Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2006 ONFSCDRS 111

FSCO A04-001781

BETWEEN:

MAURO TARANTINO

Applicant

and

AVIVA CANADA INC.

Insurer

REASONS FOR DECISION

Before:

Denise Ashby

Heard:

August 22, 23 and 24, 2005, at the offices of the Financial Services Commission of Ontario in Toronto.

Written submissions were concluded December 9, 2005

Appearances:

David Derfel for Mr. Tarantino

James M. Brown for Aviva Canada Inc.

Issues:

The Applicant, Mauro Tarantino, was injured in a motor vehicle accident on December 2, 2002. He applied for and received statutory accident benefits from Aviva Canada Inc. ("Aviva"), payable under the Schedule.¹ Aviva terminated benefits. The parties were unable to resolve their disputes through mediation, and Mr. Tarantino 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:

1. Is Mr. Tarantino entitled to receive a weekly income replacement benefit from August 29, 2003 to December 2, 2004, pursuant to section 4 of the Schedule?

2. Is Mr. Tarantino entitled to receive a weekly income replacement benefit from December 3, 2004 and ongoing, pursuant to subsection 5(b) of the Schedule?

3. What is the amount of weekly income replacement benefit that Mr. Tarantino is entitled to receive, pursuant to section 6 of the Schedule?

4. Is Mr. Tarantino entitled to payments for housekeeping and home maintenance services pursuant to section 22 of the Schedule?

5. Is Mr. Tarantino entitled to payments for the cost of examinations pursuant to section 24 of the Schedule?

6. Is Mr. Tarantino entitled to a special award pursuant to subsection 282(10) of the Insurance Act?

7. Is Aviva liable to pay Mr. Tarantino's expenses in respect of the arbitration pursuant to section 282(11) of the Insurance Act?

8. Is Mr. Tarantino liable to pay Aviva's expenses in respect of the arbitration pursuant to section 282(11) of the Insurance Act?

9. Is Mr. Tarantino entitled to interest for the overdue payment of benefits pursuant to section 46(2) of the Schedule?

Result:

1. Mr. Tarantino is entitled to receive a weekly income replacement benefit from August 30, 2003 to December 2, 2004, pursuant to section 4 of the Schedule.

2. Mr. Tarantino is not entitled to receive a weekly income replacement benefit from December 2, 2004 and ongoing, pursuant to subsection 5(b) of the Schedule.

3. Mr. Tarantino is entitled to receive a weekly income replacement benefit at the rate of $121.87 for the period August 30, 2003 to December 31, 2003 and thereafter to December 2, 2004 at the rate of $107.73 pursuant to section 6 of the Schedule.

4. Mr. Tarantino is entitled to payments for housekeeping and home maintenance services at the hourly rate of $10.00 as follows: 2 hours 45 minutes weekly for the period from December 2, 2002 to June 11, 2003 and 1 hour weekly for the period June 12, 2003 to December 2, 2004, pursuant to section 22 of the Schedule.

5. Mr. Tarantino is entitled to a payment of $956.37 for the cost of an examination pursuant to section 24 of the Schedule.

6. Mr. Tarantino is entitled to a special award fixed at $2,000.00 inclusive of interest pursuant to subsection 282(10) of the Insurance Act.

7. Aviva is liable to pay Mr. Tarantino's expenses in respect of the arbitration pursuant to subsection 282(11) of the Insurance Act.

8. Mr. Tarantino is not liable to pay Aviva's expenses in respect of the arbitration pursuant to subsection 282(11) of the Insurance Act?

9. Mr. Tarantino is entitled to interest for the overdue payments as follows:

(a) In respect of the weekly income replacement benefit from August 30, 2003 and ongoing.

(b) In respect of the housekeeping and home maintenance benefits for the benefit period from December 2, 2002 to June 11, 2003 commencing 30 days following receipt of Ms Levy's report dated January 28, 2003.

(c) In respect of the examination expense, interest is payable from 30 days following receipt of Dr. Orenstein-Frankel's invoice.

(d) In respect of the special award, interest has been included in the fixed award,

pursuant to subsection 46(2) of the Schedule.

BACKGROUND:

On December 2, 2002, Mr. Tarantino was exiting from Highway 401 onto the ramp at Highway 400 when his car was struck by a portion of the highway's guardrail. Mr. Tarantino testified that although he felt dizzy and experienced pain in his neck, back and shoulders shortly after the impact, he declined to go, by ambulance, from the accident scene to hospital. However, later that evening, as a result of increased pain, he did attend at a hospital only to leave without treatment due to the lengthy wait.

Mr. Tarantino claims that as a consequence of the accident he suffers an impairment which both substantially prevented him from carrying on the essential tasks of his employment, and renders him completely unable to engage in any employment for which he is reasonably suited by education, training or experience. Further, Mr. Tarantino submits that Aviva failed to comply with the requirements of the Schedule in terminating his income replacement benefits. As well, Mr. Tarantino submits that he is substantially unable to complete the housekeeping and home maintenance duties he engaged in pre-accident. He claims that the in-home assessment conducted on his behalf should be paid. Mr. Tarantino submits that Aviva’s conduct of his claim was such as to require that a special award be levied against Aviva.

Aviva submits that it properly terminated Mr. Tarantino’s benefits because he no longer met the Schedule’s substantial inability test for both the income replacement benefit and the housekeeping and home maintenance benefit. Aviva disputes that Mr. Tarantino is completely unable to engage in any employment for which he is reasonably suited by education, training or experience. As well, Aviva disputes that the in-home assessment was a reasonable expense incurred by or on Mr. Tarantino's behalf for the purpose of the Regulation. Aviva asserts that it properly adjusted Mr. Tarantino’s claim and therefore a special award is not appropriate in the circumstances of this matter.

EVIDENCE AND ANALYSIS:

Entitlement to Income Replacement Benefits:

Mr. Tarantino has been a hairstylist for 27 years. He and his business partner, Mr. Joe Curcio, have jointly owned Hair Impressions Inc. (the salon) since 1993. Mr. Tarantino, Mr. Curcio, Mr. Tarantino’s wife, Mary Tarantino, and his son, Giordano Tarantino, each testified on Mr. Tarantino’s behalf. Their evidence was consistent that prior to the accident Mr. Tarantino was very active. Since the accident he is far less active and works much fewer hours. Mrs. Tarantino does not work outside the home and her husband is the sole income earner for the family. Mrs. Tarantino testified that since the accident her husband is very tired, complains of pain in his back and rests a great deal. Giordano testified that a major change since the accident is his father’s frequent visits to doctors.

Mr. Tarantino described his work as requiring him to spend long hours on his feet, bending over sinks, reaching for products and equipment. As well, he is required to lift boxes of supplies, and sweep and mop the floors. Mr. Tarantino testified that prior to the accident he would deal with an average of 16 to 20 clients a day. A "fantastic" day would be 31 clients. At times he would have four clients at a time.

Mr. Tarantino returned to his salon the day following the accident but did not do any work. He referred his clients to his other stylist. This went on for some weeks during which time he managed the shop. He slowly began to take on clients beginning with shampooing. It was not until April 2003 that he returned to cutting hair. He testified that the continued pain in his neck, shoulders and lower back has prevented him from resuming the pace of work he engaged in prior to the accident. Mr. Tarantino continues to be unable to mop the floor, take care of the towels or take out the garbage. He is restricted to light cleaning. Both Mr. Tarantino and Mr. Curcio testified that after the accident Mr. Tarantino’s productivity was greatly reduced, his mobility was noticeably impaired and he spends significantly less time at the salon. Mr. Curcio testified that he knew Mr. Tarantino was serving fewer clients after the accident by the reduction in business earnings.

A portion of video surveillance conducted by Signum Investigations on April 1, 2004 was shown to both Mr. Tarantino and Mr. Curcio.² It showed Mr. Tarantino exiting his vehicle and retrieving a package from his trunk. He moved slowly and held onto the vehicle for support. They testified that the video was an accurate representation of the way Mr. Tarantino has moved since the accident. Mr. Curcio testified that Mr. Tarantino continues to have significant limitations on his movement and is unable to bend and pick things up from the floor.

Mr. Tarantino testified that recently some of the clientele he lost due to his poor health following the accident are returning. Presently he has 4 to 12 clients in a day. He continues to be unable to deal with more than one client at a time and he continues to have reduced hours of work.

Mr. Tarantino did not call any medical witnesses. He relied on the Disability Certificate completed by Dr. J. Sonja, chiropractor, on December 19, 2002³ and a further Disability Certificate completed by Dr. L. Sokol on July 25, 2005 together with Dr. Sokol's clinical notes and records.⁴ The medical reports of Dr. Gerhardt Fischer,⁵ Dr.O.Veidlinger⁶ and Dr. Stephen H. Gallay, orthopaedic surgeon, were also relied on.⁷

The reports of Dr. Fischer and Dr. Veidlinger were of little assistance beyond confirming Mr. Tarantino's testimony regarding the symptoms he experienced immediately post-accident.

Dr. Sokol is a family physician who is a diplomat and certified member of the American Academy of Pain Management.⁸ He has been treating Mr. Tarantino since December 19, 2002.⁹Mr. Tarantino testified that Dr. Sokol has been treating him with nerve block injections to help him deal with his continuing pain in his neck, shoulders and lower back. This treatment has permitted him to work restricted hours as a hairstylist since the accident.

Dr. Sokol's clinical notes and records were filed as an exhibit. Regrettably, the clinical notes are illegible and no transcription was provided. The attached typewritten short forms provided no assistance in deciphering the notes as the handwritten entries are illegible. However, included in the notes and records are 24 treatment forms documenting injections with xylocaine and marcaine for shoulder, back and "SI" pain from April 8, 2003 to June 15, 2005. The Disability Certificate dated July 25, 2005, signed by Dr. Sokol, indicates that Mr. Tarantino was suffering pain and tenderness, concluding that he is substantially unable to perform the essential tasks of his employment and is "only able to do part time, modified duties."¹⁰

Dr. S. Gallay conducted an orthopaedic assessment of Mr. Tarantino on April 10, 2003. His report documents a continuation of the neck, shoulder and low back pain documented by Dr. Fischer and Dr. Veidlinger. He approximated that neck flexion was diminished by 30%, left and right rotation by 50% and left and right flexion by 25%. Dr. Gallay further notes that he could passively increase flexion to 85% and extension to 75%, which caused Mr. Tarantino to report increased pain. Dr. Gallay noted that his examination of Mr. Tarantino's upper extremity showed an unquantified decreased range of motion particularly in the right shoulder with "significant impingement . . . localized to the AC joint."¹¹ Dr. Gallay describes Mr. Tarantino's ability to flex to the upper shin. Extension was normal with pain localized in the central low back. Lying down, Mr. Tarantino could do a 80 degree bilateral leg raise. Movement at the SI joint resulted in Mr. Tarantino reporting pain on the right side but not the left. Dr. Gallay also noted that Mr. Tarantino's grip strength averaged 27 kg. on the left side and 25 kg. on the right. Dr. Gallay supported a referral to a pain specialist if Dr. Sokol was not so qualified.¹²

Aviva issued a Notice of Stoppage of Weekly Benefits on August 11, 2003 terminating Mr. Tarantino's income replacement benefit on August 29, 2003.¹³ The notice cited at Part 3, Reason for Benefit Stoppage: "Functional Ability Evaluation and Orthopaedic Assessment report." The covering letter states: "You were recently examined by Dr. D. Brown and Robert Bullard who state in their reports that you no longer suffer a substantial inability to perform the essential tasks of your occupation."¹⁴ Aviva called both Dr. David Brown, orthopaedic surgeon, and Mr. Robert A. Bullard, kinesiologist, as witnesses. It also relied on the physical demands analysis by Ms Vida Sernas, dated March 25, 2003.¹⁵

Dr. Brown was qualified as an expert in orthopaedic surgery. He testified that Mr. Tarantino cooperated and participated fully in his assessment on July 8, 2003. Dr. Brown formed the opinion that there was no objective evidence from a musculoskeletal and orthopaedic perspective that Mr. Tarantino was suffering a significant impairment or loss of function.¹⁶ His opinion was not altered by Mr. Tarantino’s reports of pain and the observable loss of range of movement. Therefore, he was of the opinion that Mr. Tarantino did not suffer a substantial inability to perform the essential tasks of his employment. Dr. Brown stated that he had a vague idea of what Mr. Tarantino’s work entailed and was aware that Mr. Tarantino was working at the time of the assessment. In his report, Dr. Brown indicates that Mr. Tarantino’s cervical extension is 20% of normal and rotation and side bending are at "30 % of expected." His range of motion of his right shoulder is limited to 100 degrees and flexion to 110 degrees. Bilateral leg raising when lying down was approximately 75 to 80 degrees.

Mr. Bullard, a kinesiologist, was retained to conduct a Functional Abilities Evaluation. On July 7, 2003, Mr. Tarantino first attended for the evaluation. Mr. Bullard did not conduct the test because he deemed Mr. Tarantino’s blood pressure reading too high to permit a safe test.¹⁷Subsequently, Mr. Bullard conducted an assessment. His report dated September 3, 2003 was issued after Aviva issued its notice of stoppage terminating Mr. Tarantino’s income replacement benefits. Mr. Bullard’s report documents that Mr. Tarantino complained that the testing increased his pain. This resulted in the termination of certain tests.

Mr. Bullard was disqualified from giving opinion evidence. He testified that his test results were invalid because of Mr. Tarantino's "submaximal and inconsistent effort level." Mr. Bullard was the only assessor to suggest that Mr. Tarantino did not participate fully. Further, his assessment was conducted after Aviva had terminated the income replacement and housekeeping and home maintenance benefits. On the basis of the foregoing, I have placed no weight on either Mr. Bullard’s report or his testimony.

The physical demands report provides a detailed description of the tasks Mr. Tarantino was required to perform as a hairstylist. The testimony of both Mr. Tarantino and Mr. Curcio were substantially consistent with the report’s description. Where there is a discrepancy between Mr. Tarantino’s and Mr. Curcio’s testimony and the report, I accept their evidence taken together.

The testimony of Mr. Tarantino, Mr. Curcio and Mr. Tarantino’s family is consistent that Mr. Tarantino’s post-accident mobility and function remain relatively unchanged due to pain resulting from the injuries he sustained in the accident.

The orthopaedic reports of Dr. Gallay and Dr. Brown are similar in their findings but reach different conclusions. Dr. Gallay was alert to the need for an assessment by a pain specialist. Therefore, I prefer his report to the evidence of Dr. Brown.

I accept Mr. Tarantino's evidence that the pain blocks administered by Dr. Sokol provide him with pain relief which permit him to carry on his restricted business as a hairstylist.

Dr. Sokol met regularly with Mr. Tarantino to administer pain blocks. He was therefore familiar with Mr. Tarantino's medical condition. Therefore, I accept that the Disability Certificate he signed on July 25, 2005 reflects his opinion that Mr. Tarantino is substantially unable to perform the essential tasks of his employment and is restricted to part time, modified duties.

I find that Dr. Sokol's regular administration of pain blocks from April 8, 2003 to June 15, 2005 permitted Mr. Tarantino to carry on his restricted activities of daily life including his employment as a hairstylist.

The evidence of the lay witnesses, Dr. Gallay's report and Dr. Sokol's treatment records lead me to the conclusion that Mr. Tarantino is unable, due to pain, to maintain the pace of practice which would be required of a hairstylist employed by a salon. He is able to maintain his restricted business because he is a co-owner and his partner, Mr. Curcio, has accommodated his physical limitations resulting from the pain he experiences.

Termination of Income Replacement Benefits:

An income replacement benefit can be terminated by the insurer, pursuant to subsection 37(1)(b) of the Schedule. The insurer is required to give the person notice with reasons. Aviva's covering letter dated August 11, 2003, enclosing the Notice of Stoppage, stated: "You were recently examined by Dr. D. Brown and Robert Bullard who state in their reports that you no longer suffer a substantial inability to perform the essential tasks of your occupation."¹⁸ The enclosed Notice, also dated August 11, 2003, gave as the reason for the stoppage of the benefit: "Functional Ability Evaluation and Orthopaedic Assessment report."¹⁹

Mr. Bullard’s Functional Ability Evaluation report dated July 10, 2003 stated the evaluation had not been conducted because Mr. Tarantino’s blood pressure had been too high to permit safe testing.²⁰ He did not provide an opinion in respect of Mr. Tarantino's ability to perform the essential tasks of his employment.

In Turner v. State Farm,²¹ the Director’s Delegate stated the purpose of notice as follows:

The purpose of the notice requirement is to ensure that the insured person has enough information to decide whether to dispute or accept the refusal. The requirement also reinforces the insurer’s obligation to give full and fair consideration to every claim. However, while insurers are expected to take seriously their obligation to give written reasons for refusing benefits, the legislative objective of promoting early claims assessment and ongoing communications between the parties suggests they should not be held to a standard of perfection. An insurer’s misstatement of the entitlement test does not invalidate an otherwise clear and unequivocal notice.

Reliance on a non-existent opinion is an abrogation of Aviva’s "duty to give full and fair consideration" to this claim. I find Aviva’s reliance on Mr. Bullard’s report a fatal defect in its obligation to give meaningful reasons and renders the termination on August 11, 2003 effective August 28, 2003, void. Aviva did not subsequently cure the defect.

Entitlement to Pre-104 Week Income Replacement Benefits

Mr. Tarantino is required to establish on a balance of probabilities that from August 30, 2003 to December 2, 2004, he was suffering from an impairment caused by the accident which resulted in a substantial inability for him to perform the essential tasks of his employment as a hairstylist.

Aviva issued its notice to terminate Mr. Tarantino's income replacement benefit on August 11, 2003, effective August 29, 2003. Prior to August 11, 2003 Aviva paid Mr. Tarantino an income replacement benefit thereby accepting that he met the test notwithstanding he continued to work as a hairstylist. The totality of the evidence is that Mr. Tarantino's condition had not changed on the date Aviva purported to terminate his income replacement benefit and has not since. Mr. Tarantino suffers from disabling pain caused by the injuries he sustained in the accident such that he was substantially disabled from performing the essential tasks of his employment as a hairstylist from August 29, 2003 to December 2, 2004. Therefore, I find that Mr. Tarantino is entitled to a weekly income replacement benefit pursuant to section 4 of the Schedule for the period August 29, 2003 to December 2, 2004.

Entitlement to Post-104 Week Income Replacement Benefits

Mr. Tarantino is required to prove on a balance of probabilities that he, as a result of the accident, is suffering a complete inability to engage in any employment for which he is reasonably suited by education, training or experience pursuant to subsection 5(2)(b) of the Schedule. Mr. Tarantino testified that he is continuing to work as a hairstylist. I find that on the basis of his own evidence Mr. Tarantino does not meet the test set out in the Schedule and is therefore not entitled to a weekly income replacement benefit from December 3, 2004 and ongoing.

Quantum of Income Replacement Benefits:

In considering the issue of quantum of income replacement benefits, I was assisted by the evidence of Mr. Ian Wollach, chartered accountant, who testified on behalf of Mr. Tarantino and Mr. B. Webster, chartered accountant, a partner with Price Waterhouse Coopers (PWC) who testified on behalf of Aviva. Both were qualified as experts in accounting on consent.

Mr. Webster did not prepare PWC's initial two reports dated June 9, 2003 and August 6, 2003.²²However, he testified that he familiarized himself fully with the file in order to author the third report dated August 9, 2005.²³ I am satisfied that his evidence in respect of the first two reports was reliable.

Both Mr. Wollach and Mr. Webster had the advantage of having the financial statements for the years 2002, 2003 and 2004 when they prepared their reports. These were not available to PWC when its June and August 2003 reports were prepared.

Mr. Wollach had reviewed the PWC reports and reached different conclusions with respect to the calculation of Mr. Tarantino's weekly income replacement benefit. He testified that he disagreed with the assumptions made by PWC in reaching its calculation of Mr. Tarantino's income replacement benefit, particularly the attribution of an hourly rate for a self-employed person. However, notwithstanding his disagreement with this approach, Mr. Wollach relied on PWC’s initial calculations, including its assumptions, to calculate Mr. Tarantino’s income in the 52 weeks preceding the accident. He then calculated post-accident income attributing nil income to Mr. Tarantino for the period January 1, 2003 to November 29, 2004.

Both Mr. Wollach and Mr. Webster testified that a company’s financial statements offered the most reliable basis for calculating income. Mr. Webster chose to recalculate Mr. Tarantino’s income for the 52 weeks pre-accident relying on the financial statements for 2002. Further, he relied on the financial statements for 2003 and 2004 to calculate post-accident income.

Mr. Wollach chose to attribute nil income to Mr. Tarantino for the years 2003 and 2004. However, Mr. Tarantino testified he took out a line of credit and had to work harder to make the payments. Mrs. Tarantino testified that while they were under financial stress, their household expenses were being paid. There was no evidence produced by Mr. Tarantino that those expenses were being paid with funds other than those he earned at Hair Impressions Inc. Therefore, I do not accept that nil income should be attributed to Mr. Tarantino for the period January 1, 2003 to November 29, 2004.

Having heard Mr. Webster's testimony and having reviewed his report, I prefer his evidence to that of Mr. Wollach. Mr. Webster's attribution of income to Mr. Tarantino based on Hair Impressions Inc.'s financial statements was reasonable. Further, I find that Mr. Webster calculated Mr. Tarantino's post-accident income in a manner consistent with the provisions of section 6 of the Schedule. Therefore, I find that Mr. Tarantino is entitled to a weekly income replacement benefit at the weekly rate of $121.87 for the period August 30, 2003 to December 31, 2003 and $107.73 for the period January 1, 2004 to December 2, 2004.

Housekeeping and Home Maintenance Benefits:

Mr. Tarantino is required to show that he incurred additional housekeeping and home maintenance services because he sustained an impairment as a result of the accident that substantially disables him from performing his pre-accident duties pursuant to subsection 22(1) of the Schedule. In addition to the witnesses called on his behalf, Mr. Tarantino relied on reports prepared by Dr. Heather Orenstein-Frankel dated March 10, 2003²⁴ and June 11, 2003.²⁵ Aviva relied on Ms Marlene Levy's in-home assessment report dated January 28, 2003.²⁶

Mr. Tarantino testified that he has been unable to resume his home maintenance duties since the accident and his son now does the snow shovelling, lawn and garden maintenance. He testified that Aviva was informed of his promise to pay his son $60.00 a week for 6 hours work. However, neither he nor his son submitted invoices for the work done by his son. Mr. Tarantino testified the only submission in respect of housekeeping and home maintenance was an estimate for the cost of completing household renovations he had begun prior to the accident.²⁷

In their testimony, Mrs. Tarantino and her son, Giordano Tarantino, confirmed Mr. Tarantino’s evidence that prior to the accident he did a lot of work on their home including the heavy seasonal maintenance of snow shovelling, lawn and garden maintenance. Since the accident he has been unable to resume the household repairs, renovations and maintenance. Giordano has taken over the heavy seasonal maintenance. Giordano testified that he does approximately 4 to 5 hours of maintenance work a week.

On January 3, 2003(sic) 2002, Aviva wrote to Mr. Tarantino to advise it would not pay $60.00 per week for the seasonal work to be done by his son. It indicated it would consider paying the hourly minimum wage of $6.85 for such work upon receipt of a description of the chore, the name of the person who did the work and the time spent.²⁸ Mr. Tarantino testified that he received this letter.

Aviva commissioned Ms Levy to conduct an in-home assessment. On January 28, 2003, she determined that 1 hour of housekeeping and home maintenance assistance per week was needed. This assistance was to be gradually reduced and discontinued within six weeks. I find that this was notice to Aviva of Mr. Tarantino's need for assistance.

On March 10, 2003, 52 weeks later, Dr. Orenstein-Frankel conducted a further in-home assessment on behalf of Mr. Tarantino. She recommended 1 hour 45 minutes weekly plus snow shovelling as needed. Unlike Ms Levy, she completed a Form 1 recommending some assistance with personal care.²⁹ Dr. Orenstein-Frankel conducted a follow-up visit on June 11, 2003 to demonstrate the use of assistive devices she had previously recommended. Aviva authorized the purchase of those devices.³⁰ She reported Mr. Tarantino's continuing complaints of restrictions due to pain including his inability to cut the lawn and maintain his garden.

The preponderance of the evidence leads to the conclusion that Mr. Tarantino suffers from disabling pain caused by the injuries he sustained in the accident such that he was substantially disabled from performing the heavy seasonal home renovations and maintenance for the 104 week period post-accident.

I accept Mr. Giordano Tarantino's testimony, supported by the evidence of his parents, that he assumed the home maintenance duties which were his father's prior to the accident. As well, I accept that Mr. Tarantino promised to pay his son at $10.00 per hour for approximately 6 hours of work weekly.³¹

Aviva advised that it would not pay more than the minimum wage of $6.85 an hour. I find that Mr. Tarantino could not hire replacement labour to do the heavy seasonal home maintenance for that rate. I find that an hourly rate of $10.00 to shovel snow, cut lawns and do gardening is reasonable.

Dr. Orenstein-Frankel’s report dated March 10, 2003 was credible evidence that Mr. Tarantino continued to require housekeeping and home maintenance assistance. In her opinion, he required 1 hour 45 minutes of housekeeping assistance and additional time for snow shovelling. Dr. Orenstein-Frankel’s report dated June 11, 2003 indicates that the assistive devices had permitted Mr. Tarantino to resume his housekeeping tasks. I found Ms Levy’s estimate of the time required to complete the housekeeping and home maintenance tasks unrealistic. Therefore, I prefer Dr. Orenstein-Frankel’s opinion.

There was no specific evidence regarding the frequency of the seasonal maintenance done between December 2, 2002 and June 11, 2003. Snow shovelling is not usually a weekly task. However, in spring a lawn may require cutting twice a week declining to an average of once weekly in the summer and fall. In the absence of specific evidence about what was done, I have determined that 1 hour per week is a reasonable average for all of the seasonal maintenance work done by Mr. Giordano Tarantino.

Mr. Tarantino claims renovation expenses to complete work on his home commenced prior to the accident. Aviva submits that this is not the proper forum to claim home renovation expenses which are unrelated to medical necessity arising from an impairment caused by the accident. I agree with the distinction drawn between home maintenance and renovation in Harper and Liberty Mutual Insurance Company that: "maintenance is related to the upkeep, repair, preservation and modest enhancement of the home as it exists, not new construction or renovation."³² The completion of the renovations to Mr. Tarantino’s bathroom is beyond the scope of modest enhancement and is therefore not compensable under section 22 of the Schedule.

Mr. Tarantino testified that he received Aviva’s letter which advised him that it required details of the work performed. Mr. Tarantino’s failure to submit the particulars of the work that was done on his behalf is damaging to his claim. However, Aviva knew from the in-home assessments of both Ms Levy and Dr. Orenstein-Frankel that he required assistance. In his application for benefits Mr. Tarantino advised Aviva of his intention to have his family assume his pre-accident tasks. Ms Levy's report provided Aviva with sufficient information upon which to base a payment of benefits for the period December 2, 2002 to March 2003. Dr. Orenstein-Frankel's opinion provided credible evidence that he required additional housekeeping assistance at least until June 11, 2003.

Aviva's letter at the beginning of the claim process indicating it requires particulars of the housekeeping and home maintenance work being done prior to its considering the expense is insufficient to shield it from exposure for incurred expenses. The in-home assessments provided sufficient information on which to base payment of the benefit. Therefore, I find that interest attaches to housekeeping and home maintenance benefits payable from December 2, 2002 to June 11, 2003. Further, I find that Aviva should have commenced paying the benefit 30 days following receipt of Ms Levy's report dated January 28, 2003.

On the basis of the foregoing, I find that Mr. Tarantino is entitled to a housekeeping and home maintenance benefit at the hourly rate of $10.00 as follows: 2 hours 45 minutes weekly for the period from December 2, 2002 to June 11, 2003 and 1 hour weekly for the period June 12, 2003 to December 2, 2004.

Examination Expenses:

Mr. Tarantino has claimed entitlement to payment of the cost of Dr. Orenstein-Frankel's report in the amount of $956.37. Mr. Tarantino must prove that on balance the assessment was a reasonable expense for the purpose of this Regulation. Dr. Orenstein-Frankel's report included a Form 1 which recommended attendant care at the rate of $18.06 per month.

Dr. Orenstein-Frankel’s assessment was conducted at about the time Aviva’s assessor would have terminated housekeeping and home maintenance assistance. A detailed reassessment was necessary to determine both Mr. Tarantino’s attendant care and housekeeping and home maintenance needs. The assessment of attendant care needs was not undertaken by either party prior to June 11, 2003, six months post-accident. A need for attendant care was identified. The quantum of the benefit is neither a consideration nor determinative of the reasonableness of an assessment. Therefore, I find that the assessment was a reasonable expense for the purpose of the Regulation.

SPECIAL AWARD:

Mr. Tarantino claims a special award pursuant to subsection 282(10) of the Insurance Act which provides:

282.(10) If the arbitrator finds that an insurer has unreasonably withheld or delayed payments, the arbitrator, in addition to awarding the benefits and interest to which an insured person is entitled under the Statutory Accident Benefits Schedule, shall award a lump sum of up to 50 per cent of the amount of which the person was entitled at the time of the award together with interest on all amounts then owing to the insured (including unpaid interest) at the rate of 2 per cent per month, compounded monthly, from the time the benefit first became payable under the Schedule.

Aviva submits that the claim was only asserted at arbitration and the particulars of the claim were only enumerated in final written submissions. It is clear that a claim for a special award can be asserted at the hearing. In this case, having been advised of the claim in opening submissions, Aviva did not request particulars, an adjournment to prepare a response or call additional witnesses. Aviva chose to have its current adjuster, who had made none of the decisions relating to the issues being arbitrated, give evidence in support of Aviva's adjusting of the claim. I am satisfied that the claim for a special award is properly before me.

In exercising arbitral discretion a hearing arbitrator must find that the insurer acted unreasonably, not merely that it failed to pay a benefit which later was determined to have been owed.

I have determined that Mr. Tarantino is entitled to an income replacement benefit for the period August 29, 2003 to December 2, 2004. Further, I have found that the notice of stoppage issued by Aviva on August 11, 2003 was fatally flawed due to its reliance on a Functional Abilities Evaluation which had not been conducted on the date Aviva purported to rely on it. I accept Aviva's submission that Dr. Brown's opinion gave it a medical basis for terminating the benefit. I disagree that it merely mentioned Mr. Bullard's report and assessment. Aviva's wording of both its notice and covering letter is reasonably interpreted to give equal weight to both assessments. Aviva failed to correct this error. It stubbornly and unreasonably relied on its erroneous termination notice through to arbitration.

The withholding and delay in payment of the examination expense was also unreasonable. Dr. Orenstein-Frankel determined that an attendant care benefit was payable. Her assessment of Mr. Tarantino's potential eligibility for attendant care and completion of the Form 1 required that Aviva pay the benefit pursuant to section 39 of the Schedule. The proximity of Dr. Orenstein-Frankel's assessment to that of Ms Levy is irrelevant. Dr. Orenstein-Frankel was assessing eligibility for both the housekeeping and home maintenance and attendant care benefits.

Aviva's withholding payment of the housekeeping and home maintenance benefits was not unreasonable given Mr. Tarantino's failure to submit particulars of his claim.

On the basis of the foregoing, I exercise my discretion and grant a special award fixed at $2,000.00 inclusive of interest.

INTEREST:

I find that interest is due and owing as follows:

1. In respect of the weekly income replacement benefit from August 30, 2003 and ongoing;

2. In respect of the housekeeping and home maintenance benefits for the benefit period from December 2, 2002 to June 11, 2003 commencing 30 days following receipt of Ms Levy’s report dated January 28, 2003.

3. In respect of the examination expense, interest is payable from 30 days following receipt of Dr. Orenstein-Frankel’s invoice.

4. In respect of the special award, interest has been included in the fixed award, pursuant to section 46(2) of the Schedule.

EXPENSES:

Mr. Tarantino has successfully asserted his claim to pre-104 week income replacement benefits, housekeeping and home maintenance benefits and an examination expense. Therefore, I exercise my discretion to award Mr. Tarantino his expenses incurred in this proceeding. If the parties are unable to agree on the quantum of those expenses, they may make an application pursuant to the Dispute Resolution Practice Code.

June 28, 2006

Denise Ashby Arbitrator

Date

Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2006 ONFSCDRS 111

FSCO A04-001781

BETWEEN:

MAURO TARANTINO

Applicant

and

AVIVA CANADA INC.

Insurer

ARBITRATION ORDER

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

1. Mr. Tarantino is entitled to receive a weekly income replacement benefit from August 30, 2003 to December 2, 2004, pursuant to section 4 of the Schedule.

2. Mr. Tarantino is not entitled to receive a weekly income replacement benefit from December 2, 2004 and ongoing, pursuant to subsection 5(b) of the Schedule.

3. Mr. Tarantino is entitled to receive a weekly income replacement benefit at the rate of $121.87 for the period August 30, 2003 to December 31, 2003 and thereafter to December 2, 2004 at the rate of $107.73 pursuant to section 6 of the Schedule.

4. Mr. Tarantino is entitled to payments for housekeeping and home maintenance services at the hourly rate of $10.00 as follows: to 2 hours 45 minutes weekly for the period from December 2, 2002 to June 11, 2003 and to 1 hour weekly for the period June 12, 2003 to December 2, 2004, pursuant to section 22 of the Schedule.

5. Mr. Tarantino is entitled to a payment of $956.37 for the cost of an examination pursuant to section 24 of the Schedule.

6. Mr. Tarantino is entitled to a special award fixed at $2,000.00 inclusive of interest pursuant to section 282(10) of the Insurance Act.

7. Aviva is liable to pay Mr. Tarantino’s expenses in respect of the arbitration pursuant to section 282(11) of the Insurance Act.

8. Mr. Tarantino is not liable to pay Aviva’s expenses in respect of the arbitration pursuant to section 282(11) of the Insurance Act.

9. Mr. Tarantino is entitled to interest for the overdue payments as follows:

(a) In respect of the weekly income replacement benefit from August 30, 2003 and ongoing.

(b) In respect of the housekeeping and home maintenance benefits for the benefit period from December 2, 2002 to June 11, 2003 commencing 30 days following receipt of Ms Levy’s report dated January 28, 2003.

(c) In respect of the examination expense, interest is payable from 30 days following receipt of Dr. Orenstein-Frankel’s invoice.

(d) In respect of the special award, interest has been included in the fixed award.

pursuant to section 46(2) of the Schedule.

June 28, 2006

Denise Ashby Arbitrator

Date

Footnotes

1. 1The Statutory Accident Benefits Schedule — Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended.
2. 2Exhibit 6
3. 3Exhibit 4, Arbitration Brief of Aviva Insurance, Tab 3
4. 4Exhibit 7and Exhibit 2
5. 5Exhibit 3, Applicant's Document Brief, Tabs 2 and 3
6. 6Exhibit 3, Applicant's Document Brief, Tab 7
7. 7Exhibit 3, Applicant's Document Brief, Tab 4
8. 8Exhibit 9
9. 9Exhibit 2, page 1
10. 10Exhibit 7, pages 2 and 3
11. 11Exhibit 3, Applicant's Document Brief, Tab 4, page 5
12. 12Exhibit 3, Applicant's Document Brief, Tab 4
13. 13Exhibit 4, Arbitration Brief of Aviva Insurance, Tab 28
14. 14Exhibit 4, Arbitration Brief of Aviva Insurance, Tab 29
15. 15Arbitration Brief of Aviva Insurance, Tab 11
16. 16Exhibit 4, Arbitration Brief of Aviva Insurance, Tab 21
17. 17Ibid, Tab 22
18. 18Exhibit 4, Arbitration Brief of Aviva Insurance, Tab 29
19. 19Exhibit 4, Arbitration Brief of Aviva Insurance, Tab 28
20. 20Exhibit 4, Arbitration Brief of Aviva Insurance, Tab 22
21. 21(FSCO P00-00046, February 1, 2002), page 10; confirmed by the Ontario Court of Appeal 2004 CanLII 13402 (ON SCDC), [2004] O.J. No. 731
22. 22Exhibit 4, Arbitration Brief of Aviva Insurance, Tabs 19and 26
23. 23Exhibit 14
24. 24Exhibit 4, Arbitration Brief of Aviva Insurance, Tab 9
25. 25Exhibit 3, Applicant's Document Brief, Tab 8
26. 26Arbitration Brief of Aviva Insurance, Tab 7
27. 27Exhibit 4, Arbitration Brief of Aviva Insurance, Tab 8
28. 28Exhibit 4, Arbitration Brief of Aviva Insurance, Tab 5
29. 29Exhibit 22
30. 30Exhibit 4, Arbitration Brief of Aviva Insurance, Tab 16
31. 31Exhibit 4, Arbitration Brief of Aviva Insurance, Tab 5
32. 32(OIC A96-001257, December 19, 1997), page 24