FINANCIAL SERVICES COMMISSION OF ONTARIO
Neutral Citation: 2004 ONFSCDRS 85
FSCO A02-001646
BETWEEN:
KULAVEERASINGAM RAMALINGAM
Applicant
and
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY
Insurer
DECISION ON A VARIATION APPLICATION AND MOTION FOR INTERIM BENEFITS
Before: Suesan Alves
Heard: April 29, 2004, at the offices of the Financial Services Commission of Ontario in Toronto.
Appearances:
David S. Wilson for Mr. Ramalingam
Grant Dow for State Farm Mutual Automobile Insurance Company
Issues:
The Applicant, Kulaveerasingam Ramalingam, was injured in a motor vehicle accident on January 9, 2002 and claimed statutory accident benefits under the Schedule1 In an order dated September 5, 2003, (the "Order"), I awarded Mr. Ramalingam interim income replacement benefits ("IRBs"), and interim housekeeping and home maintenance benefits.
State Farm Mutual Automobile Insurance Company, ("State Farm"), seeks to vary the interim benefits order to terminate payment at the 104-week mark. Although Mr. Ramalingam does not seek to enforce payment of the housekeeping and home maintenance benefits after 104 weeks, he opposes the variation on several grounds, and seeks continued entitlement to interim IRBs.
The issues are:
Should the Order of September 5, 2003 awarding Mr. Ramalingam interim benefits be varied under section 284 of the Insurance Act, ("the Act"), R.S.O. 1990, c.I.8, as amended?
Which party is liable to pay the other's expenses of this application and motion under subsection 282(11) of the Insurance Act?
Result:
The Order of September 5, 2003 should be varied retroactively, pursuant to section 284 of the Act. State Farm is not obliged to pay interim housekeeping and home maintenance benefits under section 22 of the Schedule after January 9, 2004. State Farm is not obliged to pay interim IRBs under that Order after January 9, 2004.
A fresh order with retroactive effect will issue for interim weekly income replacement benefits, at the rate of $388.42 commencing January 10, 2004 pending the final order in this matter, pursuant to section 279(4.1) of the Act, as amended. This order is subject to the further order of the pre-hearing arbitrator and of the hearing arbitrator
If the parties are unable to agree on the expenses of this application and motion, that issue may now be addressed.
Procedural Issues:
On September 5, 2003, I granted Mr. Ramalingam's request for interim income replacement and housekeeping and home maintenance benefits. State Farm appealed the Order; however the appeal was rejected. State Farm appealed the Order a second time coupled with an appeal from an order refusing to stay the arbitration, and the appeal was again rejected. On March 11, 2004, State Farm requested a variation of the September 5, 2003 Order awarding interim benefits. By letter dated March 16, 2004, the Director of Arbitrations appointed me to hear the variation application in relation to that Order, as I had awarded interim benefits.
The Commission made hearing dates available in the weeks of March 22 and 29, 2004. However, counsel advised that the earliest date on which they were available was April 29, 2004.2
State Farm then requested an earlier date to seek a stay of my Order. As an arbitrator's authority to stay his or her own order is a novel question, I requested written submissions and, since counsel had given their earliest dates, I scheduled the stay application to be heard at the same time as the variation application.
Since State Farm was in arrears under the interim benefits Order, Mr. Ramalingam asked the Sheriff to enforce the Order. On March 29, 2004, the Sheriff made a return of $5,212.46. State Farm then withdrew its request for a stay and took the position that the stay was moot.3
I heard the variation application on April 29, 2004. Mr. Dow appeared as counsel for the Insurer, since Mr. McCarthy was unavailable.
Mr. Wilson appeared as counsel for Mr. Ramalingam. In his Affidavit, Mr. Ramalingam detailed the payments he received from State Farm. Counsel for Mr. Ramalingam objected to State Farm being given an audience on the variation application because of its non-compliance with the Order. Counsel for the Insurer advised that on the eve of the hearing State Farm paid approximately $9,000 to bring itself into compliance. At the hearing, Mr. Wilson noted that he did not know how that amount had been calculated, however, he withdrew that objection to State Farm being heard on the variation application.
On April 29, 2004, I permitted the Applicant to file three additional medical reports which counsel for the Applicant advised had been unavoidably delayed and which had been served on the Insurer. I was concerned about possible prejudice to the Insurer. Counsel for State Farm informed me that following Arbitrator Kominar's order in which he concluded that the requested insurer examinations were not reasonable and necessary, State Farm's position was that the Commission would view any further attempts to seek insurer examinations as an abuse of the Commission's process. Given that position, it was difficult to see what prejudice would ensue from receiving the additional reports. I nevertheless admitted the reports without prejudice to the Insurer seeking to vary the order, on further medical evidence, if it were unsuccessful on the variation application.
The variation application and the motion for continued interim benefits proceeded by way of Affidavit evidence, documents from the parties and submissions from counsel. No cross-examination took place on Mr. Ramalingam's Affidavit.
EVIDENCE AND ANALYSIS:
Background
The interim benefits Order of September 5, 2003 stated:
Subject to the further Order of the hearing arbitrator, State Farm Mutual Automobile Insurance Company shall pay Mr. Ramalingam interim income replacement benefits at the rate of $388.42 per week and interim housekeeping and home maintenance benefits at the rate of $100 per week from April 29, 2003 pending the final order in this arbitration, pursuant to section 279(4.1) of the Insurance Act R.S.O. 1990, c.I.8 as amended.
The expenses of this motion are in the discretion of the hearing arbitrator.
The parties agree that Mr. Ramalingam has no further entitlement to housekeeping benefits under section 22 of the Schedule, because he is not "catastrophically impaired." State Farm submits that the interim benefits award expired at the 104-week mark.
The variation State Farm requests is the addition of the phrase "until January 9, 2004," to immediately follow the date April 29, 2003 in line 4 of paragraph 1 of the Order. The effect would be to stop all interim benefits as of that date.
Law
Section 284 of the Insurance Act provides for variation and revocation applications, and states:
Application for variation, Director's or arbitrator's order
- (1) Either the insured person or the insurer may apply to the Director to vary or revoke an order made by the Director or an arbitrator appointed by the Director. R.S.O. 1990, c. I.8, s. 284 (1); 1996, c. 21, s. 40 (1).
Idem
(2) If an application is made to vary or revoke an arbitrator's order, the Director may decide the matter or he or she may appoint the same arbitrator or some other arbitrator to determine it.
Powers on variation
(3) If the arbitrator or Director is satisfied that there has been a material change in the circumstances of the insured or that evidence not available on the arbitration or appeal has become available or that there is an error in the order, the arbitrator or Director may vary or revoke the order and may make a new order if he or she considers it advisable to do so.
Idem
(4) An order made, varied or revoked under subsection (3) may be prospective or retroactive. R.S.O. 1990, c. I.8, s. 284 (2-4).
Application of subss. 282 (11 to 11.2)
(5) Subsections 282 (11) to (11.2) apply with necessary modifications to an application under this section. 1996, c. 21, s. 40 (2).
Considerations on a variation application
Under section 284(3) of the Act, a party seeking to vary an order must establish one of three grounds: that there has been a material change in the circumstances of the insured; that evidence has become available which was not available on the arbitration or appeal; or that there is an error in the order.
If the adjudicator hearing the application is satisfied that one of the grounds has been established, and he or she considers it advisable to do so, the adjudicator may vary or revoke the order or make a new order.
In this case, State Farm alleges an error in the Order and a material change in Mr. Ramalingam's circumstances. I would observe that it is awkward to comment on one's own Order. Nevertheless, I reject the submission that there is an error in the Order. In my view, in determining an error in this context, one looks at the circumstances which obtained at the time the Order was made; not at subsequent events.
The Order was made on September 5, 2003, prior to the 104-week period which ended on January 9, 2004. The Order was made in the context of the circumstances obtaining in the pre 104-week period, and addressed the test for benefits applicable during that period. The hearing was scheduled to start in a matter of weeks and there was nothing before me which suggested that the Applicant's hearing would take place outside of the pre 104-week period. Those circumstances changed following the making of the Order. On September 11, 2003, six days after the September 5, 2003 interim benefits Order was made, a different arbitrator adjourned the hearing at State Farm's request, to July 26, 27, 28, and 29, 2004. Thus, events subsequent to the making of the Order have created a need for clarification.4
The parties interpret the duration of the interim benefits Order in different ways. The Applicant submits that interim income replacement benefits were payable pending the final order in this arbitration, and that he has continued entitlement under the Order. The Insurer submits that the Order ended at 104 weeks, given my reasons which explicitly addressed the pre 104-week period. In the interests of resolving the dispute between the parties, I clarify that under the Order, State Farm was obliged to pay interim benefits until January 9, 2004, because only the pre 104-week IRB and housekeeping and home maintenance tests were addressed in my reasons.
Change in the material circumstances of the insured?
State Farm alleges that there has been a material change in circumstances of the insured because during the first 104 weeks of disability, the Applicant need only establish a substantial inability to perform the essential tasks of his pre-accident employment. After 104 weeks, the Applicant must meet a more onerous test — that he is completely disabled from engaging in any employment for which he is reasonably suited by education, training or experience. The Applicant submits that while the change in the test is a material change in circumstances, it is not a material change in the circumstances of the insured person, as required by section 284(3) of the Act.
In the case of Sittler and Canadian General Insurance Company and Pilot Insurance Company, (OIC P-000951 & V-000951 and P-004495 & V-004495, August 11, 1995), the Director of Arbitrations held that a material change in the circumstances of the insured within the meaning of section 284(3) of the Act "generally refers to the particular circumstances of an insured person, for example a change in his or her ability to perform the essential tasks of his or her occupation or employment."
I find a change in the disability test an insured person must meet after the 104-week period is a material change in Mr. Ramalingam's circumstances, because he is required to satisfy a more onerous test in order to establish entitlement to income replacement benefits and housekeeping benefits at that juncture under the Schedule.
If I am wrong, I find the Applicant's particular circumstances are materially changed in that he has adduced opinion evidence that his condition has worsened both physically and psychologically, such that he meets the prima facie test on a motion for interim benefits in the post 104-week period. Under that test, the insured person must adduce evidence which, if unanswered and believed, is sufficient to render reasonable a conclusion in favour of entitlement.5
As detailed below, under "Merits," at page 10 of this decision, from a physical perspective, Dr. M. Lee, orthopaedic surgeon, details the investigations which have taken place and the conservative treatment measures which have failed to resolve the persistent problems with pain, instability and function in Mr. Ramalingam's right shoulder. Surgical measures are now appropriate. Dr. Lee reports that Mr. Ramalingam is scheduled for surgery in June or the fall of 2004, followed by a six to twelve month period of rehabilitation.
From a psychological perspective, Dr. R.S. Miller, Mr. Ramalingam's treating psychologist, was previously of the opinion that Mr. Ramalingam was significantly disabled. In her opinion, Mr. Ramalingam's problems are now entrenched in his lifestyle and chronic, and as a result of his chronic pain problems, significant depression and anxiety, Mr. Ramalingam is unable to function in any occupation.
Considerations on an interim benefits motion
Mr. Ramalingam bases his claim for ongoing interim benefits in the post 104-week period on financial need and the merits of his case. Having regard to the summary nature of a motion for interim benefits, the importance of avoiding eviscerating the hearing process, and the particular circumstances of the case, arbitrators have considered various criteria which may guide the exercise of that discretion. It is in the nature of the exercise of discretion that arbitrators will give greater or less weight to the factors in the circumstances of each case.
In this case, I adopt the criteria of need and merits. I apply the prima facie case test, in the sense that "the insured person must produce evidence which, if unanswered and believed, is sufficient to render reasonable a conclusion in favour of entitlement."6 I also apply the test of whether it is reasonable and very probable that Mr. Ramalingam will succeed at the hearing. I consider the need to avoid a possible evisceration of the arbitration hearing process, and, subject to the further order of the pre-hearing arbitrator and the hearing arbitrator, I award Mr. Ramalingam interim income replacement benefits from January 10, 2004 pending the final order in this matter.
Mr. Ramalingam's evidence
1. Need
I am satisfied on the basis of Mr. Ramalingam's Affidavit that he continues to demonstrate need. His wife continues to work part-time. Her earnings increased by $100 per month, and she now earns $1,400 per month. The family's monthly expenses are approximately $2,800.00. Mr. Ramalingam deposes that he has been forced to borrow a further sum of $6,000 from his sister. Mr. Ramalingam deposes that State Farm's manner of complying with the Order has made it impossible for the family to budget for ongoing expenses. I am satisfied that Mr. Ramalingam continues to be unable to meet ongoing modest living expenses for himself, his wife and now six year old son, and has established financial need.
2. Merits
As noted above, to succeed in his claim for entitlement to IRBs at the hearing, Mr. Ramalingam will have to satisfy the hearing arbitrator that, as a result of the accident, he suffers a substantial inability to engage in the essential tasks of his pre-accident employment as a janitor/cleaner until January 9, 2004. From January 10, 2004, Mr. Ramalingam will need to establish that he has a complete inability to engage in any employment for which he is reasonably suited by education, training or experience.
The following are excerpts from the evidence adduced by the Applicant on his motion for continued interim benefits. In some instances, I have reproduced medical opinions provided on Mr. Ramalingam's initial motion for interim benefits. This provides context to the more current opinions, and details the evidence for my conclusion, above, that there has been a material change in Mr. Ramalingam's circumstances.7
Dr. K. Meloff, a neurologist, reported in October 2002 that the motor vehicle accident seems to have aggravated Mr. Ramalingam's neck and low back pain. Dr. Meloff opined that "the combination of these difficulties precludes heavy lifting and makes it impossible for him to do heavy work." In a report dated April 22, 2004, Dr. Meloff reaffirms his opinion that Mr. Ramalingam has chronic pain, headache, depression, urinary control difficulties and asserts his firm belief that Mr. Ramalingam is unable to do janitorial work because of chronic pain, significant right arm weakness and persistent head, neck and right upper limb pain.
In a report of April 2004, Dr. S.W. Joseph Wong, a physiatrist, opines that Mr. Ramalingam continues to suffer a substantial inability to perform his pre-accident employment as a janitor/cleaner up to January 9, 2004, due to the motor vehicle accident. Dr. Wong opines that due to his injuries and his psychological problems, Mr. Ramalingam is not able to engage in the essential duties of any employment at this time.
Dr. Wong provides a précis of a vocational assessment by Mr. Antflick from the Centre for Educational Development, in which Mr. Antflick concludes that no employer would be likely to employ Mr. Ramalingam if his anxiety, depressed mood, lack of self-esteem and fatigue problems, incontinence, or chronic pain problem persisted. In Mr. Antflick's opinion, Mr. Ramalingam remained incapable of a successful return to the work force in any suitable jobs based on his education, training and experience.8
- Dr. Moo-Hyung Lee, an orthopaedic surgeon, provides a report dated April 14, 2004 in which he details Mr. Ramalingam's pre and post-accident difficulties with his right shoulder, his persistent pain, discomfort, recurrent instability in his right shoulder with secondary rotator cuff tendinopathy, limited range of motion and function. In Dr. Lee's opinion, Mr. Ramalingam is unable to return to his previous occupation as a janitor and will have ongoing difficulties doing any heavy work, overhead work, reaching, pushing, and pulling.
Dr. Lee details the various investigations and conservative treatment which have failed to resolve Mr. Ramalingam's persistent pain and recurrent instability. In his opinion, Mr. Ramalingam may have a possible anterior labral tear and/or superior labral anterior posterior lesion in his right shoulder as well as poor rotator cuff muscle function. The exact nature of his injury will be determined at the time of an arthroscopy. Mr. Ramalingam has agreed to undergo this procedure in the summer or fall of 2004. Dr. Lee plans to perform arthroscopic subacromial decompression, explore his rotator cuff muscles, and repair any intra-articular pathology. Dr. Lee states that the recovery period from surgery will be a minimum of six months and possibly as long as a year, depending on the findings and Mr. Ramalingam's post-surgical rehabilitation.
- In a report dated December 4, 2002, Dr. R.S. Miller, a psychologist who treated Mr. Ramalingam following the accident, diagnosed an adjustment disorder associated with his accident with mixed anxiety and depressed mood, and a GAF score of 45. Dr. Miller noted that Mr. Ramalingam's severe back and neck shoulder pain, some urinary incontinence and post-traumatic anxiety, "are significantly disabling and have reduced Mr. Ramalingam's functional level. He is not capable of completing most day to day tasks at home nor is he capable of working. He clearly continues to suffer a substantial inability to perform the essential tasks of his employment
In a report dated April 13, 2003, Dr. Miller, opines that as "a result of his chronic pain problems, significant depression and anxiety, Mr. Ramalingam is unable to function in any occupation. His pain problems, low functional level, depression and anxiety have become entrenched in his lifestlyle and are chronic. The prognosis for his being able to resume any type of employment in the future is poor."
Based on the above, I find Mr. Ramalingam has adduced evidence on this motion in relation to his physical and psychological condition, their impact on his ability to work at any occupation, and at any employment for which he is reasonably suited by education, training or experience. I find that this evidence, if unanswered and believed, would render reasonable a conclusion that he is substantially unable to perform the essential tasks of his pre-accident employment as a janitor as a result of the motor vehicle accident, and that he is completely unable to work at any employment for which he is reasonably suited by education, training or experience.
The Insurer adduced no medical evidence with respect to whether Mr. Ramalingam met the post 104-week test for entitlement. I also find that, subject to the determination of any questions of credibility and causality, the evidence renders reasonable and very probable a conclusion that Mr. Ramalingam is entitled to income replacement benefits in the post 104-week period.
I have also considered the need to avoid a possible evisceration of the arbitration process. Tribunals which routinely award interim benefits may find that many applicants abandon the process once the interim benefits have expired. I believe I addressed that concern in the Order of September 3, 2003, by granting interim benefits only from the date of the motion forward to the final order in the arbitration. Despite my finding of financial need, this Order left Mr. Ramalingam without interim income replacement benefits and interim housekeeping benefits between the date State Farm terminated benefits, and the date on which the motion for interim benefits was brought. The duration of that period was approximately nine months, with approximately $19, 000 at issue.
Mr. Ramalingam is alleging a physical and a psychological disability as a result of the motor vehicle accident. He is struggling with issues of his marriage and his obligations with respect to a young child. He has strong medical opinion evidence in his favour. In my view, no useful purpose will be served by placing him in further financial jeopardy.
In the circumstances of this case, such an order is not only for the Applicant's benefit. Alleviating Mr. Ramalingam's financial stress puts him in the best possible position to focus on issues related to his recovery, and may thereby limit State Farm's exposure to income replacement benefits.
In this context, in my view, the nine-month hiatus in interim benefits remains a sufficient financial incentive for Mr. Ramalingam to proceed with the hearing. Further, the award of interim benefits is an incentive for Mr. Ramalingam to present a strong case at the hearing to avoid being faced with an order to repay the interim benefits awarded.
For these reasons, I vary the Order of September 5, 2003, to terminate it as of January 9, 2004, and make a fresh order for weekly interim income replacement benefits in the amount of $388.42, commencing January 10, 2004, pending the final order in this matter. Although the hearing is only seven weeks away, given the number of pre-hearing resumptions and interlocutory motions which have taken place on this file, I make a fresh order which is subject to variation by both the pre-hearing arbitrator and the hearing arbitrator.
Mr. Ramalingam agrees that he has no entitlement to housekeeping and home maintenance benefits under section 22 of the Schedule after the 104-week period. That portion of the Order is varied to terminate as of January 9, 2004.
EXPENSES:
If the parties are unable to agree on the expenses of this variation application and motion, that issue may now be addressed.
June 8, 2004
Suesan Alves Arbitrator
Date
Neutral Citation: 2004 ONFSCDRS 85
FSCO A02-001646
FINANCIAL SERVICES COMMISSION OF ONTARIO
BETWEEN:
KULAVEERASINGAM RAMALINGAM
Applicant
and
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY
Insurer
ARBITRATION ORDER
Under sections 282 and 284 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:
The Order dated September 5, 2003 awarding Mr. Ramalingam interim income replacement and housekeeping benefits is terminated as of January 9, 2004, pursuant to the provisions of section 284(3) of the Insurance Act, R.S.O. 1990, c.I.8, as amended.
Subject to the further Order of the pre-hearing arbitrator and of the hearing arbitrator, State Farm Mutual Automobile Insurance Company shall pay Mr. Ramalingam interim income replacement benefits at the rate of $388.42 per week from January 10, 2004 pending the final order in this arbitration, pursuant to section 279(4.1) of the Insurance Act, R.S.O. 1990, c.I.8, as amended.
If the parties are unable to agree on expenses, that issue may now be addressed.
June 8, 2004
Suesan Alves Arbitrator
Date
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.
- Letter from A. Seife, Senior Arbitrator, dated March 22, 2004.
- Letter dated April 7, 2004.
- In seeking an adjournment into the post 104-week period, it was open to the State Farm to raise the question of how the two orders would mesh.
- Malabanan and Canadian General Insurance Company (OIC A96-00084, July 26, 1996), and in Ioannidis and Canadian General Insurance Group (OIC A97-001551, December 15, 1997)
- Malabanan and Canadian General Insurance Company (OIC A96-00084, July 26, 1996), and in loannidis and Canadian General Insurance Group (OIC A97-001551, December 15, 1997).
- They are also evidence with respect to Mr. Ramalingam's entitlement to interim benefits during the pre 104-week period.
- Dr. Wong's report is dated April 13, 2003. However, Dr. Wong notes that he last saw Mr. Ramalingam in October 2003. This together with Dr. Wong's review of reports which are as late as February 2, 2004 suggest the correct date is April 13, 2004.```