Aviva Canada Inc. v. Mauro Tarantino, 2007 ONFSCDRS 248

Financial Services Commission of Ontario Commission des services financiers de l’Ontario

Neutral Citation: 2007 ONFSCDRS 248

Appeal P06-00026

OFFICE OF THE DIRECTOR OF ARBITRATIONS

AVIVA CANADA INC. Appellant

and

MAURO TARANTINO Respondent

BEFORE: Nancy Makepeace

REPRESENTATIVES: James M. Brown for Aviva David Derfel for Mr. Tarantino

HEARING DATE: April 20, 2007

APPEAL ORDER

Under section 283 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:

1. The appeal is allowed in part. The arbitration order dated June 28, 2006 is varied as follows:

(i) Paragraphs 1 through 6, and paragraph 9 are affirmed.

(ii) Paragraphs 7 and 8 (arbitration expenses) are revoked.

2. If the parties are unable to agree about arbitration or appeal expenses, a hearing may be arranged in accordance with Rule 79 of the Dispute Resolution Practice Code.

December 12, 2007

Nancy Makepeace Director’s Delegate

Date

REASONS FOR DECISION

I. NATURE OF THE APPEAL

The insurer appeals the arbitrator’s order awarding income replacement benefits, housekeeping benefits, assessment expenses, and interest under the SABS–1996¹ and a special award pursuant to subsection 282(10) of the Insurance Act.

I am not satisfied the arbitrator erred. However, the arbitrator’s expenses order will be revoked because it was inadvertently made in the absence of submissions.

II. BACKGROUND

On December 2, 2002, Mr. Tarantino was exiting Highway 401 onto Highway 400 when his van was involved in a chain reaction accident; it appears the vehicle ahead ran into the guardrail, which flew into Mr. Tarantino’s car, and another collision followed. His vehicle was a total loss. He did not require an ambulance, but began to experience dizziness and pain in his neck, back and shoulders soon after the accident.

Mr. Tarantino has worked as a hairstylist for some 30 years. He and his business partner, Mr. Joe Curcio, have jointly owned a hair salon since 1993. Mr. Tarantino returned to his salon the day after the accident, but limited himself to managing the shop, leaving the clients to Mr. Curcio. He slowly resumed more tasks, returning to cutting hair in April 2003. However, he claims that ongoing pain in his neck, shoulders and low back continue to prevent him from working the same hours or with the same productively as he had before the accident.

The insurer paid income replacement benefits (“IRBs”) from one week after the accident until August 29, 2003, when benefits were terminated based on insurer examination reports by Dr. D.E. Brown, an orthopaedic surgeon, and purportedly by Mr. Robert A. Bullard, a kinesiologist, although the functional abilities evaluation (“FAE”) was not completed until after the stoppage notice was issued. Mr. Tarantino claimed ongoing IRBs under section 4 of the SABS-1996, including benefits after 104 weeks of disability pursuant to clause 5(2)(b) of the SABS-1996. He also claimed benefits under section 22 of the SABS-1996 for housekeeping and home maintenance expenses, but these were denied by the insurer.

The arbitrator heard four days of evidence in August 2005, and written submissions were completed in December 2005. Mr. Tarantino testified, and Mary Tarantino (his wife), Giordano Tarantino (his son), and Ian Wollach (a chartered accountant) also testified on behalf of the claimant. Dr. Brown, Bruce Webster (a chartered accountant), and Kim Schiafone (one of the insurer’s adjusters on Mr. Tarantino’s file) testified for the insurer.

To establish entitlement to IRBs from August 30, 2003 to December 2, 2004, Mr. Tarantino had to prove on a balance of probabilities that he was suffering an accident-related impairment that resulted in a substantial inability to perform the essential tasks of his employment as a hairstylist. The arbitrator found that Mr. Tarantino’s condition had not changed since before the insurer issued its stoppage notice, and that the totality of the evidence, including lay evidence and the certificates and reports filed by Mr. Tarantino’s doctors, established that he continued to meet the test because his accident-related impairments resulted in reduced productivity. The insurer appeals this finding on the basis that the arbitrator erred by rejecting Dr. Brown’s evidence and preferring the lay evidence and the evidence of Mr. Tarantino’s doctors.

The post-104 week test requires proof on a balance of probabilities that the claimant is suffering a complete inability to engage in any employment for which he is reasonably suited by education, training or experience. The arbitrator found that Mr. Tarantino did not meet the “complete inability” test because he has continued to work as a hairdresser since the accident. Mr. Tarantino does not appeal that finding.

There was also a dispute at the arbitration hearing about the amount of IRBs payable to Mr. Tarantino. The arbitrator preferred Mr. Webster’s evidence on the calculation of Mr. Tarantino’s pre-accident and post-accident income from self-employment, and Mr. Tarantino does not appeal that finding.

The arbitrator found that Mr. Tarantino was entitled to an IRB of $121.87 from August 30, 2003 to December 31, 2003, and $107.73 for the period January 1, 2004-December 2, 2004.

Mr. Tarantino testified that he has been unable to do his usual outdoor chores (snow removal, lawn and garden maintenance) and that his son, Giordano, has taken over that work. No benefits were paid. At the arbitration hearing, the insurer took the position that the amount claimed was excessive and that no particulars had been provided in response to its request. Two experts assessed Mr. Tarantino’s need for these services. Ms. Marlene Levy, an occupational therapist, assessed Mr. Tarantino for the insurer on January 28, 2003, and Dr. Heather Orenstein-Frankel, a chiropractor and occupational therapist, conducted an occupational therapy assessment for Mr. Tarantino on March 10, 2003, with a follow-up in June 11, 2003. The arbitrator preferred Dr. Orenstein-Frankel’s opinion, which she found was supported by the evidence of Mr. Tarantino and his son. She allowed benefits of $10 an hour for 2 hours 45 minutes weekly between December 2, 2002 and June 11, 2003 and 1 hour weekly between June 12, 2003 and December 2, 2004. The insurer appeals, submitting that the arbitrator erred by allowing the claim despite the claimant’s failure to provide particulars in advance of the hearing, by awarding benefits at a rate higher than minimum wage, and by preferring Mr. Tarantino’s evidence about how much help he needs to that of the insurer’s expert.

Mr. Tarantino also claimed $956.37 to pay for the cost of Dr. Orenstein-Frankel’s report pursuant to section 24 of the SABS-1996. The arbitrator allowed the claim and the insurer appeals, arguing that the report was unnecessary because Ms. Levy had done an assessment just two months earlier.

In addition to the benefits claimed, Mr. Tarantino sought a special award under subsection 282(10) of the Insurance Act. The arbitrator ordered an award of $2,000, including interest, because the insurer’s notice of IRB termination relied on an FAE that had not yet been completed and because of the insurer’s delay in paying the cost of assessment claim. The insurer appeals.

III. ANALYSIS

A. Income Replacement Benefits

1. Introduction

The insurer advanced three alternative grounds for appeal: (i) the claimant failed to adduce any medical evidence capable of supporting a finding of entitlement for the period at issue (between August 29, 2003, when benefits were terminated, and December 2, 2004, the 104 week mark); (ii) the arbitrator unfairly rejected the medical evidence presented by the insurer, based on irrelevant considerations; and (iii) the arbitrator held the insurer to a standard of perfection with respect to the stoppage notice dated August 11, 2003. In addition to his specific response on all three grounds, Mr. Tarantino submits that the insurer’s appeal does not identify an error of law, as required by subsection 283(1) of the Act, but asks me to second-guess the arbitrator’s assessment of the evidence, which is beyond my authority on appeal.

I am not satisfied the arbitrator erred.

2. Lack of Supporting Evidence

The insurer submits that the arbitration decision was not supportable on the evidence because Mr. Tarantino did not call any medical witnesses and the medical reports he relied on were insufficient to satisfy his burden of proof.

I agree with Mr. Tarantino that no inference can be drawn from his decision not to call medical witnesses. Parties to arbitration proceedings are encouraged to rely on expert reports rather than calling expert witnesses for reasons of hearing efficiency.² In this case, Mr. Tarantino identified three expert witnesses at the arbitration pre-hearing — Dr. L.W. Sokol (his family doctor), Dr. Stephen H. Gallay (an orthopaedic surgeon), and Dr. Heather Orenstein-Frankel (a chiropractor and occupational therapist) — but ultimately elected not to call them. Ideally, a decision not to call previously identified witnesses should be disclosed early enough to allow the other party to identify witnesses that are required for cross-examination,³ but this is not required by the Code, and sometimes it is not practical. In any event, when Mr. Tarantino’s counsel identified his witnesses at the outset of the hearing, the insurer did not request an adjournment to require expert witnesses to attend for cross-examination, suggesting the insurer was content for Mr. Tarantino to proceed without calling medical experts.

Mr. Tarantino relied on the following medical evidence: (i) a disability certificate from Dr. J. Sonja, chiropractor, dated December 19, 2002; (ii) two “To Whom It May Concern” letters of Dr. Gerhardt Fischer, general surgeon, dated January 7, 2003 and February 18, 2003; (iii) Dr. O. Veidlinger’s consultation report to Dr. Fischer, dated January 22, 2003; (iv) the report of Dr. Gallay, dated April 10, 2003, prepared at the request of Mr. Tarantino’s counsel; and (v) a disability certificate from Dr. Sokol, dated July 25, 2005, with his clinical notes and records.

The insurer submits none of these documents should have been given any weight in deciding Mr. Tarantino’s entitlement to IRBs beyond the date of termination, August 29, 2003. I find that Mr. Tarantino’s medical evidence, while perhaps not overwhelming, supported the arbitrator’s finding of entitlement. I will address each expert in turn.

The insurer submits that Dr. Sonja’s December 19, 2002 disability certificate should not be relied upon because (i) it did not include any consideration of the disability test under the SABS or the nature of Mr. Tarantino’s work; (ii) it stated no opinion on disability apart from a check mark indicating Mr. Tarantino could not return even to modified duties; and (iii) it was prepared before Mr. Tarantino returned to work at reduced hours. Dr. Sonja indicated on the form that Mr. Tarantino suffered a Grade II cervical strain, lumbar strain, right shoulder sprain and headaches, that his work is difficult to modify, and that he cannot work because his restrictions include lifting, bending and carrying. The arbitrator mentioned but did not discuss Dr. Sonja’s disability certificate in her decision, so I conclude she gave it little weight, likely because it was completed before Mr. Tarantino’s return to modified work.

As noted by the insurer, the arbitrator stated that 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.”⁴ However, the passage excerpted below shows that the arbitrator gave some regard to the reports of Dr. Fischer and Dr. Veidlinger in deciding what weight should be given Dr. Gallay’s report.

Dr. Gallay assessed Mr. Tarantino at the request of his counsel on April 10, 2003. The arbitrator described his conclusions as follows:

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.” 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.⁵

While the arbitrator found Dr. Sokol’s clinical notes illegible, she did give weight to other records in the chart, as well as Dr. Sokol’s July 25, 2005 disability certificate:

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.”⁶

The arbitrator accepted Dr. Sokol’s evidence because of his expertise in pain management, his familiarity with Mr. Tarantino, and the evidence from Mr. Tarantino and the other lay witnesses that the treatment helped Mr. Tarantino keep working:

Dr. Sokol is a family physician who is a diplomat and certified member of the American Academy of Pain Management. He has been treating Mr. Tarantino since December 19, 2002. Mr. 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.⁷

And later:

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.⁸

The insurer relies on Khan and Allstate Insurance Company of Canada, (FSCO A98-001157, May 20, 1999), Tenkorang and Wawanesa Mutual Automobile Insurance Company, (FSCO A01-001278, March 6, 2003), and Jelisic and Guarantee Company of North America, (FSCO A98-000029, April 8, 1999) for the proposition that disability certificates are not to be given weight unless they consider the SABS disability test and explain how the claimant’s impairments affect his or her ability to perform the essential tasks of the claimant’s employment. As I read these decisions, they do not go that far. None turns on the dismissal of a disability certificate, and the claimant’s lack of credibility is an important issue in each of them.⁹ In this case, Dr. Sokol’s disability opinion was supported by the evidence that the injections had helped Mr. Tarantino keep working, and, by implication, that Mr. Tarantino is unlikely to have subjected himself to 24 nerve block injections had he not needed them. This may not have been the strongest evidence of disability, but it was cogent evidence and I find no error in the arbitrator’s decision to rely on it.

3. Unfairly Rejecting the Insurer’s Evidence

The insurer submits that the arbitrator erred in law by rejecting the medical evidence of Dr. Brown, the orthopaedic surgeon who assessed Mr. Tarantino for the insurer on July 8, 2003, based on irrelevant reasons. Dr. Brown testified at the hearing and his report was admitted into evidence. The arbitrator discussed Dr. Brown’s evidence in the following passage:

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. 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.¹⁰

The arbitrator did not accept Dr. Brown’s opinion, but preferred the opinion of Dr. Gallay for two main reasons. First, though the two doctors made “similar” findings, they reached different conclusions, and the arbitrator preferred Dr. Gallay’s opinion because he “was alert to the need for an assessment by a pain specialist.”¹¹ Second, the arbitrator found Dr. Gallay’s opinion more consistent with the other evidence she heard about the effect of Mr. Tarantino’s impairments on his ability to work:

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.¹²

The insurer submits that it was not open to the arbitrator to reject Dr. Brown’s evidence because: (i) Dr. Gallay’s reference to a pain specialist was in relation to treatment recommendations, not a disability opinion, and is therefore irrelevant to the disability issue; (ii) the issue of a referral to a pain specialist was not put to Dr. Brown, and was not addressed in submissions, depriving the insurer of its right to know the case it has to meet; (iii) Dr. Gallay did not provide an opinion on IRB entitlement and therefore there was nothing to prefer to Dr. Brown’s evidence; (iv) there was no evidence about the method of testing used by Dr. Sokol or the entitlement test he considered; (v) because of Dr. Brown’s concerns about Mr. Tarantino’s credibility, his opinion, based on testing, should have been preferred to the opinion of Dr. Sokol, who relied on Mr. Tarantino’s self-reports; (vi) Dr. Brown identified inconsistencies on testing of Mr. Tarantino’s back, right shoulder and especially his neck that could not be explained anatomically; and (vii) there were also inconsistencies in the restrictions observed by Ms. Levy on January 28, 2003, Dr. Orenstein-Frankel on March 10, 2003, and Dr. Gallay on April 10, 2003.

I accept the insurer’s submission that the evidence of non-anatomic and inconsistent results should have been addressed in the arbitrator’s reasons because it was important to the insurer’s case, and the reports from early 2003 do appear to reflect inconsistent observed restrictions. However, I am not persuaded this omission amounts to an error of law. My impression is that the arbitrator did not find Dr. Brown’s testimony compelling. Dr. Brown testified that his physical examination of Mr. Tarantino lasted 10-15 minutes,¹³ and on cross-examination he admitted that pain is subjective and not ruled out by the absence of explanation or anatomical signs;¹⁴ that Mr. Tarantino cooperated with the examination;¹⁵ that he had no reason not to believe Mr. Tarantino’s claim that he was healthy before the accident;¹⁶ and that his findings on examination “would be consistent” with the diagnosis of Grade II Whiplash Disorder and right shoulder strain on which he and Dr. Gallay agreed.¹⁷ Further, though Dr. Brown was not questioned about the possibility of referring Mr. Tarantino to a pain specialist, the role of pain in Mr. Tarantino’s complaints was the focus of much of his cross-examination by Mr. Tarantino’s counsel. Whether Mr. Tarantino had disabling pain was one of the main issues in the case, underlying both parties’ evidence and submissions. That context informs my reading of the arbitrator’s comment. I find that she considered Dr. Gallay’s recommendation of a pain referral because it reflected his recognition of pain as potentially disabling for Mr. Tarantino. That finding was well within her authority.

However, the most significant factor undermining Dr. Brown’s report was its failure to address whether Mr. Tarantino’s impairments, while admittedly not preventing him from working at all, resulted in a “substantial inability to work” as a hairdresser.

On the first page of his report, Dr. Brown recorded Mr. Tarantino’s complaint that he could only see five to seven clients per day, not the twenty to thirty clients he would see on some days before the accident, but Dr. Brown’s conclusions were based on his brief orthopaedic examination, without a functional assessment. In answer to the question, “Does the claimant suffer a substantial inability to perform his pre-accident housekeeping and home maintenance services as a result of the accident?,” Dr. Brown stated there was no evidence of “significant impairment,” without considering the “substantial inability” test. On cross-examination at the hearing, Dr. Brown admitted he was unable to give an opinion on the extent to which Mr. Tarantino’s accident-related pain and “apparent lack of function” reduced his ability to work, whether by 10 percent or 50 percent, and that this would require a functional abilities evaluation.¹⁸ In contrast, Dr. Gallay’s opinion was that Mr. Tarantino’s impairments resulted in a significant loss of productivity. As noted above, the functional abilities evaluation could not be completed because of Mr. Tarantino’s pain complaints.

The insurer’s appeal focused on the medical evidence, but Mr. Tarantino’s credibility was crucial to the arbitrator’s decision, and nothing in the insurer’s medical evidence required the arbitrator to reach a different conclusion. The ultimate issue was whether and to what extent Mr. Tarantino was substantially unable to perform the essential tasks of his employment as a result of his soft tissue injuries sustained in the accident. As is typical in soft tissue cases, the claimant’s credibility was a crucial issue, and the arbitrator found Mr. Tarantino credible, a finding I have been given no basis for second-guessing. Mr. Tarantino’s evidence was corroborated by his business partner, Mr. Curcio. According to the arbitator, both “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.” As has been stated in many cases, IRB entitlement turns on disability, not diagnosis. I note, in this regard, the well established principle that a claimant’s good faith attempt to return to work can provide compelling evidence about functional limitations in support of a disability claim. In this case, the arbitrator likely considered, as well, Mr. Tarantino’s long-term investment in his small business, his commitment to which was evidenced by his sustained return to reduced hours.

The arbitrator concluded:

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.¹⁹

The insurer raised legitimate questions about Mr. Tarantino’s claim, but I am not persuaded the arbitrator erred in concluding those questions had been answered. There was sufficient evidence to support the arbitrator’s conclusions, and no error in law.

4. The Notice of Termination

The insurer’s stoppage notice, dated August 11, 2003, gave as the reason for stopping benefits: “Functional Ability Evaluation and Orthopaedic Assessment report.”²⁰ The covering letter 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.”²¹ While Dr. Brown had provided an insurer examination report on July 8, 2003, the FAE with Mr. Bullard, originally scheduled for July 7, 2003, was discontinued at the pre-screening stage because Mr. Tarantino’s blood pressure spiked, and was rescheduled to August 12, 2003. Mr. Bullard released his FAE report on September 3, 2003, three weeks after the stoppage notice was issued.

The arbitrator found that the insurer failed to comply with the notice requirements of clause 37(1)(b) of the SABS-1996:

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. [footnote omitted] 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,²² 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.²³

The insurer’s mishandling of the FAE clearly undermined the value of Mr. Bullard’s evidence in the eyes of the arbitrator. She noted that his report documented Mr. Tarantino’s complaint that the testing increased his pain, and that this resulted in the termination of certain tests. She continued:

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 arbitrator’s assessment of the weight to be given Mr. Bullard’s evidence was well within her adjudicative discretion, and I find no error. She returned to the issue of the insurer’s defective stoppage notice with respect to the special award.

B. Housekeeping and Home Maintenance Expenses

The insurer submits that the arbitrator erred by ordering payment of housekeeping and home maintenance expenses despite Mr. Tarantino’s failure to provide particulars or documentation of the claim at any time prior to the hearing, and that she unfairly rejected the insurer’s evidence on what was needed. I am not persuaded the arbitrator erred.

Mr. Tarantino’s Activities of Normal Life form, dated December 18, 2002 (two weeks after the accident) and received by the insurer along with his Application for Accident Benefits on December 30, 2002, indicated that he was unable to do grass cutting, gardening and snow shoveling after the accident. This was supported by Dr. Sonja, whose December 19, 2002 Disability Certificate indicated that Mr. Tarantino was substantially unable to perform pre-accident housekeeping or home maintenance activities because he could do no lifting, bending or carrying.

Dr. Sonja did not specify which tasks Mr. Tarantino needed help with, but this information was provided by the insurer’s adjuster, who met with Mr. Tarantino at the salon on December 18, 2002. The adjuster reported Mr. Tarantino’s claim that his children had been doing his share of the housekeeping since the accident and that he had promised to pay them about $60 per week to shovel the snow, take the garbage out, and do some other chores, including dinner and dishes sometimes. He also indicated that his wife was the primary caregiver and that he was independent in personal care.

In a letter to Mr. Tarantino dated January 3, 2003,²⁴ the insurer stated that based on Mr. Tarantino’s statement to the adjuster and Dr. Sonja’s Disability Certificate, “it would therefore appear you are disabled from your pre-accident home maintenance activities.” In reference to his promise to pay his children to perform his chores, the insurer was prepared to consider “some expenses,” but stated that $60 is “excessive:”

During this time of year, there is no lawn maintenance, and there has been very little snow. At this time, please note that we will consider payment of minimum wage, $6.85 per hour for the help your children provide. Please submit a detailed breakdown of who performs what chore, on what date, how long it takes and the amount you have paid, at the rate of $6.85 per hour.²⁵

The insurer also advised it would be arranging an in-home assessment with an occupational therapist to determine specifically what assistance was needed. The Explanation of Benefits attached with the letter stated, in reference to section 22 expenses, “None submitted – please see attached letter for comments regarding amounts we will consider.”

The assessment was completed by Ms. Levy, an occupational therapist with Rehability Occupational Therapy Inc. (“Rehability”), on January 28, 2003. Her report the same day recommended that Mr. Tarantino have assistance for approximately one hour per week or as needed for snow shoveling, which should continue for about six weeks and then be discontinued. Ms. Levy also recommended education in body mechanics and task modification, the importance of daily activity, and the concept of “hurt versus harm.”

Dr. Orenstein-Frankel conducted an in-home assessment on March 10, 2003. She recommended that Mr. Tarantino receive assistance with grocery shopping, snow shoveling and garbage removal, totaling 1 hour 45 minutes per week. She also prepared a Form 1 (Assessment of Attendant Care Needs), indicating that Mr. Tarantino needed help with dressing and undressing for 28 minutes per week, at a cost of $18.06 per week.

It appears the insurer found out about Dr. Orenstein-Frankel’s involvement when Rehability, which had been retained to implement Ms. Levy’s recommendations, was told that Mr. Tarantino had retained his own occupational therapist. The insurer requested further information from Mr. Tarantino’s counsel. Ultimately, the insurer refused to pay the cost of Dr. Orenstein-Frankel’s assessment but agreed to pay for the assistive devices she recommended (cervical pillow, lumbar support, long-handled sponge, moist heat pack, handheld showerhose), which were similar to those recommended by Ms. Levy, and to authorize one follow-up session regarding proper body mechanics, after which it would request a brief report on recommendations for continued home maintenance assistance. Dr. Orenstein-Frankel completed the follow-up assessment on June 11, 2003, recommending additional assistive devices but without conducting a further in-home assessment.

The claim was denied by Explanation of Benefits dated August 11, 2003 (the IRB stoppage notice) based on the same reports, the reports of Dr. Brown and Mr. Bullard. As stated above, Mr. Bullard’s assessment had not been completed as this time; his report, dated September 3, 2003, found no objective impairments that would preclude Mr. Tarantino from performing his housekeeping and home maintenance chores. Dr. Brown’s response to the question whether Mr. Tarantino suffered a substantial inability to perform these tasks was a simple “no.”

The issues before me on appeal are the same issues that were before the arbitrator: (i) whether Mr. Tarantino incurred housekeeping and home maintenance expenses because he sustained an impairment as a result of the accident that substantially disables him from performing his pre-accident tasks; (ii) whether he provided sufficient particulars of the claim that the insurer was under an obligation to pay; and (iii) whether any reimbursement should be paid at minimum wage of $6.85 an hour, as the insurer submits, or $10 an hour, as Mr. Tarantino claimed.

The arbitrator found in Mr. Tarantino’s favour on all points. On appeal, the insurer essentially restates its submissions before the arbitrator.

On entitlement to section 22 benefits, the insurer submits that the arbitrator erred by preferring Dr. Orenstein-Frankel’s report on the basis that Ms. Levy’s estimate of the time required for the specified tasks was “unrealistic,” a finding for which no further explanation is provided, and by rejecting Dr. Brown’s opinion that Mr. Tarantino needed no assistance with housekeeping and home maintenance tasks. I agree the description of Ms. Levy’s estimate as “unrealistic” added little to the decision. Similarly, it is not clear to me why Dr. Orenstein-Frankel’s preparation of a Form 1 added to the weight given her report. However, the arbitrator also noted that Dr. Orenstein-Frankel “reported Mr. Tarantino’s continuing complaints of restrictions due to pain including his inability to cut the lawn and maintain his garden.”²⁶ The arbitrator rejected Dr. Brown’s opinion, and I have found no error of law in that conclusion. However, the critical evidence for the arbitrator was not the expert evidence, but the testimony of Mr. Tarantino and his wife and son, which the arbitrator found to be consistent and credible. The insurer has suggested no particular reason why I should second-guess that finding, and I find no error of law in the arbitrator’s analysis.

The main focus of the insurer’s section 22 appeal was on the lack of particulars. Mr. Tarantino admitted receiving the insurer’s January 3, 2003 letter,²⁷ and it was also sent to his counsel. He did not respond to it. At the arbitration, he explained his failure to provide particulars by saying that he expected the insurer to send him some forms to complete, he failed to keep track of the work that was done because he was in pain, he had other things to think about, and he trusted his children to be honest. Giordano, who did much of the work, also testified he never kept records of what he did,²⁸ and did not know how often he did any of the specified tasks or how long it took.²⁹

The arbitrator found that the lack of particulars insulated the insurer from a special award with respect to section 22 benefits,³⁰ but not from a finding of entitlement. I do not accept the insurer’s submission that this is a contradiction; since a special award is payable only if a withholding or delay in benefits is unreasonable, an arbitrator’s finding that benefits are payable does not by itself warrant a special award.

The insurer relies on Stargratt and Zurich North America Canada, (FSCO P01-00045, March 31, 2003), in which I dismissed the insurer’s appeal from the arbitrator’s finding that the claimant was entitled to caregiver and attendant care services provided by her family, despite her failure to provide particulars. The insurer relies particularly on the following passage:

In cross-examination, Ms. Stargratt admitted she did not discuss paying her mother or her sister after receiving [the insurer’s letter], and did not maintain a log of the services rendered. This would have been very damaging to Ms. Stargratt’s claim if Zurich had explained to her that she could claim for services received from family members, or invited her to provide particulars of the services provided. Instead, this letter implied that services must be provided by a third-party service-provider.³¹

The insurer submits that the insurer in this case did not suggest Mr. Tarantino could not pay family members to do the work and explicitly requested particulars.

The arbitrator dealt with the issue this way:

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, 2003.³²

In my view, this case was very close to the line, and another arbitrator might well have decided that Mr. Tarantino had not complied with his obligation to provide information reasonably required to assist the insurer in determining the amount of the benefit payable, and that benefits were not payable therefore in accordance with subsection 33(2) of the SABS-1996. However, there is little basis to dispute the arbitrator’s finding that the insurer knew from the outset of the claim that Mr. Tarantino needed help with the outdoor work and that he was paying his children to do it, particularly considering the reports of Ms. Levy and Dr. Orenstein-Frankel. For the same reason, I am not persuaded the arbitrator erred in law by awarding interest commencing 30 days after receipt of Ms. Levy’s report dated January 28, 2003. While the insurer continued to have legitimate questions about the amount of benefits payable, I find no error in the arbitrator’s implicit finding that the reports of Ms. Levy and Dr. Orenstein-Frankel gave it a reasonable basis for determining the benefits payable.

The insurer provides no authority for restricting payment for housekeeping and home maintenance services to minimum wage, and I do not find the $10 an hour unreasonable.

C. Assessment Costs

The insurer submits that the arbitrator erred in law by ordering payment of the cost of

Dr. Orenstein-Frankel’s report in the amount of $956.37 under section 24 of the SABS-1996.

Section 24 requires the insurer to pay for “all reasonable expenses incurred by or on behalf of an insured person for the purpose of this Regulation in obtaining and attending an examination or assessment . . . , including, (a) fees charged by a person who conducts an examination or assessment or in obtaining a certificate, report or treatment plan. . .” The claimant must establish that the expense was reasonable and that it was incurred for the purpose of the SABS-1996 for one of the prescribed goods or services.

In Tsimidis and Liberty Mutual Insurance Company, (FSCO P99-00013, August 28, 2000), Director’s Delegate McMahon set out a two-part test for reasonableness: (i) was it reasonable to conduct the assessment?, and (ii) was the cost reasonable? The focus is on the process, not the weight given the report in the arbitration decision:

The correctness of the opinion is principally important to the extent that it sheds light on whether sufficient time, care and expertise, went into the conduct of the assessment and preparation of the report.³³

The arbitrator ordered payment of the assessment cost because Dr. Orenstein-Frankel’s report included a Form 1 (unlike Ms. Levy’s report), and because the assessment was conducted at about the time Ms. Levy recommended housekeeping and home maintenance assistance be terminated. The insurer submits that Ms. Levy’s recommendation pertained only to the near future, not the long-term need for assistance.

I am not persuaded the Form 1 has much bearing in this case given Mr. Tarantino’s early return to work (albeit at reduced hours and productivity) and the very nominal amount of care recommended. I have little doubt Dr. Orenstein-Frankel was retained to respond to Ms. Levy’s report and provide support for Mr. Tarantino’s claim for ongoing housekeeping and home maintenance assistance. Though the two experts agreed on some points, they did not agree on how much help Mr. Tarantino needed or for how long. The critical factor in my decision is the standard of review. I am not persuaded the arbitrator erred in finding the referral reasonable and the insurer has suggested no reason for finding Dr. Orenstein-Frankel’s invoice unreasonable.

D. Special Award

Pursuant to subsection 282(10) of the Act, the arbitrator ordered a special award of $2,000, inclusive of interest, based on the defective stoppage notice and the withholding and delay in paying the section 24 claim for Dr. Orenstein-Frankel’s report. She was not persuaded the insurer acted unreasonably in withholding payment of housekeeping and home maintenance benefits, “given Mr. Tarantino’s failure to submit particulars of his claim.”³⁴

On appeal, the insurer submits that the arbitrator erred in awarding additional IRBs after the date of termination and in ordering payment of the assessment claim and therefore there was no entitlement basis for the special award, and it should be revoked. For the reasons given, I am not persuaded either benefits award is reviewable.

The insurer’s alternative submission focuses on the stoppage notice issue. In particular, the insurer relies on the arbitrator’s acceptance that “Dr. Brown’s opinion gave it a medical basis for terminating the benefit.”³⁵ The insurer submits that the arbitrator erroneously held it to a standard of perfection, contrary to Turner and other Commission authorities. Mr. Tarantino relies on McAngus and Guardian Insurance Company of Canada, in which I stated: “[a]rbitrators are entitled to ‘considerable leeway’ in deciding to give (or deny) a special award because a finding that an insurer has ‘unreasonably withheld or delayed benefits’ depends on the arbitrator’s assessment of the facts.”³⁶

I find no error in the arbitrator’s analysis. The Court of Appeal in Turner, while stating that an insurer’s reasons for termination need not be legally correct, also reaffirmed that the notice of termination must be clear and equivocal to satisfy the procedural requirements of the SABS and “start the clock ticking” on the two-year limitation period for commencing arbitration after a refusal of benefits.³⁷ I also take note of Mr. Justice Gonthier’s much-quoted statement, in Smith v. Co-operators General Insurance Company, another time limits case that turned on the adequacy of notice, that “insurance law is in many respects geared toward the protection of the consumer. This approach obliges the courts to impose bright line boundaries between the permissible and the impermissible without undue solicitude for particular circumstances that might operate against claimants in certain cases.”³⁸

While there is no time limits issue in this case, I query whether the insurer’s stoppage notice would be found clear enough to “start the clock ticking,” since it relied on an FAE that had not yet been completed. In any event, I find that the reference to the FAE in the stoppage notice suggests a rush to judgment, and I agree with the arbitrator that it reflected a failure to “give full and fair consideration” to the claim, as required. Given the many decisions emphasizing the importance of the procedural protections set out in the SABS, I find no error in the arbitrator’s finding that the insurer’s withholding of benefits based in part on an assessment that had not yet been completed was unreasonable or in her assessment of a nominal special award in relation to that conduct. As the $2,000 award ordered by the arbitrator was justified by the defective stoppage notice, I need not consider the insurer’s submission that the arbitrator erred by finding its refusal to pay Dr. Orenstein-Frankel’s assessment fee unreasonable.

IV. ARBITRATION AND APPEAL EXPENSES

If the parties are unable to agree about expenses of the appeal, a hearing may be arranged in accordance with Rule 79 of the Dispute Resolution Practice Code.

The parties agree and the transcript shows that the arbitrator stated she would defer her expenses decision until after release of her decision on the merits.³⁹ The parties agree and I find that her award of arbitration expenses to Mr. Tarantino reflects the fact she did not have the benefit of the transcript when writing her decision. As the parties have not had an opportunity to give their submissions on arbitration expenses, paragraphs 7 and 8 of the arbitration order will be revoked. The parties agree that, in the interests of efficiency, any dispute about arbitration expenses should be decided along with appeal expenses, after release of this decision.

December 12, 2007

Nancy Makepeace Director’s Delegate

Date

Footnotes

1. 1The Statutory Accident Benefits Schedule - Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended.
2. 2For example, Rule 42.4 of the Dispute Resolution Practice Code (the “Code”) prohibits a party from calling more than two expert witnesses without leave of the arbitrator.
3. 3Rule 41.1 of the Code.
4. 4Arbitration decision, p. 7.
5. 5Arbitration decision, p. 8 [footnotes omitted].
6. 6Arbitration decision, p. 8 [footnote omitted].
7. 7Arbitration decision, p. 7.
8. 8Arbitration decision, p. 11.
9. 9The arbitrator in Khan dismissed the claim for caregiver and housekeeping expenses for several reasons, not only her family doctor’s “perfunctory” disability certificate, report and clinical notes, and his failure to consider the disability test, but also because of the “vague and superficial” testimony of the claimant and her family, the fact that the claims had been “seriously exaggerated,” and an insurer examination report, amongst other things. The arbitrator in Tenkorang put no weight on the disability certificates of the claimant’s family doctor and chiropractor because, amongst other things, neither had any knowledge of her pre-accident employment and the family doctor, who queried a concussion, did not refer her to any specialists for evaluation; the arbitrator preferred the insurer’s expert evidence, which included an FAE. The arbitrator preferred to rely on the medical evidence because of problems with the claimant’s evidence. Similarly, the arbitrator in Jelisic found neither of the claimants credible as to the extent of their injuries or the caregiver and housekeeping expenses claimed.
10. 10Arbitration decision, p. 9.
11. 11Arbitration decision, p. 10 [footnote omitted].
12. 12Arbitration decision, p. 11.
13. 13Arbitration transcript, August 24, 2005, 361:17-18 and 402:12-13.
14. 14Arbitration transcript, August 24, 2005, 405:4-11, 17-20 and 425:20-25.
15. 15Arbitration transcript, August 24, 2005, 407:2-15.
16. 16Arbitration transcript, August 24, 2005, 426:20-21.
17. 17Arbitration transcript, August 24, 2005, 418:6-19 and 419:9-15.
18. 18Arbitration transcript, August 24, 2005, 438:24-439:7.
19. 19Arbitration decision, p. 11.
20. 20Arbitration exhibit 4, tab 28.
21. 21Arbitration exhibit 4, tab 29.
22. 22(FSCO P00-00046, February 1, 2002), page 10; confirmed by the Ontario Court of Appeal [2004] O.J. No. 731 [footnote in original].
23. 23Arbitration decision, p. 12.
24. 24Mistakenly dated January 3, 2002.
25. 25Arbitration exhibit 4, tab 5.
26. 26Arbitration decision, p. 17.
27. 27Arbitration transcript, August 22, 2005, 188:7-8.
28. 28Arbitration transcript, August 23, 2005, 288:16-21.
29. 29Arbitration transcript, August 23, 2005, 289-291.
30. 30Arbitration decision, p. 21.
31. 31At pp. 14-15.
32. 32Arbitration decision, pp. 18-19.
33. 33At p. 8.
34. 34Arbitration decision, p. 21.
35. 35Arbitration decision, p. 21.
36. 36(FSCO P98-00049, January 10, 2000), at p. 18. The leading decision on the standard of review of an arbitrator’s special award decision is Maas and State Farm Mutual Automobile Insurance Company, (OIC P96-00080, December 8, 1997).
37. 37Turner v. State Farm Mutual Automobile Insurance Company, 2005 CanLII 2551 (ON C.A.) overturning 2004 CanLII 13402 (ON S.C.D.C.).
38. 382002 SCC 30, [2002] 2 S.C.R. 129, at para. 16.
39. 39Arbitration transcript, August 25, 2005, 529:17-22.