Financial Services Commission of Ontario
Commission des services financiers de l’Ontario
Neutral Citation: 2007 ONFSCDRS 52
FSCO A05-001127
BETWEEN:
JOHN WISEMAN
Applicant
and
PILOT INSURANCE COMPANY
Insurer
REASONS FOR DECISION
Before: David Snider
Heard: June 26, 27, 28 and 29, 2006, at the offices of the Financial Services Commission of Ontario in Toronto.
Appearances:
Raymond Watt for Mr. Wiseman
Joseph Griffiths for Pilot Insurance Company
Issues:
The Applicant, John Wiseman, was injured in a motor vehicle accident on September 18, 2002. He applied for and received certain statutory accident benefits from Pilot Insurance Company ("Pilot"), payable under the Schedule.1 However, Pilot refused from the outset to pay weekly income replacement benefits ("IRBs") to Mr. Wiseman. The parties were unable to resolve their dispute through mediation, and Mr. Wiseman applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended. The issues in this hearing are:
Was the Applicant employed within the meaning of section 4(1) of the Schedule at the time of his motor vehicle accident on September 18, 2002?
In the alternative, was the Applicant entitled at the time of the motor vehicle accident to start work within one year under a legitimate contract of employment within the meaning of section 4(3) of the Schedule?
What was the weekly quantum of income replacement benefits that the Applicant was entitled to if the Applicant was employed within the meaning of section 4(1) of the Schedule at the time of his motor vehicle accident on September 18, 2002?
In the alternative, what was the weekly quantum of income replacement benefits that the Applicant was entitled to if the Applicant was entitled at the time of the motor vehicle accident to start work within one year under a legitimate contract of employment within the meaning of section 4(3) of the Schedule?
Did the Applicant suffer a substantial inability to perform the essential tasks of his employment as a result of and within 104-weeks after the accident?
Did the Applicant suffer a complete inability to engage in any employment for which he is reasonably suited by education, training or experience at and after the 104 week post accident date?
Result:
The Applicant was employed within the meaning of section 4(1) of the Schedule at the time of his motor vehicle accident on September 18, 2002.
The Applicant was not entitled at the time of the motor vehicle accident to start work within one year under a legitimate contract of employment within the meaning of section 4(3) of the Schedule.
The weekly quantum of income replacement benefits that the Applicant was entitled to because the Applicant was employed within the meaning of section 4(1) of the Schedule at the time of his motor vehicle accident on September 18, 2002 was zero ($0.00) dollars per week from September 25, 2002 to present and ongoing.
Not applicable, as the Applicant was not so entitled.
BACKGROUND:
Mr. Wiseman was an employee of Daimler Chrysler ("Chrysler") (and its successor corporations) for many years prior to the date of the motor vehicle accident. However, at the time of the accident Mr. Wiseman had been receiving long-term disability benefits from a collateral insurance company on and off and for some considerable periods of time between 1988 and the date of the accident. He continued to receive these collateral benefits after the accident until the disability benefit was folded into a final early retirement pension from Chrysler which Mr. Wiseman was continuing to receive at the time of the hearing.
Mr. Wiseman applied for IRBs from Pilot despite the fact that his long-term disability benefit carrier (not Pilot) was paying him weekly income benefits before and on the date of the accident and continued to pay him the same level of benefits after the accident and ongoing. He based his application for IRBs on section 4(3) of the Schedule, which sets out the qualification for eligibility for such benefits on the insured person's entitlement to start work within one year (of the date of the accident) under a legitimate contract of employment that was made before the accident and that is evidenced in writing. His submission was two-fold; firstly, that his health had greatly improved just prior to the date of the accident, so he was likely to have returned to work within one year of the accident date if the accident had not happened and; secondly, that he was a union member at Chrysler and the collective agreement which applied to him was a "legitimate contract of employment that was made before the accident and that is evidenced in writing".
The Relevant Sections of the Schedule:
(1) The insurer shall pay an insured person who sustains an impairment as a result of an accident an income replacement benefit if the insured person meets any of the following qualifications:
The insured person was employed at the time of the accident and, as a result of and within 104 weeks after the accident, suffers a substantial inability to perform the essential tasks of that employment.
The insured person,
i. was entitled at the time of the accident to start work within one year under a legitimate contract of employment that was made before the accident and that is evidenced in writing, and
ii. as a result of and within 104 weeks after the accident, suffers a substantial inability to perform the essential tasks of the employment he or she was entitled to start under the contract.
FINDINGS OF FACT:
There was documentation from the employer submitted into evidence which confirms that although Chrysler considered Mr. Wiseman a full-time employee in good standing at the time of the accident he in fact had not received salary directly from Chrysler for more than 101 continuous weeks immediately prior to the date of loss. The reason for his extended periods of absence was consistently psychological/psychiatric in nature and he had been undergoing psychotherapy for many years prior to the date of loss.
Although, it is not in dispute that Mr. Wiseman was substantially disabled for a period of time as a consequence of the accident which occurred in September 2002, I find that he was not "engaged in employment" for "salary, wages, other remuneration or profit" as required by the wording of section 2(5) of the Schedule. He was not reporting for work at Chrysler and therefore was not "engaged in employment" in the usual sense of those words and was not receiving a salaried or hourly income for more than a year prior to the date of loss. For that matter, even if the long-term disability benefits he was receiving on a weekly basis prior to the accident were considered to meet the words "other remuneration or profit" from section 2(5) of the Schedule, Mr. Wiseman would still not qualify for an IRB under section 4(1) of the Schedule because that source of "other remuneration or profit" did not stop flowing to him as a consequence of the accident and therefore there was no lost "income" to replace. Accordingly, Mr. Wiseman would not qualify for an IRB from one week after the date of loss and ongoing due to the fact that his income calculation for these purposes would result in a zero benefit payable by Pilot under the terms of the Schedule.
Mr. Wiseman submitted that, in the alternative, he should qualify for an IRB based upon his assertion that he was entitled at the time of the accident to start work within one year under a legitimate contract of employment that was made before the accident and which was evidenced in writing within the meaning of section 4(3) of the Schedule.
This submission is based upon two concepts. Firstly, that Mr. Wiseman was in fact nearing a stage of recovery from his psychological problems just prior to the accident and this would have enabled him to return to full-time work at the Chrysler Brampton plant around the end of September 2002 had he not been involved in the accident. Secondly, that Mr. Wiseman's position as a union employee at the Chrysler plant was based upon a collective bargaining agreement which he asserts is the equivalent to an entitlement to start work within one year under a legitimate contract of employment that was made before the accident and evidenced in writing.
The Insurer agrees that as a result of the accident Mr. Wiseman suffered a substantial inability to perform the essential tasks of his employment and that from the injury perspective alone he qualified for an IRB for at least some portion of the 104- week post-accident period. However, they take the position that his entitlement must be determined on the basis of his employment earnings, which were zero in the year prior to the accident. The Insurer further asserts that being a union employee who was off on a disability insurance claim and who might have been able to return to work if the accident had not happened is not the equivalent of having a legitimate contract of employment that was made before the accident which entitled him to start work within one year after the accident.
Accordingly, the issue before me is whether Mr. Wiseman can qualify for an IRB either in the "standard" way as an employee who earned income during the year before the date of loss, or, in the alternative, as a person entitled to start work within one year of the date of loss under a pre-existing legitimate contract of employment and evidenced in writing.
Mr. Wiseman began working for Chrysler on April 3, 1984. He first began at the Ajax plant working on an assembly line and after approximately five years he was posted to an inspection job in quality-control which is a position he held until he was transferred to the Brampton assembly plant in 1992. At the Brampton plant Mr. Wiseman worked in a number of jobs and eventually became a forklift operator.
Mr. Wiseman suffered a series of emotional breakdowns which started in 1988. The first breakdown appears to have been caused by the dissolution of his first marriage. A second breakdown occurred in late 1993 which was apparently caused by several stress factors including his transfer to the Brampton plant and the failure of his business partnership in a hobby store. In August 1995 he suffered a third breakdown and in this case was off work continuously for approximately 149 weeks until he returned in June 1998.
When Mr. Wiseman returned to work in June 1998 he was required to undergo an independent medical assessment and to enter into a formal written agreement between himself, the employer and his union. This agreement was executed on June 11, 1998, but not long thereafter he suffered a relapse and was off work for a further 18 days as a result of depression. He returned to work again on November 3, 1998 but within 14 days he was off work again and missed an additional 30 days. A further episode of depression caused Mr. Wiseman to miss work for 7 continuous weeks between April 13, 1999 and June 1, 1999. Mr. Wiseman then worked only until July 26, 1999 after which he was back on disability for a period of an additional 229 days.
Mr. Wiseman did return to work for a short period but then experienced an additional 95 day absence between June 22, 2000 and September 25, 2000. His employment records indicate that he last worked full-time at the Brampton plant on October 5, 2000. Accordingly, Mr. Wiseman had been absent from work for more than 101 weeks as of the date of his accident, September 18, 2002, which is the second longest period of disability in his entire career at Chrysler.
Mr. Wiseman testified that he eventually concluded, as a result of his psychotherapy, that the ongoing reason for his depressive episodes was that he had been abused by his mother when he was a youth. In addition, throughout the late 1990's and into the early new millennium, he was forced to care for his mother at home, as she was very ill. After she passed away he began to finally work through the psychological issues he had been facing.
Mr. Wiseman testified that he had begun to feel much better during the summer of 2002 and that he had begun to take steps to return to "normalcy" during that time, including spending enjoyable time riding his motorcycle. Unfortunately, it was the motorcycle that he was riding when the accident occurred on September 18, 2002.
I find it significant that throughout every period of disability both Mr. Wiseman and Chrysler considered him to be continuously and gainfully employed. Chrysler stated in a letter in October of 2005 that "Although, on leave due to illness at the time of his September 18, 2002 motorcycle accident, he was still in fact gainfully employed by the company, and as such was considered a full-time employee. This classification only changed after his 2004 retirement."
I find as a fact, therefore, that Mr. Wiseman was at all material times a full-time employee of Chrysler and that during the 52 weeks prior to the accident, which is the relevant period for purposes of the Schedule, he was an employee who was off work for reasons of disability not related to the accident. His income for purposes of the Schedule prescribed income calculation was zero during the 52 weeks prior to the accident and he was living on the proceeds of his employment-related disability income coverage throughout the relevant pre-accident period. This would reduce the calculated amount of IRBs payable by Pilot under the Schedule to zero throughout the entire post-accident period. As well, the long-term income replacement coverage from the collateral Insurer continued uninterrupted after the accident, rendering any obligation which may otherwise have arisen for Pilot as a consequence of the injuries Mr. Wiseman suffered in the accident to a nil point in any event as the Schedule prioritizes the coverage making Pilot's potential obligation secondary to the collateral carrier.
CONCLUSIONS:
Mr. Wiseman has suggested that the wording of section 4(3) can be interpreted in such a way that if I concluded that he was likely to have been able to return to work at Chrysler during the first year after the date of the accident if the accident had not occurred, then I could consider him to be eligible for IRBs under the Schedule on the basis that he had a contract, evidenced in writing, to "start" work within one year of the accident. I find this to be an illogical interpretation of the facts of this case, because as I have found above, both Mr. Wiseman and Chrysler considered him to be a full-time permanent employee of Chrysler throughout the many years before the accident and even thereafter, albeit one who was often and for prolonged periods off work on disability coverage. It is clear, as well, that the disability coverage would not have been available to Mr. Wiseman during these periods if he was not an eligible full-time Chrysler employee. Long-term income replacement coverage was, however, available to him at all material times and he qualified for a Chrysler company pension when his coverage was "rolled over" into such pension some years after the date of the accident.
It would require a significant twisting of the facts to find that Mr. Wiseman was eligible to "start" work under a contract of employment within a year after the date of the accident. I am not prepared to find that the employment relationship Mr. Wiseman had with Chrysler during all times material to my findings here ever actually ended, so I cannot find that he was eligible to "start" work with Chrysler during the one year period after the accident. At best, I may have been able to conclude that he could "return" to work during the one year period, but that does not satisfy the requirements of section 4(3) of the Schedule. Accordingly, I do not find that Mr. Wiseman has any eligibility for IRBs based upon the wording of section 4(3) the Schedule.
I do find that, based upon his employment status during the 52 weeks prior to the date of the accident, Mr. Wiseman would qualify for an IRB under the Schedule if any were payable. I also find that he was sufficiently injured in the accident to have met the disability test for such coverage for at least some portion of the 104-week post-accident period. However, I have found that his employment income during the 52 weeks prior to the accident was zero and that accordingly, the weekly IRB he would qualify for would also be zero. I also find that even if the long-term disability payments he received during the year prior to the accident were the equivalent of income from his employment, Mr. Wiseman would still not financially qualify for an IRB because that source of "income" did not stop as a result of the accident and there was no lost income to replace.
Pilot Insurance therefore, had/has no obligation to pay an IRB to Mr. Wiseman at any time or for any period as a consequence of the accident which occurred on September 18, 2002.
EXPENSES:
Due to the somewhat novel fact situation which Mr. Wiseman wished to get a ruling upon, his Application for Arbitration was not without merit despite the result. Accordingly, I have concluded that each side shall bear their own expenses in this matter.
March 15, 2007
David Snider
Arbitrator
Date
Financial Services Commission of Ontario
Commission des services financiers de l’Ontario
Neutral Citation: 2007 ONFSCDRS 52
FSCO A05-001127
BETWEEN:
JOHN WISEMAN
Applicant
and
PILOT 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:
The Application for Arbitration is dismissed.
Each party shall bear its own expenses in this matter.
March 15, 2007
David Snider
Arbitrator
Date
Footnotes
- The Statutory Accident Benefits Schedule — Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended.