Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2006 ONFSCDRS 113

FSCO A05-000353

BETWEEN:

LUCIA PATRIARCA

Applicant

and

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY

Insurer

REASONS FOR DECISION

Before: Maggy Murray

Heard: March 20, 21, 22 and 23, 2006, at the offices of the Financial Services Commission of Ontario in Toronto. Written submissions were received on March 31, April 10 and 21, 2006.

Appearances: Andrew M. Lee and David Schell for Mrs. Patriarca Paul Giuliano for State Farm Mutual Automobile Insurance Company

Issues:

The Applicant, Lucia Patriarca, was injured in a motor vehicle accident on October 16, 2002. She applied for and received statutory accident benefits from State Farm Mutual Automobile Insurance Company ("State Farm"), payable under the Schedule.¹ State Farm terminated weekly housekeeping benefits on July 15, 2003 and refused to pay for various other benefits. The parties were unable to resolve their disputes through mediation, and Mrs. Patriarca 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 Mrs. Patriarca entitled to receive $3,210.00 as proposed in the Treatment Plan dated February 24, 2005 prepared by Kipling Heights Rehab for physiotherapy claimed pursuant to paragraph 14(2)(b) of the Schedule?

2. Is Mrs. Patriarca entitled to payments for housekeeping and home maintenance services for the period from July 16, 2003 to October 16, 2004, pursuant to section 22 of the Schedule? Mrs. Patriarca claims $100.00 per week.

3. Is Mrs. Patriarca entitled to payments for the following costs of examinations, pursuant to section 24 of the Schedule:

a) Orthopaedic Assessment by Dr. Fred Langer dated October 1, 2003 in the amount of $1,070.00;

b) In-Home Assessment by Synergy Rehab dated October 13, 2004 in the amount of $959.00; and

c) Orthopaedic Assessment by Dr. Fred Langer dated October 26, 2004 in the amount of $1,284.00.

4. Is Mrs. Patriarca entitled to interest for the overdue payment of benefits pursuant to subsection 46(2) of the Schedule?

5. Is either party entitled to expenses in respect of the arbitration under subsection 282(11) of the Insurance Act?

Result:

1. Mrs. Patriarca is entitled to receive $3,210.00 for a Treatment Plan dated February 24, 2005 prepared by Kipling Heights Rehab for physiotherapy claimed pursuant to paragraph 14(2)(b) of the Schedule.

2. Mrs. Patriarca is entitled to payment of housekeeping expenses in the amount of $5,232.00.

3. a) Mrs. Patriarca is not entitled to payment for the Orthopaedic Assessment by Dr. Fred Langer dated October 1, 2003 in the amount of $1,070.00 pursuant to section 24 of the Schedule;

b) Mrs. Patriarca is not entitled to payment for the In-Home Assessment by Synergy Rehab dated October 12, 2004 in the amount of $959.00 pursuant to section 24 of the Schedule; and

c) Mrs. Patriarca is entitled to payment for the Orthopaedic Assessment by Dr. Fred Langer dated October 26, 2004 in the amount of $1,284.00.

4. Mrs. Patriarca is entitled to interest of 2 per cent per month compounded monthly on the amount of $5,232.00 from March 19, 2005 until the benefit is paid in accordance with subsection 46(2) of the Schedule in respect of the housekeeping benefit.

5. The issue of expenses is deferred.

EVIDENCE AND ANALYSIS:

Overview:

Mrs. Patriarca was 47 years old when her vehicle was rear-ended by another vehicle. At the time of the accident, she worked full time as a medical secretary in an office, a position she has held for the past 20 years. Following the accident, she was off work for a few days, and then returned to work part time for a period of three months. Thereafter, she returned to work full time. Her injuries included soft-tissue injuries to her neck and back as a result of the accident.

Medical Benefit:

Law

Under section 14 of the Schedule, an insurer is required to pay certain medical benefits. Pursuant to subsection 38(2) of the Schedule, the insured must submit to the insurer an application for the benefit and a Treatment Plan. If the insurer refuses to pay for the medical benefit, pursuant to subsection 38(12) of the Schedule, the insurer shall require the insured to be assessed in respect of the services at a designated assessment centre ("DAC"). Under section 43 of the Schedule, the DAC assessment is to report an opinion on whether the benefit is reasonable and necessary for the insured person's treatment or rehabilitation.

Background

Mrs. Patriarca submitted to State Farm a Treatment Plan in the amount of $3,210.00 ("Treatment Plan") dated February 24, 2005 prepared by Jerzy Krynicki, a physiotherapist at Kipling Heights Rehabilitation Centre. Jerzy Krynicki proposed 25 physiotherapy sessions. State Farm denied the proposed Treatment Plan and submitted it to a DAC. Dr. Christopher McKenzie, a chiropractor, performed the DAC assessment. He opined that the proposed physiotherapy treatment was not reasonable or necessary.

To establish her entitlement to payment of the expense for the treatment recommended in the Treatment Plan prepared by Kipling Heights Rehab, Mrs. Patriarca must establish that the expense was reasonable and necessary for her treatment or rehabilitation.

Dr. McKenzie and Mrs. Patriarca testified regarding the Treatment Plan.

Analysis

Mrs. Patriarca testified that her family doctor, Dr. Donsky, referred her to Kipling Heights Rehab for physiotherapy. If she went for physiotherapy, she planned on going home following work, resting, and then going to physiotherapy. In both her examination-in-chief and cross-examination, Mrs. Patriarca testified that she felt she needs physiotherapy.

Dr. McKenzie testified that he interviewed and examined Mrs. Patriarca on April 12, 2005 for a total of one hour and that he did not have any concerns with her credibility. He found her to be cooperative and found no evidence of malingering. Upon examination, Dr. McKenzie found a 25% limitation in Mrs. Patriarca's cervical spine and lumbar spine. According to Dr. McKenzie, Mrs. Patriarca had chronic pain and, although he thought treatment would provide 20-30 minutes of pain relief following each treatment session, the proposed treatment would not benefit Mrs. Patriarca. Dr. McKenzie recommended that Mrs. Patriarca receive three educational sessions with a physiotherapist and a neuromuscular ball together with a demonstration of proper and safe spinal stabilization exercises for her neck and low back.

Dr. McKenzie concluded in part in the DAC report that: "The ... Damage Estimate Report indicated the net total damage to Mrs. Patriarca's Mazda Protege was $407.45, which involved removal, repair, refinishing, painting and installation of the rear bumper. This cost estimate reflects essentially minor damage." When cross-examined, Dr. McKenzie testified that he spent 15 minutes in total reviewing the damage documentation and that it was a "relevant" and "pertinent factor" in his conclusion that the proposed treatment was not reasonable or necessary. Dr. McKenzie conceded on cross-examination that he has no training in accident reconstruction, he is not a biomechanical engineer nor can he comment on the forces that were generated in the collision. I place little weight on Dr. McKenzie's conclusion that the Treatment Plan is not reasonable and necessary because, despite his lack of expertise in engineering, his opinion is based in part on the damage to Mrs. Patriarca's vehicle.

The Insurer argued in its closing that more physiotherapy would not benefit Mrs. Patriarca because, according to an In-Home Assessment dated October 13, 2004, when Mrs. Patriarca finished physiotherapy in 2003, she found it did not help to reduce the pain. I disagree. An individual's medical diagnosis can change over time, or, new information about their condition may arise. MRIs of Mrs. Patriarca's lumbar and cervical spine were conducted upon request by Dr. Donsky, her family doctor, in November 2004 which revealed multilevel degenerative disc disease. Following this, Dr. Donsky recommended physiotherapy. Mrs. Patriarca's evidence regarding Dr. Donsky's recommendation that she attend physiotherapy was not shaken in cross-examination. Consequently, I found Mrs. Patriarca credible and I accept her evidence that she wanted to follow through on Dr. Donsky's recommendation for physiotherapy.

Consequently, I find that the Treatment Plan is reasonable and necessary for Mrs. Patriarca's treatment and rehabilitation.

Housekeeping:

In a Disability Certificate dated October 10, 2002, Dr. Carolyn Donsky, family doctor, certified that Mrs. Patriarca was substantially unable to perform her pre-accident housekeeping and home maintenance activities. On the basis of this Certificate, State Farm began paying Mrs. Patriarca the weekly maximum housekeeping benefit of $100 per week. Andrea Brodie, occupational therapist, visited Mrs. Patriarca in her home and assessed her a total of four times between February 11 and July 8, 2003. Although Ms. Brodie was initially retained by Mrs. Patriarca, as of January 20, 2003, it appears that Ms. Brodie's referral source was State Farm.

On July 9, 2003, Ms. Brodie reported that Mrs. Patriarca did not demonstrate a substantial inability to complete her housekeeping activities, which she could complete "to a reasonable degree using educational strategies and assistive equipment." Ms. Brodie concluded that housekeeping services were no longer required. On the basis of that opinion, State Farm terminated Mrs. Patriarca's housekeeping benefit effective July 16, 2003.

Law

The test for entitlement to housekeeping expenses is set out in section 22 of the Schedule as follows:

(1) The insurer shall pay for reasonable and necessary additional expenses incurred by or on behalf of an insured person as a result of an accident for housekeeping and home maintenance services if, as a result of the accident, the insured person sustains an impairment that results in a substantial inability to perform the housekeeping and home maintenance services that he or she normally performed before the accident.

(2) The amount payable under this section shall not exceed $100 per week.

The test under section 22 involves a consideration of the housekeeping and home maintenance services the insured normally performed before the accident and then a consideration of whether the insured suffered a substantial inability to perform those services as a result of an impairment suffered in the motor vehicle accident. If it amounts to a substantial inability, the next question is whether the expenses the insured incurred as a result of that inability are reasonable and necessary.²

Background

Mrs. Patriarca shares a house with her husband Bruno and two teenage sons, Anthony and Gianpaolo, aged 28 and 25 respectively. The house is approximately 3,000 sq. ft. divided between two storeys, containing four bedrooms, two and a half bathrooms, a kitchen, plus a basement with a kitchen.

Ms. Brodie interviewed Mrs. Patriarca on her various visits to the house and testified at this hearing. Mrs. Patriarca, her husband Bruno and her two sons, Anthony and Gianpaolo, also testified regarding Mrs. Patriarca's need for housekeeping assistance.

I will now examine the evidence I heard regarding Mrs. Patriarca's household chores prior to and after the accident.

Mrs. Patriarca testified that prior to the accident, she cleaned the house thoroughly every Saturday beginning at 7:30 a.m. until the end of the day. Her weekly housekeeping routine included the following: cleaning the washrooms, washing the hardwood floors, cleaning the tiles with bleach, washing the shower curtains, vacuuming the floors and couches, dusting, cleaning the carpets, airing the carpets on the veranda, washing the cupboards, cleaning the drapes, fridge, stove, toaster, fan, microwave and chandeliers. She did laundry nightly as well as on Sunday's. She also did the cooking before the accident. Mrs. Patriarca's evidence was that following the accident, she could no longer do her housekeeping chores because she had too much pain in her neck and back, as well as numbness in her right hand.

Anthony Patriarca's evidence was that before the accident, his mother was a strong and independent woman who ran the house and was the "nucleus of the family." She "took care of everything." Following the accident, Anthony testified that his mother was sluggish, she lay on the couch following work, she was easily fatigued and could not bend down.

Mrs. Patriarca, her husband and sons testified that before the accident, the housekeeping was performed primarily by Mrs. Patriarca and her sons were responsible for keeping their rooms clean. Mrs. Patriarca and her sons testified that before the accident, her husband and sons performed most of the outdoor work such as lawn care and snow removal.

Mrs. Patriarca, her husband and sons testified that following the accident, Mrs. Patriarca hired Eula Johnson to clean their house weekly until State Farm terminated her housekeeping benefits. Mrs. Patriarca testified that when State Farm terminated her housekeeping benefits, Ms. Johnson began cleaning her house every other week because she could not afford to pay Ms. Johnson to come weekly. According to Mrs. Patriarca, when Ms. Johnson began cleaning the Applicant's house every other week, her husband and two sons had to do more housework.

Bruno Patriarca and his sons testified that following the accident, no specific household chores were assigned to them and they all pitched in and did whatever needed to be done around the house, such as the laundry, dusting, mopping the floor, cleaning the bathrooms, and assisting with grocery shopping. Mrs. Patriarca's husband also assisted with dinner.

Ms. Johnson's invoice indicates that she dusted the entire home, washed the floors throughout the house, cleaned the bathrooms and vacuumed the entire home. Although the invoice submitted indicates that Ms. Johnson was paid $10 per hour for eight hours of work biweekly, Mrs. Patriarca and her husband both testified that Ms. Johnson was paid $100 biweekly.

Mrs. Patriarca's sons testified that following the accident, they did at least two hours of housework per week. Mrs. Patriarca's husband testified that he did two to three hours of housework per week. Mrs. Patriarca testified that Anthony completed the invoices for housekeeping as her husband does not write well. The invoices submitted indicate that Mrs. Patriarca's husband and two sons each did two hours of housework per week and charged $10 per hour. The Applicant's husband and two sons testified that Mrs. Patriarca promised to pay them for assisting with the housework. On cross-examination, Gianpaolo stated that he did not agree to any particular hourly rate that he would receive and he did not remember when the invoice was completed. I find that Gianpaolo's difficulty remembering the hourly rate for housekeeping is minor considering the time that has elapsed between the accident and the hearing.

Ms. Brodie testified that Mrs. Patriarca's house was kept in "pristine" condition. She said it was one of the cleanest homes she has ever been in and that Mrs. Patriarca's cleanliness standards were "very high."

In Ms. Brodie's report of May 20, 2003, she states that Mrs. Patriarca is "completely unable to perform heavy housekeeping activities in addition to her full-time work responsibilities (emphasis in original)." Ms. Brodie's reports dated May 20, 2003 and July 9, 2003 note that Mrs. Patriarca's pain complaints remained generally the same and were 8-10 on a pain scale with zero being no pain and 10 being unbearable pain. Mrs. Patriarca's pain complaints remained the same between May and July 2003. Despite this, according to Ms. Brodie, by July 2003, Mrs. Patriarca did not need housekeeping assistance if she used assistive devices, body mechanics and pacing, even though Mrs. Patriarca had pain and difficulty completing tasks such as vacuuming and floor washing.

Ms. Brodie stated in cross-examination that even using compensatory techniques,

Mrs. Patriarca's housekeeping would not be as good as it was before the accident.

Ms. Brodie's opinion was that although Mrs. Patriarca could not do eight hours of housekeeping in one day as she did before the accident, she could perform all her housekeeping tasks over a period of one week, for example, doing a little bit each night.

Both Mrs. Patriarca and Ms. Brodie testified that Ms. Brodie did not observe Mrs. Patriarca completing all her household chores as she preformed them before the accident. According to Mrs. Patriarca's evidence, which I accept as it was not challenged in cross-examination, Ms. Brodie asked her to demonstrate mopping the floor but the bucket was empty and Mrs. Patriarca only demonstrated cleaning 3-4 tiles. Mrs. Patriarca's evidence, which again was not challenged in cross-examination, is that when Ms. Brodie visited her in her home in July 2003, Ms. Brodie was only there for 30-40 minutes.

Analysis

I find that Mrs. Patriarca performed her housekeeping tasks fastidiously. I disagree with Ms. Brodie's opinion that Mrs. Patriarca needs to alter her lifestyle and perform her housekeeping chores nightly rather than weekly. I also disagree that Mrs. Patriarca's standards for cleanliness should decrease as a result of the accident. Ms. Brodie reversed her opinion of Mrs. Patriarca's ability to perform her housekeeping tasks despite Mrs. Patriarca's pain complaints remaining the same between May and July 2003. I prefer the evidence of Mrs. Patriarca, her husband and sons to that of Ms. Brodie's brief observation of Mrs. Patriarca completing some household chores differently than Mrs. Patriarca performed the tasks prior to the accident.

I have assessed the credibility of Mrs. Patriarca, her husband and two sons and considered the following factors: their demeanour, their apparent powers of observation, their apparent powers of recall, their attitude while testifying, their ability to resist the tug of self interest, the inherent plausibility of their evidence within itself, and the consistency of that evidence standing alone and as compared to other evidence.³ Mrs. Patriarca, her husband and sons all testified in a direct and forthright manner. They did not appear to embellish or exaggerate their evidence. Their evidence was not shaken in cross-examination. Based on the foregoing, I find that Mrs. Patriarca, her husband and two sons were credible. Their evidence was clear and persuasive concerning Mrs. Patriarca's performance of housekeeping tasks before and after the accident. The difference between what Mrs. Patriarca did before the accident and what she could do after the accident amounts to a substantial inability to perform her normal housekeeping tasks.

I heard no evidence or argument on a reasonable hourly rate. I find that the expenses Mrs. Patriarca incurred as a result of her inability are reasonable and necessary. The time period between July 16, 2003 to October 16, 2004 is 65.4 weeks. Because Ms. Johnson cleaned Mrs. Patriarca's house every other week, Mrs. Patriarca is entitled to 32.7 weeks of housekeeping for Ms. Johnson's services at the rate of $100 per week which amounts to $3,270. Mrs. Patriarca is also entitled to 32.7 weeks of housekeeping for the assistance provided by her husband and two sons for the weeks Ms. Johnson did not clean the house at the rate of $10 per hour for six hours per week, which amounts to $1,962. Mrs. Patriarca is therefore entitled to the total amount of $5,232.00 for housekeeping assistance for the period from July 16, 2003 to October 16, 2004, pursuant to section 22 of the Schedule.

Section 24 Expenses:

Law

On October 1, 2003, section 24 of the Schedule was amended to provide that, with specified exceptions, an insurer is not required to pay an examination cost if the expense is incurred before obtaining the approval of the insurer. Subsection 38.2 sets out the procedure the parties should follow when applying for approval of an expense under section 24 and the procedure to follow if the insurer denies approval.

a) Orthopaedic Assessment by Dr. Fred Langer dated October 1, 2003 in the amount of $1,070.00

On October 1, 2003, Dr. Langer performed an "Orthopaedic Assessment" on Mrs. Patriarca which was forwarded with his invoice for $1,070.00 to State Farm. State Farm refused to pay this expense because it claimed that Dr. Langer did not first seek its approval as required by section 24 of the Schedule.

Ontario Regulation 281/03 of the Insurance Act was the regulation enacting the amendments to section 24. It was filed on July 2, 2003. It was published in the Ontario Gazette on July 19, 2003.⁴ Unless otherwise stated in it, a regulation comes into force and has effect on and after the day upon which it is filed.⁵ That section 24 was amended effective October 1, 2003 was known no later than July 19, 2003 due to its publication in the Ontario Gazette. According to the Applicant, Dr. Langer's assessment began July 31, 2003, the date on which the assessment scheduled for October 1, 2003 was confirmed. I disagree. The date of the assessment and not the date it was arranged should be used to determine when the cost was incurred. It is the assessment that triggers section 24. All other costs (such as reviewing a patient's file and preparing the final report) are secondary to the actual assessment.

The fee charged by Dr. Langer for the report dated October 1, 2003 does not fall within the specified exceptions to the approval process. Mrs. Patriarca did not first seek approval of State Farm. Accordingly, State Farm is not required to pay this fee.⁶

b) In-Home Assessment by Synergy Rehab dated October 13, 2004 in the amount of $959.00

The application for approval of this expense was submitted to State Farm on October 4, 2004. State Farm denied this expense stating that it was unreasonable on October 7, 2004. Despite State Farm's denial of this expense, the assessment was conducted on October 12, 2004 and a report dated October 13, 2004 was prepared.

The fee charged by Synergy Rehab for the report dated October 13, 2004 does not fall within the specified exceptions to the approval process. Although the Applicant sought State Farm's approval for this assessment, when State Farm denied this assessment expense, the Applicant did not follow the procedure outlined in subsection 38.2 of the Schedule and nonetheless underwent the assessment. Accordingly, State Farm is not required to pay this expense.

c) Orthopaedic Assessment by Dr. Fred Langer dated October 26, 2004 in the amount of $1,284.00

The application for approval of this expense was submitted to State Farm on August 27, 2004. State Farm denied this expense stating that it was unreasonable on August 30, 2004 and the procedure outlined in paragraph 38.2(7) of the Schedule was followed. A fast track DAC (i.e., a review of documents only and no examination of the Applicant) was conducted by Dr. Gary Abraham, family doctor, who concluded on October 13, 2004 that Mrs. Patriarca's injuries do not need the services of an orthopaedic surgeon and that this assessment request was "deemed not necessary."

Dr. Langer and Dr. Abraham testified at this hearing regarding this orthopaedic assessment. The test under paragraph 24(1)3 of the Schedule is whether Dr. Langer's assessment was reasonably required in connection with a benefit claimed.

State Farm argued that Dr. Langer's assessment was not reasonably required because: (1) There were no issues in dispute at the time of the assessment; and (2) there was no evidence that the second assessment was used by anyone for any purpose. I disagree with both arguments. Firstly, Mrs. Patriarca was aware that State Farm terminated her housekeeping benefits effective July 16, 2003. Secondly, the assessment was used by Mrs. Patriarca to support her claim for ongoing housekeeping assistance because State Farm terminated her housekeeping benefits more than one year prior to Dr. Langer's assessment.

Dr. Langer's evidence was that Mrs. Patriarca complained of neck pain, right shoulder pain and pain in her right arm and difficulty sleeping when he assessed her on October 1, 2003 and October 26, 2004. According to Dr. Langer, if an individual continues to be symptomatic, follow up by an orthopaedic surgeon is appropriate. Dr. Langer opined in his report dated October 26, 2004, as well as his testimony, that Mrs. Patriarca requires ongoing housekeeping assistance.

Dr. Abraham testified that Mrs. Patriarca's injuries did not warrant intervention by an orthopaedic surgeon because she did not require surgery, such as for a fracture or a herniated disc.

I prefer the evidence of Dr. Langer, who assessed Mrs. Patriarca because, as Dr. Abraham testified in chief, a clinical examination is important, especially when dealing with neck and back pain which is continuous. Dr. Abraham agreed that seeing a patient is better than merely reviewing a file. In addition, when cross-examined, Dr. Abraham agreed that not all patients who are seen by an orthopaedic surgeon will require surgery. Dr. Abraham further agreed when cross-examined that soft tissue injuries are musculoskeletal. Dr. Abraham stated that when a patient reports continuous pain, he may refer the patient to a musculoskeletal specialist, such as a neurosurgeon.

In the words of Dr. Abraham, medicine isn't an "exact science." Although Dr. Abraham would not refer patients who sustain soft tissue injuries to an orthopaedic surgeon, it does not mean that such an examination is unreasonable. I find that Dr. Langer's assessment was reasonably required in connection with a benefit claimed, namely, Mrs. Patriarca's housekeeping benefit.

Interest:

Pursuant to subsection 17(2) of the Statutory Powers Procedure Act, R.S.O. 1990, c.S22,

[a] tribunal that makes an order for the payment of money shall set out in the order the principal sum, and if interest is payable, the rate of interest and the date from which it is to be calculated.

Subsection 46(2) of the Schedule provides that interest of 2 per cent per month compounded monthly is payable on overdue payments. An amount is overdue when the insurer fails to pay the benefit within the time required under Part X of the Schedule.

Medical Benefit

Subsection 38(11) of the Schedule states that the insurer shall pay for a medical benefit within 30 days of receiving the invoice. The question is: When is the payment for a medical or rehabilitation benefit overdue when the DAC determines that the goods and services are not reasonable and necessary but an arbitrator determines that they are reasonable and necessary?

Paragraph 38(14)2 of the Schedule states that, subject to adjudication, if the DAC report finds that the proposed treatment is not reasonable and necessary, the insurer is not required to pay for the expense. In Khaledi and Allstate Insurance Co. of Canada, Director's Delegate McMahon determined that the insurer is under no obligation to pay the expense until there is a decision from an arbitrator or judge that the treatment was reasonable and necessary, in which case the insurer is responsible for payment of the treatment, but will not be responsible for the payment of interest pursuant to subsection 46(2) prior to adjudication because the amount awarded was not overdue before that time.⁷ Accordingly, there is no interest payable on the treatment plan prepared by Kipling Heights Rehab dated February 24, 2005 if State Farm pays this expense within 30 days of receipt of this decision.

Housekeeping

Under subsection 41(1), the insurer shall pay a housekeeping benefit within 30 days after it receives the application for the benefit if the insured is entitled to the benefit. I determined that Mrs. Patriarca is entitled to housekeeping benefits in the amount of $5,232.00 for the period from July 16, 2003 to October 16, 2004. Housekeeping invoices for the period July 2003 onwards were submitted to State Farm on February 16, 2005. Accordingly, the benefits were overdue on March 19, 2005. Mrs. Patriarca is therefore entitled to interest of 2 per cent per month compounded monthly on the amount of $5,232.00 from March 19, 2005 until the benefit is paid in accordance with subsection 46(2) of the Schedule.

Section 24 Expense

Under subsection 41(1) of the Schedule, if an insured is entitled to a section 24 expense, the insurer shall pay the benefit within 30 days after receiving the application for the benefit. Subparagraph 38.2(13)2 of the Schedule states that, subject to adjudication, if the DAC report finds that the proposed assessment or examination is not reasonably required in connection with a benefit claimed, the insurer is not required to pay for the expense. For the same reasoning as in Director's Delegate McMahon's decision in Khaledi and Allstate⁸, the insurer is under no obligation to pay the expense until there is a decision from an arbitrator or judge that the assessment or examination is reasonably required in connection with a benefit claimed. In this case, the insurer will be responsible for payment of the assessment or examination but will not be responsible for the payment of interest pursuant to subsection 46(2) prior to adjudication because the amount awarded was not overdue before that time. Accordingly, there is no interest payable on the orthopaedic assessment by Dr. Langer dated October 26, 2004 if State Farm pays this expense within 30 days of receipt of this decision.

EXPENSES:

Expenses were not addressed at the hearing. If the parties are unable to agree on the issue of entitlement to or amount of the expenses, they may make submissions on both issues in accordance with Rule 79 of the Dispute Resolution Practice Code - Fourth Edition

July 7, 2006

Maggy Murray Arbitrator

Date

Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2006 ONFSCDRS 113

FSCO A05-000353

BETWEEN:

LUCIA PATRIARCA

Applicant

and

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY

Insurer

ARBITRATION ORDER

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

1. Mrs. Patriarca is entitled to receive $3,210.00 for a Treatment Plan dated February 24, 2005 prepared by Kipling Heights Rehab for physiotherapy claimed pursuant to paragraph 14(2)(b) of the Schedule.

2. Mrs. Patriarca is entitled to payment of housekeeping expenses in the amount of $5,232.00 pursuant to section 22 of the Schedule.

3. a) Mrs. Patriarca is not entitled to payment for the Orthopaedic Assessment by Dr. Fred Langer dated October 1, 2003 in the amount of $1,070.00 pursuant to section 24 of the Schedule;

b) Mrs. Patriarca is not entitled to payment for the In-Home Assessment by Synergy Rehab dated October 13, 2004 in the amount of $959.00 pursuant to section 24 of the Schedule; and

c) Mrs. Patriarca is entitled to payment for the Orthopaedic Assessment by Dr. Fred Langer dated October 26, 2004 in the amount of $1,284.00.

4. Mrs. Patriarca is entitled to interest of 2 per cent per month compounded monthly on the amount of $5,232.00 from March 19, 2005 until the benefit is paid in accordance with subsection 46(2) of the Schedule in respect of the housekeeping benefit.

5. If the parties cannot agree on the issue of entitlement to or amount of the expenses of this Arbitration proceeding, they may request a determination of these issues in accordance with Rule 79 of the Dispute Resolution Practice Code - Fourth Edition

July 7, 2006

Maggy Murray Arbitrator

Date

Footnotes

1. 1The Statutory Accident Benefits Schedule —Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended.
2. 2Konstantakos and Aviva Canada Inc. (FSCO A05-000546, May 17, 2006)
3. 3Hawley v. Bapoo, 2005 CanLII 36451 (ON SC), [2005] O.J. No. 4328, QL at para. 6 (Ont. S.C.J.)
4. 4Vol. 136-29.
5. 5Regulations Act, R.S.O. 1990 c.R.21, s.3
6. 6See also Pereira and Kingsway General Insurance Co. (FSCO A04-000161, October 14, 2005) and Tan and Royal and SunAlliance Insurance Company of Canada (FSCO A04-000656, November 29, 2004)
7. 7QL at 3, para. 12 and p.4, para. 13 (FSCO P01-00046, July 17, 2003)
8. 8QL at 3, para. 12 and p.4, par. 13 (FSCO P01-00046, July 17, 2003)