Neutral Citation: 2002 ONFSCDRS 192
FSCO A02-000182
FINANCIAL SERVICES COMMISSION OF ONTARIO
BETWEEN:
DAVID ZLOCHEVSKY
Applicant
and
ALLSTATE INSURANCE COMPANY OF CANADA
Insurer
REASONS FOR DECISION
Before:
Joyce Miller
Heard:
November 12 and 13, 2002, at the offices of the Financial Services Commission of Ontario in Toronto.
Appearances:
Thomas Wolf Zwiebel for Mr. Zlochevsky
Ian D. Kirby for Allstate Insurance Company of Canada
Issues:
The Applicant, David Zlochevsky, was injured in a motor vehicle accident on June 15, 2001. He applied for and received statutory accident benefits from Allstate Insurance Company of Canada ("Allstate"), payable under the Schedule.1 Allstate, however, refused to pay Mr. Zlochevsky's claim for an income replacement benefit. The parties were unable to resolve their disputes through mediation, and Mr. Zlochevsky 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:
Is Mr. Zlochevsky entitled to receive a weekly income replacement benefit from June 15, 2001 to June 15, 2002, claimed pursuant to section 4 of the Schedule?
What is the amount of weekly income replacement benefit that Mr. Zlochevsky is entitled to receive pursuant to section 6 of the Schedule?
Is Mr. Zlochevsky entitled to a special award pursuant to subsection 282(10) of the Insurance Act?
Is Mr. Zlochevsky liable to pay Allstate's expenses in respect of the arbitration pursuant to subsection 282(11) of the Insurance Act?
Is Allstate liable to pay Mr. Zlochevsky's expenses in respect of the arbitration pursuant to subsection 282(11) of the Insurance Act?
Result:
Mr. Zlochevsky is not entitled to an income replacement benefit.
Mr. Zlochevsky is not entitled to his expenses in this hearing.
Allstate is entitled to its reasonable expenses in this hearing.
EVIDENCE:
Mr. Ziochevsky's Testimony
Mr. Zlochevsky testified that the accident happened on June 15th, 2001 at about 5:30 p.m. Mr. Zlochevsky testified that he was going north on Yonge Street and just before Finch a car made a left-hand turn in front of his car and struck his vehicle. He stated that he was traveling at 55 km an hour and that when the impact occurred his air bag did not open.
Mr. Zlochevsky testified that he does not recall the details of his accident. He did not know why he would be driving north on Yonge Street towards Finch Avenue when he worked north and west of Finch and he usually finished work at 5:00 or 6:00 p.m. He did not recall what he did after he reported the accident at the Collision Center. When it was pointed out that in his statement to Allstate on July 31, 2001 it notes that he called a friend who came over and drove him to Branson Hospital, he responded that he did not recall the details.
Mr. Zlochevsky testified that after the accident he vomited for a few days. He had constant headaches, neck pain, back pain, and numbness in his leg. He said he had pain all over his body and he could no longer work at his
Mr. Zlochevsky testified that he went to The Rehab Clinic for treatment four days after the accident and only saw his family doctor after he began treatment. He could not recall who provided the referral for his physical rehabilitation. Neither did he present any evidence of a referral to the clinic.
Mr. Zlochevsky testified that he went for treatment three times a week but does not recall for how long a period of time. He stated that he received chiropractic treatment, physiotherapy, massage and he was assigned exercises to do.
Mr. Zlochevsky testified that he has not returned to work since the accident.
Mr. Zlochevsky testified that at the time of the car accident he had been working for two months as a preparation man ("prep man") at an auto body shop, Next Millennium Motors Inc. ("Next Millennium"). Mr. Zlochevsky stated that his job duties required him to prepare a car before it was to be painted. As well he would perform any other duties he was asked. He stated it was a very physically demanding job which required him to stand all day.
Mr. Zlochevsky testified that he did not remember how he obtained this job. He thinks that he came into the auto body shop and asked for a job and was hired. He stated his salary was $24 an hour and that he worked 40 hours a week. He stated that he did not miss any time from work.
Mr. Zlochevsky testified that he was paid cash for his work. He stated that the statement he gave to Allstate on July 31, 2001 that he was paid by cheque was wrong. He stated that since he came from Ukraine he always dealt in cash. He did not own any credit cards. He opened his first bank account on May 18, 2001.
Mr. Zlochevsky testified that he had not seen his former employer, Mr. Chaim Lunievski (also known as "Jeff"), since he stopped working, except for one time when he asked Mr. Lunievski to take him back to work. He testified that Mr. Lunievski was not a friend of his nor has he been in business with him.
However, under cross-examination, Mr. Zlochevsky admitted that he is presently working as a clinic coordinator at Health Way Rehab Clinic and that he is a part owner in this clinic with Mr. Lunievski. Mr. Zlochevsky stated that he did not reveal this latter fact because he was concerned about how Allstate would treat his clinic if they knew he was an owner.
Mr. Lunievski's Testimony
To support his claim, Mr. Zlochevsky called the owner of Next Millennium, Mr. Lunievski, as a witness.
Mr. Lunievski testified that he hired Mr. Zlochevsky after he came into his auto body shop looking for work. He stated that he did not know Mr. Zlochevsky before he hired him but had seen him in the community. He believed Mr. Zlochevsky was a reliable person.
Mr. Lunievski was evasive in his answer when he was asked whether he had been friends with Mr. Zlochevsky at the time of the car accident. His response was that he was a friend with everyone in his shop. He testified that since the accident he and Mr. Zlochevsky had become friends and that about a month ago they had opened a rehabilitation clinic together.
Mr. Lunievski testified that he paid Mr. Zlochevsky $24 an hour in cash. When he was asked why he paid cash, his response was "Why not." He stated that he always paid cash in his business. Mr. Lunievski denied that he told a claims examiner for Allstate, Ms. Donna Ford, that he paid Mr. Zlochevsky by cheque at a rate of $16 an hour.
When Mr. Lunievski was presented with the discrepancies regarding Mr. Zlochevsky's gross salary (these discrepancies will be discussed below), he stated that Mr. Zlochevsky may have stopped working before the accident.
Ms. Ford’s Testimony
Ms. Donna Ford, a Senior Claims Examiner employed by Allstate and Pembridge, testified on behalf of Allstate. Ms. Ford stated that she only handled Mr. Zlochevsky's claim for a short period of time when the adjuster on the file, Mr. Ibrahim Abaza, was on vacation.
Ms. Ford testified that she visited Mr. Lunievski at his office on August 2, 2001. Ms. Ford stated that she was suspicious of Mr. Zlochevsky's claim that he was working for Next Millennium at the time of the accident. She stated that in May 2001 Mr. Zlochevsky made a property damage claim to Allstate. When asked for a business telephone number, Mr. Zlochevsky did not provide the number for Next Millennium.
Ms. Ford testified that she surreptitiously tape recorded her conversation with Mr. Lunievski on August 2, 2001. She also took notes in his presence. As a result, she was able to have an accurate recollection of her conversation with Mr. Lunievski.
Ms. Ford testified Mr. Lunievski told her on August 2, 2001 that he paid Mr. Zlochevsky by cheque. He stated "It is not legal to pay by cash." He told her that he usually signed the paycheques, but that Ms. Julia Goodgartz, his employee, did the payroll.
Ms. Ford testified that she told Mr. Lunievski that if he was paying Mr. Zlochevsky by cheque, then he should be able to provide copies of the cheques. Mr. Lunievski responded that sometimes he paid Mr. Zlochevsky in cash.
Ms. Ford testified that Mr. Lunievski told her that Mr. Zlochevsky made $16 an hour and that he had only started to work at Next Millennium about three weeks before the accident. He stated however, he did not know the exact time and that Ms. Goodgartz knew the exact time. Ms. Goodgartz, however, was not present at the time of the discussion.
Ms. Ford testified that she did not believe that the OCF2 was a truthful document. Nor did she believe that Mr. Lunievski was being truthful about Mr. Zlochevsky having worked for nine weeks at Next Millennium. Ms. Ford stated that had Allstate been provided with reasonable objective evidence of Mr. Zlochevsky's employment income it would have paid him an income replacement benefit.
ANALYSIS AND FINDINGS:
Section 4 of the Schedule provides that an insurer shall pay an insured person who sustains an impairment as a result of an accident an income replacement benefit if the insured person was employed at the time of the accident and, as a result of and within 104 weeks after the accident, suffers a substantial inability to perform the essential tasks of that employment.
The burden of proof rests with Mr. Zlochevsky to show on a balance of probabilities that he was employed at the time of the accident and that as a result of the accident he suffered an impairment which substantially disabled him from carrying out the essential duties of his employment between June 15, 2001 and June 15, 2002. For the following reasons I find Mr. Zlochevsky has not discharged his burden.
My reasons will deal with three issues: one, credibility; two, whether Mr. Zlochevsky was employed at the time of the accident; and three, whether as a result of the accident, Mr. Zlochevsky was substantially disabled from performing the essential tasks of his employment.
1. Credibility
Mr. Zlochevsky was not a credible witness. His testimony and evidence was a myriad of inconsistencies, contradictions and implausibilites. He presented his testimony at the hearing in an evasive manner. He responded to many straightforward questions in a vague way, often stating that he could not remember things that he should have easily known. Although certain slips of memory are understandable, I find that, in Mr. Zlochevsky's case, his consistent memory lapses amounted to evasion.
I also give little weight to the evidence of Mr. Lunievski who testified on behalf of Mr. Zlochevsky. Mr. Zlochevsky testified that he had not seen Mr. Lunievski since he stopped working, except for one occasion. In fact, it turned out that Mr. Lunievski was not only his friend but his business partner. As a result I can only conclude that Mr. Lunievski was not a disinterested witness and it was more likely than not, based on my findings below, that Mr. Lunievski attended as a witness to shore up Mr. Zlochevsky’s story.
2. Was Mr. Zlochevsky employed at the time of the car accident?
For the following reasons I find that Mr. Zlochevsky was not employed by Next Millenium for nine weeks prior to the accident.
First, I find there were significant discrepancies in the evidence regarding when Mr. Zlochevsky began working at Next Millennium. In his Application for Accident Benefits, Mr. Zlochevsky stated that he began working on March 1, 2001. The Employer's Confirmation of Income form by Mr. Lunievski states that Mr. Zlochevsky began working on April 16, 2001. However, when Ms. Ford interviewed Mr. Lunievski, he told her that Mr. Zlochevsky had only begun to work for him three weeks before the accident. I received no reasonable or plausible explanation for these discrepancies.
Second, I find the evidence regarding the manner in which Mr. Zlochevsky was paid his salary was inconsistent and contradictory. In his statement to Allstate on July 31, 2001, Mr. Zlochevsky stated, "When I am paid my employer takes the taxes and deductions from my cheque." [emphasis added]
On August 21, 2001, Allstate wrote to Mr. Zlochevsky's lawyer stating their concerns regarding the amount Mr. Zlochevsky claims he was paid and stated:
Given this concern, it would only be reasonable that your client would substantiate his claim for Income Replacement Benefit by proving [sic] us with:
pay stubs,
proof of gross and net income,
the front and back of all pay cheques,
copy of the bank statement.
The above information is requested pursuant to section 33(1)2of the Statutory Accident Benefits Schedule.
Mr. Zlochevsky's lawyer responded to this letter on November 7, 2001 stating, "I have been advised that there are no "pay stubs" as it is a direct deposit situation. [emphasis added]
On April 18, 2002, Allstate's lawyer wrote to Mr. Zlochevsky's lawyer requesting certain productions including: "A copy of the bank statement .... showing the deposited cheques or showing the direct deposit of the weekly income from Next Millennium Motors, (any personal information may be blacked out if this is an issue)."
On July 10, 2002, a day after the pre-hearing in this arbitration, Allstate’s lawyer wrote to Mr. Zlochevsky’s lawyer stating:
In accordance with the agreement at the pre-arbitration and the order of Arbitrator Skinner, I would ask that you arrange to obtain and forward to me copies of Mr. Zlochevsky’s bank statement for the two months prior to his motor vehicle accident of June 15, 2001.
The bank statement, which was only provided to Allstate three weeks prior to the arbitration hearing, indicates two deposits into Mr. Zlochevsky’s account between the period of May 18, 2001, when he opened the account, and June 15, 2001, the date he stopped working. One was a deposit on May 31, 2001 in the amount of $300 and the other a deposit on June 12, 2001 in the amount of $100. There is no indication in the bank statement that Mr. Zlochevsky had cashed a pay cheque or had his salary directly deposited into his account, or personally deposited his alleged cash salary.
When Ms. Ford interviewed Mr. Lunievski, he told her that he paid Mr. Zlochevsky by cheque and that he signed the cheques. He stated it was illegal to pay in cash. At the hearing, however, both Mr. Zlochevsky and Mr. Lunievski testified that Mr. Zlochevsky was paid in cash. Both denied stating that they told representatives of Allstate that Mr. Zlochevsky was paid by cheque.
I do not believe Mr. Zlochevsky's and Mr. Lunievski's testimony. In my view, it is more likely than not that, after Allstate requested copies of the cheques, Mr. Zlochevsky stated that he was paid by direct deposit; when Allstate requested a copy of his bank statement to verify payment by direct deposit, Mr. Zlochevsky changed his story again and stated he was paid in cash to cover up the fact that no direct deposit was made.
I also find that, given the non-arm’s length relationship between Mr. Lunievski and Mr. Zlochevsky, it is more likely than not that he denied telling Ms. Ford he paid Mr. Zlochevsky by cheque in order to support Mr. Zlochevsky’s version. Given the serious issues of credibility in this case, I prefer the evidence of Allstate’s representative, Ms. Ford.
Third, I find that there are serious contradictions regarding the amount Mr. Zlochevsky claims he was allegedly paid for his work.
In support of the quantum of his income replacement benefit, Mr. Zlochevsky presented into evidence his Application for Accident Benefits, an Employer’s Confirmation of Income, a T4 and a payroll summary. It should be noted, however, that this evidence was generated either by Mr. Zlochevsky or Mr. Lunievski.
There were a number of discrepancies in the documents that were presented. First, Mr. Zlochevsky’s Application for Accident Benefits states that he worked 40 hours a week at the rate of $24 per hour from March 1, 2001. On the other hand, his Employer's Confirmation of Income form, filled out by Mr. Lunievski, indicates that his salary for April 16 to June 16, 2001 totalled $7,680 at the rate of $24 an hour for 40 hours a week. However, at a minimum, if Mr. Zlochevsky was working for the full period of time as stated in the Employer’s Confirmation of Income, his gross salary should have been $2,640. These discrepancies were not adequately explained and I therefore give little weight to these documents as evidence of Mr. Zlochevsky’s alleged earnings.
Second, the T4, generated by Mr. Lunievski after the accident, which states Mr. Zlochevsky earned $7,680, contradicts the payroll summary, also created by Mr. Lunievski, which indicates that his gross earnings were $6,720. I give little weight to this evidence.
There is no objective verifiable evidence to support that this T4 was ever filed with Revenue Canada. There is no evidence that Mr. Zlochevsky filed an income tax return for 2001 claiming that he earned income from employment at Next Millennium. I therefore give little weight to the T4 as evidence of Mr. Zlochevsky’s earnings.
Similarly, I give little weight to the alleged payroll summary which clearly contradicts both the Employer's Confirmation of Income form and the T4. I give little weight to Mr. Lunievski’s explanation for the discrepancy, namely, that Mr. Zlochevsky may have stopped working before the accident. This contradicts Mr. Zlochevsky’s testimony that he worked for the alleged full period of time. Also, it does not explain why Mr. Lunievski filled out an Employers Confirmation of Income with a higher amount than the amount recorded in the payroll summary.
As I noted above, I did not find Mr. Lunievski to be either a credible or disinterested witness and therefore give little weight to his evidence that Mr. Zlochevsky was his employee and that he worked at Next Millennium for nine weeks, 40 hours a week, and earned $24 an hour.
Conclusion
For all of these reasons I find that Mr. Zlochevsky has not provided any credible, objective verifiable evidence to support his position that he was employed by Next Millennium from April 16, 2001 and June 15, 2001. I find that Mr. Zlochevsky presented a myriad of inconsistent, contradictory evidence regarding when he allegedly began working at Next Millennium, the manner in which he was paid his salary, and the amount he was paid.
Mr. Zlochevsky did not provide any reasonable or plausible explanation for this inconsistent and contradictory evidence.
Accordingly, I find that Mr. Zlochevsky was not employed at the time of the car accident and therefore is not entitled to an income replacement benefit pursuant to section 4 of the Schedule.
3. Was Mr. Zlochevsky substantially disabled as a result of the accident?
If I am wrong in my conclusion regarding the issue of employment, for the sake of completeness I will deal with the issue of whether Mr. Zlochevsky, as a result of his car accident, was substantially disabled from performing the essential tasks of his employment.
For the following reasons I find that Mr. Zlochevsky did not provide any objective, reliable evidence to support his claim that as a result of his car accident he was substantially disabled from performing the essential tasks of his employment from June 15, 2001 to June 15, 2002.
Mr. Zlochevsky testified that after the accident he went to The Rehab Clinic for treatment for his injuries. However, he was unable to provide any evidence as to which medical practitioner, if any, had referred him for treatment. Mr. Zlochevsky only saw his family doctor, Dr. Zukov, after he began his treatment.
The only medical evidence provided for the hearing from his family doctor was a Disability Certificate dated June 25, 200l, which indicated that as a result of the accident Mr. Zlochevsky suffered soft tissue injuries to his neck and back, and queried whether he had a head concussion.
I give little weight to this certificate because it is not supported by any further clinical notes or records from his family doctor.
On April 8, 2002, Allstate’s counsel had requested Dr. Zukov’s clinical notes and records for two years prior to the accident. On May 14, 2002, Mr. Zlochevsky’s counsel advised Allstate’s counsel that he would "attempt to obtain the family doctor’s records." These records were never produced. Allstate has submitted that I should draw an adverse inference from this, which I do.
At a minimum the family doctor’s records would indicate what, if any, diagnosis and or treatment Mr. Zlochevsky received as a result of the accident. As well, there may have been some relevant information regarding Mr. Zlochevsky’s pre-accident physical condition. This latter point is important because Mr. Zlochevsky had testified that he had pre-accident neck and back pain.
The only clinical notes and records that were produced were as a result of Allstate having subpoenaed The Rehab Clinic to bring its records to the hearing. The records included two files. One file was for the accident on June 15, 2001. The other was for a second car accident on November 29, 2001. With respect to the first car accident the file indicates that Mr. Zlochevsky’s treatment had stopped on October 30, 2001 and only resumed after the second car accident.
I find that, in reviewing The Rehab Clinic’s file on the first accident, the records are largely unhelpful to Mr. Zlochevsky’s case. The file contains a few pages of assessment forms, some of which are undated, some with only initials, but not the complete name of the person or persons who recorded the notes. More importantly, these notes did not comment on Mr. Zlochevsky’s disability.
Mr. Zlochevsky did provide several assessment reports from DEAHY Medical Assessments Inc. ("DEAHY"). These included assessments by a psychologist, an orthopaedic surgeon and an Arcon Functional Assessment. For the following reasons I give little weight to these assessments.
(a) The Psychological Assessment
The psychological assessment was performed on October 17, 2001 by Mr. Howard B. Waiser, a psychologist. In his report Mr. Waiser stated he believed Mr. Zlochevsky "is experiencing a Pain Disorder" as well as "emotional distress" as a result of the car accident. Mr. Waiser stated that it was his opinion that Mr. Zlochevsky "is experiencing significant Adjustment Disorder with Mixed Anxiety and Depressed Moods as a result of the accident..."
Mr. Waiser recommended that Mr. Zlochevsky be seen for three to four months of individual therapy and that he would also benefit from a trial of anti-depressant medication. Mr. Waiser stated it would also be appropriate for Mr. Zlochevsky to be seen for a neurological assessment. He concluded his report by stating:
Mr. Zlochevsky is experiencing considerable emotional distress and is eager to resolve these dynamics. It is believed that with these interventions in place that he will be able to return to his pre-accident lifestyle. It is believed that this therapeutic attention will be instrumental in achieving this goal.
First, it should be noted that there is no evidence that Mr. Zlochevsky followed any of the recommendations by Mr. Waiser.
Second, I give little weight to the conclusions in this report as they are based solely on Mr. Zlochevsky’s reporting and not on any objective reliable medical evidence. More importantly, I note that Mr. Waiser does not state whether it is his opinion that as a result of the car accident Mr. Zlochevsky could not return to work because he was substantially disabled from performing the essential tasks of his pre-accident employment. Instead, he states, "[Mr. Zlochevsky] has been unable to return to work because of his fatigue and limitations." Succinctly, Mr. Zlochevsky's inability to work is based on Mr. Zlochevsky reporting he is unable to work and is not based on any objective clinical findings.
(b) The Functional Capacity Assessment
On October 22, 2001, Mr. Zlochevsky underwent an Arcon Functional Assessment. This assessment is a computerized assessment. The report concludes that on the basis of the results obtained during functional testing, "... Mr. Zlochevsky is currently unable to perform the required duties of his occupation of auto-body repairer, nor is able to perform his activities of daily living..." [emphasis in original]
I give little weight to this conclusion. There is no objective verifiable evidence to support this conclusion. The conclusion is totally based on what Mr. Zlochevsky reported to the assessor, both in his assessment interview and the testing. The report notes that "Mr. David Zlochevsky agreed to provide a maximum effort on each test and was asked to report any pain or discomfort that he experienced during each test." [emphasis added]
Succinctly, the test results are dependent on whether Mr. Zlochevsky was being truthful in his interview and about his experience while taking the test. Given Mr. Zlochevsky's lack of credibility, and no other reliable objective supporting evidence, I cannot give much weight to his self reporting. Accordingly, I give little weight to the conclusion in the DEAHY Functional Assessment report.
(c) The Orthopaedic Assessment
I give little weight to the conclusions of Dr. Brian Alpert, an orthopaedic surgeon, who assessed Mr. Zlochevsky on October 23, 2001. In his report, Dr. Alpert concluded that "Mr. Zlochevsky remains disabled and unable to return to performing the essential duties of his pre-accident employment as an auto body shop prep man." Again, much of the information that Dr. Alpert received came from Mr. Zlochevsky.
There is no indication in Dr. Alpert’s report that his assessment included a review of any reports or clinical notes and records of any medical practitioner who may have treated Mr. Zlochevsky after the accident. And more importantly, it does not include a review of any pre-accident reports or clinical notes and records from any medical practitioner.
In his report, Dr. Alpert states, "Mr. Zlochevsky denies any prior history of motor vehicle accidents, musculoskeletal problems, or fractures..." However, this contradicts Mr. Zlochevsky's testimony that he did have pre-accident back and neck problems. I, therefore, conclude from Dr. Alpert's report that he was not provided with a reliable medical history on which he based his clinical findings and conclusion. Accordingly, I give his report very little weight.
Conclusion
For all of these reasons I find that Mr. Zlochevsky has not presented any credible, objective or reliable evidence to support his claim that as a result of his car accident on June 15, 2001 he was substantially disabled from performing the essential tasks of his employment from June 15, 2001 to June 15, 2002.
Accordingly, I find that Mr. Zlochevsky is not entitled to an income replacement benefit pursuant to section 4 of the Schedule.
Special Award:
Mr. Zlochevsky claims a special award in this case.
Pursuant to subsection 282(10) of the Insurance Act,3 an arbitrator may grant a special award, up to 50 per cent of the benefit awarded, plus interest, once he or she finds that an insurer has acted unreasonably in withholding or delaying payment. For the following reasons I find that Mr. Zlochevsky is not entitled to a special award.
Mr. Zlochevsky did not provide any evidence or submissions on this issue. In any case, on the facts of this case, Mr. Zlochevsky would not be entitled to a special award. A special award is based on the amounts to which the applicant is entitled at the time of the award. Mr. Zlochevsky was neither paid any income replacement benefits by Allstate nor was he awarded any benefits in this arbitration hearing for which a special award could be considered. Accordingly, Mr. Zlochevsky is not entitled to a special award.
EXPENSES:
Subsection 282(11) of the Insurance Act provides:
The arbitrator may award, according to criteria prescribed by the regulations, to the insured person or the insurer, all or part of such expenses incurred in respect of an arbitration proceeding as may be prescribed in the regulations, to the maximum set out in the regulations.
The degree of success in the outcome of an arbitration proceeding is only one of a number of criteria that an arbitrator takes into consideration when exercising his or her discretion to award expenses to a party.4 Subsection 12(2) of the Expense Regulation5 provides that other matters to be considered are:
the manner in which the parties conducted the hearing;
whether the proceeding or any position taken by the insurer or the insured person during the proceeding was manifestly unfounded, frivolous, vexatious, fraudulent or an abuse of process the conduct of the parties,
the degree of complexity and, novelty of the issues raised,
settlement offers,
as well as any other matter related to the proceeding that an arbitrator considers relevant to the issue of awarding expenses.
Findings
Applying the criteria outlined above, for the following reasons I find that Mr. Zlochevsky is not entitled to his expenses and Allstate is entitled to its expenses.
Adhering to the criteria, I did not find that the issues in this case were complex or novel. There were no settlement offers in this case that I must consider. Although the hearing was conducted by both parties in a timely manner, this does not offset the fact that Mr. Zlochevsky was not only unsuccessful in his claim, but also that his claim lacked any merit. Mr. Zlochevsky was not a credible witness. As well, he did not present any credible or reliable evidence to support his claim. His one witness, Mr. Lunievski, was not credible. As a result Allstate was forced to defend a clearly frivolous proceeding.
Accordingly, pursuant to subsection 282(11 of the Insurance Act, I find that Mr. Zlochevsky is not entitled to his expenses and that he must pay Allstate its reasonable expenses in this arbitration hearing.
December 6, 2002
Joyce Miller Arbitrator
Date
Neutral Citation: 2002 ONFSCDRS 192
FSCO A02-000182
FINANCIAL SERVICES COMMISSION OF ONTARIO
BETWEEN:
DAVID ZLOCHEVSKY
Applicant
and
ALLSTATE 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:
This arbitration is dismissed.
Pursuant to subsection 282(11) of the Insurance Act Mr. Zlochevsky shall pay Allstate its reasonable expenses in this arbitration.
December 6, 2002
Joyce Miller Arbitrator
Date
If the arbitrator finds that an insurer has unreasonably withheld or delayed payments, the arbitrator, in addition to awarding the benefits and interest to which an insured person is entitled under the Statutory Accident Benefits Schedule, shall award a lump sum of up to 50 per cent of the amount to which the person was entitled at the time of the award together with interest on all amounts then owing to the insured (including unpaid interest) at the rate of 2 per cent per month, compounded monthly, from the time the benefits first became payable under the Schedule.
Footnotes
- The Statutory Accident Benefits Schedule — Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended by Ontario Regulations 462/96, 505/96, 551/96, 303/98, 114/00 and 482/01.
- Section 33 of the Schedule imposes a positive obligation on an applicant to provide any information reasonably required by the insurer to assist it in determining his entitlement to a benefit within 14 days after receiving a request from the insurer. Subsection 33(2) specifies that a benefit is not payable for any period before the person complies with subsection 33(1).
- Subsection 282(10) provides that:
- The case law is clear, awarding expenses at arbitration is not based on the results approach of the courts, but is based on the underlying purpose of the statutory accident benefit scheme, namely, to facilitate access to inexpensive, speedy and informal adjudication of disputes. See for example: McCormick and Economical Mutual Insurance, (OIC A-000139, October 2, 1991); Calogero and The Co-operators General Insurance Company, (OIC P-000251, February 13, 1992); Allison and Markel Insurance Company of Canada, (OIC P-001231, August 21, 1996); Biliouras and Allstate Insurance Company of Canada, (FSCO P98-00002, October 13, 1998); Athanasiadis and Zurich Insurance Company, (FSCO A 97-001239, December 23, 1999); Gray and Zurich Insurance Company, (FSCO P-98-00047, June 11, 1999); and Morelli and Zurich Insurance Company, (FSCO A97-001997, June 27, 2000.
- Regulation 664, R.R.O. 1990, as amended by Ontario Regulation 464/96 made under the Insurance Act.