Neutral Citation: 2000 ONFSCDRS 89
FSCO A97-000807
FINANCIAL SERVICES COMMISSION OF ONTARIO
BETWEEN:
MICHAEL PAPATHANASIOU
Applicant
and
ALLIANZ INSURANCE COMPANY OF CANADA
Insurer
DECISION ON A PRELIMINARY ISSUE
Before:
John Wilson
Heard:
January 27, 2000, at the Offices of the Financial Services Commission of Ontario in Toronto.
Written submissions were received on February 2, 2000.
Appearances:
Stephen B. Abraham for Mr. Papathanasiou
Edmund W. Kent for Allianz Insurance Company of Canada
Issues:
The Applicant, Michael Papathanasiou, was injured in a motor vehicle accident on August 17, 1993. He applied for statutory accident benefits from Allianz Insurance Company of Canada (Allianz), payable under the Schedule.1 Allianz terminated weekly income benefits. The parties were unable to resolve their disputes through mediation, and Mr. Papathanasiou applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended (the Act).
The preliminary issue is:
- Is Mr. Papathanasiou precluded from proceeding to arbitration because his application for arbitration was filed beyond the two-year limitation period set out in section 281(5) of the Act and subsection 26(1) of the Schedule?
Result:
- Mr. Papathanasiou is not precluded from proceeding to arbitration.
EVIDENCE AND ANALYSIS
Background:
This preliminary issue hearing turns principally on the question of whether Mr. Papathanasiou received proper notice of the termination of his benefits from the Insurer, and whether this information was properly and clearly communicated to him.
If Mr. Papathanasiou was properly provided with a clear notice terminating benefits, then, in the absence of a waiver of the time limit by the Insurer, the present challenge to Allianz's termination of benefits would be beyond the time limit set by section 281(5) of the Insurance Act, and I would have to dismiss his application.
Mr. Papathanasiou, a maintenance worker at the Toronto East General Hospital in Toronto, claimed that he suffered a variety of disabilities following his motor vehicle accident on August 1993. Mr. Papathanasiou is Greek-speaking with little comprehension of written or spoken English. He relied on his family for translation services when he had to deal with the English-speaking world in matters of business.
Following the accident, Mr. Papathanasiou filed for weekly income benefits from his Insurer, Allianz, which paid benefits on the basis of the initial information supplied by Mr. Papanathanasiou.
During the time Mr. Papathanasiou was receiving his weekly income benefits, the adjuster on the file, Ms. Denise Felstead, continued to adjust and investigate his claims. During this process, it was discovered that Mr. Papathanasiou potentially had some collateral income replacement benefits through his employer, the Toronto East General Hospital. If this was the case, then Allianz would be entitled to deduct the amounts of such collateral income benefits from his weekly income benefits.
As a result, Allianz sent Mr. Papathanasiou a Notice of Assessment dated October 18, 1993, which informed the Applicant of an overpayment situation.
Ms. Felstead also consulted with Mr. Papathanasiou's family physician, Dr. R.E. Verschuren, concerning the duration and severity of the Applicant's claimed disabilities.
According to Ms. Felstead's notes, on October 18, 1993, after receiving an opinion from Dr. Verschuren that Mr. Papathanasiou had now returned to his pre-accident status, Allianz began the procedure of terminating Mr. Papathanasiou's weekly income benefits. Ms. Felstead first sent a letter to the doctor, confirming their conversation, with a request that the physician make any necessary corrections, sign it, and return the letter to Allianz.
Finally, according to Ms. Felstead, the Insurer sent a Notice of Assessment, dated February 9, 1994, terminating benefits. The Applicant denies receiving any such notice.
Mr. Papathanasiou was in the habit of relying on his daughter, Irene Montgomery, for assistance in dealing with outside correspondence. According to her, her father would put any correspondence into a box of papers for her to examine and translate when she came to visit. Ms. Montgomery apparently also would make telephone calls on his behalf, and a telephone conversation took place between Ms. Felstead and Ms. Montgomery some time after the benefits were terminated. There is some dispute, however, about who initiated the conversation and what exactly was said.
Indeed, the diverging accounts of the conversation are indicative of the misunderstanding that appear to have marked the termination of benefits in this matter. At the same time that Allianz was contemplating ceasing payment of benefits to Mr. Papathanasiou, it was also pursuing an overpayment issue on benefits already paid.
This made even the stoppage of payments susceptible to the interpretation that Allianz was holding back funds to adjust for the claimed overpayment, and not because it denied Mr. Papathanasiou's entitlement to income replacement benefits. Ms. Montgomery testified that she understood that no further payments were forthcoming due to the overpayment situation.
Mr. Papathanasiou, having realized at some point that there were matters outstanding, arising from the accident, took the step of contacting and retaining a lawyer who spoke Greek, Mr. Tony Lafanzanis. Mr. Lafanzanis handled the file from February 1994, until replaced by another law firm, Linnett and Karoly in September 1996. Neither firm claimed to be aware of the Notice of Assessment terminating accident benefits. Both claimed first to be aware of the termination notice in May 1997, when Allianz faxed a copy to the firm of Linnett and Karoly.
Limitation Matters:
The law on limitations, as it relates to applications for statutory accident benefits, was re-stated succinctly by Arbitrator Bayefsky in his decision Jakovljevic and Commercial Union Assurance Company (FSCO A98-001163, July 26, 1999):
Arbitration decisions have established a number of principles as to the manner in which the limitation periods under the legislation are to be applied. The principles most relevant to the case at hand are that the two year period begins to run from the date the applicant receives a clear and unequivocal refusal of the benefits he or she has claimed, and that the insurer bears the onus of establishing both that the applicant received such a refusal and the date of receipt.
If Allianz can prove that it delivered a clear and unequivocal refusal to pay benefits, then the time limit for Mr. Papathanasiou to challenge its refusal would begin to run at the time he received that notice .
Validity of the Notice:
The Notice of Assessment referred to by Allianz, dated February 9, 1994, contains a checkmark in the box marked "Entire Claim Denied" under the heading; "Weekly Income Benefits." In a handwritten "explanation," Allianz advised: "Based on medical documentation you are back to your pre-accident status, therefore no further benefit payable."
I find that the words clearly express the intention to cease paying weekly income benefits.
Mr. Papathanasiou argued that the notice was not clear to him, since it was totally in English, and he is a virtually unilingual, Greek-speaking person. I accept that Allianz was aware that the Applicant had very limited English skills. It had notations in its files about arranging interpretation, and Ms. Felstead had met with Mr. Papathanasiou personally.
I heard evidence from Ms. Montgomery, that her father relied upon her to translate any official documents that were received, and to assist him in dealing with the English-speaking world on business matters. There was evidence that Ms. Montgomery had spoken to Ms. Felstead of Allianz on behalf of Mr. Papathanasiou. Previous letters sent in English seem to have been understood, albeit with the help of family members.
Although having the notice translated might have removed any element of doubt in communicating the Insurer's decision to Mr. Papathanasiou, I find that it was reasonable for Allianz to rely on the Applicant's own resources to assist him in understanding the contents of the notice. It was not necessary that the notice be translated into Greek for notice to be clear.
Was the Notice Received by Mr. Papathanasiou?
Mr. Papathanasiou has denied receiving such a notice. His daughter, Ms. Montgomery, has testified that she was unaware of such a document in her father's possession. Both she and her husband testified that they searched through her father's document box and found no such document.
Ms. Felstead testified as to her belief that Mr. Papathanasiou received notice of termination. She referred to the assessment of claim form dated February 9, 1994, and indicated that she had sent it to Mr. Papathanasiou. This document states, unequivocally, that the weekly income benefits would be terminated. She also testified that no covering letter of any sort was sent with the notice.
Ms. Felstead testified that the document was not sent by either courier or registered mail. Therefore, there is no evidence of receipt of the document by Mr. Papathanasiou. Although she testified that it was normal practice to send these documents by regular mail, she did not provide any evidence of how and when the document was actually mailed.
Allianz produced a photocopy of a cashed cheque, dated February 8, 1994, endorsed by Mr. Papathanasiou. Ms. Felstead testified that it was the Insurer's general policy to enclose any cheques that had to go out to an applicant, with any correspondence going out at the same time. She clearly believed that the Notice of Assessment, and the cheque of February 8, 1994 were mailed at the same time .
Upon cross-examination by the Applicant, however, it was apparent that Ms. Felstead had no independent recollection of whether the notice of assessment was, indeed, included with the cheque cashed by Mr. Papathanasiou.
Allianz produced some printouts of the electronic notes made by the adjuster, as well as some of her handwritten notes. Although it is clear from the notes that Ms. Felstead meant to terminate benefits, there is no note or log record indicating that the Notice of Assessment was mailed or couriered to Mr. Papathanasiou, or that the last cheque was mailed in the same envelope with the notice.
Mr. Papathanasiou argued that, although the document may have been created, and put in the file, there is no evidence of when it was created or that it was ever sent. He pointed to the lack of a covering letter in the file, and the fact that the statement from Dr. Verschuren, upon which Ms. Felstead stated that Allianz had relied, was dated February 11 and was not received by Allianz until after the date shown on the Notice of Assessment.
Mr. Papathanasiou further suggested that the notice might have been created in anticipation of the receipt of Doctor Verschuren's letter but inadvertently left in the file, and not released when the letter was in their hands. He further suggests that the notice may have continued to sit in the files, and was not, indeed ever sent to him.
I heard evidence from Mr. Papthanasiou's previous lawyers that they never saw a notice of termination, when they received the claims file from Allianz.
Allianz did not produce any mailroom logs of material mailed, or evidence of what exactly their procedures were with respect to the mailing of documents to clients. It asks that the word of their representative concerning the mailing of a single document some six years ago be considered sufficient to prove the delivery of the notice.
I accept that Ms. Felstead intended to issue and deliver a notice of termination at some point. That much is consistent with her contemporary notes. I accept, as well, that Ms. Felstead sincerely believes that she indeed did issue and deliver the notice. However, as I have noted, Ms. Felstead in cross-examination demonstrated that she had no direct recall of most incidents surrounding its issuance and delivery, and had to rely on statements of belief about the general practice of her employer concerning such matters.
There are too many unexplained lapses in the paper-handling and documentation on both sides to make any conclusions concerning the absence of the Notice in the lawyers' files. I find, therefore, that the absence of the Notice of Assessment in the records of Mr. Papathanasiou's lawyers is not conclusive evidence that Allianz failed to provide it to them.
In Simcoe and Erie General Insurance Company and Wiggan,2 Director of Arbitrations, Elisabeth Sachs, observed: "....there is no indication where that document went after leaving the hands of the claims examiner, who could only say it went into some form of internal company distribution system. There is no evidence Ms. Wiggan did or did not ever receive written notice of refusal."
Likewise, in Mr. Papathanasiou's situation, the best evidence the Insurer can come up with is a suggestion that the notice was possibly enclosed with a cheque. I cannot accept that the cheque and the Notice of Assessment necessarily went out together. The fact that the cheque was received and cashed by Mr. Papathanasiou does not prove receipt of the Notice of Assessment.
Allianz knew that clear and unequivocal notice had to be given to the Applicant if it intended to stop benefits. This is not a new requirement. It had the option of using personal service, registered mail, or a courier service, or even documenting thoroughly the manner and time that the notice was consigned to the normal mail system. It did none of these. Its only witness, Ms. Felstead had no clear recollection of putting the notice in the mail.
I found Mr. Papathanasiou and his family to be credible witnesses, and accept their evidence that they did not receive the Notice of Assessment from Allianz.
I find that Allianz has not met the onus of proving that it sent the notice of assessment to Mr. Papathanasiou on February 9, 1994.
EXPENSES:
I exercise my discretion to award Mr. Papathanasiou his expenses incurred in this preliminary issue hearing.
May 11, 2000
John Wilson
Arbitrator
Date
Neutral Citation: 2000 ONFSCDRS 89
FSCO A97-000807
FINANCIAL SERVICES COMMISSION OF ONTARIO
BETWEEN:
MICHAEL PAPATHANASIOU
Applicant
and
ALLIANZ INSURANCE COMPANY OF CANADA
Insurer
ARBITRATION ORDER
Under section 282 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:
- Mr. Papathanasiou is not precluded from proceeding to arbitration.
May 11, 2000
John Wilson
Arbitrator
Date