Neutral Citation: 2003 ONFSCDRS 129

FSCO A02-000004

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

DEXTER HOWARD

Applicant

and

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY

Insurer

DECISION ON A PRELIMINARY ISSUE

Before:

William J. Renahan

Heard:

July 14 and 15, 2003, at the offices of the Financial Services Commission of Ontario in Toronto.

Appearances:

Alan J. Davis for Mr. Howard

Eric K. Grossman for State Farm Mutual Automobile Insurance Company

Issues:

The Applicant, Dexter Howard, was struck by a motor vehicle on August 13, 1990 as he waited for a bus. His most serious injury was a fracture to the mid-shaft of the femur which was treated by the insertion of a metal plate. Mr. Howard applied for and received statutory accident benefits from State Farm Mutual Automobile Insurance Company ("State Farm"), payable under the Schedule.¹

At the time of the motor vehicle accident Mr. Howard had two jobs. He worked full-time at Becker's Milk ("Becker's") in a refrigerated warehouse and part-time for Howard Johnson's as a banquet waiter. He returned to work at Becker's on January 24, 1992 and State Farm terminated weekly income benefits. Mr. Howard did not return to Howard Johnson's. He continued to work at Becker's for over three years until he was laid off due to lack of work in September 1995. He started another employment in July 1996 with Black's Photography ("Black's") from which he was laid off on January 24, 1997.

He claimed weekly income benefits under section 12 of the Schedule from January 24, 1997. State Farm refused to pay. The parties were unable to resolve their disputes through mediation, and Mr. Howard applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

The hearing opened on July 14, 2003. Mr. Howard claims weekly income benefits under paragraph 12(5)(b) of the Schedule from January 24, 1997. At the conclusion of Mr. Howard's testimony on the first day of the hearing, the parties agreed that I should determine the following preliminary issue.

The preliminary issue is:

1. Assuming that Mr. Howard was disabled from suitable employment after January 24, 1997 and assuming his disability was caused by the motor vehicle accident of August 13, 1990, does Mr. Howard's return to work at Becker's and Black's disqualify him from benefits under section 12 of the Schedule because his injury did not "continuously" prevent him from engaging in suitable employment within the meaning of section 12(5)(b) of the Schedule?

Result:

1. Whether Mr. Howard was continuously prevented from engaging in suitable employment within the meaning of section 12(5)(b) of the Schedule is a question of fact which cannot be determined until the balance of the evidence is presented.

EVIDENCE AND ANALYSIS:

The functional tests for entitlement to a weekly income benefit are set out in section 12 of the Schedule. Under subsection (1) the insured person must suffer a "substantial inability to perform the essential tasks of his or her occupation or employment" to qualify for the benefit. This is often referred to as the "own occupation test." This coverage is restricted under paragraph 12(5)(b):

The insurer is not required to pay a weekly benefit under subsection (1),

(a) . . .

(b) for any period in excess of 156 weeks unless it has been established that the injury continuously prevents the insured from engaging in any occupation or employment for which he or she is reasonably suited by education, training or experience.

In Lanctot and Zurich Insurance Company,² Director Draper wrote:

Therefore, even after 156 weeks of disability, the first question is whether the insured person continues to meet the s.12(1), "own occupation," test. If not, s.12(5)(b) never comes into play. However, if the insured person meets the s.12(1) test, the issue is whether he or she also meets the s.12(5)(b) test. This is stricter in two respects. First, the scope of possible work is expanded from the insured person's own occupation or employment to any suitable occupation or employment. Second, the degree of disability is tightened from "substantially unable to perform the essential tasks" to "continuously prevented."

Mr. Davis argued that 156 weeks refers to any period in which the insured person is continuously prevented from engaging in suitable employment. However, in Pina Coles and Dominion of Canada General Insurance Company³ the Divisional Court confirmed that the insurer's "obligation under s. 12(1) ran for 156 weeks of substantial inability following upon the first week after the date of the accident." It was irrelevant whether the insurer had to actually pay out monies, or how much the insurer had to pay out, over this period due to calculation of the quantity the insurer was obliged to pay under s. 12(4).

Mr. Davis claimed that Mr. Howard was disabled and met the section 12(1) "own occupation" test after he returned to Becker's because he was disabled from returning to Howard Johnson's.⁴In view of Mr. Davis's submission that Mr. Howard continued to meet the section 12(1) test because he could not return to work at Howard Johnson's, I find that State Farm's obligation under subsection 12(1) ended after 156 weeks on August 20, 1993, at which time the paragraph 12(5)(b) test came into play.

In Domingos Antunes and Allstate Insurance Company of Canada,⁵ Director's Delegate McMahon considered the temporal operation of paragraph 12(5)(b). In that case, Mr. Antunes was injured in a motor vehicle accident on October 25, 1991. Allstate terminated weekly income benefits on October 28, 1994. Approximately three years later, Mr. Antunes claimed that he had developed a chronic pain syndrome and was entitled to weekly benefits under paragraph 12(5)(b) because he could not engage in suitable employment. The Director's Delegate described the meaning of "continuously prevents" as follows:

I agree with the suggestion that the matter cannot be disposed of on the basis of an examination of the person's condition on the last day of the 156^th week. As has been noted in other contexts, a snap-shot approach is rarely advisable. In my view, the person's condition must be looked at over a reasonable period of time. But this analysis must be conducted keeping in mind that s. 12(5)(b) superimposes an additional set of criteria after a defined period of time. Namely, after 156 weeks of disability. Seen in this light, the ultimate question must be: can the insured person demonstrate that as of that time, they are continuously prevented from engaging in any suitable employment?

Since the insured conceded that he did not meet the additional criteria imposed by paragraph 12(5)(b) until three years after the 156-week mark, the Director's Delegate found that he was not continuously disabled.

Accordingly, I find that the test for entitlement in this case is whether Mr. Howard was continuously prevented from engaging in suitable employment starting from August 20, 1993.

The parties referred me to a number of cases where it was determined that the insured person was continuously prevented from engaging in suitable employment despite evidence that they returned to work for significant periods of time. In these cases, the insured person's return to work are generally characterized as failed attempts to return to work.

In Foden v. Co-Operators Insurance Association (Guelph),⁶ Reid J. found that a six-month return to work did not defeat a claim for weekly benefits under Schedule E of the Insurance Act, R.S.O. 1970, c. 224 which required that the insured be "wholly and continuously" disabled. He wrote:

It might at first glance seem anomalous to hold that a person who has returned full-time to work and who is receiving full pay is at the same time "totally disabled". The anomaly is more apparent than real. First, on the facts, plaintiff's employer did not keep her on because he was satisfied with her work. He was not satisfied. He kept her because he hoped she would improve, notwithstanding that she was not capable of doing what was expected of her and that the quality of her work had deteriorated.

In Brasseur v. Anglo Canada General Insurance Co.,⁷ the motions judge found it was a triable issue whether the insured was continuously disabled notwithstanding a return to work of 15 months because of evidence that the insured merely survived for 15 months and because of evidence it was not work that she was physically capable of doing judged by any reasonable standard.

In Graper and Liberty Mutual Fire Insurance Company,⁸ the insured was injured on March 20, 1993. After September 1994, he returned to teaching, part-time, although it made him ill. He stopped working on May 1, 1998, and the insurer reinstated weekly benefits under the 1990 Schedule.⁹ The insurer terminated benefits on June 22, 1999. The insured applied for arbitration and on the eve of the hearing, the insurer paid the insured income replacement benefits to date. Notwithstanding the periods of return to work, the arbitrator found that the overwhelming preponderance of medical evidence indicated that the insured could not return to work and that the insurer acted unreasonably in terminating and withholding income replacement benefits.

Although Mr. Howard concluded his testimony, I did not hear all his evidence on the issue of whether he was continuously prevented from engaging in suitable employment after August 20, 1993. Since the question of whether Mr. Howard was continuously prevented from engaging in suitable employment within the meaning of section 12(5)(b) of the Schedule is a question of fact, I must hear all the evidence relevant to the issue.

Burden of proof:

The parties also made submissions on the effect of section 16 of the Schedule.

Section 16 provides as follows:

Temporary Return to School or Work

16. (1) Subject to section 15 and subsection (3), a person receiving a benefit under this Part may attend school or accept, or return to, work at any time during the first two years following the accident for any period of time without affecting his or her benefits under this Part if, as a result of the accident, he or she is unable to continue at school or in the occupation or employment.

(2) Subject to section 15 and subsection (3), after the two year period referred to in subsection (1), a person receiving a benefit under this Part may attend school or accept, or return to, an occupation or employment for periods of up to ninety days without affecting his or her benefits under this Part if he or she, as a result of the injury, is unable to continue at school or in the occupation or employment.

(3) The insurer is not required to pay weekly benefits under section 13 for any week in which the insured person attends school.

I agree with the reasoning in Lafleur and Zurich Insurance Company¹⁰ that subsection 16(2) creates a rebuttable presumption that if, after two years from the date of the accident, the insured returns to work for more than 90 days, it is presumed that he is ineligible for weekly income benefits.

Accordingly, Mr. Howard has the burden of rebutting the presumption that because he returned to work at Becker's and Black's, he is ineligible for further weekly income benefits.

A caseworker will arrange with the parties dates for the resumption of this hearing before me.

August 29, 2003

William J. Renahan

Arbitrator

Date

Neutral Citation: 2003 ONFSCDRS 129

FSCO A02-000004

FINANCIAL SERVICES COMMISSION OF ONTARIO

BETWEEN:

DEXTER HOWARD

Applicant

and

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY

Insurer

ARBITRATION ORDER

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

1. The hearing will be resumed before me on a date to be arranged by the Commission.

August 29, 2003

William J. Renahan

Arbitrator

Date

Footnotes

1. 1The Statutory Accident Benefits Schedule — Accidents Before January 1, 1994, Regulation 672 of R.R.O. 1990, as amended by Ontario Regulations 660/93 and 779/93.
2. 2(FSCO P99-00012, November 9, 1999)
3. 3[1999] O.J. No. 2927
4. 4Despite his inability to work at Howard Johnson's, he was not entitled to further weekly income benefits once he returned to Becker's because, by operation of section 15 of the Schedule, his income from Becker's reduced any weekly income benefit to zero.
5. 5(FSCO P00-00011, November 28, 2001).
6. 61978 CanLII 1622 (ON HCJ), 20 O.R. (2d) 728
7. 7[1994] O.J. No. 2235, October 6, 1994.
8. 8(FSCO A00-000133, July 20, 2001)
9. 9The Statutory Accident Benefits Schedule - Accidents on or Between June 22, 1990 and December 31, 1993, Regulation 672 of R.R.O. 1990, as amended.
10. 10(OIC A-004141, May 11, 1995)```