Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2007 ONFSCDRS 90

FSCO A06-000207

BETWEEN:

DOMENICO MARTUCCI

Applicant

and

ECONOMICAL MUTUAL INSURANCE COMPANY

Insurer

DECISION ON A MOTION

Before:

Richard Feldman

Heard:

By written submissions received by April 30, 2007.

Appearances:

J. John Vettese for Mr. Martucci

Cary Schneider for Economical Mutual Insurance Company

Order sought:

This is a motion, brought by Economical Mutual Insurance Company ("Economical"), for an order:

1. Adjourning the arbitration until such time as the Applicant attends at the following insurer examinations pursuant to section 42 of the Schedule¹ in order to assess the Applicant's entitlement to post-104 week income replacement benefits:

(a) an examination by a physiatrist; and (b) an examination by a cardiologist.

2. That the Applicant pay Economical's costs of this motion, fixed and payable forthwith.

3. For such further and other relief as I may deem just.

Result:

1. Economical's motion is denied.

2. The decision on the expenses of this motion is referred to the hearing arbitrator.

EVIDENCE AND ANALYSIS:

Background

The Applicant, Domenico Martucci, was injured in a motor vehicle accident on February 21, 2005. He applied for and received statutory accident benefits from Economical, payable under the Schedule. Amongst other benefits, Economical paid to Mr. Martucci weekly income replacement benefits for the period from February 28, 2005 through September 13, 2005.

In July 2005, Economical had Mr. Martucci undergo an assessment by a physiatrist, Dr. A. Oshidari. Based upon that assessment, Economical took the position that Mr. Martucci no longer suffered a substantial inability to perform the essential tasks of his pre-accident employment and, effective September 13, 2005, it terminated the Applicant's income replacement benefits. Mr. Martucci challenged this decision. The parties were unable to resolve their disputes through mediation and, in January 2006, Mr. Martucci applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

Some time between July and September 2006, prior to the pre-hearing conference, Economical learned that Mr. Martucci had had a heart attack in March 2006. Counsel for Economical requested further particulars and records from the hospital(s) Mr. Martucci attended and from all specialists seen by Mr. Martucci concerning his heart condition.

On September 26, 2006, I conducted the pre-hearing conference and, that same day, issued a report identifying the issues for arbitration and, on consent of the parties, setting the date for the commencement of the hearing as June 4, 2007. The Applicant clearly indicated at the pre-hearing conference that he would be seeking post-104 week income replacement benefits and this was noted in the pre-hearing letter of September 26, 2006.² Despite this fact, counsel for Economical wrote repeatedly to counsel for the Applicant asking for confirmation of whether a claim was being advanced for post-104 week benefits.

By letter dated October 25, 2006, counsel for the Insurer advised opposing counsel that the Insurer "would like to schedule an insurer's examination with a cardiologist" once all of the requested records concerning the Applicant's heart condition were received. Most of the relevant records relating to Mr. Martucci's heart attack were contained in the clinical notes and records of his family physician, Dr. Di Carlo, and had been in the possession of Economical since about July 2006.

By letter dated November 15, 2006, counsel for the Applicant advised that the Applicant "will not be attending any insurer examinations unless the insurer concedes payments of outstanding income replacement and housekeeping benefits to date."

On November 22, 2006, Mr. Martucci executed a Direction to permit Dr. Luis Yao, cardiologist, to release his clinical notes and records to Economical but this Direction was not actually provided to counsel for Economical until February 2, 2007. On February 15, 2007, Economical received a copy of Dr. Yao's clinical notes and records.

Approximately three weeks later, on March 9, 2007, Economical served notice upon the Applicant that it intended to have him examined by a physiatrist, Dr. Oshidari, on March 26, 2007 and by a cardiologist, Dr. Mukherjee, on April 13, 2007. Both examinations were for the stated purpose of determining if Mr. Martucci suffered a complete inability to engage in any employment for which he is reasonably suited by education, training or experience.

On March 9, 2007, counsel for the Applicant advised that Mr. Martucci would not attend these examinations. Shortly thereafter, Economical brought this motion, which has proceeded by way of a written hearing.

Submissions of the Insurer

Economical takes the position that the heart attack suffered by Mr. Martucci in March 2006 represents a significant change in his health circumstances and that Economical ought to be able to have a cardiologist and a physiatrist examine Mr. Martucci to investigate, what role, if any, his heart condition has had in his purported, continued inability to work. Economical also asserts that it has pursued its rights in this regard with reasonable diligence but that it wanted to wait until it had all of the relevant medical records before scheduling the section 42 examinations.

Submissions of the Applicant

The Applicant states that the Insurer has not established how the Applicant's heart attack and the claim for post-104 week benefits are related. Income replacement benefits were terminated based on the pre-104 week test of "substantial inability" and, suggests the Applicant, the Insurer has failed to demonstrate how the change in the disability test now necessitates additional examinations.

Furthermore, the Applicant takes the position that Economical has not acted promptly. According to the record, as interpreted by Mr. Vettese, Mr. Schneider had virtually all of the medical records concerning the Applicant's heart attack as early as July 2006 but Economical failed to serve a notice for an insurer's examination until March 2007 for appointments in March and April 2007 (approximately two months prior to the date scheduled for the commencement of the hearing).

It is submitted that examinations so close to the hearing ought reasonably to be presumed to be for the purpose of obtaining evidence to bolster the defence rather than for true adjustment of the claims.

The Law

Section 42 of the Schedule provides that, for the purposes of assisting an insurer determining if an insured person is or continues to be entitled to a benefit, an insurer may, as often as is reasonably necessary, require an insured person to be examined by one or more persons chosen by the insurer who are members of a health profession.

The following represents a summary of some of the more important principles governing this type of motion:

1. The onus is upon the insurer to establish that the proposed examination is reasonable.³

2. The appropriate question is: Given the information already available, does the insurer reasonably require this examination in order to assess the validity of a claim to ongoing benefits or in response to a new claim (rather than for purposes of trial brinkmanship or an attempt to bolster the insurer's position)?⁴

3. In assessing the reasonableness of the proposed examination, the Commission will consider all of the relevant circumstances, including:⁵

a. The timing of the insurer's request;

b. The possible prejudice to both sides;

c. The number and nature of previous insurer's examinations;

d. The nature of the examination(s) being requested;

e. Whether there are any new issues being raised in the applicant's claim that require evaluation;

f. Whether there is a reasonable nexus between the examination requested and the applicant's injuries.

4. With respect to the timing of the insurer's request:

a. An insurer has an ongoing responsibility to assess the condition of an insured person and to assess information it receives concerning that person's condition and the fact that an insurer has already denied or terminated a benefit or that the dispute resolution process provided for in the Insurance Act (i.e., mediation or arbitration) has begun does not automatically preclude an insurer from requesting reasonable assessments in accordance with the Schedule;⁶

b. The request can be made even if there is a delay from the time that the insurer first knew or ought reasonably to have known about the particular impairment in question;⁷

c. The closer in time the request for an assessment comes to the date set for the commencement of the hearing, the closer will be the scrutiny of the Commission as there will be a greater likelihood of prejudice to the applicant (by a delay of the proceedings) and a greater likelihood that the primary purpose for conducting the assessment is to obtain evidence for use at the arbitration hearing rather than adjustment of the claim;⁸

d. There is no presumptive right to an insurer's examination at the 104 week mark where the insurer has already terminated the benefits on the basis that it has concluded that the insured person failed to meet the less stringent, pre-104 week test for disability.⁹

5. With respect to possible prejudice to the parties:

a. It is recognized by the Commission that insurer examinations are "inherently intrusive";¹⁰

b. The Commission strongly disapproves of an insurer using excessive insurer examinations as a means to harass or intimidate an applicant or in callous disregard of information that such assessments may adversely affect the health of the applicant;¹¹

c. The Commission will consider whether the requested assessment is likely to delay the hearing;

d. The Commission will also consider the potential prejudice to the insurer's ability to independently assess the validity of an ongoing claim if it is not permitted to have the requested assessment conducted.

6. While an arbitrator has no authority to compel an insured person to submit to an insurer's examination which has been reasonably requested, an arbitrator may adjourn the hearing until the insured person attends such an examination. An arbitrator's power, however, also includes the discretion, in appropriate cases, to refuse to adjourn a hearing where an adjournment would be unfair to the applicant.¹²

Analysis

Physiatric Examination

I find that Economical's request to have an examination conducted by a physiatrist at this time is not reasonable.

I note that in Mr. Schneider's letter of October 25, 2006, he only refers to Economical's desire to have the Applicant examined by a cardiologist and says nothing about an examination by a physiatrist. It appears from the documents filed with me that the first time Economical advised the Applicant that it wished to have him undergo a second examination by a physiatrist was when it served upon him (on or about March 9, 2007) a notice for an appointment with Dr. Oshidari on March 26, 2007. The letter sent from Economical to Mr. Martucci on March 9, 2007 states that, "the appointment has been scheduled, to assess your entitlement to Post 104 Income Replacement Benfits claimed under Section 4 of the SABS." Similarly, in his letter of March 19, 2007, Mr. Schneider's writes, "It has come to my attention that you have refused to allow your client to be assessed for a post-104 insurer examination ..." (emphasis added).

I agree with Arbitrator Muzzi that there is no presumptive right to an insurer's examination at the 104-week mark simply because the eligibility criteria for income replacement benefits changes at that point.¹³

Following the accident, Mr. Martucci's main complaints related to neck pain and low back pain. Dr. Oshidari examined Mr. Martucci at the request of Economical and concluded that, from a neuromusculoskeletal point of view, there was no abnormality or impairment as a result of the February 21, 2005 accident. Economical relied upon this opinion when it terminated payment of income replacement benefits to Mr. Martucci in September 2005 on the basis that he did not, as a result of the accident, suffer a substantial inability to perform the essential tasks of his pre-accident employment. If Mr. Martucci could not meet the pre-104 week test, then Economical need not be worried about the post-104 week test unless, of course, it is concerned that its original decision to terminate these benefits may be found to have been wrong. In any event, the onus will be upon the Applicant to prove entitlement to the benefits claimed, not upon Economical to disprove entitlement and Economical will have many opportunities to challenge the evidence presented by the Applicant during the hearing.

Furthermore, if Economical intended to conduct further assessments after February 2007 as a result of a change in the test for entitlement, it ought not to have agreed to the hearing being scheduled for the beginning of June 2007.

Economical has failed to adduce sufficient evidence to convince me that it is within the expertise of Dr. Oshidari to comment on the impact on the Applicant's physical abilities of a heart attack he suffered more than one year ago or why a physical examination at this point would be likely to shed any light on that issue.

I agree with counsel for the Applicant that where, as in this case, an examination is proposed so close to the hearing, it is a reasonable presumption that it is primarily intended for the purpose of obtaining evidence for use at the hearing and not part of the normal adjustment of the claim. Economical has failed to rebut this presumption in this case.

For all of these reasons, I find that the proposed examination by a physiatrist is not reasonable.

Cardiological Examination

On its face, Economical's request to have Mr. Martucci undergo an examination by a cardiologist does not appear to be unreasonable. Economical did not learn of Mr. Martucci's March 2006 heart attack until some time after it had received this application for arbitration. It is conceivable that the condition of his heart could affect Mr. Martucci's ability to work and Economical wants an opportunity to have this issue investigated by a specialist of its choice. It has not yet had that opportunity.

There are two main problems with Economical's request. The first is the timing of its request. The second is with respect to the appropriateness of the remedy Economical is now seeking.

(a) Timing of Request

In paragraph 14 of the Affidavit of Mr. Vettese, he claims that the Insurer had in its possession the clinical notes and records of Dr. Di Carlo since July 7, 2006. Mr. Schneider has not specifically refuted this assertion. He merely states (in paragraphs 6 and 7 of his affidavit) that he believes that the Applicant did not specifically advise the Insurer about his heart attack until shortly before the pre-hearing conference in September 2006.

By reviewing the clinical notes and records of Dr. Di Carlo, Economical ought to have been aware of Mr. Martucci's heart attack by July of 2006. As of July 7, 2006, Dr. Di Carlo's clinical notes and records included the following:

1. notes concerning what appear to be eight examinations of the Applicant subsequent to his heart attack;

2. a consultation report dated March 20, 2006 from Dr. Yao concerning Mr. Martucci's heart attack of March 18, 2006;

3. a Discharge Summary from Sunnybrook & Women's College Heath Science Centre dated March 22, 2006 concerning the angioplasty procedure conducted at this hospital on March 21, 2006;

4. the Discharge Summary from the Humber River Regional Hospital dated March 22, 2006;

5. a report to Dr. Di Carlo from Dr. Yao dated April 7, 2006;

6. a referral by Dr. Di Carlo of Mr. Martucci to Toronto Rehabilitation Institute; and

7. a Cardiopulmonary Exercise Test Report from Toronto Rehabilitation Institute to Dr. Di Carlo (concerning a test conducted May 30, 2006).

Economical chose not to schedule its own examination until it obtained the clinical notes and records from Dr. Yao. The only new material contained in documents received from Dr. Yao appears to be the following:

1. a blood pressure report addressed to Dr. Di Carlo dated September 5, 2006;

2. a blood pressure report addressed to Dr. Di Carlo dated January 19, 2007;

3. a Cardiopulmonary Exercise Test Report from Toronto Rehabilitation Institute to Dr. Di Carlo (concerning a test conducted November 27, 2006); and

4. a report to Dr. Di Carlo from Dr. Yao dated July 7, 2006.

Although the Applicant was somewhat slow in delivering his authorization to the release by Dr. Yao of his clinical notes and records, the same material could likely have been obtained by Economical by simply requesting an update of the clinical notes and records of Dr. Di Carlo. To be fair, Economical could not know for certain in advance that there would not be documents contained in Dr. Yao's records that were not also contained in Dr. Di Carlo's file. Economical knew that the hearing date was quickly approaching, however, and waiting until it collected every single relevant document was a risky tactical decision on its part. Economical already had enough medical information available to it to have had a meaningful cardiological examination conducted well before the hearing. In my view, Economical has not adequately explained why it waited from July 2006 until March 2007 to formally request an insurer's examination by a cardiologist and why, knowing that this was an issue, it agreed at the pre-hearing to schedule the hearing for June 2007.

By choosing to wait until shortly before the hearing to formally pursue the cardiological examination, Economical has created a presumption that the examination is primarily intended for the purpose of obtaining evidence for use at the hearing and is not part of the normal adjustment of the claim. Economical has failed to rebut this presumption in this case.

Furthermore, the heart attack in question occurred more than one year ago. There is no evidence before me of any serious ongoing cardiological complaints. Economical has also failed to adduce evidence that satisfies me that it is reasonable at this point for Mr. Martucci to undergo a physical examination by a cardiologist in order for Economical to assess whether Mr. Martucci, as a result of the accident, suffers a complete inability to engage in any employment for which he is reasonably suited by education, training or experience.

Economical appears to want to put forward a theory that, if Mr. Martucci was unable to work from March 18, 2006 onwards, it was because of the condition of his heart and not because of any impairments he sustained as a result of the accident. Economical will have the opportunity to advance this theory in a number of ways. Economical will have the opportunity to cross-examine the Applicant, members of his family, Dr. Di Carlo and any expert witnesses called by Mr. Martucci and (if it has followed the correct procedures or obtains leave from the hearing arbitrator) Economical can call as witnesses Dr. Yao, Dr. Oshidari and any other experts who Economical believes can provide relevant opinion evidence. Economical can also rely upon the medical documentation that is available. Thus, there are other ways that Economical can seek to raise this defence that do not depend upon a physical examination of the Applicant.

(b) Remedy Sought

Even where an insurer can establish that a proposed examination under section 42 is reasonable, on a motion such as this it must still be decided whether granting a stay of the proceedings is an appropriate remedy for the failure or refusal of the Applicant to attend the examination.

As was pointed out by Arbitrator Blackman in Martinho and York,¹⁴ adjourning the hearing is only one possible remedy. Other remedies include drawing an adverse inference from the applicant's refusal to attend the examination, limiting the evidence presented by the applicant or limiting the scope of the claim (either in terms of the benefit period sought or the basis for the claim).

A stay of the proceedings is really the "ultimate weapon." A stay prevents an applicant from proceeding with any of his or her claims until he or she submits to an examination by a medical professional of the insurer's choice. It is not a remedy specifically provided for in the Insurance Act or the regulations made thereunder for a refusal by an applicant to attend a section 42 examination. It is an approach which has been adopted by the Commission in relatively rare cases where to allow the applicant to proceed with his or her claim without permitting the insurer to conduct a reasonable examination would be so prejudicial and unfair to the insurer that it ought not to be permitted.

In balancing the potential prejudice that will be suffered by both parties in this case, I find that the prejudice to the Applicant in adjourning the hearing that is scheduled to commence on June 4, 2007 outweighs the potential prejudice to the Insurer in proceeding without having an opportunity to have a cardiologist of its choice examine Mr. Martucci at this point in the proceedings. As previously indicated, Economical has other ways to advance its theory of this case and to test the evidence presented by, or on behalf of, Mr. Martucci. I also note that income replacement benefits are just one of many issues in dispute in this case; the Applicant is also claiming medical benefits (under section 14 of the Schedule) and housekeeping and home maintenance benefits (under section 22 of the Schedule) as well as a special award (under section 282(10) of the Insurance Act). There is no reason why these claims should not proceed as originally scheduled. Of course, it is open to the hearing arbitrator to make such further or other orders as he or she deems appropriate to ensure that both parties receive a fair hearing. At this time, however, I am not satisfied that Economical has proven that it is entitled to an adjournment of the hearing that is scheduled to commence on June 4, 2007.

Post-hearing Submissions

The deadline for filing material for consideration on this motion was April 30, 2007. On May 4, 2007, counsel for the Insurer wrote to the Commission, advising that he had just been served by the Applicant with a Vocational Assessment and a Functional Abilities Evaluation. I generally do not consider unsolicited post-hearing submissions and I see no reason in this case to re-open the hearing. If the Insurer feels that the Applicant has breached any procedural rules, this issue can be raised before the hearing arbitrator. If the Insurer is implying that it ought to be able to examine the Applicant in order to respond to the reports just filed by the Applicant, this would only serve to strengthen my suspicion that the Insurer is seeking to have the Applicant examined primarily for the purpose of preparing "defence medicals" rather than for the purpose intended by section 42 of the Schedule.

Conclusion

For the reasons set out above, Economical's motion is denied.

EXPENSES:

I do not want to delay the hearing that is scheduled to commence in a few weeks. Since this motion proceeded by way of written evidence and submissions, the hearing arbitrator will be in as good a position as I to determine the issue of the expenses of this motion. I am therefore referring to the hearing arbitrator the issue of the expenses of this motion.

May 8, 2007

Richard Feldman

Arbitrator

Date

Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2007 ONFSCDRS 90

FSCO A06-000207

BETWEEN:

DOMENICO MARTUCCI

Applicant

and

ECONOMICAL MUTUAL 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. Economical's motion is denied.

2. The decision on the expenses of this motion is referred to the hearing arbitrator.

May 8, 2007

Richard Feldman

Arbitrator

Date

Footnotes

1. 1The Statutory Accident Benefits Schedule — Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended.
2. 2see page 2 of the pre-hearing letter.
3. 3Manolakos v. Royal Insurance, [1998] O.J. NO. 2157; aff'd [1999] O.J. 3356 (C.A.); Prudential of America General Insurance Co. (Canada) and Chafe-Moote, (FSCO Appeal P99-00044, September 8, 2000); Stanley and Pilot Insurance Company, (FSCO A01-001482, November 13, 2002); Bogic and Axa Insurance (Canada), (FSCO A96-001192, April 30, 1999).
4. 4Hodgins-Babin and Coseco Insurance Co.,(FSCO A00-001252, January 22, 2002) at p. 7; M.D. and Halifax Insurance Company, (FSCO Appeal P00-00049, May 16, 2001) at p. 7; Allstate Insurance Company of Canada and Sellathamby, (FSCO Appeal P02-00009, December 17, 2002); Gutzke and Dufferin Mutual Insurance Company, (FSCO A99-000640, July 10, 2000).
5. 5Stanley and Pilot Insurance Company, (FSCO A01-001482, November 13, 2002) at pp. 5-6.
6. 6Granic and Allstate Insurance Company of Canada, (OIC A-006615, January 30, 1995); Kasperowicz and Royal Insurance Company of Canada, (OIC A96-001306, May 29, 1997); Martinho and York Fire & Casualty Insurance Company, (FSCO A98-000878, April 12, 1999); Stanley and Pilot Insurance Company, (FSCO A01-001482, November 13, 2002).
7. 7Kasperowicz and Royal Insurance Company of Canada, (OIC A96-001306, May 29, 1997).
8. 8Ohayon and ING Wellington Insurance Company, (FSCO A04-000524, September 16, 2005); Tupe and Allstate Insurance Company of Canada, (FSCO A04-001367, September 9, 2005); Nandkumar and Economical Mutual Insurance Company, (FSCO A03-000831, April 7, 2004).
9. 9Kong and Personal Insurance Company of Canada, (FSCO A04-001188, March 15, 2005).
10. 10Martinho and York Fire & Casualty Insurance Company, (FSCO A98-000878, April 12, 1999) at p. 7.
11. 11Prudential of America General Insurance Company (Canada) and Chafe-Moote, (FSCO Appeal P99-00044, September 8, 2000).
12. 12Bogic and Axa Insurance (Canada), (FSCO A96-001192, April 30, 1999) at pp. 6-7.
13. 13Kong and Personal Insurance Company of Canada, (FSCO A04-001188, March 15, 2005).
14. 14Martinho and York Fire & Casualty Insurance Company (FSCO A98-000878, April 12, 1999).