Financial Services Commission of Ontario
Neutral Citation: 2008 ONFSCDRS 115 FSCO A06-002501
BETWEEN:
CHANH PHAM Applicant
and
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY Insurer
DECISION ON A PRELIMINARY ISSUE
Before: Edward Lee Heard: April 23, 2008, at the offices of the Financial Services Commission of Ontario in Toronto.
Appearances: Joseph J. Faust for Mrs. Pham Todd J. McCarthy for State Farm Mutual Automobile Insurance Company
The Applicant, Chanh Pham, was injured in a motor vehicle accident on May 8, 2004. She applied for and received statutory accident benefits from State Farm Mutual Automobile Insurance Company ("State Farm"), payable under the Schedule.1 State Farm terminated caregiver benefits on October 6, 2004. The parties were unable to resolve their disputes through mediation, and Mrs. Pham applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.
The preliminary issue is:
- Is Mrs. Pham precluded from proceeding to arbitration because she did not commence the proceeding within two years of State Farm's refusal to pay the amount claimed, as required by 51(1) of the Schedule?
Result:
- Mrs. Pham is precluded from proceeding to arbitration because she did not commence the proceeding within two years of State Farm's refusal to pay the amount claimed, as required by 51(1) of the Schedule.
EVIDENCE AND ANALYSIS:
At the hearing, State Farm presented evidence that Mrs. Pham's application for arbitration had been filed on November 24, 2006. The refusal to pay the amount claimed (OCF-9), was sent to Mrs. Pham on or about October 6, 2004. The report of the mediator was sent to the parties on or about December 15, 2005.
In response, Mrs. Pham conceded the issue and agreed that her arbitration proceeding had indeed been commenced outside of the two-year period. Accordingly, I find that Mrs. Pham is precluded from proceeding to arbitration because she failed to commence her arbitration within the two-year limitation period pursuant to Section 51(1) of the Schedule.
EXPENSES:
The only issue between the parties were the expenses of the proceedings. There had been one in-person prehearing conference that took place at the offices of the Commission on April 4, 2007, and then another via teleconference that occurred on January 1, 2008. In between, the parties had settlement discussions that appeared to settle the matter on July 6, 2007. In October 2007, it was determined that the matter had not been resolved and the preliminary issue hearing was re-scheduled to April 23, 2008. Further settlement discussions were conducted in the week of April 11, 2008.
State Farm argued that it should be entitled to its expenses because it was not until April 11, 2008, that it first learned from Mrs. Pham that she was prepared to concede the limitation issue, and that Mrs. Pham was at that time seeking to withdraw her application on a no-costs basis.
State Farm asserted that by January 8, 2008, all the preparatory work had been done in contemplation of this proceeding. By then the Insurer had prepared and completed a Brief of Documents and a Brief of Authorities. These had been filed with the Commission on February 4, 2008. In total, the Insurer sought 5.0 hours for appearance at the prehearings and the hearing of April 23, 2008, and 15.0 hours of preparation time for the pleadings and the briefs of authorities and documents.
In response, Mrs. Pham argued that I should not award expenses to State Farm. Mrs. Pham argued that she had in fact been involved in two accidents: this one and another that took place on May 21, 2006. Mrs. Pham suggested that the Insurer had not negotiated fairly in that they had always linked the two accidents in their settlement discussions and were not willing to settle one without the other. Mrs. Pham had sent a letter to the Insurer indicating that she was willing to withdraw this application on a "without costs" basis on April 18, 2008.
In the present instance, I am not convinced that Mrs. Pham's involvement in two accidents greatly influences the manner in which I should address the issue of expenses. The Insurer was successful in regard to the outcome of the proceeding. Nevertheless, Mrs. Pham's communication of April 18, 2008 shortened the length of this preliminary issues hearing. I also note that the fifteen hours sought for preparation time for the document and authorities brief appears overstated.
In the circumstances, I am awarding to the Insurer the amount of $500.00 as expenses.
July 10, 2008
Edward Lee Arbitrator
Financial Services Commission of Ontario
Neutral Citation: 2008 ONFSCDRS 115 FSCO A06-002501
BETWEEN:
CHANH PHAM Applicant
and
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY Insurer
ARBITRATION ORDER
Under section 282 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:
Mrs. Pham is precluded from proceeding to arbitration because she did not commence the proceeding within two years of State Farm's refusal to pay the amount claimed, as required by 51(1) of the Schedule.
Mrs. Pham shall pay $500.00 to State Farm as expenses.
July 10, 2008
Edward Lee Arbitrator
Footnotes
- The Statutory Accident Benefits Schedule — Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended.