Financial Services Commission of Ontario
Commission des services financiers de l’Ontario
Neutral Citation: 2006 ONFSCDRS 168
FSCO A03-001565
BETWEEN:
IONIE BARRETT
Applicant
and
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY
Insurer
DECISION ON A MOTION FOR INTERIM BENEFITS
Before: John Wilson
Heard: July 28, 2006, by teleconference. Written submissions received by June 30, 2006
Appearances: Allan S. Blott for Mrs. Barrett Paul Giuliano for State Farm Mutual Automobile Insurance Company
Issues:
The Applicant, Ionie Barrett, was injured in a motor vehicle accident on April 9, 2002. She applied for accident benefits from State Farm Mutual Automobile Insurance Company ("State Farm"), payable under the Schedule.1 The parties were unable to resolve their disputes through mediation, and Mrs. Barrett applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.
The dispute in question centred on proposed treatments for a temporomandibular joint (TMJ) condition that arose following the accident. My understanding is that a disruption of the temporomandibular joint can result in ongoing pain and discomfort.
Mrs. Barrett attributes her TMJ problems to the motor vehicle accident, which took place April 9, 2002, while State Farm has taken the position that they may be caused by matters unrelated to the accident.
Because of difficulties in obtaining a completed treatment plan and full details of her problem from Dr. Goldberg, her then treating dental surgeon, I first adjourned this matter on February 8, 2006 to permit Mrs. Barrett to obtain the necessary information and bring the complete dispute to arbitration.
At the time of the adjournment, I noted:
During discussions with the counsel for both parties it became apparent that, due to the late receipt of information from Dr. Goldberg concerning the details of proposed treatment for Ms. Barrett, the hearing arbitrator would not be in a position to deal with the entirety of the dental-related claim at arbitration.
Since subsequent to the adjournment Dr. Goldberg continued to raise problems in providing the necessary information and treatment plans, Mrs. Barrett transferred to Dr. Freedman who, following initial consultations, was able to produce a report outlining treatment.
The manner in which Dr. Freedman presented his treatment plan being not in accordance with State Farm's expectations, the Insurer continued to request a completed treatment plan.
Dr. Freedman did ultimately present a treatment plan which, in turn, was rejected by State Farm as incomplete since it lacked the signature of Mrs. Barrett.
The hearing remained scheduled for July 24, 25, 26 and 27, 2006.
State Farm then requested an adjournment on June 13, 2006 on the basis that "(T)o date, the applicant has not provided a valid treatment plan." and that "Without a valid treatment plan, the insurer is incapable of having the applicant assessed by Dr. Gryfe."
The Insurer also requested an order suspending any interest on overdue payments.
If the Insurer was correct in its assessment of the situation, then there would be little of the real dispute ready to proceed to arbitration on the scheduled dates.
Mrs. Barrett, through her counsel, denied that she had failed to produce a valid treatment plan.
However, given the Insurer's refusal to deal with the claim as presented, any progress towards further assessments and elaboration of the claim was stalled. Mrs. Barrett suggested that in the event that an adjournment was necessary, it be made conditional on agreement by State Farm to "pay all costs arising from the 'predetermination phase' as set out in the Predetermination Schedule which accompanied Dr. Freedman's May 24, 2006 Treatment Plan."
In addition, she wanted State Farm to "pay Dr. Freedman's costs to date."
While ultimately granting the adjournment, I reserved on the question of conditions appropriate to the adjournment.
The remaining issue is:
- Is Mrs. Barrett entitled to interim benefits pursuant to section 279(4.1) of the Insurance Act to "pay all costs arising from the 'predetermination phase' as set out in the Predetermination Schedule which accompanied Dr. Freedman's May 24, 2006 Treatment Plan?
Mrs. Barrett also claims interest on any amounts owing and her expenses incurred on this motion.
Result:
State Farm shall pay Mrs. Barrett:
The expenses related to the "initial screening examination" of March 13, 2006. Line 9 of Ms. Martha Benko's affidavit identifies "Dr. Freedman's costs to date" as $425.00.
The "Specific Area Exam & Diag" listed at line 1 in the addendum to Dr. Freedman's treatment plan.
The diagnostic Photographs listed on lines 2 through 9 in the addendum to Dr. Freedman's treatment plan.
The "complete oral exam" listed at line 10 in the addendum to Dr. Freedman's treatment plan.
The various radiographs and films listed in lines 11 to 15 in the addendum to Dr. Freedman's treatment plan.
EVIDENCE AND ANALYSIS:
As noted earlier, this interim benefit application arose in the context of State Farm's request for an adjournment on June 13, 2006.
Rule 72.4 of the Dispute Resolution Practice Code (4th Edition, Updated - October 2003) (Practice Code) specifically provides for adjournments being "on such terms as he or she [the adjudicator] considers just." Neither the Practice Code, the Schedule nor the Insurance Act provides any guidance as to the nature of the terms that an arbitrator can impose in the case of an adjournment.
In accident benefit cases, an order for some sort of interim benefits is not unheard of in this context.2 In Hussein v. De Marco, Lane J., sitting as a single judge of the Divisional Court, noted in an application for leave to appeal such an order:
Counsel for the Applicant concedes that Dempster v. Mutual Life holds that an insurer may be ordered to make such payments as a term of the adjournment, to the extent that the payment responds to the impact of the adjournment on the insured.3
The Dempster4 case, cited by Lane J., involved an order that the insurer pay disability benefits for three months as a condition of an adjournment. In Dempster, the Divisional Court only had the brief endorsement to deal with on appeal. It examined the power to make such an order, and found that this was not the equivalent of a mandatory injunction restoring the policy to full force, but of a reasonable condition upon adjournment. The court dismissed the appeal and found the judge within his jurisdiction to make the interim order. It stated:
The term imposed was not the equivalent of a mandatory injunction restoring the policy to full force. It was clearly an interim step to ease the problem created for the plaintiff by the request for a lengthy adjournment.
In the context of an accident benefit claim and the situation of a particular arbitration, any condition imposed on an adjournment must be "just."5 "Just" has been defined as "Legally right; lawful; equitable."6 Likewise, it can be "acting or done in accordance with what is morally right or fair, deserved, well grounded," or "right in amount."7
The ordering of conditions is within the discretion of an arbitrator, a discretion that must be exercised lawfully, fairly or equitably. The discretion of an adjudicator is a judgement call in the context of each case that provides a wide range of options in the exercise of that discretion. Consequently, the discretion, although circumscribed by its need to be appropriate, to relate to the prejudice to the party, and the need to be "just" is not subject to those rules specifically relating to either injunctions in the court setting, or to interim benefit applications in arbitrations under the Insurance Act.
Given the wide-ranging nature of judicial discretion and the necessary vagueness of the concept of "just" in the context of conditions on judicial orders, the best summary of the power would be that it must be applied on a principled basis, and its application will "depend upon the circumstances of each case."8
From a principled perspective, it is important to keep in mind the purposes of the legislative statutory accident benefit scheme.
Eberhard J., in Gill v. Zurich, 1999 CanLII 36826 (ON SC), [1999] O.J. No. 4333 at p.14, made the following comments on the purposes of the statutory accident benefit scheme:
I adopt the statement of purpose articulated by Arbitrator Mackintosh at page 12 in Edgar v. Wellington Insurance Co. [1994] O.I.C.D. No. 34 File A-005441 that SABS is remedial, that is to be interpreted in a broad and liberal way, and that its principal object is to provide a "fair and adequate income stream to those who are injured and disabled from work."
In Smith v. Co-operators General Insurance Co.9, one of the few accident benefit cases to have made its way to the Supreme Court, Gonthier J. made the following comment:
There is no dispute that one of the main objectives of insurance law is consumer protection, particularly in the field of automobile and home insurance.
I adopt Eberhard J.'s and Gonthier J.'s comments on the nature of the accident benefit system.
Arbitrator Bayefsky outlined the role of an interim benefit order in the arbitration system:
In my view, an order of interim benefits is designed to address the personal situation of the applicant in light of a preliminary determination of the merits of the case. It does not set in motion any process with respect to ongoing benefits, particularly when the nature and scope of such benefits can only be determined after a full arbitration hearing.10
Providing, as in this case, the order has a specified, relatively short, duration and addresses the circumstances and the equities of the adjournment itself, it may be made as part of the adjournment order alone. In this case, I find that the conditions requested are appropriate to an adjournment and can be supported in that context, as discussed in the balance of this decision.
As Laskin J.A. stated in Khimji v. Dhanani 2004 CanLII 12037 (ON CA), [2004] O.J. No. 320: "Under our modern Rules non-compensable prejudice plays a pivotal role in deciding whether to grant an amendment or an adjournment." This suggests to me that if costs were the only available condition to an adjournment, I might well decline the adjournment request, since costs could not balance any prejudice to Mrs. Barrett caused by a further delay in the assessment/treatment process.
Because the claims process had ground to a halt, with the Insurer's refusal to deal with what it viewed as an incomplete treatment plan, I was convinced that an adjournment was necessary to allow the parties to bring the full dispute to arbitration. Nothing would be served by having a multitude of arbitrations, each dealing with some small aspect of Mrs. Barrett's claim.
The analysis of the dynamics of the adjournment request, however, was more difficult. Identifying the prejudice suffered by the parties and fashioning an appropriate remedy involved more than a quick review of submissions. Each party submitted reasons that, if the underlying facts were accepted, would be plausible. The only common ground between the two positions was that the issues were not ready for arbitration. Each blamed the other.
Although blame is hard to apportion, and the determination process usually of questionable utility, I will focus first on the Insurer's allegation that as of June 13, 2006 "the applicant has not provided a valid treatment plan."
Reviewing the background of this matter, the parties were agreed at the date of the first adjournment in February of 2006 that it would be in the interest of everyone to have all the issues brought forward in a single arbitration, including all of those dealing with the proposed TMJ treatment.
As noted earlier, Mrs. Barrett, after trying to obtain the co-operation of Dr. Goldberg, obtained the services of another dental surgeon [Dr. Lawrence Freedman] who set out the preliminary requirements in terms of examination and exploration of the TMJ problem. These examinations, in Dr. Freedman's view, had to take place as a prelude to a decision on the nature and degree of the final treatment that would be recommended. He also sketched in some of the possible treatments that would take place following assessment.
It should be noted that the assessment mechanisms potentially had a dual function and could form part of any wider treatment protocol. The procedures that had this dual characteristic would include the initial examinations of the mouth, the taking of radiographic images of various parts of the mouth, and the complete oral examination. Completing them would serve both to clarify the range of the proposed treatment and, since they are a pre-condition to any therapeutic treatment, advance the treatment itself.
State Farm wanted the June adjournment because it claimed that in the absence of a completed treatment plan, it could not proceed with the necessary evaluations, and, consequently, the hearing. It also viewed the necessity of an adjournment as stemming directly from Mrs. Barrett's default in not submitting a treatment plan in proper form.
The best that can be said is that State Farm's characterization of the scenario leading to the adjournment is less than generous. While at the time of the first adjournment Mrs. Barrett may not have been timely in bringing forward complete particulars of her claim for treatment, by June 13, 2006 the situation had changed. She had provided the Insurer with full details of the requested treatment as well as an OCF 18, the form on which a treatment plan is submitted. It is fair to suggest that by June 13, 2006, she had at the very least substantially completed her obligation to render a treatment plan and communicate her treatment requirements.
For State Farm, substantial completion was not enough. It had to be in the proper form and executed by the required parties. In the absence of such a perfected application, it did not consider itself either obliged or even permitted to take any steps to deal with the treatment proposal.
There are several reasons why State Farm's approach to this issue was ill-advised. First of all, looking at the purpose of the legislative provision itself, I do not accept that the requirement for a treatment plan is placed in the Schedule merely to provide a roadblock to an insured who requires treatment. Clearly, it is there to facilitate access to such treatment by providing to the Insurer details of the proposed treatment as well as the reasons for the proposal so that an approval can be made in a timely manner. This approach is consistent with the very tight timelines provided to an insurer to respond to a treatment plan, and the deemed approval that results if the insurer is dilatory.11
As well, while initially a signature may have been lacking on the OCF 18, it should be noted that section 28 of the Interpretation Act provides specifically for such circumstances:
deviation from forms
In every Act, unless the contrary intention appears,
(d) where a form is prescribed, deviations therefrom not affecting the substance or calculated to mislead do not vitiate it;
Dealing with the alleged deviation from the prescribed treatment plan, I do not find that the OCF-18 filed by Mrs. Barrett was misleading in any way. Taken in the context of the rest of the material provided in the history of this matter, the Insurer could not but have a reasonable sense of the assessments and treatment that Mrs. Barrett wished to pursue. Ultimately, such communication is the critical part of the treatment plan itself.
Nor do I accept that the Insurer could not proceed to further assessments under section 42 of the Schedule without a treatment plan that was perfect in every respect. It knew of the details of the proposed treatment when it received the "Report of Findings and Treatment Plan for Mrs. Ionie Barrett," dated April 4, 2006.
It was also within the power of the Insurer to waive the need for a signature. Section 38(2) of the Schedule specifically provides that "An application under this section must be signed by the insured person, unless the insurer waives that requirement:' Consequently, the Insurer's position that, without the signature it could not proceed to deal with the treatment plan, is both misleading and false. It could have dealt with the plan if it so wished, but it refused. I noted in my letter of February 8, 2006:
To ensure that all evidence related to the proposed treatments has been exchanged well before the hearing date, both parties undertook to expedite the claims process and to co-ordinate in the scheduling of any examinations. State Farm also confirmed that the reasonable expenses of any related treatment providers incurred in preparing the treatment plans would be addressed promptly.
In the light of the agreement between the parties following the original adjournment that an elaboration of a treatment plan would assist the process and move forward the arbitration, the technical position taken by the Insurer is both disappointing and unsupportable.
I also find the allegation that "without a valid treatment plan the insurer is incapable of having the applicant assessed by Dr. Gryfe" as being without foundation. It was already clear that TMJ associated claims were at issue in Mrs. Barrett's claim. No further treatment plan would have been necessary to justify a section 42 examination by an expert of State Farm's choice. For some unknown reason it did not follow that course of action.
The Insurer also requested a stay of interest as a condition of this adjournment. Given the history of this matter, and the need for Mrs. Barrett to change dental surgeons in order to obtain the necessary treatment plan, I do not accept that Mrs. Barrett's delay was the sole or the overwhelming reason behind this adjournment. Consequently, I do not find it an appropriate situation to order a stay of interest pending arbitration, even if there were jurisdiction to make such an order at this stage in the process. The issue of interest on any overdue amounts will be left to the hearing arbitrator who alone has the jurisdiction to rule on that issue.
As noted earlier, the power of an arbitrator to adjourn a matter pursuant to Rule 72 of the Practice Code "on such terms he or she considers just" includes the power to order a payment or payments of benefits, in circumstances where such an order would be appropriate.
With regard to Mrs. Barrett's claim for an interim order to "pay all costs arising from the 'predetermination phase' as set out in the Predetermination Schedule which accompanied Dr. Freedman's May 24, 2006 Treatment Plan", I accept that there are grounds for such an interim order as a condition of the adjournment, and that such an order would be both appropriate and consonant with the aim of the accident benefit scheme.
I do not accept, however, that in this case a claim for interim benefits can or should be cast quite as widely as suggested by Mrs. Barrett.
Mrs. Barrett has asked for the payment of Dr. Goldberg's account. The hearing is now scheduled to take place in December. The claim for Dr. Goldberg's expenses, having waited this long, can easily wait a few months until the hearing. There is no particular urgency to them, especially since he will not be a treating practitioner.
Elements of Dr. Freedman's predetermination expenses, however, may be cast in a different light. While an interim benefit should not predetermine the principal issues in the arbitration, it may properly address matters which can advance both the issues for arbitration, and address the urgent needs of the claimant.
Firstly, the expenses related to the creation of Dr. Freedman's treatment plan should be paid, if they have not already been paid. The OCF 18 was insisted upon by the Insurer, who also undertook to pay the related expenses. I note that Dr. Freedman billed $175.00 for the preparation of the treatment plan.
Secondly, the necessary expenses related to the determination of an appropriate treatment strategy for Mrs. Barrett's TMJ condition would be useful in both advancing her treatment and in further delineating the scope of the medical benefit being dealt with at arbitration.
Had the matter not been adjourned at the request of the Insurer, it is quite possible that Mrs. Barrett would have been able to commence the assessment and treatment process already. The interim award, as noted, will both mitigate further delay in therapeutic treatment, and advance the information available to the hearing arbitrator.
In my original letter to the parties, dated August 10, 2006, I identified the appropriate expenses as follows:
The expenses related to the "initial screening examination" of March 13, 2006. Line 9 of Ms. Benko's affidavit identifies "Dr. Freedman's costs to date" as $425.00.
The "Specific Area Exam & Diag" listed at line 1 in the addendum to Dr. Freedman's treatment plan.
The diagnostic Photographs listed on lines 2 through 9 in the addendum to Dr. Freedman's treatment plan.
The "complete oral exam" listed at line 10 in the addendum to Dr. Freedman's treatment plan.
The various radiographs and films listed in lines 11 to 15 in the addendum to Dr. Freedman's treatment plan.
I also noted that:
The above treatments appear to be those parts of the "predetermination expenses" which are diagnostic rather than solely remedial on their face. The amounts identified in the treatment plan for lines 2 to 5 total $1333.38. With the previous expenses (March assessment), this would total $1758.33, plus the amount, (if any) outstanding for the creation of the treatment plan.
I have no reason to believe that the balance of therapeutic elements of the treatment plan could be completed prior to the December 11 commencement of the arbitration hearing.
I also ordered that the above preliminary procedures should be undertaken in a timely fashion so that the results will be available to both parties at least 30 days prior to the scheduled commencement of the arbitration.
Given that the Insurer still disputes the causation of the TMJ problem, I also ordered: "As is usual, the interim benefit will be repayable by Mrs. Barrett if she is unsuccessful in her claim against State Farm." I note that there was no evidence before me that Mrs. Barrett would be unable to repay the expenses outlined in the interim order should she be unsuccessful at arbitration.
EXPENSES:
The question of expenses was deferred until all other issues in this motion were decided. Given the upcoming hearing in this matter, I leave that issue to the hearing arbitrator.
November 1, 2006
John Wilson Arbitrator
Date
Financial Services Commission of Ontario
Commission des services financiers de l’Ontario
Neutral Citation: 2006 ONFSCDRS 168
FSCO A03-001565
BETWEEN:
IONIE BARRETT
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:
State Farm shall pay Mrs. Barrett interim benefits as follows:
The expenses related to the "initial screening examination" of March 13, 2006. Line 9 of Ms. Martha Benko's affidavit identifies "Dr. Freedman's costs to date" as $425.00.
The "Specific Area Exam & Diag" listed at line 1 in the addendum to Dr. Freedman's treatment plan.
The diagnostic Photographs listed on lines 2 through 9 in the addendum to Dr. Freedman's treatment plan.
The "complete oral exam" listed at line 10 in the addendum to Dr. Freedman's treatment plan.
The various radiographs and films listed in lines 11 to 15 in the addendum to Dr. Freedman's treatment plan.
The above interim payments will be repayable by Mrs. Barrett if she is unsuccessful in her claim against State Farm.
November 1, 2006
John Wilson Arbitrator
Date
Footnotes
- The Statutory Accident Benefits Schedule —Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended.
- See Ecuimates v. Rix [1993] O.J. No. 4100
- [2003] O.J. No. 1417
- Dempster v. Mutual Life of Canada 2001 CanLII 38743 (ON SCDC), [2001] O.J. No. 3336
- Historically, in Simpson v. Smith, 2 U.C.Q.B. (O.S.) 629 Upper Canada Executive Council, Chief Justice Robinson found that the granting of a power to the Vice Chancellor to "make such order or decree... as may appear to him just and reasonable" gave the court "perfect control over the whole subject." The modern view is a little less broad.
- Black's Law Dictionary, 8th edition St. Paul 2004
- The Canadian Oxford Dictionary Toronto 1998
- See Spiller v. Paris Skating Rink Company Limited (1878) 27 W.R. 225.
- 2002 SCC 30, [2002] 2 S.C.R. 129
- See Kolonjari and Co-operators General Insurance Company, (FSCO A97-002059, November 18, 1998)
- 38(8.2) 2. In the case of a notice under paragraph 1 of subsection (8), the insurer shall pay for all goods and services provided under the treatment plan that relate to the period starting on the 11th business day after the day the insurer received the application and ending on the day the insurer gives the notice described in paragraph 1 of subsection (8). O. Reg. 281/03, s. 16 (4); O. Reg. 546/05, s. 14 (9, 10).