Neutral Citation: 2003 ONFSCDRS 158

FSCO A02-001646

BETWEEN:

KULAVEERASINGAM RAMALINGAM

Applicant

and

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY

Insurer

DECISION ON A MOTION

Before: Robert Kominar

Heard: July 7, 2003 by teleconference, and July 18, 2003 at the offices of the Financial Services Commission of Ontario in Toronto and by way of written submissions

Appearances: David S. Wilson for Mr. Ramalingam Todd McCarthy for State Farm Mutual Automobile Insurance Company

Issues:

The Applicant, Kulaveerasingam Ramalingam, was injured in a motor vehicle accident on January 9, 2002. He applied for and received statutory accident benefits from State Farm Mutual Automobile Insurance Company ("State Farm"), payable under the Schedule.¹ State Farm terminated weekly income replacement benefits on July 27, 2002. The parties were unable to resolve their disputes through mediation, and Mr. Ramalingam applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

The issue is:

Should the arbitration proceeding be stayed and should Mr. Ramalingam be prohibited from receiving income replacement benefits until he makes himself reasonably available for independent neurology, physiatry and psychology examinations as requested by State Farm?

Result:

State Farm's application for a stay of the arbitration proceedings and an order prohibiting Mr. Ramalingam from receiving income replacement benefits pending attendance at independent neurology, physiatry and psychology examinations is dismissed.

EVIDENCE AND ANALYSIS:

This matter was brought before me originally as a request from State Farm to have the arbitration proceedings stayed pending Mr. Ramalingam's attendance at a series of independent medical examinations and to prohibit him from receiving income replacement benefits pending his attendance.

The process began as a teleconference on July 7, 2003, but it became evident during that initial session that not all of the documentation being referred to by counsel was actually before me. The Insurer's motion was therefore adjourned to July 18, 2003 for an oral hearing at the Financial Services Commission and I advised the parties that they should file any written materials they intended to rely on prior to that date. I subsequently received case briefs from both parties, as well as affidavits sworn by Mr. Ramalingam and Mr. Jeffrey Kope, claims representative for State Farm. The parties chose not to conduct any cross-examinations on these affidavits. The only additional evidence that I was asked to consider, that was not provided by affidavit, was a statement by Mr. Kope maintaining that he did not personally see a letter addressed to him from Mr. Wilson dated May 13, 2003 prior to these proceedings.²

This matter has had a rather complex procedural history already. Given the circumstances, the chronology of the interaction of the parties is important to clarify.

At the time this motion was brought before me, there was a pending motion for interim benefits which had been argued and was under consideration by Arbitrator Alves. In actuality, the issues in this motion arose out of the disclosure of certain medical information by Mr. Ramalingam in his application for interim benefits. Arbitrator Alves released her decision on September 5, 2003, granting Mr. Ramalingam interim income replacement and home maintenance benefits.

Mr. Ramalingam was involved in an accident on January 9, 2002. State Farm paid income replacement benefits to him from January 18, 2002 through July 27, 2002, at which point they terminated those benefits based on orthopaedic and psychological examinations conducted at their request. A mediation at FSCO was commenced on October 4, 2002 and the mediator reported that the issues of entitlement to income replacement benefits and interest failed on November 14, 2002.³

Mr. Ramalingam's Application for Arbitration was received at FSCO on November 21, 2002. I note that in his Application for Arbitration Mr. Ramalingam states, in Section 5 of the Application, that the only documentation in his possession, as of that date, which he intended to rely on at arbitration, was the Disability Certificate prepared by Dr. E. George. State Farm filed its Response to the Application for Arbitration on December 23, 2002. Mr. Ramalingam did not request a disability DAC assessment as a result of the termination of his benefits.

Mr. Kope deposes in his affidavit of July 4, 2003 that the only medical documentation to support Mr. Ramalingam's benefit claims, up to the date the Application for Arbitration was filed, was the Disability Certificate provided by Dr. George, dated February 2, 2002. Mr. Kope further states that he received a report from Mr. Wilson, prepared by Dr. K. Meloff, who is a neurologist, on January 13, 2003. The report was dated October 31, 2002.

An arbitration pre-hearing was held at FSCO on March 24, 2003. In between the pre-hearing and the return date for the motion for interim benefits of April 29, 2003, Mr. Kope states that State Farm was made aware of the existence of reports prepared by another neurologist, Dr. Ronald Wilson: dated April 27, 2001, September 6, 2001, October 12, 2001, February 14, 2002 and May 30, 2002. In addition, State Farm was made aware of a psychological report prepared by Dr. R.S. Miller dated: December 4, 2002. Dr. S.W. Joseph Wong, a physiatrist, prepared a report dated March 6, 2003. Also included in Mr. Ramalingam's medical brief were a report from Dr. R. Jain, an orthopaedist, dated July 16, 2002; a report from the family physician, Dr. George, dated October 21, 2002; another disability certificate and diagnostic test result from Dr. R. Fuller, a chiropractor, dated August 7, 2002; as well as reports from Dr. Fuller dated March 6, 2003 and Dr. W.E. Baldwin, a urologist, dated January 13, 2003.

Mr. Kope deposes that he did not actually see any of these reports until after they were produced to State Farm's counsel in April 2003 in support of Mr. Ramalingam's motion for interim benefits. It appears that the motion record for the interim benefits was served on Mr. McCarthy by Mr. Wilson on April 7, 2003.

Shortly after the parties argued the motion for interim benefits on April 29, 2003, Mr. Kope sent to Mr. Ramalingam a series of notices requiring him to attend for various section 42 examinations. Mr. Ramalingam did not attend any of these examinations requested by State Farm and these failures to attend underlie the Insurer's request in this motion that the arbitration proceedings be stayed and that Mr. Ramalingam be precluded from receiving any income replacement benefits until he attends for the examinations. The hearing of this arbitration has now been adjourned to July 26, 2004.

State Farm arranged an examination with Dr. Summerfield, a neurologist, to take place on May 21, 2003, and communicated this to Mr. Ramalingam by letter dated May 1, 2003.

In addition, State Farm arranged a psychological examination with Dr. Goodfield to take place on June 2, 2003, and communicated this to Mr. Ramalingam by letter dated May 6, 2003.

Finally, State Farm arranged for a physiatry examination to take place with Dr. John on May 28, 2003, and communicated this to Mr. Ramalingam by letter dated May 6, 2003.

These appointments, co-ordinated through D&D Disability Management, were confirmed by letters to Mr. Ramalingam dated April 30 and May 5, 2003.⁴

On May 7, 2003, Mr. Wilson wrote to Mr. Kope advising him that Mr. Ramalingam would not attend the neurological assessment arranged with Dr. Summerfield. Mr. Wilson specifies in that letter that he believes that the Insurer was requesting the examination not for the purpose of "adjusting the claim, but rather, is related to buttressing the insurer's case at the upcoming arbitration proceeding. Such is an improper purpose and accordingly, my client will not be attending." Mr. Wilson goes on to say: "The insurer was well aware of the existence of neurological problems prior to the termination of benefits and was obviously not concerned with investigating the source of those problems."

On May 13, 2003, Mr. Wilson further corresponded with Mr. Kope, this time with respect to all three of the proposed insurer examinations. Mr. Wilson unequivocally advised Mr. Kope that Mr. Ramalingam would not be attending any of the proposed examinations. As I set out above, Mr. Kope's evidence is that he did not see this letter from Mr. Wilson at the time it was purportedly delivered to State Farm.

ANALYSIS

It has long been clearly established that the right of an insurer to obtain independent medical examinations under section 42 of the Schedule has to be balanced with the right of privacy that an insured person has relating to health matters. Medical examinations are inherently intrusive and the insurer's right to them arises out of the practical need to obtain objective information about the health status of a person claiming benefits. It is a right that is limited in scope and one that is circumscribed with notice requirements that are meant to provide an insured person with sufficient information to make an informed decision about whether to comply with the required examination or decline it and accept the consequences of so doing.

The Schedule provides:

(1) For the purpose of determining whether an insured person is entitled to a benefit, except a funeral or death benefit, an insurer may give the insured person notice requiring him or her to be examined by one or more persons specified by the insurer, each of whom is a member of a health profession or a person with expertise in vocational rehabilitation.

(2) The notice shall state the benefit to which the examination relates.

(3) The insurer may require examinations as often as is reasonably necessary.

The explicit rationale for Mr. Wilson's advice to Mr. Ramalingam not to attend at these examinations was that they were not required by the Insurer to "adjust the file." Mr. Ramalingam deposes in his affidavit that the only benefits he has claimed from State Farm are income replacement benefits and medical benefits. He further states that he chose not to dispute State Farm's denial of medical benefits and that there has been no ongoing dispute with respect to them. By implication this would seem to leave only income replacement benefits in issue. However, the pre-hearing letter notes that Mr. Ramalingam is claiming housekeeping and home maintenance benefits as well as income replacement benefits. In looking at the file, I note that the only Mediator's Report in it does not address housekeeping and home maintenance claims - only income replacement benefits. Housekeeping and home maintenance was an issue before Arbitrator Alves, who awarded interim housekeeping and home maintenance benefits to Mr. Ramalingam. Although it is not clear how the housekeeping and home maintenance claims became an issue in this arbitration, I find that Mr. Ramalingam was claiming income replacement benefits as well as housekeeping and home maintenance benefits at all relevant times for the purpose of this motion.

Was State Farm's Requirement that Mr. Ramalingam attend these medical examinations reasonable and necessary?

There are two dimensions to any consideration of the relief sought by State Farm in this motion. In order to compel Mr. Ramalingam to attend a medical examination, an insurer must be able to support its being reasonably necessary in relationship to some benefit claim the person is making. Beyond that, the insurer must meaningfully comply with the notice provisions set out in the Schedule. Numerous arbitration decisions have dealt with the procedural requirements for adequacy of such notices. It is reasonable to summarize them as standing for the proposition that the notice must be specific and clear enough that the average insured person can make an informed decision whether to consent to undergo the examination and continue to pursue the benefit, abandon the claim for the benefit, or question, through the dispute resolution process, whether the examination is reasonably required in the particular circumstances.

The purpose of section 42 examinations, as well as section 24 examinations, is not inherently adversarial. Mr. Wilson makes a valid observation in his correspondence with Mr. Kope, one I concur with. Nothing in the Schedule supports the tactical mustering of medical reports for the purpose of supporting either side's position taken in an arbitration. Rather, the purpose is to acquire informed and objective information from health care professionals about the health status of the insured person as it relates to benefit claims arising out of a particular automobile accident. Such information should be of value to the parties in their direct negotiations with each other regarding entitlement to benefits. Beyond that, the information can be extremely helpful to mediators, whose role is to assist parties, when they cannot agree between themselves, in engaging in constructive dialogue about their disagreement. Ultimately, if mediation is not successful in helping the parties to find common ground, the reports and evidence of health care professionals rationally warrant the decisions of arbitrators and judges, who must bring closure to disputes fairly and reasonably.

The point of this is that the FSCO dispute resolution process encourages parties to not act on the basis of tactical manoeuvring. The arbitration process is not "litigation lite" and arbitrators have noted that independent insurer examinations do not play the same role here that defence medicals do in the civil litigation process. Neither insurers nor insured persons are well served by a failure to explore the possibilities that lie in open and honest collaborative problem solving. A precondition of this is full and timely exchange of relevant information. The Schedule is a two-way street and the FSCO dispute resolution process promotes an ongoing flow of information between the parties throughout the process.

In looking at Mr. Ramalingam's situation, I have considered what is fair and reasonable to do at this point in time. Although State Farm's requests for examinations are not patently unreasonable, I cannot conclude that they are necessary at this point in time for fulfilling the purposes they are meant to serve in the Schedule.

Based on the evidence before me, I find that Mr. Ramalingam, and his counsel, were aware of his neurological concerns throughout this claim. The original disability certificate alluded to the fact that he had at that time already seen a neurologist. Mr. Ramalingam relies on the disclosure of these neurological concerns in the disability certificate as grounds for refusing to attend a neurological insurer examination at this point in time, arguing that State Farm could have followed up on this lead earlier if it was interested in it. Given the dates of the various medical reports that were disclosed during the interim benefits hearing, and having regard to the logistics of setting up such evaluations and a reasonable time frame for the health care practitioners to actually produce and deliver their reports, I find that Mr. Ramalingam was in the ongoing process of obtaining medical evidence to support of his claim for benefits consistently through the dispute resolution proceedings at FSCO. Viewed in the austere light of Mr. Wilson's expression of concern that State Farm was engaged in marshalling evidence to support its case in arbitration, I have to wonder why the medical information that Mr. Ramalingam was rather regularly coming into possession of was not disclosed to State Farm on a more timely basis than it appears to have been here. In my view, Mr. Ramalingam ought to have been disclosing the information that supported his claim to State Farm on a more regular basis. However, I do not find that this changes the scope of State Farm's right to require him to attend at the medical examinations at this point in time. However, if the only disclosure of the neurological concerns were the comments in the disability certificate, I might have viewed State Farm's request differently.

Mr. Ramalingam raises two different kinds of concerns about attending these examinations. The first concern can be summed up as relating to the need for such examinations to be reasonably connected to the benefits he is claiming. The second concern relates to the adequacy of the notices for them.

State Farm requested that he attend with a physiatrist, a neurologist and a psychologist. It is clear from considering the number of medical reports that Mr. Ramalingam submitted to the arbitrator in his application for interim benefits, and the period of time over which they were likely generated, that Mr. Ramalingam has had a significant medical history and one that, in general, rationally warrants the Insurer's interest in exploring. But, as I have noted, the right to an insurer examination is one that is limited in scope.

State Farm argued that it was caught by surprise at the interim benefits hearing, when it learned that Mr. Ramalingam had been consulting with various health care practitioners. I accept that they may have been surprised, but find also that if they were surprised it was partly a result of their own handling of the file.

From the evidence before me, it is clear that a neurological concern, of some sort, was disclosed to State Farm in the original disability certificate. In fact, Dr. George mentions the neurological matter twice in that certificate. State Farm initially paid benefits to Mr. Ramalingam and then chose, on some basis only State Farm knows, to send Mr. Ramalingam for orthopaedic and psychological insurer examinations. While it is clear from the multiple references to Mr. Ramalingam's physical problems in the disability certificate why State Farm chose to send him to see an orthopaedic specialist, it is less than clear why they sent him to a psychologist. However, Mr. Ramalingam complied with their request for both examinations. State Farm chose not to follow up on Dr. George's references to neurological problems. One would assume that State Farm felt confident in the reasonableness of its decision to terminate benefits on July 27, 2002 based on what it learned from the independent psychological and orthopaedic examinations. If those examinations did not provide a sufficient foundation for a proper termination, in other words, if State Farm was still meaningfully interested in adjusting the file, then it could have requested further examinations at that time. I have no evidence that any such request was made.

The matter is further complicated by Mr. Kope's acknowledgement that he received a neurological report, prepared by Dr. Meloff, in January 2003. This was after the arbitration proceedings had been commenced and well before the pre-hearing of March 24, 2003. In preparation for a pre-hearing at FSCO, parties are expected to begin the document exchange process. Even if State Farm had inadvertently overlooked the neurological aspects of Mr. Ramalingam's claims prior to January 2003, I fail to understand how they can reasonably maintain that they were unaware of the significance of this aspect of the situation after that date. The period between the receipt of Dr. Meloff's report and the disclosure of the rest of the medical evidence Mr. Ramalingam had obtained is like a black hole during which nothing seems to have been done to reconsider his entitlement to benefits. Instead, the parties entered the dispute resolution process.⁵

I accept Mr. Kope's evidence that he personally did not see the letter from Mr. Wilson of May 13, 2003. The difficulty I have with State Farm's argument is that it does not explain in any meaningful way why there was no follow up on the neurological concerns after the receipt of Dr. Meloff's report in January 2003. Most significantly, I do not understand why the issue was not raised as a concern at the pre-hearing?⁶ Mr. Kope states in his affidavit that he did not want to delay the application for interim benefits and so he waited until that motion was argued before requesting that Mr. Ramalingam attend at these examinations. I find that this was a particularly non-adversarial approach for which State Farm should be congratulated. However, this still leaves a period of roughly three months during which the Insurer ought reasonably to have known that there was a neurological element to this case and, in my view, if they were still of a mind to openly address the benefit issue, they would have requested a neurological examination at that time to help them to re-evaluate their denial of benefits. Based on all of the evidence, the most likely explanation for what happened here is that State Farm was confident in the basis of the denial of benefits in July 2002 and remained so even after receiving Dr. Meloff's report in January 2003; but they reassessed their views after being confronted with a large number of reports at the interim benefits stage.

With regard to the psychological examination, I have no evidence before me that there is a psychological aspect to this case that has not been investigated. Both parties have psychological reports and there is no evidence that anything has changed in this regard for Mr. Ramalingam since those reports were prepared.

With regard to the physiatry examination, I also find that State Farm investigated Mr. Ramalingam through an orthopaedic examination early in the file. I have no evidence that anything new has come up which would support the need for a physiatry examination at this point in time.

The conclusion that I draw from all of this is that the requirement that Mr. Ramalingam attend at these examinations did not arise out of State Farm's processing any claim for benefits. I find that, at the time the requests were made for Mr. Ramalingam to attend the examinations, State Farm was no longer actively re-evaluating its position on entitlement to benefits. In my judgement, if State Farm was open to that option, it would have followed up on Dr. Meloff's report in some way. The only plausible inference I draw from this conclusion is that the requests for these examinations were primarily focussed on obtaining reports that State Farm might potentially use in the arbitration hearing to respond to Mr. Ramalingam's unexpected expert evidence.

Sending Mr. Ramalingam to these examinations at this point in time would be tantamount to allowing the Insurer to generate evidence to reinforce the conclusion that they made the correct decision in terminating benefits. In my view, providing such backfill is not what the Schedule contemplates. Although parties should always be encouraged to re-evaluate their positions in the light of new information, State Farm's failure to follow up on the receipt of Dr. Meloff's report leads me to conclude that this was not what they had in mind. The situation here is reminiscent of a lender who gets skittish about a loan and who attempts to assuage her concerns by requesting extra collateral security "in case" things go badly in the future. Ironically, it is an insurer requesting insurance from the benefit claimant here.

I find that the three examinations that State Farm has requested Mr. Ramalingam attend are not reasonably necessary at this point in time. On the basis of this finding, there is no need to consider Mr. Ramalingam's arguments as to whether the notices State Farm provided were procedurally adequate.

State Farm raised the argument that at times procedural fairness should be the criterion for compelling an insured person to attend an independent medical examination. In support of this proposition, State Farm relies on Arbitrator Muir's recent decision in Sidhu and Security National.⁷ I find that the situation in Sidhu is not relevantly similar to this case. Arbitrator Muir was dealing with a situation where leave was being requested to file a report outside of the time frames stipulated in the Dispute Resolution Practice Code. In that circumstance, he decided that, if an indulgence was granted to allow the report to be filed, then there had to be some opportunity for the insurer to respond to it based on simple fairness. My finding here is that State Farm failed to respond to advice of Mr. Ramalingam's neurological condition and there is no suggestion that Mr. Ramalingam did not comply with the Code in filing his reports. Although Mr. Ramalingam did not disclose everything he knew about his condition in a timely manner to State Farm, I find that sufficient information was given to State Farm for them to have had their interest tweaked in exploring it. Procedural fairness is not an issue here.

I decline to stay the arbitration proceeding or make any order prohibiting Mr. Ramalingam from receiving benefits pending his attendance at the three examinations requested by State Farm.

EXPENSES:

I exercise my discretion to award Mr. Ramalingam his expenses incurred on this motion in any event of the outcome of the arbitration hearing. If the parties cannot agree on expenses I remain seized for assessment purposes.

November 12, 2003

Robert A. Kominar Arbitrator

Date

FINANCIAL SERVICES COMMISSION OF ONTARIO