Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2005 ONFSCDRS 126 FSCO A04-001367

BETWEEN:

LOTA TUPE Applicant

and

ALLSTATE INSURANCE COMPANY OF CANADA Insurer

MOTION ON A PRELIMINARY ISSUE

Before: Joyce Miller

Heard: By telephone conference call on July 19, 2005.

Appearances: Allen J. Wynperle for Ms. Tupe Paul Yoo for Allstate Insurance Company of Canada

Issues:

The Applicant, Lota Tupe, was injured in a motor vehicle accident on May 30, 2002. She applied for and received statutory accident benefits from Allstate Insurance Company of Canada ("Allstate"), payable under the Schedule.¹ Allstate terminated weekly income replacement benefits on April 9, 2003. The parties were unable to resolve their disputes through mediation, and Ms. Tupe applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

The preliminary issue is:

1. Is Ms. Tupe precluded from proceeding to arbitration until she complies with a request by Allstate to attend an insurer examination, pursuant to section 42 of the Schedule?

Result:

1. Allstate's medical examination scheduled with Dr. Hershberg on August 8, 2005, pursuant to section 42 of the Schedule, is not reasonably necessary. The arbitration shall proceed on October 24, 25, 26 and 27, 2005.

2. If needed, the parties can speak to me on the issue of expenses within 30 days of this decision.

EVIDENCE AND ANALYSIS

Background

On June 10, 2005 at a resumption of a pre-hearing, Allstate sought a stay of the arbitration hearing scheduled for October 24, 25, 26 and 27, 2005 on the basis that Ms. Tupe had refused to attend an Insurer's Medical Examination ("IME") with Dr. R. Hershberg scheduled for August 8, 2005.

After hearing submissions from both parties the pre-hearing Arbitrator made an oral ruling on only one element of their submissions, namely that Allstate had not given proper notice to Ms. Tupe.² The parties advised³ that in addition to making this oral ruling, the Arbitrator informed Allstate that once it provided a proper notice to Ms. Tupe it can come back to have the issue of the stay reconsidered by her. Accordingly, on June 10, 2005, in compliance with the Arbitrator's direction, Counsel for Allstate, Mr. Wilson, wrote to Mr. Wynperle requesting Ms. Tupe attend an IME with Dr. Hershberg on August 8, 2005 pursuant to subsection 42(2) of the Schedule.⁴

On June 21, 2005, Allstate wrote to FSCO requesting "a further Pre-Hearing to resolve the issue of Mr. Wynperle's refusal to allow his client to attend the August 8, 2005 IME scheduled with Dr. Hershberg." On June 30, 2005, the pre-hearing Arbitrator advised that a Motion should be scheduled to deal with this issue.

A Motion was scheduled for July 19, 2005 before me. On consent of the parties, I heard the preliminary issue ab inito. By letter dated July 26, 2005, I advised the parties of my decision on the Preliminary Issue with reasons to follow.

The following are my reasons:

Submissions

Allstate's Submissions

Allstate submits that its request for an IME on August 8, 2005 is a reasonably necessary and timely request.

Allstate submits that in November 2003 Ms. Tupe underwent an assessment by her own specialist, Dr. van Reekum, a neuro-psychiatrist, who found, pursuant to the post 104-week test for weekly benefits, that Ms. Tupe suffers from a complete inability to engage in any employment as a result of the car accident.

In March 2004, on behalf of Allstate, Dr. Hershberg, a neuro-psychiatrist, conducted a paper review of the medical evidence, including Dr. van Reekum's report. In his report of March 24, 2004, Dr. Hershberg came to a different conclusion than Dr. van Reekum.

Allstate submits that on December 1, 2004 at the pre-hearing, after settlement talks had failed, Allstate advised Ms. Tupe's counsel that they were going to request that Ms. Tupe attend a medical examination with Dr. Hershberg.

On December 16, 2004, Mr. Wilson wrote to Mr. Wynperle advising him that a medical examination was scheduled with Dr. Hershberg for April 7, 2005.

Allstate submits that on February 28, 2005, Mr. Wynperle, on behalf of his client advised, without giving any reasons, that Ms. Tupe would not be attending the appointment with Dr. Hershberg.

Allstate submits that on May 19, 2005, Mr. Wilson again wrote to Mr. Wynperle that an examination was scheduled with Dr. Hershberg for August 8, 2005.

Allstate submits that Ms. Tupe had ample notice of Allstate's request for an IME. Unlike the arbitration cases of Kong and Personal Insurance Company of Canada⁵, Bishop and Aviva Canada Inc.⁶ and Eidt and Pilot Insurance Company⁷ where it was found that the lateness of the insurer's request for an IME was seen as an attempt by the insurer to bolster their case, in this instance Ms. Tupe had ample knowledge before the date of the arbitration hearing that Allstate was seeking an IME.

Allstate submits that even if its request for an IME was not in the proper form, pursuant to subsection 42(2) of the Schedule, this was merely a technicality as Ms. Tupe was fully aware in a timely fashion of its intention to request this IME since the time of the pre-hearing on December 1, 2004.

Along with the timeliness of its request, Allstate submits that its request for an IME is reasonable. One of the issues at the arbitration hearing will be whether Ms. Tupe is entitled to post 104-weekly benefits. Allstate submits that while Ms. Tupe had a physical examination with a neuro-psychiatrist, Dr. van Reekum, to deal with this issue, Allstate has not had an opportunity to have her examined by its own neuro-psychiatrist. Allstate submits that in fairness it should be entitled to have a medical examination which addresses the post 104-week test.

Allstate further submits that if Ms. Tupe attended the IME with Dr. Herschberg on August 8, 2005, Dr. van Reekum would have ample time to respond to any of Dr. Hershberg's conclusions before the October 24, 2005 arbitration hearing.

Ms. Tupe's Submissions

Ms. Tupe submits that Allstate's request for an IME is neither reasonable nor timely.

Ms. Tupe submits that Allstate has already had a number of assessments in its favour. In a section 42 multi-disciplinary assessment report dated October 30, 2003, Dr. Paitich, an orthopaedic surgeon, and Dr. Koepfler, a psychologist, both found that Ms. Tupe was not substantially disabled from performing her pre-accident occupation, housekeeping or activities of daily living.

Similarly, in a DAC assessment report, Dr. Sawa, a neurologist, Dr. Clements, an orthopaedic surgeon, Dr. Prendergast, a psychologist, and the results of a Functional Abilities Examination, concluded that Ms. Tupe was not substantially disabled from performing her pre-accident job.

As well, a DAC assessment on attendant care, conducted by an occupational therapist, Ms. Kennedy, concluded on June 20, 2003 that "Ms. Tupe did not demonstrate any functional impairments related to the injuries she sustained as a direct result of the accident with regards to the activities listed on Form 1."

Accordingly, Ms. Tupe submits the post 104-week test would not be applicable as it is a more stringent test than the pre 104-week test.

Ms. Tupe further submits that after she was assessed by Dr. van Reekum, who found that she suffers from a complete inability to engage in any employment as a result of the car accident, Allstate could have requested a section 42 IME with Dr. Hershberg to deal with the post 104-week test. Instead, it chose to have Dr. Hershberg conduct a paper review of her medical file.

Ms. Tupe pointed out that Dr. Hershberg, in his report, concluded that Ms. Tupe's condition is a psychiatric condition which predates the accident. His report notes that several months prior to the accident Ms. Tupe suffered some exacerbation of her pre-existing schizophrenic condition probably as a result of non-compliance with her pre-accident drug treatment. Ms. Tupe submits it would be unfair to have her assessed by Dr. Hershberg so that he can confirm his already pre-conceived conclusion.

Ms. Tupe submits that to now request a physical examination with Dr. Hershberg is too late. Ms. Tupe submits that the only proper notice that was given to her to attend an IME was on June 10, 2005, a year and a half after Dr. van Reekum's report and over one year after the post 104-week test came into play.

Ms. Tupe submits that if she now attended the assessment with Dr. Hershberg in August there would not be sufficient time for her to get her own assessment to respond to Dr. Hershberg's report before the October 24, 2005 arbitration date. There is no guarantee as to when Dr. Hershberg's report would be ready and whether an appointment with Dr. van Reekum or any other specialist could be made on short notice.

THE LAW:

Section 42 of the Schedule provides the following:

(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.

(4) The insurer shall make reasonable efforts to schedule the examination for a time that is convenient for the insured person and shall provide the insured person with reasonable notice of the examination.

(5) For the purpose of the examination,

(a) the insured person shall provide the person or persons who conduct the examination with such information as is reasonably necessary; and

(b) the insured person shall submit to any reasonable physical, psychological, mental and functional examinations requested by the person or persons who conduct the examination.

(6) The person or persons who conduct the examination shall prepare a report and provide a copy of the report to the insurer.

(7) An insurer that receives a report under subsection (6) shall provide the insured person with a copy of the report within seven days.

(8) If an insured person fails or refuses to submit to an examination required by the insurer under this section or fails to comply with subsection (5),

(a) the insurer may stop payment of the benefit related to the examination until the person submits to the examination or complies with subsection (5), after which time the insurer shall resume payment of the benefit; and

(b) no benefit is payable for the period after the giving of the notice under subsection (1) or the failure to comply with subsection (5) and before the insured person submits to the examination and complies with subsection (5).

Section 50 provides the following:

An insured person shall not commence a mediation proceeding under section 280 of the Insurance Act unless,

(a) he or she notified the insurer of the circumstances giving rise to a claim for a benefit and submitted an application for the benefit within the times prescribed by this Part;

(b) he or she made himself or herself reasonably available for any examination required by the insurer under section 42; and

(c) he or she made himself or herself reasonably available for any assessment under section 43 and he or she complied with subsection 43 (2) in respect of the assessment.

ANALYSIS AND FINDINGS:

In the case of Eidt and Pilot Insurance Company⁸ Arbitrator Killoran stated: "It is well established that the onus is on the insurer to prove that insurer's medical examinations are reasonably necessary." For the following reasons I find that Allstate has not met this onus. I find that it is more likely than not that Allstate's purpose in requesting an IME with Dr. Hershberg was not to adjust its file but to bolster its case.

The case of Bogic and AXA Insurance (Canada)⁹, which outlines the test to determine whether an insurer's examination was reasonable and necessary, states that:

The closer a request is made to a hearing, the closer the scrutiny of its reasonableness to ensure that there is not avoidable delay or that the insured's preparation for hearing is not prejudiced. The speed and informality of the dispute resolution process do not allow for the insurer to investigate the Applicant's claim indefinitely.

Allstate argues that although it may not have applied the proper procedure in this case, Ms. Tupe had ample notice of its intention to request a section 42 IME pursuant to its letters dated December 16, 2004 and May 19, 2005 and accordingly, its request was timely and reasonable. I disagree. If one examines the two letters sent to Ms. Tupe prior to the June 10, 2005 request for a section 42 IME, it is obvious that Allstate was not requesting a section 42 IME but a "defence medical" to bolster its claim.

Allstate's letter, dated December 16, 2004, states as follows:

My client's offer to settle expired yesterday and I did not hear from you. I have therefore arranged for a defence medical with Dr. Richard Ian Hershberg, psychiatrist, on April 7, 2005 at 1:30 p.m. Dr. Hershberg will be conducting this medical examination at his office located at 208 St. Clair Avenue West, Suite 7 (2nd floor waiting area), in Toronto. The duration of the appointment will be approximately 2½ to 3 hours. [emphasis added]

Kindly confirm your client's attendance.

Allstate's second letter, dated May 19, 2005, states:

This is to confirm we have arranged a defence medical for your client at the office of Dr. Hershberg on Monday August 8, 2005 at 10:00 a.m. His office is located at:

Please confirm your client's anticipated attendance on that day.

[emphasis added]

In my view, it was reasonable for Ms. Tupe to conclude from these letters, which did not adhere to the requirements of subsection 42(2) of the Schedule, that it was not the intention of Allstate to set up an appointment with Dr. Hershberg, pursuant to section 42 of the Schedule, to adjust her claim, but rather it was a request by Allstate for a "defence medical" to bolster its case, once the settlement talks did not succeed.

Accordingly, I find that Allstate's request for an Insurer's Medical Examination based on these two letters was not reasonable and it was reasonable for Ms. Tupe to refuse to attend the "defence medical."

Regarding Allstate's request for a section 42 IME on June 10, 2005, which Ms. Tupe concedes complies with subsection 42(2), I do not find this request was either timely or reasonable.

I agree with Ms. Tupe's submissions that the June 10, 2005 request is too late and would prejudice her ability to prepare for the hearing in a timely fashion. I agree with Ms. Tupe that she would need an opportunity to respond to Dr. Hershberg's report and that this would take time as there was no guarantee as to when Dr. Hershberg's report would be available and whether she would be able to set up an appointment with Dr. van Reekum or another assessor in a timely fashion.

I also agree with Ms. Tupe's submissions that Allstate had numerous medical reports to support its defence that Ms. Tupe was not substantially disabled from performing her pre-accident employment which is a less stringent test than the post 104-week test.

The facts show that by March 28, 2004, as a result of a multi-disciplinary assessment and two DAC assessments, Allstate had reports from two orthopaedic surgeons, two psychologists, a neurologist, an FAE, and an occupational therapist assessment that Ms. Tupe was not substantially disabled from performing her pre-accident occupation, housekeeping or activities of daily living.

The facts also show that Allstate had ample time to request a post 104-week assessment after it received Dr. van Reekum's report in November 2003. Instead of requesting an IME, pursuant to section 42, Allstate chose to have Dr. Hershberg conduct a paper review of Ms. Tupe's claim that she suffers from a complete inability to engage in any employment.

Although Allstate's position is that it does not have a post 104-week assessment and it should be entitled to have an assessment with Dr. Hershberg, I agree with Ms. Tupe's submission that it would be unreasonable to have her assessed by Dr. Hershberg when he has already concluded that her injuries are not accident related.

Succinctly, I find that it is more likely than not that Allstate's request for an assessment with Dr. Hershberg is not to adjust Ms. Tupe's claim, but to confirm a conclusion it already has.

Accordingly, I find that Allstate's request of a section 42 IME with Dr. Hershberg on August 8, 2005 is not reasonably necessary in the circumstances of this case. The arbitration shall proceed on October 24, 25, 26 and 27, 2005.

EXPENSES:

If needed, the parties can speak to me on the issue of expenses within 30 days of this decision.

September 9, 2005

Joyce Miller Arbitrator

Date

Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2005 ONFSCDRS 126 FSCO A04-001367

BETWEEN:

LOTA TUPE 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:

1. Allstate's medical examination scheduled with Dr. Hershberg on August 8, 2005, pursuant to section 42 of the Schedule, is not reasonably necessary. The arbitration shall proceed on October 24, 25, 26 and 27, 2005.

2. If needed, the parties can speak to me on the issue of expenses within 30 days of this decision.

September 9, 2005

Joyce Miller Arbitrator

Date

Footnotes

1. 1The Statutory Accident Benefits Schedule —Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended.
2. 2In a letter, dated June 30, 2005, the Arbitrator confirmed her ruling. She stated "As a mandatory prerequisite, subsection 42(2) of the Schedule states that the notice shall state the benefit to which the examination relates. I find that Allstate did not do this in this case. Accordingly, I am not prepared to order that the arbitration be stayed."
3. 3I was advised of this at the Motion hearing on July 19, 2005.
4. 4At the Motion hearing on July 19, 2005, Mr. Wynperle conceded that the letter of June 10, 2005 from Allstate had complied with the requirements of subsection 42(2) of the Schedule.
5. 5(FSCO A04-001188, March 15, 2005)
6. 6(FSCO A04-000230, March 3, 2005)
7. 7(FSCO A04-001277, February 11, 2005)
8. 8(FSCO A04-001277, February 11, 2005)
9. 9(FSCO A96-001192, April 30, 1999)