Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2006 ONFSCDRS 50

FSCO A01-001012

BETWEEN:

JOSEPH ROVELLA

Applicant

and

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY

Insurer

REASONS FOR DECISION No. 2

Before:

Joyce Miller

Heard:

December 9, 2005, at the offices of the Financial Services Commission of Ontario in Toronto.

Appearances:

Mr. Rovella represented himself

Angela James for State Farm Mutual Automobile Insurance Company

Issues:

The Applicant, Joseph Rovella, was injured in a motor vehicle accident on January 18, 1997. He 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 income replacement benefits on April 10, 2000. The parties were unable to resolve their disputes through mediation, and Mr. Rovella applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

A hearing was held on September 9, 10, 11, 12 and 13, 2002 to deal with outstanding issues in dispute between Mr. Rovella and State Farm. Counsel for Mr. Rovella was Ian Little and Robert Franklin was counsel for State Farm. Written submissions were submitted from both parties by October 25, 2002.

The issues at the September 2002 arbitration were as follows:

1. Is Mr. Rovella entitled to receive a weekly income replacement benefit pursuant to section 4 of the Schedule from April 11, 2000 and ongoing?

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

3. Is Mr. Rovella liable to repay State Farm the benefits he received from State Farm, pursuant to section 47 of the Schedule?

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

5. Is State Farm liable to pay Mr. Rovella's expenses in respect of the arbitration under subsection 282(11) of the Insurance Act?

6. Is Mr. Rovella liable to pay State Farm's expenses in respect of the arbitration under subsection 282(11) of the Insurance Act?

7. Is Mr. Rovella entitled to interest for the overdue payment of benefits pursuant to subsection 46(2) of the Schedule?.

On March 26, 2003, I issued a decision wherein I made the following orders:

1. The Arbitration is dismissed.

2. Mr. Rovella shall pay State Farm $33,997.72 plus interest pursuant to section 47 of the Schedule.

3. Mr. Rovella shall pay State Farm its reasonable expenses of the arbitration pursuant to subsection 282(11) of the Insurance Act

The issues in this hearing are:

4. Is State Farm entitled to an assessment of its expenses with respect to the arbitration order of March 26, 2003?

5. What is the interest rate and the date upon which interest commences for the repayment ordered in the arbitration order of March 26, 2003?

Result:

1. State Farm is not entitled to an assessment of its expenses with respect to the arbitration order of March 26, 2003.

2. Mr. Rovella shall pay State Farm $33,997.72 plus interest on this amount from October 4, 1999 at the bank rate of 4.75% per annum, pursuant to section 47 of the Schedule.

BACKGROUND:

On October 12, 2004, approximately 19 months after the decision of March 26, 2003 was issued, State Farm wrote FSCO (the Commission) requesting that the order in the March 26, 2003 decision be amended to include the amount of the costs "fixed at $10,000" and interest in the sum of $33,997.72 shall run from October 4, 1999, at 4.75% per annum.

Upon the file being retrieved from archives on November 4, 2004, I advised State Farm through the Case Administrator, that State Farm must follow the Rules in the Dispute Resolution Practice Code, specifically Rule 79.2.

Rule 79.2 requires that within 30 days after an award of expenses is made, the party seeking an assessment of the expense award must provide the other party with a Bill of Costs outlining the expenses claimed and serve it on the other party. Rule 79(d) provides "if a dispute remains, the parties shall serve and file the above materials, together with a written request for an assessment of expenses upon all parties to the proceeding."

After receiving the message from the Case Administrator, State Farm did not serve Mr. Rovella with an itemized Bill of Costs nor did it, pursuant to the Rules, ask for an extension of time to serve Mr. Rovella with its Bill of Costs. Instead, on January 19, 2005, State Farm served Mr. Rovella with an Application for Variation/Revocation.² The Application did not give a breakdown of the costs it was claiming. Instead, State Farm provided contradictory amounts of $10,000 and $15,000 that were being claimed as costs and filed all of its dockets that amounted to expenses of $20,000.

On February 3, 2005, the Director of Arbitrations, in a short letter, advised State Farm that he would not hear the Application for Variation/Revocation. He stated:

I am not convinced that a formal application for variation/revocation is required in these circumstances. The parties to an arbitration are entitled to an order that specifies the amount owing and, if interest is payable, the start date and rate of interest. Therefore, rather than open a new variation/revocation file, I will bring State Farm's request to the Arbitrator's attention and ask her to respond. If, for any reason, the Arbitrator concludes that she is unable to clarify her order, State Farm can bring the matter back to me. [emphasis added]

The Director of Arbitration's letter of February 3, 2005 was brought to my attention on March 2, 2005. I reviewed the file and except for the contradictory, lump sums of expenses claimed in the Application for Variation/Revocation, I did not see any evidence that pursuant to the Dispute Resolution Practice Code that State Farm had provided Mr. Rovella, who was now unrepresented, with an itemized Bill of Costs so that he could know what exactly was being claimed and therefore could either accept or dispute the items claimed. Nor, was there any request in the file to extend the time for service of the Bill of Costs. In short, the Rules in the Dispute Resolution Code were not followed.

Accordingly, on March 2, 2005 I sent a letter to the parties, which dealt only with the issue of costs,³ the purpose being to reinforce the November 4, 2004 verbal message given by the Case Administrator to State Farm's counsel by providing written directions as to the procedures it must follow if it wished to have an Assessment of Expenses hearing. The letter in full states:

I am responding as requested in the letter of February 3, 2005 by the Director of Arbitrations, and brought to my attention today.

For the following reasons I find that this is not a situation that requires that my order of March 26, 2003 should be amended.

I received Mr. Wydrzynski's letter dated October 12, 2004 requesting that I amend my order of March 26, 2003 to include the amount of $10,000 for expenses. On November 4, 2004, I advised Mr. Wydrzynski, through the Case Administrator, Susan Alleyne, that pursuant to Rule 79.2 of the Dispute Resolution Practice Code, State Farm must make an application for an assessment of expenses if Mr. Rovella did not agree to the amount requested by State Farm. [emphasis added]

Rule 79.2 of the Dispute Resolution Practice Code states: "Where an adjudicator has issued an order of expenses to be paid and the parties cannot agree on the amounts to be paid under that order, either party may request, in writing, an appointment before an adjudicator provided that ..." the parties follow the rules outlined in paragraphs (a) to (d).

• Paragraph (a) states that within 30 days of an arbitrator's order awarding expenses, the party awarded the expenses must provide the other party with an account outlining the expenses. [emphasis added]

• Paragraph (b) requires that the other party must promptly respond in writing identifying the items in dispute.

• Paragraph (c) requires that the party awarded the expenses must promptly provide copies of supporting documentation in respect of the disputed items.

• Paragraph (d) provides that if a dispute still remains then the parties shall serve and file the above materials, together with a written request for an assessment of expenses upon all parties to the proceeding.

Accordingly, I find that the proper procedure that State Farm should have followed is outlined in Rule 79 of the Dispute Resolution Practice Code and for this reason I decline to consider the request to amend my order of March 26, 2003. [emphasis added]

If you have any questions or require more information, please telephone this office at (416) 250-6714, or call toll free at 1-800-517-2332.

State Farm appealed this letter on the basis that I had made a final order without providing any reasons as to why it was not entitled to an assessment of its expenses, and that I had not provided any guidance on the issue of amending the interest order.

Director's Delegate, in his decision of September 12, 2005, made the following order:

1The matter is remitted to the arbitrator to specify the interest rate and the date upon which interest commences for the repayment ordered in her order of March 26, 2003.

2. The matter is remitted to the arbitrator to determine whether State Farm is entitled to an assessment of expenses with respect to her order of March 26, 2003.

3 The parties may contact me within 30 days of this decision if they are unable to agree on appeal expenses.

As a consequence of this decision, on December 9, 2005 a hearing was held to deal with the two outstanding issues.

ISSUE 1. IS STATE FARM ENTITLED TO AN ASSESSMENT OF EXPENSES PURSUANT TO THE ARBITRATION ORDER OF MARCH 26, 2003?

Testimony of Mr. Jeffrey Kope

Mr. Kope, a claims adjuster with State Farm for the past 18 years, testified that he had assumed carriage of Mr. Rovella's file at the time of mediation.

Mr. Kope testified that after receiving the decision of March 26, 2003, he waited to see if there would be an appeal by Mr. Rovella before taking any action on the file. As well, he stated that before enforcing a judgement or order against a policyholder of State Farm he needed to seek approval from State Farm's head office in Bloomington, Illinois. Mr. Kope testified that he requested this approval in June 2003.

Mr. Kope testified that he received approval in October 2003. However, for reasons not explained, prior to receiving approval from the head office on August 13, 2003, Mr. Kope wrote Mr. Rovella's counsel wherein he stated:

Further to the arbitration order of March 26, 2003, we look to Mr. Rovella for the repayment of $33,997.72 plus interest and the expenses of the arbitration.

Mr. Kope testified that he received no reply to this letter and so on October 16, 2003 he sent another letter to Mr. Little wherein he stated:

Further to the writer's correspondence of August 13, 2003, I have yet to receive a response.

Kindly advise as to when we may expect payment from Mr. Rovella for the $33,997.72 plus interest and expenses.

Mr. Kope testified that on October 23, 2003 he received a letter from Mr. Little advising him that he no longer represented Mr. Rovella.

Mr. Kope testified that sometime in November he spoke to Mr. Rovella personally. He stated that no amounts were discussed regarding expenses as no bill of costs had been provided to Mr. Rovella.

Mr. Kope testified that in January 2004 he called State Farm's counsel, Mr. Franklin, and asked that he execute the order of March 26, 2003 and collect the costs from Mr. Rovella.

In his cross-examination of Mr. Kope, Mr. Rovella pointed out that in the billing dockets for State Farm's counsel, there is no entry of any communication between State Farm and its counsel between November 11, 2003 and April 2, 2004. This latter entry states:

• Telephone call from Mr. Jeffrey A. Kope re execution

• Memo to student to enforce order

• Report to Client re enforcement of cost Order

As well, Mr. Rovella pointed out there is only one other entry after the April 2, 2004 entry, on July 6, 2004 - "Telephone call from Mr. Kope re status" - before the letter of October 12, 2004 was sent.

Mr. Kope testified that according to his log notes he in fact had made several phone calls to counsel about this matter, including having left a voice message for Mr. Franklin in January 2004. Mr. Kope speculated that not every call he makes to counsel is billed.

Submissions

State Farm's Submissions

State Farm submits that while there was a delay in rendering its account to Mr. Rovella there were no actions on the part of State Farm that would cause Mr. Rovella to assume that the claim for costs had been abandoned. State Farm submits that Mr. Rovella was served in October 2004 with a notice that it was seeking repayment of its costs. State Farm submits that it believed that Mr. Rovella would not pay any account willingly so it did not send him a bill of costs until they decided to enforce the order in October 2004. State Farm submits that any delay in rendering the account was a technical breach. Failing to render the account was procedural and not meant to show that the account was abandoned.

Without providing any case law to support its submission State Farm submits that actual prejudice must be shown before a substantive right to costs is struck away. State Farm submits that Mr. Rovella has not shown any actual prejudice or evidence that State Farm had abandoned seeking its costs.

Mr. Rovella's Submissions

Mr. Rovella submits that State Farm's own practice shows that it does not automatically enforce orders against their policyholders. Permission must first be sought from the head office in Bloomington. Mr. Rovella submits that to date, State Farm has never personally served him with an itemized Bill of Costs. Accordingly, Mr. Rovella submits that by never serving him with a Bill of Costs one could logically presume that State Farm chose to abandon or forfeit its costs in this case. Mr. Rovella submits that he is being penalized because State Farm took no steps in processing its file in a timely manner and therefore it should be denied its assessment of expenses.

The Law

The following Rules in the Dispute Resolution Practice Code are relevant to the issue in dispute:

Rule 79.2 of the Code provides:

Where an adjudicator has issued an order of expenses to be paid and the partie's cannot agree on the amount's to be paid under that order, party may reques t, in writin g, an appoin tment before an adjudi cator provid ed that:

(a) within 30 days from the date of the order awarding expenses, the party awarded expenses provides the other party with an account describing each of the expenses claimed, services received and the costs;

(b) the party ordered to pay expenses must promptly provide the other party with a written response to the account, identifying the items in dispute and the reasons for the dispute;

(c) the party awarded expenses must promptly provide the other party with copies of supporting documentation, such as invoices, receipts, computerized dockets or cancelled cheques in respect of the disputed items;

(d) if a dispute remains, the parties shall serve and file the above materials, together with a written request for an assessment of expenses upon all parties to the proceeding and legal counsel or representatives whose time and disbursements are reflected in the expenses sought;

(e) the Dispute Resolution Group shall notify the parties and their present and/or former legal counsel or representatives whether the assessment will be conducted by way of written submissions, or by an oral or electronic hearing, the date, time and if necessary, the location of the assessment hearing.

Rule 1.3 of the Code provides:

A defect in form or other technical breach will not make a proceeding invalid.

Rule 81.1 of the Code provides:

Subject to the requirements of the Insurance Act and the Statutory Powers Procedure Act, the adjudicator may on such terms as he or she considers just:

(a) set aside any time limit set out in these Rules for doing any act, serving any notice, filing any document or holding any hearing.

Analysis and Findings

The burden of proof rests with State Farm to show that it is entitled to an Assessment of its Expenses. For the following reasons I find that State Farm has not discharged its burden.

I do not accept State Farm's submission that its actions in seeking its costs in this case amounted to a technical breach of the Rules in the Dispute Resolution Practice Code. Instead, I find that, based on the evidence, State Farm's actions amount to a blatant disregard of the Rules.

State Farm provided no reasonable explanation as to why, when it was clear that Mr. Rovella was not going to appeal the decision of March 26, 2003 (the time for appeal being 30 days), it never served a Bill of Costs on Mr. Rovella in a timely fashion. At a minimum if it was awaiting advice from its head office to enforce the order, it had this advice by October 2003.

Although State Farm submitted that it had notified Mr. Rovella in October 2004 it was pursuing its costs, it did not provide any credible independent evidence to support this submission.

The original letter sent to the Commission on October 12, 2004 does not indicate that a copy was ever sent to Mr. Rovella. State Farm submits it sent a copy of this letter⁴ to Mr. Little, but Mr. Kope confirmed in his testimony that State Farm knew in October 2003 that Mr. Rovella was no longer represented by Mr. Little.

It would appear from the independent evidence that the first time Mr. Rovella knew that State Farm was seeking to recover its costs in this case was on January 19, 2005 as a result of the Application for Variation/Revocation made by State Farm.

At the December 9, 2005 hearing, State Farm was unable to give any reason why it chose to apply for a variation of my order as opposed to following my direction to adhere to the Rules in the Dispute Resolution Practice Code which would include serving Mr. Rovella with an itemized Bill of Costs so that he could either accept the Bill of Costs or dispute it.

Instead of providing Mr. Rovella with an itemized Bill of Costs, State Farm in its application for variation put forward two contradictory figures of $10,000 and $15,000 and attached $20,000 in expense dockets to the Application without delineating for what items payment was being sought.

After the Director of Arbitrations had declined to hear State Farm's variation application, State Farm took no steps to provide Mr. Rovella with an itemized Bill of Costs that he could accept or dispute. Nor did it ask for an extension of time to serve Mr. Rovella with a Bill of Costs.

At the Appeal on September 6, 2005, for the first time, as part of its Appeal brief State Farm presented an itemized Bill of Costs. This Bill of Costs delineated an itemized account of the costs, with supporting documentation, that State Farm was seeking to recover the amount of $8,681.36. It should be noted that this was a different amount to the generalized, contradictory figures of $10,000 and $15,000 it had claimed in its letter of October 12, 2004 and in its application for variation.

In his appeal decision the Director's Delegate stated: "The arbitrator provided no reasons for her refusal to consider an assessment of expenses." The Director's Delegate then stated, that if my reason for declining to amend the March 26, 2003 order was because State Farm had not adhered to the time lines required by the Rules, then I had failed to consider the discretionary power I had under Rule 81.1(a) to "set aside any time limit set out in these rules for doing any act, serving any notice, filing any document or holding hearing on such terms as she considers just."

The Director's Delegate provided the example where arbitrators have used that Rule to forgive the failure to meet the 30-day deadline where, for instance, a party awarded expenses was occupied preparing a Response to Appeal and assumed that the question would be dealt with in the context of the entire appeal.

At the December 9, 2005 hearing, State Farm gave various reasons why it had not served Mr. Rovella with an itemized Bill of Costs. These included:

• It needed to wait to see if Mr. Rovella was going to appeal the case;

• It needed to wait to get permission from its head office in Bloomington, Illinois to execute the order; and

• It had never expected Mr. Rovella to pay its Bill of Costs willingly.

In my view, unlike the reasonable example given by the Director's Delegate,⁵ State Farm's excuses do not justify why it never served Mr. Rovella with an itemized Bill of Costs to which he could respond.

As noted above, State Farm knew that Mr. Rovella was not appealing the arbitration decision 30 days after the decision was issued on March 26, 2003. As well, by October 2003 State Farm had permission from head office to enforce the order. Accordingly, by this latter date State Farm had no apparent reason why it could not serve Mr. Rovella with an itemized Bill of Costs.

In his decision the Director's Delegate further stated that "If the arbitrator was considering the other criteria applicable to the insurer before an assessment of expenses can be heard, those have now been met. As part of the appeal process, State Farm has served copies of its supporting documentation pursuant to Rule 79.2(c). ... State Farm has also filed those materials, and its actions since the fall of 2004 can be taken as a written request for an assessment of expenses, pursuant to Rule 79.2(d)."

With respect, I disagree. As noted above, it is clear that no credible objective evidence has been filed to show that Mr. Rovella had received any notice in the Fall of 2004 that State Farm was seeking to recover its costs. Mr. Rovella has been aware since my decision of March 26, 2003 that he was liable for State Farm's expenses. What Mr. Rovella did not know was that in the Fall of 2004 State Farm was now seeking to collect its expenses.

In his decision the Director's Delegate stated "In light of the provision in Rule 1.1 '[t]hese Rules will be broadly interpreted to produce the most just, quickest and least expensive resolution of the dispute' and in Rule 1.3 that '[a] defect in form or other technical breach will not make a proceeding invalid,' State Farm's actions could have been interpreted as an application for an assessment of expenses." [emphasis added]

With respect, on the facts of this case, if I were to follow the Director's Delegate's direction, that since the Fall of 2004 "State Farm's actions could have been interpreted as an application for an assessment of expenses", it would set a precedent wherein parties seeking their costs can look to this decision as a basis that no penalty will ensue if the rules are completely ignored for no valid reason whatsoever.

With respect, the actions by State Farm in this case do not, in my view, amount to a "defect in form or other technical breach." These actions include:

• Waiting approximately 19 months, without any reasonable or logical explanation, to enforce the expense order of March 26, 2003;

• Asking for an amendment of my order in a letter dated October 12, 2004 without advising Mr. Rovella that it was now seeking its costs;

• Not adhering to my directions in the Fall of 2004 to follow the Rules in the Code and instead, without any reasonable explanation, applied for a variation of the March 26, 2003 order;

• After the application for variation was denied, instead of requesting an extension of time to serve an itemized Bill of Costs that Mr. Rovella could respond to, State Farm continued to rely on its letter of October 12, 2004, requesting an amendment of my March 26, 2003 order; and

• Never personally serving Mr. Rovella with an itemized Bill of Costs, which Mr. Rovella could accept or dispute, except as part of its Appeal Brief for the Appeal hearing on September 6, 2005, two years and 5 months after my decision;

In summary, I find that State Farm has not provided any cogent, credible reasons as to why it did not seek its costs in a more timely and direct manner. The Code provides simple and straightforward Rules to be followed. State Farm did not follow these Rules. While an arbitrator has the discretion pursuant to Rule 81.1 of the Code to set aside any time limits that have been breached, or pursuant to rule 1.3 to rectify a defect in form or other technical breach, I find that on the facts of this case State Farm has not provided any reasonable explanation as to why I should exercise my discretion to set aside the time limit and correct any technical breach.

Accordingly, I find that State Farm is not entitled to an assessment of its expenses.

ISSUE 2. WHAT IS THE INTEREST RATE AND THE DATE UPON WHICH INTEREST COMMENCES FOR THE REPAYMENT ORDERED IN THE ARBITRATION DECISION OF MARCH 26, 2003?

Background

In my March 26, 2003 decision I made the following order: "Mr. Rovella shall pay State Farm $33,997.72 plus interest pursuant to section 47 of the Schedule." No rate of interest was included in my order as State Farm had not provided any evidence as to what the applicable bank rate should be. Nevertheless, it is clear from subsection 47(6) of the Schedule that "interest is owing from the fifteenth day after notice is given under subsection (2) at the bank rate in effect on that day." Mr. Rovella did not appeal my March 26, 2003 decision.

On October 12, 2004, State Farm wrote to the Commission and requested that the March 26, 2003 order be amended to state the date from which the interest is owed and the rate of interest.

The Director's Delegate, in his decision of September 12, 2004, declined State Farm's request that the overpayment order be amended to include "interest from October 4, 1999, at 4.75%."

The Director's Delegate stated:

... the start date is set out in her reasons, and I could amend the order to reflect that fact. However, the arbitrator still has to make a finding on whether the interest rate proposed by State Farm is correct. In addition, Mr. Rovella has raised a delay argument that must be adjudicated. [emphasis added]

Submissions:

State Farm's Submissions

State Farm submits that the order of March 26, 2003 should be amended to state that Mr. Rovella shall pay State Farm $33,997.72 plus interest from October 4, 1999, at the bank rate of 4.75%. State Farm submits that the fact that it has taken some time to get the order particularized does not take away from the fact that at all times Mr. Rovella was deemed to be aware that pursuant to section 47 that he owed the repayment and it was subject to interest at the bank rate. Accordingly, it submits that the fact that it has taken so long to enforce the order should not affect the length of time that interest is owed on the overpayment.

Mr. Rovella's Submissions

Mr. Rovella submits that he should not be penalized because State Farm took such a long time to collect on its repayment. He submits that State Farm could have asked for my order to be amended within at least 30, 60 or even 90 days after the order was issued. Instead, it waited "a very long time," allowing the interest to mount up before it sought to amend the order. Accordingly, Mr. Rovella submits that he should not have to pay the interest requested by State Farm because of the length of time it took to ask for an amendment.

Analysis and Findings

Subsection 47(6) of the Schedule provides that "interest is owing from the fifteenth day after notice is given under subsection (2) at the bank rate in effect on that day."

Mr. Rovella did not dispute that notice regarding the overpayment was provided to him on September 17, 1999. Accordingly, pursuant to subsection 47(6) of the Schedule, I find that the effective date that interest commenced to be owed is October 4, 1999, 15 days after notice was provided.

Evidence on the "bank rate" for October 4, 1999 was presented by affidavit evidence by Jonathan Schrieder, a lawyer in the law firm of Reisler Franklin LLP, to be 4.75%. Mr. Rovella did not dispute this rate. Accordingly, I accept the affidavit evidence and find that the "bank rate" for October 4, 1999 was 4.75%.

While Mr. Rovella does not dispute the date of notice, amount owed and rate of interest, he does dispute the fact that it took State Farm a long time to enforce the order. Accordingly, Mr. Rovella submits that he should not be required to pay the full amount of interest. I disagree.

My order on March 26, 2003 stated that: "Mr. Rovella shall pay State Farm $33,997.72 plus interest pursuant to section 47 of the Schedule." Mr. Rovella did not appeal this order.

At any time after the March 26, 2003 order Mr. Rovella could have paid or made arrangements to pay the $33,997.72 owing. He did not do so. In my view, the fact that Mr. Rovella knew from the time of the March 26, 2003 decision that he would have to pay interest on any unpaid amounts if he did not repay the overpayment in a timely fashion means that Mr. Rovella must now bear the consequences of his decision not to make the repayment in a timely fashion. Accordingly, I find it is not the length of time it has taken State Farm to enforce the repayment order but Mr. Rovella's delay in making the repayment that has caused the interest to accumulate.

As noted above, Mr. Rovella does not dispute the amount owing, the interest rate or the effective date when interest commences. Accordingly, I find that Mr. Rovella shall pay State Farm $33,997.72 plus interest on this amount from October 4, 1999 at the bank rate of 4.75% per annum pursuant to section 47 of the Schedule.

EXPENSES:

If needed, the parties may contact me within 30 days of this decision if they cannot agree on the issue of expenses in this hearing.

March 31, 2006

Joyce Miller Arbitrator

Date

Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2006 ONFSCDRS 50

FSCO A01-001012

BETWEEN:

JOSEPH ROVELLA

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. State Farm is not entitled to an assessment of its expenses with respect to the arbitration order of March 26, 2003.

2. Mr. Rovella shall pay State Farm $33,997.72, plus interest on this amount from October 4, 1999 at the bank rate of 4.75% per annum, pursuant to section 47 of the Schedule.

March 31, 2006

Joyce Miller Arbitrator

Date

Footnotes

1. 1The Statutory Accident Benefits Schedule —Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended.
2. 2At the hearing on December 9, 2005, State Farm advised it could not provide a reason as to why it chose to ignore my direction and proceed by variation/revocation.
3. 3Regarding the issue of the interest order, the normal course of procedure would have been for me to have asked the Case Administrator to retrieve the file from archives and set up a hearing wi th the parties to deal with this issue. This would have been made verbally at the time the October 12, 2004 letter was received, as well as after receipt of the Director of Arbitration's letter of February 3, 2005. There is nothing in the file to indicate what had transpired as to this matter.
4. 4The original letter to the Commission does not show a carbon copy to Mr. Little, however, a photocopy of this letter was presented into evidence with a "c.c." typed in at the bottom to Mr. Little.
5. 5Chafe-Moote and Prudential of America General Insurance Company (FSCO P99-00044, September 8, 2000) appeal