Neutral Citation: 2002 ONFSCDRS 132

FSCO A01-000344

BETWEEN:

ALKSANDER POLYAKOV

Applicant

and

ALLSTATE INSURANCE COMPANY OF CANADA

Insurer

REASONS FOR DECISION

Before:

Deena Baltman

Heard:

June 3, 4, 5 and 6, 2002, at the offices of the Financial Services Commission of Ontario in Toronto.

Appearances:

Vadim Malyshev for Mr. Polyakov

Ian D. Kirby for Allstate Insurance Company of Canada

The Applicant, Alksander Polyakov, was injured in a motor vehicle accident on December 8, 1999. He applied for income replacement benefits and various medical benefits from Allstate Insurance Company of Canada ("Allstate"), under the Schedule.¹

Allstate denied income replacement benefits on the basis that Mr. Polyakov fabricated his pre-accident employment. Allstate paid for some medical benefits, but denied others because Mr. Polyakov failed to attend a DAC² assessment and because it viewed the expenses as unreasonable or unnecessary. The parties were unable to resolve their disputes through mediation, and Mr. Polyakov 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:

a) Was Mr. Polyakov employed at the time of the accident in accordance with section 4 of the Schedule?

b) If so, did he suffer a substantial inability to perform the essential tasks of that employment within the meaning of section 4 of the Schedule?

If Mr. Polyakov was not employed at the time of the accident, did he suffer a complete inability to carry on a normal life as a result of the accident within the meaning of section 12(1) of the Schedule?
Is Mr. Polyakov barred from recovering various expenses incurred at the Integrated Health Recovery clinic because he failed to make himself reasonably available for an assessment at a designated assessment centre, as required by subsection 43(3)(b) of the Schedule?
If not, were those expenses reasonable and necessary?

Mr. Polyakov was not employed at the time of the accident.
Mr. Polyakov did not suffer a complete inability to carry on a normal life as a result of the accident within the meaning of section 12(1) of the Schedule.
Mr. Polyakov is barred from recovering expenses incurred at the Integrated Health Recovery clinic from March 15, 2000 onward.
For the period preceding March 15, 2000, Mr. Polyakov is entitled to recover expenses as specified in this decision.

D. Background

i) Personal and Work History

Mr. Polyakov, now 54 years old, was born and raised in the Soviet Union, where he attended university and studied electronic engineering and economics. He then moved to the Ukraine and worked as an engineer in a factory for 22 years. In 1990 he relocated to Israel, where he worked as a supervisor for a manufacturer of doors and windows.

In 1992, Mr. Polyakov emigrated to Canada with his wife and children. He lived in Montreal until 1996, when he moved to Toronto and worked for a few different metal producing companies. He was laid off in September of 1998 and went on Unemployment Insurance (UI) benefits in November 1998. In May 1999, when his UI benefits ran out, he began receiving welfare benefits.

Mr. Polyakov is fluent in Russian and can function at a basic level in English, but requires translation for more complex matters. His evidence at the hearing was given through a Russian interpreter.

Mr. Polyakov alleges that on November 3, 1999, he began working for ITF Consulting Ltd., a matter which is discussed in more detail below. Allstate disputes that Mr. Polyakov was employed at the time of the accident.

ii) The accident and its aftermath

The accident occurred on December 8, 1999. While travelling in the passing lane, Mr. Polyakov rear-ended another vehicle. Mr. Polyakov's vehicle was damaged beyond repair.

Mr. Polyakov testified that immediately after the accident he felt pain in his neck, back and arm but denied any injuries to the attending police officer and the offer of ambulance service to a hospital because he "didn't want to worry" his family. A few days after the accident, he saw Dr. A. Tchernov, a family physician, because his regular physician, Dr. O. Livshin, was not then available.

On December 13, 1999, upon referral by Dr. Tchernov, Mr. Polyakov began attending the Integrated Health Recovery clinic. He received treatment there until July 2000 under the supervision of its director, Dr. V. Levitin, a chiropractor. This included chiropractic treatments, acupuncture, and physiotherapy. Mr. Polyakov testified that the treatments helped him cope with his pain and, when Allstate terminated them, he felt his medical condition deteriorated. He was involved in a further car accident in January 2001, for which he retained a different lawyer. In November 2001, he was hospitalized following a heart attack.

On December 19, 1999, after his initial treatment by Dr. Tchernov, Mr. Polyakov began seeing his regular family physician, Dr. Livshin. Dr. Livshin diagnosed a whiplash injury and recommended conservative treatment. He eventually concluded that Mr. Polyakov was suffering from chronic pain and depression.

Mr. Polyakov testified that his pain has never resolved to any significant degree and he has become despondent and anxious. He compares himself "to a vegetable," feeling that whereas before the accident he supported his family, now he is simply a burden to them.

E. The Issues in Dispute

Issue # 1: Was Mr. Polyakov employed at the time of the accident in accordance with section 4 of the Schedule?

Mr. Polyakov seeks income replacement benefits (IRBs) under section 4(1) of the Schedule, which requires that he was "employed at the time of the accident and, ....suffers a substantial inability to perform the essential tasks of that employment." Although Allstate maintains that Mr. Polyakov is not disabled from any type of employment, the main dispute in this case is whether he was employed at all at the time of the accident.

Mr. Polyakov testified that on November 3, 1999, approximately five weeks before this accident, he began working at ITF Consulting Ltd. (ITF). ITF is a recruitment agency that solicits workers and places them with various companies. Mr. Polyakov learned of ITF through an ad in a Russian newspaper, and contacted them by phone two to three days before November 3rd. He spoke with the owner, Mr. Andrey Douleba, in Russian. After learning of Mr. Polyakov's background, Mr. Douleba offered him a job at BigTek, to begin in a few days. They agreed that Mr. Polyakov would earn $500 per week for a five-day work week, and would be paid in cash at the end of every week.

Mr. Polyakov stated that he worked in the shipping and receiving department of BigTek, and was required to enter a timecard into a machine when he arrived at and left work each day. His duties involved receiving and unpacking boxes of electronic equipment. He recorded the inventory and then transported the parts to other areas of the plant for inspection, maintenance or repair.

Mr. Polyakov testified that he occasionally worked overtime, but was not paid extra for that. While working at BigTek he befriended other workers of Russian background, including Mr. Vladimir Shapiro, who worked in another department and had also been placed by ITF.

Allstate submits that Mr. Polyakov never worked at BigTek, and only fabricated this employment after he was involved in the accident so that he could support a claim for IRBs.

After reviewing the evidence I find that Mr. Polyakov was not employed at the time of the accident. I rely on the following factors:

a) On the day after the accident, Mr. Polyakov's daughter, who was then 17 and living with her parents, spoke by telephone with Allstate on her father's behalf. She is fluent in English and Russian. She advised Allstate that her father had not been employed at the time of the accident but was instead receiving welfare. Mr. Polyakov's daughter did not testify at the hearing. Mr. Polyakov offered no plausible testimony that would suggest his daughter had been mistaken about either his employment status or his receipt of welfare benefits.

b) Mr. Polyakov continued to receive welfare during the period when he was allegedly working. I find implausible his claim that when he advised the welfare office that he was working, they continued nonetheless to make payments. Similarly, I reject as unlikely his testimony that when he alerted welfare a second time, they "insisted" he keep the money they had paid in error.

c) There is no arm's length documentation to support Mr. Polyakov's claim that he was employed. Mr. Polyakov attempted to rely upon a letter dated December 24, 1999, from Mr. Douleba, confirming that Mr. Polyakov provided "temporary services" from November 3, 1999, until his accident. However, I find it troubling that Mr. Douleba subsequently refused to fill out an Employer's Confirmation of Income and, according to Mr. Polyakov, refused to testify at the hearing. I note as well that Mr. Douleba failed to respond to numerous requests by Allstate for particulars which would support Mr. Polyakov's claim.

Nor were any records produced from ITF or BigTek, including the time cards that Mr. Polyakov allegedly had punched through the machine each day. Although BigTek apparently does not keep any records with respect to temporary workers, because it did not pay them directly, Mr. Polyakov could have summonsed Mr. Douleba to corroborate the alleged employment.

I also find it troubling that although Mr. Polyakov claims that he earned $500 per week in the four to five weeks preceding this accident, he has no cheques, pay stubs, T4 slip or contract of employment to validate those earnings. Even if, as he claims, he was paid in cash, I find it peculiar that his bank account shows no deposits during the relevant period. Moreover, when Mr. Polyakov initially filed his income tax return for 1999, he made no reference to employment with ITF. It was only after he retained counsel and initiated this arbitration that he filed an amended income tax return in which he reported this alleged income.

d) I have difficulty accepting the evidence of Mr. Vladimir Shapiro, who claimed to be Mr. Polyakov's co-worker at BigTek at the time of the accident. I find it odd that, although they were both placed temporarily at BigTek by ITF and both worked essentially as labourers, their compensation differed so widely. Mr. Shapiro earned $320 per week, whereas Mr. Polyakov earned $500 per week.³ Mr. Shapiro was paid by the hour, including overtime, whereas Mr. Polyakov claimed that he was paid a set rate of $500 per week, regardless of whether he worked overtime. I also find it peculiar that Mr. Polyakov was required to punch a time card upon arrival and departure from work each day, and yet was expected to work overtime without pay.

e) Nowhere in his records does Dr. Levitin indicate that Mr. Polyakov was employed, much less what type of work he was performing. Dr. Levitin testified that Mr. Polyakov had told him about his job at BigTek. If so, I find it peculiar that no reference is made to this job in Dr. Levitin's notes, or in his report to Allstate. More significantly, in Dr. Levitin's treatment plans of December 13, 1999, and March 8, 2000, in response to the question "At the end of the Treatment Plan, is there an anticipated change in disability?" Dr. Levitin checked the box indicating "return to activities of normal life", and left blank the box indicating "return to work." I find implausible Dr. Levitin's explanation that he failed to check the latter box because he believed the former to be broad enough to encompass work activities. And although he testified that he advised Allstate by phone that Mr. Polyakov required a j obsite analysis, there is nothing in his records to confirm that advice.

For all these reasons I conclude that Mr. Polyakov was not employed at the time of the accident, and is therefore not entitled to IRBs.

Issue # 2: Did Mr. Polyakov suffer a complete inability to carry on a normal life as a result of the accident within the meaning of section 12(1) of the Schedule?

Mr. Polyakov argues that if, as I have found, he was not entitled to IRBs, he is nonetheless entitled to a "non-earner" benefit under section 12(1) of the Schedule. That provision requires that the insured person suffers "a complete inability to carry on a normal life" as a result of the accident. However, subsection 12(7)(a) also provides that the benefit is not payable during the first 26 weeks after the onset of disability. In this case, that means Mr. Polyakov is not eligible for a non-earner benefit unless he can show that he suffered a complete inability to carry on a normal life for some period beyond June 8, 2000. Previous case law⁴ suggests that this test requires a very high degree of impairment.

Although Mr. Polyakov presented himself as employed full-time at the time of the accident, I have found that he was not so engaged. I received very little evidence as to what other activities he carried on pre-accident. He indicated that when not working, he read, studied English, went fishing or attended movies with his family, and helped his son with home renovations. He suggested that the accident has left him largely in a vegetative state, but offered no medical or lay evidence to support that contention.

I also note that Mr. Malyshev placed little emphasis on this issue, choosing to make no submissions thereon at the conclusion of the hearing and simply leaving it to my "discretion." Having considered the evidence, I find that Mr. Polyakov has not demonstrated that he suffered a complete inability to carry on a normal life for any period beyond June 8, 2000. I rely on the following factors:

Dr. Levitin testified that by March 2000, Mr. Polyakov had achieved "significant improvement" in his condition, to the point where he was driving his vehicle and was able to engage in approximately three hours of exercises per day (with breaks), four days a week;
Dr. R. Soric, a physiatrist who examined Mr. Polyakov on behalf of Allstate, testified that as of March 2000, he was not suffering from any impairment that would prevent him from performing activities of daily living;
Dr. H. Grossman, a psychologist who examined Mr. Polyakov in May 2000 on behalf of Allstate, reported that he was "not doing his activities of daily living," but he attributes that in part to Mr. Polyakov's "poor motivation." Moreover, Dr. Grossman relied heavily on Mr. Polyakov's account of his pre-accident activities, including his alleged employment, which I have found did not exist. Dr. Grossman also predicted that with the proper medication, Mr. Polyakov would improve over the next three months. Finally, Mr. Polyakov failed to disclose to Dr. Grossman his pre-accident history of emotional stress. For all these reasons, to the extent that Dr. Grossman's opinion could support a finding of disability, I am not prepared to rely on it.
Mr. Polyakov, who suffered from high blood pressure and chest pain pre-accident, conceded in cross-examination that he is "afraid to work" because of the heart attack he suffered in November 2001, a problem that has not been reliably linked to this car accident.
Dr. Livshin acknowledged that in November 1997, well before this accident, he completed a medical certificate in support of Mr. Polyakov's claim for disability benefits, where he concluded that Mr. Polyakov was unable to work because of "poorly controlled" hypertension and "disabling vertigo." He then did not see Polyakov again until after this car accident, and knew very little of his pre-accident activities. Dr. Livshin also conceded that after Mr. Polyakov sustained a further car accident in January 2001, "everything [went] back to square one" with respect to his soft tissue injuries. Finally, Dr. Livshin stated that currently his major health concern for Mr. Polyakov involves his heart condition.

For all these reasons, I conclude that Mr. Polyakov has not established that he suffered a complete inability to carry on a normal life for any period beyond June 8, 2000.

Issue # 3: Is Mr. Polyakov barred from recovering various expenses incurred at the Integrated Health Recovery clinic because he failed to make himself reasonably available for a DAC assessment, as required by subsection 43(3)(b) of the Schedule?

i) The issue

As noted above, shortly after the accident Mr. Polyakov began receiving treatments at the Integrated Health Recovery clinic (IHR). Section 38 of the Schedule provides that before expenses in respect of which a medical or rehabilitation benefit may be payable are incurred, the insured person must submit a treatment plan to the insurer. In this case, Dr. Levitin submitted two treatment plans, one dated December 16, 1999 and a second one dated March 8, 2000.

By letter dated February 8, 2000, Mr. Bill Gold, the adjuster handling the file, wrote to Mr. Henry Goldentuler, Mr. Polyakov's then lawyer, rejecting the first treatment plan, and requiring Mr. Polyakov to attend a DAC in accordance with section 43 of the Schedule. Allstate then proceeded to arrange for the assessment, which included evaluations scheduled for March 15, 20, and 27, 2000. Allstate notified both Mr. Polyakov and Mr. Goldentuler of these appointments by letter dated March 3, 2000.

Mr. Polyakov attended none of the appointments. He testified that Mr. Goldentuler advised him not to attend and that he had written to Allstate advising them that Mr. Polyakov would not be attending the DAC assessments. Mr. Polyakov stated that at the pre-hearing, in August 2001, he learned for the first time that Mr. Goldentuler had never sent such a letter, and that Allstate was refusing to pay IHR's expense because of his non-attendance at the DAC.

Allstate argues that because Mr. Polyakov failed to attend the DAC assessments, he is precluded from recovering benefits under section 43(3) of the Schedule, which provides:

(3) If an insured person does not make himself or herself reasonably available for an assessment or fails to comply with subsection (2),

(b) no benefit is payable for the period after the insured person failed to make himself or herself reasonably available or failed to comply with subsection (2) and before the insured person makes himself or herself reasonably available and complies with subsection (2). [emphasis added]

(ii) The period after March 15, 2000

I find that at least from March 15 onward, being the date of the first DAC assessment, Mr. Polyakov failed to make himself reasonably available for the DAC assessment. He was properly notified and offered no reasonable excuse for his failure to attend. Mr. Polyakov claims that he was prepared to attend the DAC, and blames his non-attendance on bad advice that he received from Mr. Goldentuler. Even if, as Mr. Polyakov claims, he was advised by Mr. Goldentuler not to attend the DAC, he accepted that advice and is therefore bound by it. I therefore conclude that Mr. Polyakov is barred from recovering any expenses incurred at IHR from March 15, 2000 onward.

(iii) The period before March 15, 2000

A somewhat different analysis applies to the period preceding March 15, 2000. As noted above, section 43(3) precludes benefits for the period "after" an insured person fails to make himself reasonably available for a DAC assessment. A plausible inference, therefore, is that an insured person is not precluded from benefits for any period before he fails to attend a properly scheduled DAC. This was the interpretation adopted by Arbitrator Sampliner in Johnson and Allstate Insurance Company of Canada,⁵ who found that non-compliance with section 43(3) excludes benefits only during the period that the insured person fails to be reasonably available:

Indicating the time-limited nature of this exclusion, the drafters specifically set out the qualifying events for its commencement and termination, unlike the general exclusions respecting income replacement benefits in Part IX of the Schedule where the drafters did not see fit to limit the operative time period for the exclusion. With the legislative intent clearly set out, it is my view that subsection 43(3) excludes benefits only during the time specific period the insured person fails to be reasonably available, [emphasis added]

Allstate argues that this interpretation ignores section 38(16) of the Schedule, which requires an insurer to pay for a minimum number of treatments, irrespective of any assessment at a DAC:

(16) Subject to subsection (14), if the treatment plan contemplates goods or services provided by a chiropractor or physiotherapist, the insurer shall, despite requiring the insured person to be assessed by a designated assessment centre under subsection (12) in respect of those goods or services, pay for all expenses incurred, after submission of the treatment plan, in respect of those goods and services, up to the lesser of the following amounts:

The total expenses incurred on behalf of the insured person in respect of the first 15 treatment sessions with a chiropractor or physiotherapist after the accident.
The total expenses incurred on behalf of the insured person in respect of all treatment sessions with a chiropractor or physiotherapist within six weeks after the accident, [emphasis added]

Allstate submits that if section 43(3) is interpreted to permit an applicant to recover the cost of treatment until such time as he fails to attend a DAC, the restriction regarding 15 sessions (or six weeks of treatment) in section 38(16) becomes meaningless. It points out that in many cases, an applicant may undergo much more than 15 sessions or six weeks of treatment before he even submits an application for accident benefits. As the insurer cannot schedule a DAC until after receipt of an application for accident benefits and a treatment plan, by relying upon the reasoning in Johnson, an applicant or treatment provider could insure payment of treatment well beyond the limits of section 38(16) simply by delaying the provision of an application for accident benefits and treatment plan until after extensive treatment has already been provided. This, Allstate argues, leaves the insurer at the mercy of the Applicant and his treatment provider.

I do not take the Johnson case as resulting in the grim scenario that Allstate has painted. Subsection 38(16) is nothing more than a "pay pending dispute" provision, which requires an insurer to pay for a minimum number of treatment sessions regardless of whether a DAC assessment has been scheduled or what the DAC opinion is. Beyond 15 sessions or six weeks of treatment, the insurer is free to refuse coverage on the basis that the treatments are not reasonable or necessary. That position would be reinforced in those cases where the applicant or treatment provider delayed in providing an application for accident benefits or a treatment plan until after extensive treatment had been provided, because an insurer could argue that the applicant failed to provide contemporaneous medical documentation to support his claim.

I note as well that section 38(16) mandates payment only with respect to chiropractic or physiotherapy sessions, and does not cover many other types of medical or rehabilitative expenses. This suggests that it is designed to insure a minimum amount of commonly used services that may be needed immediately following an accident, and is not intended to provide a comprehensive limitation upon what services an applicant may claim before a DAC assessment takes place.

For all these reasons, I conclude that section 43(3) does not bar Mr. Polyakov from recovering expenses incurred at IHR for the period preceding March 15, 2000.

Issue # 4: Were the expenses incurred at Integrated Health Recovery reasonable and necessary?

Sections 14 and 15 of the Schedule requires the insurer to pay for, among other things, all "reasonable and necessary expenses" incurred by an applicant for specified medical and rehabilitation services. Allstate argues that some of the services provided by IHR were either unnecessary or excessively priced. In view of my finding on the last issue, I will consider only expenses incurred before March 15, 2000 which are in dispute.

(i) Fee for initial assessment

IHR charged $275 for this item; Allstate argues it should pay no more than $250. I am satisfied that $250 is reasonable. This accords with the Ontario Chiropractic Association (OCA) Guidelines, dated June 1997, which were in effect at the time of the assessment. The guidelines indicate that a maximum of $250 for an Extended Assessment of a new patient is reasonable. IHR charged $275 based on an estimate of nearly two hours of time. Given the relatively straightforward injuries involved in this case, I am not satisfied that more than one hour was required, and therefore allow $250.

(ii) Acupuncture treatments

Allstate does not dispute the hourly rate, or the usefulness of acupuncture in principle, but argues that it was not necessary in this particular case. It notes that Dr. Tchernov did not specifically recommend acupuncture in his referral note. Nonetheless, I am satisfied that the treatment in this case was a legitimate and effective method of pain relief, and therefore allow the amounts claimed.

(iii) Active and passive physiotherapy treatments

IHR charged a block fee of $125 for each session. I find this excessive. Mr. Polyakov's injuries were not complicated. Moreover, I was not satisfied from Dr. Levitin's testimony precisely what services were provided in each session, by whom, and for how long. I allow $125 for the first session and $60 for each session thereafter.

All the above findings are subject to a deduction for any amounts already paid by Allstate and any contributions by OHIP.

C. EXPENSES:

I encourage the parties to resolve this issue on their own, failing which they may consult me no later than Friday, September 6, 2002.

August 23, 2002

Deena Baltman Arbitrator

Date