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

Neutral Citation: 2008 ONFSCDRS 122

FSCO A07-000194 and A07-000195 FSCO A07-000196 and A07-000199

BETWEEN:

CYNTHIA JOHNSON

and

CYRIL JOHNSON

Applicants

and

ALLSTATE INSURANCE COMPANY OF CANADA

Insurer

REASONS FOR DECISION

Before: Judith Killoran Heard: April 28, 29 and May 1, 2008 Appearances: Derek L. Smith for Mr. and Mrs. Johnson Carla Falkeisen for Allstate Insurance Company of Canada

Issues:

The Applicants, Cynthia and Cyril Johnson, were injured in motor vehicle accidents on October 24, 2004 and January 13, 2005. They applied for and received statutory accident benefits from Allstate Insurance Company of Canada (“Allstate”), payable under the Schedule.¹ The parties were unable to resolve their disputes through mediation, and Mr. and Mrs. Johnson applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

On October 26, 2007, a resumption of pre-hearing discussion was conducted by teleconference. The parties requested that the four Applications for Arbitration filed by Mr. and Mrs. Johnson be combined and heard together. The arbitrator found this to be a reasonable request and issued an order to that effect.

The issues in this hearing are:

With respect to Mrs. Johnson:

1. Is Mrs. Johnson entitled to receive a rehabilitation benefit under section 15 of the Schedule, for the following costs claimed by her for care of various foster children:

a) $1,238.28 for the period from October 24, 2004 to January 12, 2005;

b) $1,992.34 for the period from January 13, 2005 to April 2, 2005; and

c) $2,424.00 for the period from April 3, 2005 and ongoing?

2. Is Mrs. Johnson entitled to payments of $1,949 for housekeeping and home maintenance services under section 22 of the Schedule?

3. Is Allstate liable to pay a special award under subsection 282(10) of the Insurance Act because it unreasonably withheld or delayed payments to Mrs. Johnson?

4. Is either party liable to pay the other’s expenses under subsection 282(11) of the Insurance Act?

5. Is Mrs. Johnson entitled to interest for the overdue payment of benefits under subsection 46(2) of the Schedule?

With respect to Mr. Johnson:

1. Is Mr. Johnson entitled to receive a rehabilitation benefit under section 15 of the Schedule for care provided for various foster children in the following amounts:

a) $1,076.28 for the period from October 24, 2004 to January 12, 2005;

b) $822.24 for the period from January 13, 2005 to April 2, 2005; and

c) $1,638.00 for the period from April 3, 2005 and ongoing?

2. Is Mr. Johnson entitled to the following amounts for housekeeping and home maintenance services under section 22 of the Schedule:

a) $1,157.00 for the period from October 24, 2004 to January 12, 2005;

b) $1,078.04 for the period from January 13, 2005 to April 2, 2005; and

c) $90.00 for the period from April 3, 2005 and ongoing?

3. Is Allstate liable to pay a special award under subsection 282(10) of the Insurance Act because it unreasonably withheld or delayed payments to Mr. Johnson?

4. Is either party liable to pay the other’s expenses under subsection 282(11) of the Insurance Act?

5. Is Mr. Johnson entitled to interest for the overdue payment of benefits under subsection 46(2) of the Schedule?

Result:

With respect to Mrs. Johnson:

1. Mrs. Johnson is entitled to a rehabilitation benefit under section 15 of the Schedule for child care costs for her foster children in the following amounts:

a) $1,238.28 for the period from October 24, 2004 to January 12, 2005;

b) $1,992.34 for the period from January 13, 2005 to April 2, 2005; and

c) $2,424.00 for the period from April 3, 2005 and ongoing.

2. Mrs. Johnson is entitled to $1,950 in payment for housekeeping and home maintenance benefits claimed under section 22 of the Schedule.

3. Mrs. Johnson is entitled to a special award of $3,000.

4. Mrs. Johnson is entitled to her expenses of the hearing.

5. Mrs. Johnson is entitled to interest for the overdue payment of benefits.

With respect to Mr. Johnson:

1. Mr. Johnson is entitled to a rehabilitation benefit claimed under section 15 of the Schedule for care provided for various foster children in the following amounts:

a) $1,076.28 for the period from October 24, 2004 to January 12, 2005;

b) $822.24 for the period from January 13, 2005 to April 2, 2005; and

c) $1,638.00 for the period from April 3, 2005 and ongoing.

2. Mr. Johnson is entitled to payment of housekeeping and home maintenance services under section 22 of the Schedule in the following amounts:

a) $1,157.00 for the period from October 24, 2004 to January 12, 2005;

b) $1,078.04 for the period from January 13, 2005 to April 2, 2005; and

c) $90.00 for the period from April 3, 2005 and ongoing.

3. Mr. Johnson is entitled to a special award of $2,000.

4. Mr. Johnson is entitled to his expenses of the hearing.

5. Mr. Johnson is entitled to interest for the overdue payment of benefits.

With respect to Mr. and Mrs. Johnson:

1. A previous payment of $2,389 from Allstate to Mr. and Mrs. Johnson is to be applied as a credit to the total amount owed to them.

EVIDENCE AND ANALYSIS:

Background

Mr. and Mrs. Johnson are foster parents who were involved in two accidents which occurred on October 24, 2004 and January 13, 2005. In both accidents their vehicle was rear-ended and they suffered injuries.

In the first accident, the Johnsons were going to church on Sunday morning when a car hit the back of their van. Mrs. Johnson experienced pain in her neck, back and shoulders and had a headache. After the first accident, Mr. Johnson felt “torn up inside.” He had pain across his neck, shoulder and lower back. He could only stand for short periods of time.

The Johnsons had not fully recovered from the October accident when the second accident occurred in January. They suffered from neck, back and shoulder injuries resulting from the January accident.

Cynthia and Cyril Johnson were sixty-five and sixty-eight years old respectively, at the time of the accidents. Mr. Johnson was retired as a security guard as was Mrs. Johnson from her previous occupation as a personal support worker. However, both of them fostered approximately eighty children in a 4-5 year period beginning in 2002. They fostered children for varying lengths of time ranging from one night to a number of years.

Mr. Johnson had some health problems, including diabetes and a heart condition, prior to the accidents. Mrs. Johnson had some health problems also, mostly involving a frozen shoulder, in the year prior to the accidents.

Mr. and Mrs. Johnson cared for 2-4 foster children at a time. Mrs. Johnson did much of the child care while Mr. Johnson did many of the associated tasks such as grocery shopping, heavier housekeeping such as vacuuming, and driving the children. The Johnsons received an allowance from the Children’s Aid Society to reimburse them for the expenses related to caring for their foster children. They were also provided with some relief funding for child care prior to the accidents. Relief child care was provided by a woman named Mrs. Carmen Campbell who had been screened and approved by the Children’s Aid Society.

The important issue before me is whether the Johnsons are entitled to reimbursement for child care costs as a rehabilitation expense, and housekeeping costs associated with their responsibilities to their foster children. Both applicants are also making a special award claim.

REHABILITATION BENEFITS

The relevant clauses of section 15 of the Schedule state:

(1) The insurer shall pay an insured person who sustains an impairment as a result of an accident a rehabilitation benefit.

(2) The rehabilitation benefit shall pay for reasonable and necessary measures undertaken by an insured person to reduce or eliminate the effects of any disability resulting from the impairment or to facilitate the insured person’s reintegration into his or her family, the rest of society and the labour market.

(3) Measures to reintegrate an insured person into the labour market include measures that are reasonable and necessary to enable the person to,

(a) engage in employment that is as similar as possible to employment in which he or she engaged before the accident; or

(b) lead as normal a work life as possible.

(4) In determining whether a measure is reasonable and necessary for the purpose of subsection (3), the insurer shall consider the insured person’s personal and vocational characteristics.

(5) The rehabilitation benefit shall pay for all reasonable and necessary expenses incurred by or on behalf of the insured person as a result of the accident for a purpose referred to in subsection (2) for,

(l) other goods and services that the insured person requires, except services provided by a case manager.

Rehabilitation Benefits – Mrs. Cynthia Johnson

On November 4, 2004, Mrs. Johnson submitted an Application for Accident Benefits.² She stated that her sore back prevented her from bending and lifting, thus restricting her to very light domestic duties. On February 5, 2005, Mrs. Johnson submitted a second Application for Accident Benefits.³

Mrs. Johnson testified that she received 1 day per month per child in child care relief from the Children’s Aid Society (“CAS”). She paid Mrs. Campbell out of her own pocket for other child care at the rate of $10 an hour which increased to $12 an hour after the first accident. Other than that, she received no help with child care, housekeeping or personal care prior to the accidents. She took care of the foster children, doing everything from bathing them, doing their laundry, and taking them to school. She also washed dishes, dusted furniture, made beds and did the laundry.

I find that $12 an hour was an appropriate amount to pay for child care and housekeeping, not $7 an hour which was the rate approved by Allstate. For safety reasons, adults in the household with the foster children were required to be screened and approved by the CAS. Mr. and Mrs. Johnson were not permitted to hire any homecare or child care provider. Mrs. Campbell was allowed in their household because she had been screened and approved by the CAS.

Mrs. Johnson attended therapy which started a week after the first accident. She found she could do very little not even give herself a bath. She enlisted the help of Sonia Fletcher, Mrs. Campbell and Annemarie Johnson. One of Mr. and Mrs. Johnson’s daughters took the children to her house until the CAS could find another foster parent. Subsequently, the CAS removed the children from the Johnson household for 2 weeks.

Mrs. Johnson testified that she filled out an Application for Accident Benefits and engaged in a conversation on October 26, 2004 with her insurance adjuster about reimbursement for child care expenses related to her foster children. She initially attended Central Park Physiotherapy for treatment with her husband. They received therapy for a number of months and noticed an improvement in their function.

During the first 3 or 4 weeks after the first accident, Mrs. Johnson could not go downstairs to do the laundry, could not make the beds and relied on Mrs. Campbell to do the housework, cook for the household, make meals for the children, do laundry and lay out the children’s clothes. After the initial 3 or 4 weeks, Mrs. Campbell came to help for gradually decreasing amounts of time as Mr. and Mrs. Johnson’s health improved slowly. However, she continued to assist with housekeeping and child care for approximately 3 hours a day for several months.

On January 13, 2005, the second accident occurred. The Johnsons were driving to therapy when their van was struck in the rear. Mrs. Johnson testified that she could not move and started crying after the collision. The Johnsons went to their doctor the next morning. Mrs. Campbell began coming to their house again for full days during a 2 to 3 week period. She was still coming to assist in April and May but was spending less time in the household. From October to May, Mr. and Mrs. Johnson’s daughter Annemarie Johnson was also helping with the children and the household chores, primarily every weekend. She also assisted her mother with her personal care, such as bathing and washing her hair.

On January 14, 2005, counsel for the Johnsons forwarded an expense claim in the amount of $1,076 for rehabilitation expenses relating to Cynthia Johnson for the period from October 24, to December 23, 2004.⁴

Mrs. Johnson did not recover fully after the first accident and felt worse after the second accident. She testified that she did not use the CAS child care relief money to pay for Mrs. Campbell’s services. Instead, the Johnsons paid Mrs. Campbell from their own funds. They continued to receive assistance for child care after April/May of 2005 as they were still attending treatment sessions for physiotherapy, chiropractic and massage.

The Johnsons returned to physiotherapy in March, April and May of 2005 due to pain. In his letter of June 16, 2005 to which he attached claim forms and a schedule, counsel filed for further rehabilitation benefits in the amount of $162 for extra child care provided to allow for therapy with respect to the first accident and $810 with respect to the second accident.⁵ On July 5, 2005, further correspondence from counsel for the Johnsons together with detailed schedules was forwarded to Allstate.⁶ On September 19, 2005⁷ and January 26, 2006⁸, counsel forwarded more claims for rehabilitation which totalled $4,217.95 for Mrs. Johnson.

Mrs. Johnson was cross-examined about rehabilitation claims for therapy. She testified that she and her husband attended physiotherapy separately as they would need a babysitter if they went together. She attended twice a week which was reduced to once a week. Prior to the first accident, Mrs. Johnson had attended physiotherapy once a week.

After the first accident, the Johnsons had 2 foster children who were aged 5 and 2½ years old. One was at home full time and the other attended school for a half day. The visits recorded on the surveillance tape which showed the Johnsons dropping children off at the Mid-Town Mall were for the purpose of attending supervised visits with their parents.⁹

Mrs. Johnson testified that she needed no help with her housekeeping or child care before the first accident. She only used Mrs. Campbell’s services when she needed to go somewhere not because of any medical difficulties. Although Mrs. Johnson conceded she had a frozen shoulder prior to the first accident, she testified that she was fully functional before the accidents. Although her family doctor’s clinical notes described an aching on the left side of her neck, an aching left shoulder and left wrist complaints before the accident, I accept Mrs. Johnson’s testimony that she was fully functional before the accidents and these were minor complaints.

On December 26, 2004, the Johnsons accepted a 7 year old as a new foster child in their house. Mrs. Johnson testified that her daughters helped with child care after the first accident. After the second accident, the Johnsons took in a fourth child on January 19, 2005. The child was 2½ years old. Two children attended school and 2 children were too young to attend school.

I find little merit in Allstate’s argument that because the Johnsons continued to take foster children after each accident, this confirms that they did not suffer impairments. Rather, I accept the testimony of Mr. and Mrs. Johnson that they had obligations to the CAS as foster parents which included accepting up to 4 children at any given time. They managed to fulfil those pre‑existing obligations by continuing to attend therapy while employing relief child care and housekeeping providers.

Mrs. Johnson’s disability certificates dated November 4, 2004 and January 27, 2005 were completed by her family physician, Dr. Haw K. Fan-Lun.¹⁰ He itemized her neck, back and shoulder injuries and stated that she could not look after her foster children without assistance due to her headaches, neck and back pains which were constant. He also described her limitations with housework. In an updated report dated May 18, 2007, Dr. Fan-Lun stated that Mrs. Johnson had seen him on December 15, 2005, January 17 and January 31, 2006 with complaints of pain in the neck and upper and lower back. In his opinion, “the 2 car accidents have made her neck and back condition into a chronic pain syndrome.”¹¹

Dr. F. Abuzgaya, an orthopaedic surgeon, provided to Allstate an undated report based on an assessment of Mrs. Johnson on February 4, 2005. He concluded that she sustained an impairment as a result of the two accidents resulting in a substantial inability to provide full care to her foster children and to perform her housekeeping duties.¹²

Ms. Emilia Radovini, occupational therapist, provided to Allstate reports dated June 3, July 4, July 25, September 6, October 5, and October 24, 2005.¹³ She recommended assistive devices for Mrs. Johnson together with occupational therapy visits and assistance with household tasks due to Mrs. Johnson’s inability to complete moderate to heavy tasks and repetitive movements of the upper extremities. Mrs. Johnson also demonstrated a decreased endurance due to fatigue, shortness of breath and pain. In her final report dated October 24, 2005, Ms. Radovini stated that Mrs. Johnson was caring for her foster children with no reported difficulties. It was Ms. Radovini’s opinion that Mrs. Johnson appeared capable of resuming her pre-accident household tasks with pacing.

All of the medical documentation supported Mrs. Johnson’s claims for housekeeping and child care assistance. To the extent the occupational therapist’s conclusions varied with Mrs. Johnson’s testimony that she required assistance past October 2005, I prefer Mrs. Johnson’s testimony and Dr. Fan-Lun’s report.

Rehabilitation Benefits – Mr. Cyril Johnson

Mr. Johnson drove the children to school, to supervised visits with their parents, to doctors, did the grocery shopping and paid bills at the bank. Before the first accident he cooked and drove the children. In his words: “There was always work to be done around the house.” His family doctor sent him for therapy which he started within a week after the first accident due to his difficulties walking.

Although Mr. Johnson testified that he had not seen the documents attached to correspondence from his counsel dated April 20, 2005 before¹⁴, I accept that he was perhaps confused and his memory was faulty. Mr. Johnson was aware and indeed, signed the claims which were being presented to the insurance company. He conceded that he could have seen Schedules A and B which were attached to the letter sent by his counsel. Schedule A documented the housekeeping claims while Schedule B related to child care from March 6, 2005 to April 2, 2005.

Mr. Johnson was cross-examined on his family doctor’s records which describe his complaint of lower back pain on the left side prior to the accidents. He insisted that he needed no extra help prior to the accidents. I find that the various medical problems described in the family doctor’s clinical notes and records prior to the accidents were, as with Mrs. Johnson, nothing more than minor complaints. In any case, they did not prevent Mr. and Mrs. Johnson from participating fully in their societal roles as foster parents in an inclusive family which included their sons and daughters, their extended families and various young children in need of foster care.

Surveillance shows Mr. Johnson on March 2, 2005 changing the bulb in his left tail light. He is moving stiffly and bending a little. Other surveillance in March shows Mr. Johnson picking up children from school and buying groceries. On March 4, 2005, Mr. Johnson is attending at the Royal Bank. None of the surveillance undermines Mr. Johnson’s credibility or the veracity of his account concerning his level of functioning.

I found it troubling that Allstate was prepared to expend relatively large amounts of money for surveillance of Mr. and Mrs. Johnson. They were an elderly couple who were entirely blameless with respect to two unfortunate accidents. They were performing important societal roles as foster parents with at risk children who depended on them and would suffer from any disruptions in their already troubled lives.

Mr. Ralph Di Domenico, a Claims Manager for Allstate, testified that an Application for Accident Benefits package was sent to the Johnsons on October 26, 2005. However, the Applications for Expenses were not sent out until November 29, 2004 after Mrs. Johnson called and requested them.

Conclusion:

On cross-examination, Mr. Di Domenico was directed to subsection 15(2) and the provision that a rehabilitation benefit shall pay for reasonable and necessary measures to reduce the effects of disability and facilitate reintegration into society. He was asked whether child care would reduce the effects of the disabilities experienced by the Johnsons and promote their reintegration into society. Mr. Di Domenico did not agree that child care qualified as a rehabilitation expense.

While Allstate is permitted to disagree with the notion that child care may qualify as a rehabilitation expense, it is required to acknowledge that it has been recognized as such, in particular circumstances, by our judicial system. Mr. and Mrs. Johnson applied to Allstate for rehabilitation benefits to cover the expense of hiring replacement labour for child care responsibilities relating to their foster children. At the hearing, they relied on the judicial review decision in G.B. v. Pilot Insurance Co.¹⁵ which restored the order of Arbitrator Blackman. The decision held that the provision of nanny services was an integral part of a proposal to reduce or eliminate the disability resulting from the accident and to facilitate the insured’s reintegration into her family.

In his arbitration decision¹⁶, Arbitrator Blackman rejected the submission that section 13 was the exclusive basis for caregiver funding. The language of subsection 15(5) contains an express exclusion of services provided by a case manager but no other exclusion limiting the application of the broad language “other goods and services that the insured person requires.” Arbitrator Blackman characterized the case as being about whether the recommended services were reasonable and necessary to rehabilitate a family at risk.

I find no merit in Allstate’s submission that any payment of a rehabilitation benefit to the Johnsons is subject to the prohibition found in subsection 60(2) of the Schedule. It specifies that payment of a rehabilitation benefit is not required for that portion of an expense for which an insured person is entitled to payment under any other plan or law. To the extent that Mr. and Mrs. Johnson were entitled to payment of some child care expenses by the CAS, those payments were pre-existing and not linked to the accidents. Any child care expenses claimed as rehabilitation expenses by Mr. and Mrs. Johnson are linked to the accidents and represent amounts paid by them in excess of the CAS payments.

Both Mr. and Mrs. Johnson were impressive witnesses. They were forthright and compelling when they testified. I attach great weight to their testimony. I find that the services applied for by the Johnsons are reasonable and necessary to rehabilitate a family at risk. These expenses are not simply to fund child care but were for the rehabilitation of the Johnsons. The relief child care was necessary to allow the Johnsons to both attend rehabilitation programs and integrate back into their societal roles as foster parents.

HOUSEKEEPING

Subsection 22(1) of the Schedule states:

The insurer shall pay for reasonable and necessary additional expenses incurred by or on behalf of an insured person as a result of an accident for housekeeping and home maintenance services if, as a result of the accident, the insured person sustains an impairment that results in a substantial inability to perform the housekeeping and home maintenance services that he or she normally performed before the accident.

Housekeeping – Mrs. Johnson

On January 17, 2005, Allstate received from Mrs. Johnson, an application for housekeeping expenses, together with supporting documents, related to the first accident¹⁷. On April 21, 2005, Allstate received applications for housekeeping expenses, together with supporting documents, related to both accidents.¹⁸ Further requests for housekeeping expenses, together with updated documentation were submitted on her behalf on July 5, September 19, October 22, 2005 and January 26 and July 25, 2006.¹⁹ Allstate paid some of the housekeeping expenses on May 6, June 27 and September 27, 2005.²⁰

According to Mr. Di Domenico, Mrs. Johnson spoke to an adjuster on October 26, 2004 and advised that she would take care of housekeeping with the assistance of her children and a friend. He testified that it was difficult for Allstate to separate additional housekeeping expenses from those normally required for children. The medical information on the Johnsons was contained in the original applications and the disability certificates. Subsequently, Allstate asked the Johnsons to attend an orthopaedic examination with Dr. F. Abuzgaya on February 4, 2005. His assessment report was received by Allstate on March 21, 2005. ²¹

Allstate forwarded, on May 6, 2005, a cheque for $1,344 for housekeeping for both Mr. and Mrs. Johnson. Allstate calculated the full period from October 24, 2004 to April 22, 2005. This was 23 weeks totalling 192 hours of housekeeping at $7 per hour. I refer to my earlier finding that $7 an hour was not realistic as Mr. and Mrs. Johnson were limited in their choice of housekeeping providers. Mrs. Campbell was screened and approved by the CAS. She was also a familiar figure to the children, offering them continuity during a difficult time.

On June 27, 2005 Allstate paid housekeeping claims for the period from April 3 to July 16, 2005. Arrangements were made for an occupational therapist to perform an in-home assessment on May 10, 2005. It was shortly after that examination that $705 was paid.

Housekeeping was paid to July 28, 2005.²² Allstate did not pay any more housekeeping based on the occupational therapist’s report where Ms. E. Radovini advised that Mrs. Johnson was back to her full-time housekeeping.²³

On cross-examination, Mr. Di Domenico conceded that the disability certificates for Cyril and Cynthia Johnson itemized different pre-accident housekeeping and care giving duties for each.

Housekeeping – Mr. Johnson

Mr. Cyril Johnson testified that he had responsibilities in the house for cooking, washing dishes, vacuuming, cutting the lawn, and taking out the garbage. Mrs. Johnson testified that Mr. Johnson did vacuuming, cooking, washing dishes, gardening and mowing the lawn and taking out the garbage. He could not do any of these chores after either accident.

Mr. Johnson testified that he could perform few of his usual responsibilities after the accidents. He tried to cut the lawn but could not do it. He paid someone to do his regular jobs. After the second accident, he said he began to deteriorate. He had been getting back to normal, almost recovering but after the second accident, he felt as though he was back to “square one.”

Mr. Johnson stated that an Application for Expenses was sent in after the first accident, although Allstate’s date stamp on the document is “January 17, 2005.” He described doing most of the snow shovelling before the accident. As is often typical in neighbourhoods, sometimes his neighbour would shovel his snow and sometimes he would shovel his neighbour’s snow.

Allstate relied on Dr. Abuzgaya’s undated orthopaedic report based on an evaluation on February 4, 2005 but not received by Allstate until March 21, 2005. The report stated that Mr. Johnson was not impaired and nothing prevented him from engaging in his housekeeping and care giving tasks. This orthopaedic report was used by Allstate to justify benefits not paid in October 2004.

A review of Dr. Abuzgaya’s report discloses that Mr. Johnson had neck pain radiating on the left side to the left shoulder which is worse with turning, sleeping and driving. “The pain began with the first accident and it has not improved since. The second accident made the discomfort worse.” Dr. Abuzgaya also notes low back pain complaints localized to the lower lumbar area which are worse with sitting, standing, cleaning, getting up to an upright position, walking, or any activity. He found that Mr. Johnson’s range of motion in both his neck and his lower lumbar spine was 50% of normal with an abnormal rhythm. Toe walking and heel walking were accomplished with difficulty.²⁴ I find that Dr. Abuzgaya’s conclusions that Mr. Johnson did not suffer a substantial inability to perform his pre-accident care giving and housekeeping duties is not consistent with his physical findings, particularly in light of the occupational therapist, Ms. Radovini’s reports.

Ms. Radovini, the occupational therapist retained by Allstate, assessed Mr. Johnson’s housekeeping needs in her reports dated July 21, 2005 and September 6, 2005.²⁵ She confirmed he needed ongoing assistance with indoor and outdoor housekeeping tasks. However, the only payment to Mr. Johnson from Allstate was $120 for lawn cutting and snow removal.²⁶

Conclusion:

It did not appear that Allstate communicated to the Johnsons the difficulty it had separating housekeeping from child care and its reluctance to treat child care as a rehabilitation expense. Allstate knew prior to January 17, 2005 that the Johnsons needed help with housekeeping. By the end of November 2004, Mrs. Johnson called and was requesting funds to pay Mrs. Campbell. Allstate was still assuming that no housekeeping needed to be paid based on a conversation 48 hours after the first accident.

Mr. Di Domenico conceded that simply forwarding to Mrs. Johnson an Explanation of Benefits was not an effective response to her claims and communication could have been better.²⁷

Allstate does not appear to have ever forwarded a response to Mr. Johnson’s housekeeping claims. There was no Explanation of Benefits sent. Mr. Di Domenico conceded that better communication was needed as Mr. Johnson had no way of knowing that his housekeeping expenses had been combined with his wife’s claim.

I find that Mr. and Mrs. Johnson have established on the balance of probabilities that the housekeeping expenses which they claimed were reasonable and necessary as a result of impairments sustained in the accidents which resulted in a substantial inability to perform the housekeeping and home maintenance services which they normally performed before the accident.

Quantum of Rehabilitation and Housekeeping Benefits

I have allowed the total amount of rehabilitation and housekeeping benefits claimed by Mr. and Mrs. Johnson based on their testimony and the documentary evidence filed. Mrs. Johnson is entitled to a total of $5,654.62 for rehabilitation benefits and $1,949 in housekeeping benefits. Mr. Johnson is entitled to a total of $3,536.52 for rehabilitation benefits and $2,325.04 for housekeeping benefits. However, a payment of $2,389 from Allstate is to be applied as a credit to the total amount owed to Mr. and Mrs. Johnson.

SPECIAL AWARD:

Subsection 282(10) of the Insurance Act states:

If the arbitrator finds that an insurer has unreasonably withheld or delayed payments, the arbitrator, in addition to awarding the benefits and interest to which an insured person is entitled under the Statutory Accident Benefits Schedule, shall award a lump sum of up to 50 per cent of the amount to which the person was entitled at the time of the award together with interest on all amounts then owing to the insured (including unpaid interest) at the rate of 2 per cent per month, compounded monthly, from the time the benefits first became payable under the Schedule.

I find that Allstate has unreasonably withheld or delayed payments for the benefits claimed by Mr. and Mrs. Johnson. There were serious communication problems which were never addressed by the Insurer. I find that Allstate was harsh and high handed in its treatment of Mr. and Mrs. Johnson who were seeking a limited amount of assistance. Their claims fit within the statutory framework. I have considered the totality of the evidence and find that Allstate did not offer sufficient explanation or assistance to the Johnsons to fulfil its responsibilities as their first party insurer, particularly in light of their advanced years.

It was troubling that Allstate expended relatively large sums of money conducting surveillance of Mr. and Mrs. Johnson while not conducting even the most cursory investigation of their claims. It chose to rely on inadequate medical reports and ignore those that were favourable. It neglected to take into account the particular and unique characteristics of its insured and offered little assistance to an elderly couple who were seeking to regain their health and resume their responsibilities as foster parents. Mr. and Mrs. Johnson filed modest claims for benefits and were met with resistance and suspicion by Allstate at a time in their lives when they were injured and vulnerable.

Although I find that this file was mishandled so that payments were unreasonably withheld or delayed, I find some merit to the Insurer’s argument that one of the categories, that is, the claim for child care as a rehabilitation expense, was a novel claim and the law on the question was somewhat unsettled. However, Arbitrator Blackman released his decision in Ms. G. on December 22, 2005. It is certainly not the case that when the judicial review decision in G.B., restoring Arbitrator Blackman’s order, was released on January 21, 2008, Allstate paid Mr. and Mrs. Johnson for their child care expenses.

Allstate was obligated to treat with seriousness and utmost good faith the Johnsons’ claims for child care as rehabilitation expenses, together with their housekeeping claims. This was not done. Allstate did not communicate adequately with Mr. and Mrs. Johnson. It ignored their very detailed descriptions of the housekeeping and child care which they required and was provided. At no time did Allstate respond to Mr. Johnson’s claims separately from those of his wife. Mr. Johnson summed up his anger and frustration in his testimony when he exclaimed: “Why did they put us through all of this?”

Mrs. Johnson’s total claim for rehabilitation and housekeeping benefits is $7,603.62. Mr. Johnson’s total claim for rehabilitation and housekeeping benefits is $5,861.56. Mr. and Mrs. Johnson have conceded that a payment of $2,389 from Allstate is to be applied as a credit to the total amount owed to them.

The claims filed by Mr. and Mrs. Johnson were quite modest. However, they represented a considerable amount of money to this couple. I note their counsel’s correspondence of April 5, 2005 which stated: “Ms. Johnson is in an acute stage of financial difficulty. She needs funds to pay for the help she needs, in order to maintain her circumstances.”

I fix the special award at $3,000 for Mrs. Johnson and $2,000 for Mr. Johnson. The amount of the special award to be paid by Allstate to Mr. and Mrs. Johnson is substantial considering the small monetary amount of their total claims. This is a reflection of my finding of the degree to which Allstate unreasonably withheld and delayed payments and failed in its obligations to Mr. and Mrs. Johnson.

INTEREST:

Mr. and Mrs. Johnson are entitled to interest under subsection 46(2) of the Schedule on all unpaid benefits.

EXPENSES:

Mr. and Mrs. Johnson were successful with all of their claims. I find that they are entitled to their expenses. The parties are encouraged to resolve the question of quantum. If they are unable to do so, they may schedule an expense hearing before me according to the provisions of Rule 79 of the Dispute Resolution Practice Code.

July 18, 2008

Judith Killoran Arbitrator

Date

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

Neutral Citation: 2008 ONFSCDRS 122

FSCO A07-000194 and A07-000195 FSCO A07-000196 and A07-000199

BETWEEN:

CYNTHIA JOHNSON

and

CYRIL JOHNSON

Applicants

and

ALLSTATE INSURANCE COMPANY OF CANADA

Insurer

ARBITRATION ORDER

Under section 282 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:

With respect to Mrs. Johnson:

1. Mrs. Johnson is entitled to a rehabilitation benefit under section 15 of the Schedule for child care costs for her foster children in the following amounts:

a) $1,238.28 for the period from October 24, 2004 to January 12, 2005;

b) $1,992.34 for the period from January 13, 2005 to April 2, 2005; and

c) $2,424.00 for the period from April 3, 2005 and ongoing.

2. Mrs. Johnson is entitled to $1,950 in payment for housekeeping and home maintenance benefits claimed under section 22 of the Schedule.

3. Mrs. Johnson is entitled to a special award of $3,000.

4. Mrs. Johnson is entitled to her expenses of the hearing.

5. Mrs. Johnson is entitled to interest for the overdue payment of benefits.

With respect to Mr. Johnson:

1. Mr. Johnson is entitled to a rehabilitation benefit claimed under section 15 of the Schedule for care provided for various foster children in the following amounts:

a) $1,076.28 for the period from October 24, 2004 to January 12, 2005;

b) $822.24 for the period from January 13, 2005 to April 2, 2005; and

c) $1,638.00 for the period from April 3, 2005 and ongoing.

2. Mr. Johnson is entitled to payment of housekeeping and home maintenance services under section 22 of the Schedule in the following amounts:

a) $1,157.00 for the period from October 24, 2004 to January 12, 2005;

b) $1,078.04 for the period from January 13, 2005 to April 2, 2005; and

c) $90.00 for the period from April 3, 2005 and ongoing.

3. Mr. Johnson is entitled to a special award of $2,000.

4. Mr. Johnson is entitled to his expenses of the hearing.

5. Mr. Johnson is entitled to interest for the overdue payment of benefits.

With respect to Mr. and Mrs. Johnson:

1. A previous payment of $2,389 from Allstate to Mr. and Mrs. Johnson is to be applied as a credit to the total amount owed to them.

July 18, 2008

Judith Killoran Arbitrator

Date

Footnotes

1. 1The Statutory Accident Benefits Schedule - Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended.
2. 2Exhibit 1, Tab 1
3. 3Exhibit 1, Tab 3
4. 4Exhibit 1, Tab 5
5. 5Exhibit 1, Tab 10
6. 6Exhibit 1, Tab 12
7. 7Exhibit 1, Tab 14
8. 8Exhibit 1, Tab 18
9. 9Exhibit 2, Tab 3
10. 10Exhibit 9, Tabs 1A and 1B
11. 11Exhibit 9, Tab 1C
12. 12Exhibit 9, Tab 2
13. 13Exhibit 9, Tabs 3 A, B, C, D, E, and F
14. 14Exhibit 1, Tab 8
15. 15[2008] O.J. No. 288, Ontario Superior Court of Justice, January 21, 2008.
16. 16Ms. G. and Pilot Insurance Company (FSCO A04-000446, December 22, 2005)
17. 17Exhibit 1, Tab 5
18. 18Exhibit 1, Tab 7
19. 19See Exhibit 1, Tabs 8, 12, 14, 17, 18 and 19
20. 20See Exhibit 1, Tabs 9, 11, 15 and 16
21. 21Dr. Abuzgaya’s report, Exhibit 16
22. 22Exhibit 1, Tab 13
23. 23Exhibit 9, Tab 3F
24. 24Exhibit 16, pages 4 and 5
25. 25Exhibit 10, Tabs 2A and 2B
26. 26Exhibit 17
27. 27Exhibit 1, Tab 6