Fenech v. State Farm Mutual Automobile Insurance Company, 2001 ONFSCDRS 124

Neutral Citation: 2001 ONFSCDRS 124

FSCO A00-000043

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

LOUISE FENECH

Applicant

and

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY

Insurer

REASONS FOR DECISION

Before:

Asfaw Seife

Heard:

September 18 and 19, 2000, at the Offices of the Financial Services Commission of Ontario in Toronto.

Written submissions were received on October 24, 2000.

Appearances:

Roland Spiegel (Agent) for Ms. Fenech

Lisa Trabucco (Barrister and Solicitor) for State Farm Mutual Automobile Insurance Company

Issues:

The Applicant, Louise Fenech, was injured in a motor vehicle accident on May 25, 1996. She applied for and received statutory accident benefits from State Farm Mutual Automobile Insurance Company ("State Farm"), payable under the Schedule.¹ State Farm refused to pay Ms. Fenech the cost of assessments conducted by DEAHY Medical Assessments Inc. (DEAHY), in the amount of $2,568. The parties were unable to resolve their disputes through mediation, and Ms. Fenech 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:

1. Is Ms. Fenech entitled to payment of the cost of examination in the amount of $2,568, pursuant to section 57(1) of the Schedule?

2. Is Ms. Fenech entitled to a special award because State Farm unreasonably delayed or withheld benefits, pursuant to section 282(10) of the Insurance Act?

3. Ms. Fenech entitled to her arbitration expenses?

4. Is State Farm entitled to its arbitration expenses ?

Result:

1. Ms. Fenech is not entitled to the payment of the cost of examinations claimed under section 57(1) of the Schedule.

2. Ms. Fenech is not entitled to a special award.

3. The issue of arbitration expenses is deferred.

EVIDENCE AND ANALYSIS:

Background:

There is no dispute that as a result of the accident of May 25, 1996, Ms. Fenech sustained a fracture in her left thumb, as well as neck and back strain. The fracture healed soon after the accident. However, Ms. Fenech continued to complain of neck and back discomfort and headaches. Despite her problems, Ms. Fenech was able to return to her pre-accident employment as a full-time social services worker within a few days after the accident and she has been able to perform the essential tasks of her employment without restrictions. She has made no claims for income replacement benefits.

Ms. Fenech's medical history following the accident is brief and undisputed. Immediately after the accident, she was taken to the emergency ward of St. Joseph's Hospital in Chatham where she had her left thumb placed in a splint. On May 30, 1996, five days after the accident, she saw her family physician, Dr. Jennifer Beretta with complaints of neck and back pain. Dr. Beretta found tenderness in her neck and mid-back, with full range of motion except in the extremes of movement of her neck. She prescribed anti-inflammatory medications for her and recommended physiotherapy. Ms. Fenech started physiotherapy at the Mississauga Orthopaedic and Sports Injury Clinic (Mississauga Orthopaedic) on July 8, 1996.

On September 18, 1996, approximately ten weeks after she started physiotherapy, Ms. Fenech was examined by Dr. Lyndon Mascarenhas, on State Farm's referral. Dr. Mascarenhas' report states that her examination was normal from a neurological and orthopaedic perspective; however, he noted that she continued to be troubled by the residual effects of her soft-tissue injuries. He recommended that Ms. Fenech should taper and discontinue her treatment over the next two to three weeks as he found no clinical indication for ongoing massage therapy. He concluded that she was able to perform the essential tasks of her pre-accident employment as well as the activities of daily living.

Ms. Fenech was discharged from Mississauga Orthopaedic on October 11, 1996, at her own request. In addition to the above treatments, Ms. Fenech has received twelve, one-hour massage sessions from June 13, 1996 to May 18, 2000.

By letter dated October 16, 1996, State Farm terminated Ms. Fenech's medical benefits on the basis of Dr. Mascarenhas' opinion that she no longer required physiotherapy or massage therapy. The letter informed Ms. Fenech that if she disagreed with Dr. Mascarenhas' report, she had the right to request to be assessed by a Designated Assessment Centre (DAC), and that she must make such a request within fourteen days of the receipt of the letter.

On November 18, 1996, Ms. Andrene Martin, State Farm's adjuster, wrote to Mr. Daniel Daley, Ms. Fenech's lawyer, advising that the fourteen days for requesting a DAC assessment had lapsed. Ms. Martin requested confirmation of Ms. Fenech's status, as her understanding was that Ms. Fenech was no longer attending physiotherapy and was working full-time. She did not receive a response to this letter. Ms. Fenech never requested the DAC assessment.

On February 14, 1997, Ms. Martin wrote another letter to Mr. Daley stating that she had been unsuccessful in her attempts at reaching him by telephone and requesting confirmation of Ms. Fenech's status. Ms. Martin sent similar letters to Mr. Daley on May 7, 1997 and August 27, 1997. She received no response to these letters.

In November 1998, more than two years after the termination of her medical benefits, Ms. Fenech saw Mr. Daley, because, as she testified, she was experiencing headaches which interfered with her activities of daily living. She testified that she continued to perform her job-related duties with no significant problems.

Ms. Fenech testified that Mr. Daley gave her a form entitled "Request for Multi-Disciplinary Assessment" in DEAHY's letterhead, and asked her to take it to her family doctor. The form is a referral of Ms. Fenech to DEAHY for a functional abilities assessment and a medical assessment. The form was partially completed before she took it to her doctor. It indicated that Ms. Fenech continued to have ongoing problems of neck and back pain as well as headaches and that the "assessment is reasonable and necessary, to assist me in further management and treatment of my patient." Ms. Fenech saw her family doctor on November 23, 1998, and had the form signed by her.

On February 12, 1999, DEAHY wrote to State Farm advising that it was proceeding to schedule the Functional Abilities Evaluations (FAE) and an orthopaedic assessment and that State Farm would be billed for these assessments.

By letter dated February 23, 1999, State Farm's new adjuster, Ms. Sue Dickinson, replied to DEAHY's letter stating that State Farm would not pay the cost of the assessments as they were neither reasonable nor necessary. Ms. Dickinson testified that she made the decision not to pay the expense for the following reasons: there had been no activity in the file since October 1996; Ms. Fenech had not contacted State Farm for more than two and a half years; no claims were submitted by her or on her behalf; Ms. Fenech had not disputed the termination of her benefits; and that the medical information in State Farm's file indicated Ms. Fenech had returned to work within a few days after the accident.

Despite State Farm's refusal to pay the cost, DEAHY proceeded with the examinations. On February 18 and 22, 1999, Ms. Fenech underwent an FAE and an orthopaedic assessment. The FAE concluded that Ms. Fenech was able to perform the required duties of her occupation as a social services worker on a full-time basis. With respect to the activities of daily living, it concluded that she was "unable to perform her pre-accident tasks due to decreased lifting/carrying strengths, decreased cervical spine range of motion, decreased postural tolerances and general deconditioning." The assessment recommended that Ms. Fenech attend a structured exercise program at a local gym designed by a certified kinesiologist and receive massage therapy two to three times per month.

The orthopaedic assessment concluded that Ms. Fenech was suffering from chronic strain of the cervical and lumbar spine and cervicogenic headaches, with restrictions in prolonged sitting or driving. The assessment confirmed that Ms. Fenech's left thumb fracture had healed.

Ms. Dickinson testified that she reviewed the DEAHY reports, and concluded that they did not reveal any new information that made her change her decision not to pay the cost. She sent a second letter to DEAHY dated April 14, 1999 confirming her decision not to pay.

Analysis:

Ms. Fenech claims entitlement to the cost of the assessments under Section 57 of the Schedule which provides that the insurer shall pay for all reasonable expenses incurred by or on behalf of an insured person in obtaining and attending an examination or assessment for the purpose of the Regulation, including fees charged by a person who conducts an examination or assessment.

The onus is on Ms. Fenech to establish that the DEAHY assessments were required for the purpose of the Schedule and that the expenses of obtaining the assessment were reasonably incurred. For the following reasons, I find Ms. Fenech has failed to discharge this onus.

I heard no evidence as to the reason for requiring the DEAHY assessments. It is clear from the evidence that it was Ms. Fenech's lawyer who initiated the referral; however, he did not testify, neither have I received any documentary evidence that would explain why he made the decision. Ms. Fenech did not testify about any reasons communicated to her about the need for the assessments. I find from Ms. Fenech's evidence that it was not Dr. Beretta who actually referred her to DEAHY. Dr. Beretta merely formalized the referral by signing the form. Dr. Beretta's clinical notes confirm that it was Ms. Fenech who "needed forms filled". This was also Ms. Fenech's testimony. Dr. Beretta did not testify. There is nothing in Dr. Beretta's clinical notes and records before November 23, 1998 to suggest that she felt Ms. Fenech should be assessed. There is no evidence that Dr. Beretta used DEAHY's report to treat Ms. Fenech.

DEAHY did not provide treatment to Ms. Fenech after the assessment; nor did it arrange for Ms. Fenech to be treated by any health practitioner. No one from DEAHY testified as to why the assessments were requested.

Ms. Fenech's lawyer did not respond to the various letters sent to him by State Farm about the status of Ms. Fenech's case. Both Ms. Fenech and her lawyer were properly notified of her rights under the Schedule to be assessed by a medical rehabilitation DAC. She did not request such an assessment.

Ms. Fenech did not at any time make a claim for income replacement benefits. She did not commence mediation with respect to the termination of her medical and rehabilitation benefits. The cost of these assessments was the only dispute between Ms. Fenech and State Farm.

For over two years, there was no activity in Ms. Fenech's file with State Farm. In addition, the medical evidence does not support that Ms. Fenech was experiencing inability to cope with the activities of daily living or with her employment essential tasks. She discharged herself from physiotherapy. I find no evidence to suggest that Ms. Fenech had intended to litigate the termination of her benefits.

The test under section 57(1) is reasonableness. For the reasons outlined above, I am not satisfied that the cost of the DEAHY assessments was reasonably incurred for the purposes of the Regulation.

EXPENSES:

I may be spoken to if the parties are unable to resolve the issue of arbitration expenses.

August 29, 2001

Asfaw Seife Senior Arbitrator

Date

Neutral Citation: 2001 ONFSCDRS 124

FSCO A00-000043

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

LOUISE FENECH

Applicant

and

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY

Insurer

ARBITRATION ORDER

(Corrected)

Under section 282 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:

1. Ms. Fenech's claim for payment of cost of examinations under section 57(1) of the Schedule is dismissed.

September 21, 2001

Asfaw Seife Senior Arbitrator

Date

Footnotes

1. 1The Statutory Accident Benefits Schedule — Accidents after December 31, 1993 and before November 1, 1996, Ontario Regulation 776/93, as amended by Ontario Regulations 635/94, 781/94, 463/96 and 304/98.