that if he could find an appropriate job, he would be a dedicated and enthusiastic performer. . . My impression of the REC DAC report is that it represents a thorough assessment process and yields helpful information.

Dr. Berman measured Mr. Di Santo's occupationally relevant aptitudes. The tests highlighted particular strengths in the area of clerical perception, although he showed aptitudes for a broader range of occupations. She also assessed his interests, and the general test results indicated that such occupations as production scheduler, retail stock clerk, and sales clerk were consistent with his interests. Regarding both these types of assessments, Dr. Berman noted that the suitability of any occupation would be dependant upon Mr. Di Santo's educational background, aptitudes and interests.

As to his personality functioning and psychological state, Dr. Berman noted ongoing depressive symptomology such as feelings of worthlessness, hopelessness and loss, suggestions of substance abuse problems, and a significant amount of suicidal ideation. Based on his functional presentation, she did not consider these symptoms to be of such proportions that he could not return to work. Nevertheless, she suggested further treatment and wrote to Mr. Di Santo's family doctor at the same time suggesting the use of anti-depressant medication (Mr. Di Santo has tended to avoid medication) and possibly further psychotherapeutic intervention.

Dr. Berman then considered alternative occupations for Mr. Di Santo, noting that he had few directly transferable skills to other areas of the construction, lumbering or carpentry industries because of his reported lack of knowledge of wood products, blueprint reading, or materials costing. She concluded as follows:

Given [Mr. Di Santo's] level of intelligence, background education, demonstrated aptitudes, but lack of relevant transferable or formal occupational skills, placement in a sales, service, clerical or semi-clerical position seems the most realistic for any direct employment. However, in considering such possible positions, most limiting to Mr. Di Santo, at present, is not his intellectual functioning, literacy or numeracy, or general aptitudes, but rather his lack of computer-related skills which would significantly reduce his direct placement employment opportunities. As such, Mr. Di Santo is eligible for a more limited range of occupations, or to those in which an employer may be willing to train him on the job. From a learning ability perspective, Mr. Di Santo certainly has the capacity to acquire computer-related skills if given the opportunity, even with his left hand restrictions.

In general then, Mr. Di Santo is considered presently capable, in theory, of entry-level clerical positions (e.g. bank teller, customer service clerk, order desk clerk), as well as a number of sales or inspection positions at an entry level, assuming that computer skills are not required or could be easily acquired on the job. Moreover, despite his ongoing emotional distress, he remains a highly personable young man who is socially quite competent, and who could cope quite well in areas such as the above where interpersonal effectiveness is an asset.

Dr. Gorman commented on the REC DAC assessment in her letter of November 30, 1999. As noted above, she considered Dr. Berman's report to be accurate and the REC DAC to be thorough. She continued: "The only problem with the findings is that Mr. Di Santo does not feel any enthusiasm for the range of vocational choices suggested." She thought that Mr. Di Santo could function in the proposed employment category, as he is a "personable young man" who "could deal well with the public":

However, he does not picture himself doing that kind of work. He loves the out-of-doors, and he feels at home in the building and construction field of employment, and he imagines himself fulfilling a personal goal which is consistent with his interests. If he were able to complete the program in architectural technology, the chances that he would find satisfaction and success in this area of work would seem much greater than if he were to take a job in the customer service industry.

Dr. Gorman believes that Mr. Di Santo needs to pursue the architectural technology program, as being forced to settle for less, that is, the type of clerk occupation identified for him, "could certainly lead to further depression and deterioration of his psychological condition." She also considered the possible income as a clerk, and concluded:

$25,000 to $27,000 per year hardly represents the level of income that he requires. Furthermore, when one considers the customer service type of job, which he does not find himself being interested in, plus a very low income possibility from it, I can only imagine that he would continue to experience frustration and discouragement about his situation. This would not be healthy for him or his family.

Thus, Dr. Gorman addresses in her report the question of the reasonableness of the proposed occupation having regard to the possibility of deterioration in Mr. Di Santo's impairment. However, I find that the bases of her conclusions are not particularly solid. She focuses on the impact of the low salary, $25,000 to $27,000 per year, for instance, but as I read her report she does not seem to be aware that this income or any income Mr. Di Santo would receive would be in addition to his current benefits. Taken together, his total income would approximate his pre-accident income, as Mr. Di Santo admitted. She does not address the situation that would actually arise.

In any event, if Mr. Di Santo does complete the diploma, he testified that his starting salary would be the same or less than that of a clerk, so I find that the salary by itself is not particularly relevant as between the two occupations. Furthermore, Dr. Gorman refers to how much Mr. Di Santo enjoyed working outdoors in the construction trade, yet there is no guarantee that his proposed occupation as an architectural technologist would let him work as before, since as Mr. Di Santo testified, his most likely occupation would be that of a drafter, working indoors. Finally, I note that Dr. Gorman's report is hedged with phrases such as "he imagines" and "if he were able" and "I can only imagine," which I find are inconclusive and weaken her own conclusions. Accordingly, I do not find that the proposed occupation of clerk is unreasonable having regard to the possibility of deterioration in Mr. Di Santo's impairment.

The other issue under paragraph 30(2)3, then, is whether it would be reasonable to expect Mr. Di Santo to engage in the proposed clerical employment having regard to his personal and vocational characteristics. These characteristics are defined in section 1 of the Schedule as follows:

"personal and vocational characteristics" include,

(a) employment history,

(b) education and training,

(c) vocational interests and aptitudes,

(d) vocational skills,

(e) physical abilities,

(f) cognitive abilities, and

(g) language abilities

There is no dispute that Mr. Di Santo's physical, cognitive and language abilities are suitable for the proposed clerical employment. Accordingly, the key categories are categories (a) through (d) of the definition.

In addition, Mr. Di Santo submitted that by the use of the word "include" the list of personal and vocational characteristics is not a closed category. Arbitrator Renahan found in Angolano and Liberty Mutual Insurance Company⁴ that the definition is not limited to the items listed in section 1. He found that a significant personal and vocational characteristic of Mr. Angolano was his age, 60, at the time of the LECB offer, making it difficult for him to retrain. Conversely, Mr. Di Santo is still quite young. In that light, I find that the following from the appeal decision in Angolano⁵ is helpful in analysing Mr. Di Santo's personal and vocational characteristics:

Employment is not inappropriate simply because it is not the insured person's first choice. Some flexibility is required, as reflected in the rehabilitation and back to work provisions. The degree of flexibility will depend on the particular circumstances. In this case, the arbitrator was dealing with a 60-year-old man who had run his own small business for 19 years. He provides detailed reasons for rejecting the various job proposals which, although perhaps on the restrictive side, do not reflect any error of law.

As Mr. Di Santo is young, he also has a relatively short employment history. He had worked full time only from early 1990 until the time of the accident, with approximately eight months in that period when he was not working due to injuries. Although he was learning to read blueprints, he worked essentially as a general labourer. This forms a contrast with another case that counsel for Mr. Di Santo asked me to consider, Desroches and Economical Mutual Insurance Company.⁶ In that case, Mr. Desroches was 41 years of age at the time of the accident and had worked some 20 years as a stone mason after leaving school early. I find that decision of little assistance here, as the proposed occupation there failed all of the criteria, which is not the case here. Furthermore, unlike Mr. Di Santo, Mr. Desroches was a skilled craftsman. Indeed, there is little evidence to show that the proposed occupation is unsuitable for Mr. Di Santo, as Dr. Gorman considered the DAC to have been accurate, and she herself felt that Mr. Di Santo could do well in the proposed employment category. Her main reservations were about the level of income and Mr. Di Santo's lack of interest.

I do not consider the difference in income between Mr. Di Santo's former occupation and the proposed occupation to be particularly compelling in these circumstances. Ironically, of course, the lower the income of the proposed occupation, the higher the benefit to the applicant. That was the essence of the dispute in the Lehman case⁷ dealing with the residual earning capacity. In that case the parties agreed that the insured person was able and qualified to perform the essential tasks of two types of employment. The question was which one best satisfied the criteria. Mr. Lehman expressed an interest in the proposed occupation with the lower income, which was found to be legitimate; the effect nonetheless was that he received a higher benefit.

In this case, there are no alternate occupations, although Liberty Mutual had originally assessed Mr. Di Santo's residual earning capacity as being higher, on the basis that he did have some skills that could have earned him a higher salary (as noted in paragraph 2 of the Agreed Statement of Fact, the offer was based on a REC of $479.23 weekly representing the occupation of lumber grader or other wood-processing inspectors). Mr. Di Santo was successful in showing that he does not have transferable skills for that higher-paying job, thereby decreasing the REC and increasing the benefit. However, he then argues that the income of the proposed occupation is too low, meaning that it is unsuitable and that he should receive a benefit as if he has no REC. Taken to its extreme, this argument would mean that the whole process of determining an LECB would be almost meaningless: either the proposed occupation pays nearly as much as the old occupation, in which case the LECB is nil or nearly so, or the proposed occupation pays less, in which case it is unsuitable, and the REC is then nil.

As noted by Arbitrator Blackman in Desroches, orthopaedic surgeons should not be forced to work as parking lot attendants, nor should any less respect be given to skilled craftsmen. I am satisfied that the proposed occupation does not represent that kind of mismatch between Mr. Di Santo's former and proposed occupation. As already noted, the medical evidence shows that Mr. Di Santo has the personality and the skills to be successful at the proposed occupation. Accordingly, I find that the difference in income between the former and the proposed occupations does not render the latter otherwise unsuitable.

As to Mr. Di Santo's lack of interest in the proposed occupation, I have discussed it above with respect to any possible psychological damage. In the Angolano appeal, Director's Delegate Draper noted that some flexibility is required in the choice of proposed occupation. I find that in these circumstances Mr. Di Santo's professed disinterest does not render the proposed occupation unsuitable where the evidence otherwise shows that it is suitable. Accordingly, I find that the proposed occupation matches the criteria set out in subsection 30(2) of the Schedule and that Mr. Di Santo's correct REC is that as determined by the REC DAC assessment, namely $25,301.00 annually.

As Liberty Mutual has been paying LECBs on the basis of the REC DAC assessment, it follows that no interest is payable.

EXPENSES:

As the parties did not advise me if either of them seeks to have an Offer to Settle or a Response to an Offer to Settle considered in connection with an award of expenses, I have not determined that issue. If the parties cannot agree on the issue of expenses, either party may apply for a hearing on expenses.

April 5, 2000

David J. Evans Arbitrator

Date

ARBITRATION ORDER