Neutral Citation: 2005 ONFSCDRS 74

FSCO A04-000594

BETWEEN:

ROSA DICERBO

Applicant

and

CITADEL GENERAL ASSURANCE COMPANY

Insurer

Before:

William J. Renahan

Heard:

January 24 and 25, 2005, at the offices of the Financial Services Commission of Ontario in Toronto.

Written submissions were received up to March 29, 2005.

Appearances:

Derek L. Smith for Mrs. Dicerbo

Jonathan B. Schrieder for Citadel General Assurance Company

The Applicant, Rosa Dicerbo, was injured in a motor vehicle accident on January 15, 2000. She applied for and received statutory accident benefits from Citadel General Assurance Company ("The Citadel"), payable under the Schedule.¹ The Citadel terminated weekly income replacement benefits on November 14, 2002. The parties were unable to resolve their disputes through mediation, and Mrs. Dicerbo 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 Mrs. Dicerbo entitled to income replacement benefits pursuant to section 4 of the Schedule after November 14, 2002?
Is Mrs. Dicerbo entitled to attendant care benefits pursuant to section 16 of the Schedule from January 15, 2000 to January 15, 2002 for services provided by her husband, Pat Dicerbo, and if so, in what amount?
Is Mrs. Dicerbo entitled to housekeeping benefits pursuant to section 22 of the Schedule from January 15, 2000 to January 15, 2002 for services provided by various family members, and if so, in what amount?
Is The Citadel entitled to a repayment of income replacement benefits pursuant to section 47 of the Schedule?
Is Mrs. Dicerbo entitled to a special award pursuant to section 282(10) of the Insurance Act?
Is either party entitled to expenses of the hearing pursuant to section 282(11) of the Insurance Act?
Is Mrs. Dicerbo entitled to interest pursuant to section 46 of the Schedule?

Mrs. Dicerbo is entitled to income replacement benefits from November 14, 2002, subject to any right to repayment which The Citadel may have as described in these reasons.
Mrs. Dicerbo is not entitled to attendant care benefits.
Mrs. Dicerbo is entitled to housekeeping benefits for services provided by her sister, Carmella Friello, in the amount of $4,160.
Mrs. Dicerbo is entitled to a special award of $1.
Each party shall bear its own expenses of the arbitration proceeding.
Mrs. Dicerbo is entitled to interest pursuant to section 46 of the Schedule, as described in these reasons.

Overview

The Schedule provides rules and a process parties should follow when an insurer wishes to terminate weekly benefits. Independent assessments by Designated Assessment Centres (DACs) are part of that process. The week before the hearing of this case, the parties discovered that The Citadel terminated weekly income benefits on the basis of a report from a DAC which was not authorized to express an opinion on Mrs. Dicerbo's disability. I must first determine the consequences of that mistake.

The Schedule also provides rules and time lines parties should follow when making claims. Mrs. Dicerbo did not submit claims for attendant care and housekeeping expenses until nearly three years after the accident. The week before the hearing, she advised The Citadel that she was seeking a special award on the grounds that The Citadel did not advise her of the procedure for claiming these benefits when The Citadel knew that she was receiving attendant care and housekeeping services. I must also determine whether these rules were followed and the consequences.

Background

On January 15, 2000, Mrs. Dicerbo was stopped in her vehicle, waiting to make a turn at an intersection, when her vehicle was struck from behind. She drove home and two days after the accident saw her family doctor.

Mrs. Dicerbo is 51 years old now and claims that she was disabled as a result of the accident. She has complained of pain in many parts of her body. However, her major complaints are variously described as shoulder pain, headaches and cardiac problems leading to chest pain, difficulty breathing and an irregular heart beat.

The reports of pain are inconsistent and not clear. For example, Mrs. Dicerbo testified that she has headaches every day which she deals with by sitting on the couch in the dark. Mr. Dicerbo testified that Mrs. Dicerbo has headaches which knock her out and require that she stay on the couch about once a week or twice a month.

With respect to her heart complaints, Mrs. Dicerbo has undergone a stress test, echocardiogram and coronary angiogram, all of which were normal. Her cardiologist has prescribed a low dose beta blocker to treat an irregular heart beat.

In 2003, Mrs. Dicerbo's family doctor, Dr. Glatt, reported that Mrs. Dicerbo did not have any permanent organic damage related to this accident. Mrs. Dicerbo's husband has a significant heart condition which Mrs. Dicerbo worries about. Dr. Glatt thought that many of Mrs. Dicerbo's symptoms were related to anxiety.

Mrs. Dicerbo has a grade eight education. She is more comfortable communicating in her first language, which is Italian. For most of her working life, Mrs. Dicerbo has worked in the family business, with time off to raise four sons. Mr. Dicerbo owns and operates a tool and die business with 53 or 54 employees. He mostly makes parts for fork lift trucks. Three of their sons also work in the business. Mr. Dicerbo described Mrs. Dicerbo as a partner. She came to the shop every morning with him and did clerical duties. She left between 1 and 5 in the afternoon. Mr. Dicerbo has hired someone to replace his wife's clerical duties. He paid his wife $500 per week and the parties agree that the amount of the income replacement benefit is $400 per week.

The Citadel first terminated weekly income benefits in 2001. Mrs. Dicerbo elected a disability DAC which found that she was psychologically disabled from returning to work. The psychologist, Dr. David Prendergast, found that Mrs. Dicerbo was not psychologically minded and that it was Mrs. Dicerbo's belief that she was disabled by pain which prevented her from returning to work. By way of example, he noted that Mrs. Dicerbo had recently returned to driving. Although nothing had changed for her physically, she had decided, at a psychological level, that she no longer wished to remain dysfunctional in terms of her driving. He noted:

As such, while the accident in and of itself was not particularly significant, it may well have represented the final straw for a woman who was already experiencing a significant loss of control, even if was not manifesting itself directly, a loss of control due to her anxieties about her husband.

The test for eligibility for income replacement benefits for the first 104 weeks after the accident is whether the insured suffers a substantial inability to perform the essential tasks of her employment at the time of the accident. After 104 weeks, the test changes and is more difficult to satisfy. It is whether the insured suffers a complete inability to engage in suitable employment. The Citadel advised Mrs. Dicerbo on February 28, 2002 that it was arranging a disability assessment at a DAC to determine whether she met the post-104 week test.

Procedure for terminating weekly benefits

The Citadel did not comply with the procedures for terminating income replacement benefits in this case.

The Citadel did not comply with section 37 of the Schedule which requires the insurer to give the insured notice of termination, with reasons and with notice that the insured has the right to require an assessment at a DAC. Instead of giving a notice of termination, The Citadel informed Mrs. Dicerbo that it was arranging a post-104 week DAC.

The Citadel arranged an assessment at a DAC which was authorized to conduct post-104 week disability assessments, however, that DAC advised The Citadel that it was in a conflict because one of its assessors had seen Mrs. Dicerbo before. Mrs. Dicerbo's counsel was not willing to waive the conflict and The Citadel arranged another assessment at the next closest DAC, Kingsway Health and Rehabilitation Associates ("Kingsway Rehab").

DACs are appointed under section 52 of the Schedule which provides:

The committee appointed under section 7 of the Insurance Act shall,

(a) designate assessment centres for the purpose of this Regulation;

(b) specify the types of impairments that each designated assessment centre is authorized to assess; and

At the time of the assessment, section 53 stipulated the place for the assessment as follows:

(1) An assessment shall be conducted by the designated assessment centre nearest to the insured person's residence that,

(a) is authorized to assess impairments of the type sustained by the insured person; and

(b) is authorized to conduct the type of assessment that is required.

The website of the Financial Services Commission, www.fsco.gov.on.ca, lists the assessment centres in regional locations. The listing indicates what types of assessment each DAC is authorized to conduct and what types of impairment each DAC is authorized to assess.

Kingsway Rehab is not authorized to assess disability where the post-104 week test applies. The Citadel sent a referral form to Kingsway Rehab to perform an assessment. The form contained boxes to check for either a pre- or post-104 week assessment. Neither box was checked. Kingsway Rehab conducted an assessment and concluded that Mrs. Dicerbo was not substantially disabled from returning to her pre-accident work.

It is clear from Kingsway Rehab's report in October 2002 that it improperly applied the pre-104 week test, rather than the post-104 week test. Neither party raised this error until the week before the hearing, more than two years after the assessment, when Mr. Smith wrote to Mr. Schrieder.

What are the consequences of The Citadel stopping income replacement benefits on the basis of the opinion of a DAC which applied the wrong test and which was not authorized to assess for the correct test?

The Schedule gives the DAC an important role in the resolution of disputes where the parties disagree about disability.

In M.D. and Halifax Insurance Company², Director Draper wrote:

Although the process is somewhat different for medical and rehabilitation benefits, the DAC plays essentially the same role — it provides an impartial assessment where the parties are unable to agree on the insured person's entitlement to accident benefits. If the insurer decides that the medical or rehabilitation benefits claimed by the insured person are not payable, it must notify the insured person of its decision and arrange for a DAC assessment. In other words, the insurer must arrange an independent review of its decision.

The DAC report is not just another opinion. Although either party can challenge it through the dispute resolution system, the DAC's conclusion governs the payment of benefits in the meantime.

As stated in M.D. and Halifax, the DACs play a "pivotal role" in dispute resolution. "Their function is to take the dispute out of the back-and-forth of competing partisan reports by providing an impartial assessment."

The legislation is clear that the opinion of the DAC resolves the issue pending a decision of an arbitrator or the court.³

Among other things, The Citadel argues that it does not matter that Mrs. Dicerbo was assessed at a DAC which was not authorized to conduct the assessment and which employed the wrong test because, if Mrs. Dicerbo could not satisfy the pre-104 week disability, she could not satisfy the harder post-104 week test.

I do not agree. The fact that one DAC came to one conclusion does not mean that another DAC would come to the same conclusion. In several decisions, arbitrators have disagreed with a DAC's opinion on disability. Similarly, in several appeal decisions, Director's Delegates have said that another arbitrator might have come to a different conclusion on disability. Although each decision maker strives to make the right decision on disability, there is no guarantee that another decision maker would come to the same conclusion.

The procedure an insurer must follow to terminate income replacement benefits is set out in section 37 of the Schedule. At the time of the purported termination in this case, section 37 read as follows:

(1) If the insurer determines that a person is not entitled or is no longer entitled to receive an income replacement, non-earner or caregiver benefit, the insurer shall give the person notice of its determination, with reasons,

(a) within 14 days after receiving an application for the benefit; or (b) if the insurer has been paying the benefit to the person, no later than the date the next payment of the benefit is due.

(2) If notice is given under clause (1) (b), the insurer shall specify in the notice a date for stopping the benefit and the insurer may stop payment of the benefit in accordance with the notice.

(3) If notice is given under clause (1) (b) for the reason that the person no longer suffers from the disability in respect of which the benefit was paid,

(a) the date specified under subsection (2) shall be at least 14 days after the person receives the notice;

(b) the notice under clause (1) (b) shall inform the person that he or she has the right to require an assessment in accordance with section 43 by giving the insurer written notice before the date specified under subsection (2); and

(c) despite subsection (2), the insurer shall not stop payment of the benefit if, within 14 days after receiving the notice under clause (1) (b), the person gives the insurer written notice that he or she requires an assessment in accordance with section 43.

(4) If the person gives the insurer written notice under clause (3) (c) that he or she requires an assessment and the report from the designated assessment centre states that the person no longer suffers from the disability in respect of which the benefit was paid, the insurer may stop paying the benefit after it has provided the person with notice of its reasons for stopping payment.

(5) If the person gives the insurer written notice under clause (3) (c) that he or she requires an assessment and the report from the designated assessment centre states that the person continues to suffer from the disability in respect of which the benefit is paid, the insurer may dispute the obligation to pay the benefit in accordance with sections 279 to 283 of the Insurance Act, and, pending the resolution of the dispute, the insurer shall pay the benefit.

(6) Nothing in this section prevents a person from disputing a stoppage in the payment of a benefit in accordance with sections 279 to 283 of the Insurance Act and section 50 of this Regulation and, if it is finally determined that payment of the benefit should not have been stopped, the insurer shall,

(a) resume payment of the benefit; and

(b) pay any amounts under the benefit that were not paid.

Since physical and psychological assessments are invasive, it is my opinion that the legislated right to perform them should be strictly construed and applied.

The insurer can only stop paying income replacement benefits by following the steps in section 37. The Citadel did not comply with sections 37(1)(b), 37(2), 37(3)(a) and (b) and 37(4). The Citadel's biggest mistake was sending Mrs. Dicerbo to a DAC which was not authorized to conduct the appropriate assessment. Therefore, The Citadel has not complied with section 53(1)(b). The Citadel did not comply with section 37 and is not entitled to stop income replacement benefits until it does comply. Therefore, I find that Mrs. Dicerbo is entitled to income replacement benefits until The Citadel complies with section 37.

The weekly income benefits outstanding, without interest, amounts to more than $90,000. If it is finally determined that Mrs. Dicerbo is no longer entitled to income replacement benefits, it might appear that The Citadel has suffered significant prejudice as a result of Mr. Smith not raising this issue until nearly three years after the termination. However, The Citadel received the Kingsway Rehab report at the same time Mr. Smith received it, and it is clear that each of the assessors employed the wrong test. A simple investigation by The Citadel at that time would have revealed that Kingsway Rehab was not authorized to conduct the post-104 week assessment.

Normally, where I make a determination on the law which resolves the issue, I go on to consider the facts for the sake of completeness and in the event I am overruled on the legal determination. However, in this case I will not consider whether Mrs. Dicerbo is completely disabled from engaging in any suitable employment. The DAC assessment is part of the process of dispute resolution, and for me to render an opinion on disability before an authorized DAC renders an opinion subverts the process. As well, an assessment at an authorized DAC may resolve the parties' dispute.

This decision does not mean that Mrs. Dicerbo may not ultimately have to repay these benefits.

In Henry and Allstate Insurance Company of Canada⁴, Director Draper, dealing with the termination provisions under the previous Schedule, wrote:

...section 64 deals with process, not entitlement. It protects the flow of benefits by controlling the insurer's right to cancel them. Benefits must be paid pending the DAC assessment even though the insurer claims the person is no longer entitled. This obligation to pay, however, does not create an entitlement that is immune from later challenge....the legislation was not intended to give insured persons an automatic right to extend their entitlement by requesting a DAC assessment, regardless of the merits of their claim.

If the parties are unable to resolve this issue following compliance with section 37, I remain seized of the issue.

If Mrs. Dicerbo elects a DAC, I will consider the DAC report in any submissions. If Mrs. Dicerbo does not elect a DAC, I will make a decision on the basis of the evidence I heard.

Notice and Application for Attendant Care and Housekeeping Benefits

Mrs. Dicerbo submitted a claim for attendant care and housekeeping benefits to The Citadel on December 9, 2002, nearly three years after the accident. The Citadel argued that the claims were out of time. Mrs. Dicerbo argued that The Citadel did not comply with its duty to provide her with information on the procedure for claiming attendant care and housekeeping benefits when it knew that she was receiving those services. The relevant procedure for claiming these benefits is set out in section 32 of the Schedule:

(1) A person who wants to apply for a benefit under this Regulation shall notify the insurer within 30 days after the circumstances arose that gave rise to the entitlement to the benefit, or as soon as practicable thereafter.

(2) The insurer shall promptly provide the person with,

(a) the appropriate application forms;

(b) a written explanation of the benefits available under this Regulation;

(d) information on any possible elections relating to income replacement, non-earner and caregiver benefits.

(3) The person shall submit an application for the benefit to the insurer within 30 days after receiving the application forms.

An in-home assessment, which The Citadel arranged two weeks following the accident, as well as the reports of different service providers, reported that Mrs. Dicerbo was receiving attendant care and housekeeping services. I find sufficient information that The Citadel was aware of the circumstances that might give rise to claims for attendant care and housekeeping benefits within 30 days of the accident as required by section 32(1). It was therefore obliged, pursuant to section 32(2)(c) of the Schedule, to provide Mrs. Dicerbo with information to assist her in applying for these benefits.

On January 17, 2000, The Citadel mailed to Mrs. Dicerbo an application for accident benefits and "brochures describing coverage available." These brochures were not made exhibits, even though Mr. Smith had identified failure to advise Mrs. Dicerbo of her entitlements as an issue before the hearing. On January 21, 2000, Mrs. Dicerbo completed a "disability interview" for The Citadel and to the question "Do you anticipate the need for help due to the injuries sustained in your motor vehicle accident?" she replied "not sure now." She also acknowledged receipt of an "Accident Benefits Application Package" and Statutory Accident Benefits Schedule.

Given the consumer protection nature of accident benefits,⁵ I do not find that giving Mrs. Dicerbo a copy of the Schedule, the details of which may "overwhelm" a layperson, and the interpretation of which is often the subject of arbitration or litigation, satisfies The Citadel's obligation to provide Mrs. Dicerbo with "information to assist the person in applying for benefits." As well, without having the "brochures describing coverage available" in evidence, I cannot find that these brochures satisfied The Citadel's obligation to inform. I heard no other reliable evidence concerning information The Citadel gave Mrs. Dicerbo to assist her in applying for benefits.

Accordingly, I find that Mrs. Dicerbo's lack of knowledge concerning her entitlements is a reasonable explanation for her failure to comply with the time limits in section 32.

Entitlement to attendant care

Under section 16(2) of the Schedule, The Citadel is obliged to pay for all reasonable and necessary expenses incurred by or on behalf of the insured person as a result of the accident for services provided by an aide or attendant.

Mrs. Dicerbo claims $9,360 for services which her husband provided over two years.

Mrs. Dicerbo testified that her husband helped her with showering and washing for over six months. Mr. Dicerbo testified that his wife required assistance with bathing for the first few months and that the assistance was mostly provided by her sister and his mother. Under cross-examination Mr. Dicerbo said that the last time he helped his wife with showering or dressing was Friday or Saturday.

An in-home assessment by the Insurer, two weeks after the accident, noted that the husband was assisting with showering. About three months after the accident, three assessors at a medical and rehabilitation DAC noted that Mrs. Dicerbo was independent in self-care.

This is the most cogent evidence I received on what care Mrs. Dicerbo needed and who provided it. It is contradictory, unclear and not persuasive. I find that Mrs. Dicerbo is not entitled to attendant care benefits.

Entitlement to and amount of housekeeping expenses

Under section 22 of the Schedule, the insurer shall pay for reasonable and necessary housekeeping and home maintenance expenses incurred by the insured as a result of the accident if the insured sustains an impairment that results in a substantial inability to perform the housekeeping and home maintenance services she normally performed before the accident.

Mrs. Dicerbo testified that she did all the housekeeping before the accident. The house had four bedrooms, five bathrooms and two kitchens. She did not say how much time she spent on housekeeping before the accident. She claims the maximum benefit of $100 per week for 104 weeks.

Mr. Dicerbo testified that he paid Mrs. Dicerbo's sister, Carmella Friello, $150 to $200 per week. Mr. Dicerbo's mother lived next door and she also helped with housekeeping, but Mr. Dicerbo never paid her.

Mrs. Dicerbo testified that her sister came two or three times a week and that now she comes once a week and that her husband paid her $100 per week. The medical rehabilitation DAC in May 2000 reported that a cleaning lady came three times a week for two hours each time. In June 2001, Dr. Urovitz as part of a disability DAC reported that Mrs. Dicerbo said she could do limited housework but that her sister did the heavier aspects.

I did not receive much expert evidence on Mrs. Dicerbo's ability to do housework. Most of the documentary evidence refers to her sister doing housework two or three times a week for two hours each time. Now, according to Mrs. Dicerbo, Ms. Friello comes once a week.

I find it likely that Ms. Friello helped Mrs. Dicerbo with housework two or three times a week for two hours each time, gradually decreasing to once a week. On average this is approximately four hours a week for 104 weeks from January 15, 2000 to January 15, 2002. I allow $10 per hour, or $4,160 for housekeeping.

Interest

Under sections 35 and 46(1), a weekly income replacement benefit is overdue if the insurer fails to pay the benefit within 14 days after receiving the application. I have found that the weekly income replacement benefits in this case were overdue starting with the payment due November 28, 2002. Under section 46(2), Mrs. Dicerbo is entitled to interest on these overdue payments from the date the amount became overdue at the rate of 2 per cent per month compounded monthly.

Under section 41(1), the insurer shall pay housekeeping expenses within 30 days after receiving the application. In this case, Mr. Smith submitted the claim for housekeeping expenses on December 9, 2002. Under section 46(2), Mrs. Dicerbo is entitled to interest on $4,160 from February 15, 2002 at the rate of 2 per cent per month compounded monthly.

Mr. Smith's written submissions were due January 31, 2005. Under cover of his letter dated March 15, 2005, I received Mr. Smith's submissions on March 23, 2005. Mrs. Dicerbo is not entitled to interest for the period January 31, 2005 to March 23, 2005.

Special Award

Under section 282(10) of the Insurance Act, I am required to make a special award where I find that the insurer has unreasonably withheld or delayed payments. I find that The Citadel's decision to terminate income replacement benefits on the basis of a DAC which was not authorized to assess the disability and on the basis of a DAC assessment which clearly employed the wrong test was unreasonable and was its most blameworthy conduct. In this case, Mrs. Dicerbo suffered little harm and The Citadel received no benefit. As well, since the issue was not raised until the week before the hearing, The Citadel had no time to rectify the mistake. I assess a nominal special award of $1.

Application to reopen hearing

Mr. Smith applied to reopen the hearing to adduce further documentary evidence. Mr. Schrieder objected. This evidence is correspondence from Kingsway Rehab with respect to what information The Citadel gave to Kingsway Rehab regarding the assessment and why a pre-104 week assessment was performed. I heard no submission that this evidence was not reasonably available before the hearing. The fact that Kingsway Rehab applied the wrong test was evident more than two years ago. If Mr. Smith had investigated that fact at the time, he would have had the evidence he now seeks to introduce two years ago. I have no information as to why Mr. Smith did not raise the issue of Kingsway Rehab's authority until the week before the hearing and I find no valid reason to reopen this hearing.

Expenses

The criteria for awarding expenses of the arbitration proceeding are set out in Ontario Regulation 664, as amended. The parties would have avoided the main issue in this hearing if they had recognized Kingsway Rehab was not authorized to conduct a post-104 week disability assessment when that information was reasonably available more than two years ago. If the parties had addressed the issue then, The Citadel could have offered Mrs. Dicerbo an assessment at an authorized post-104 week disability DAC. If The Citadel now offers such a DAC assessment, the parties will either resolve the issue or arbitrate or litigate the issue of entitlement to income replacement benefits again. I find that this proceeding was largely unnecessary and that both parties are equally at fault. Therefore, each will bear their own expenses of the arbitration proceeding.

May 30, 2005

William J. Renahan Arbitrator

Date