Robert Carpenter v. Farmers' Mutual Insurance Company, 2008 ONFSCDRS 130

Financial Services Commission des

Commission services financiers

of Ontario de l’Ontario

Neutral Citation: 2008 ONFSCDRS 130

FSCO A07-001980

BETWEEN:

ROBERT CARPENTER

Applicant

and

FARMERS’ MUTUAL INSURANCE COMPANY

Insurer

DECISION ON A MOTION

Before: Richard Feldman

Heard: By written submissions received by June 27, 2008

Appearances: Jason Singer for Mr. Carpenter

Linda Matthews for Farmers’ Mutual Insurance Company

Issues:

This is a motion, brought by Farmers’ Mutual Insurance Company (“Farmers’”), for an order:

staying this proceeding (i.e., the Arbitration) until such time as the Applicant attends a section 42 assessment with a physiatrist, Dr. Raphael Chow, to determine whether the Applicant suffers a complete inability to carry on a normal life as a result of the motor vehicle accident; and
for its expenses of this motion.

This motion was heard by way of written submissions. Farmers’ was permitted until May 30, 2008 to file its motion material. The Applicant was then given until June 13, 2008 to file responding motion material. I then permitted Farmers’ until June 27, 2008 to file any reply material. The parties complied with these time requirements.

I note that in Farmers’ Reply Submissions (filed June 27, 2008), Farmers’ appears for the first time to seek an order staying the proceeding not only until the Applicant attends an examination by a physiatrist but also until the Applicant attends a Functional Abilities Evaluation. There was no formal request by Farmers’ to amend its motion and Farmers’ raised this issue at a time and in a manner that deprived the Applicant of an opportunity to respond. As the issue of a Functional Abilities Evaluation is not properly before me, I shall not be making any rulings with respect thereto and shall deal only with the relief requested in Farmers’ Notice of Motion (filed on May 30, 2008).

Result:

Farmers’ motion is denied.
The decision on the expenses of this motion is referred to the hearing arbitrator.

EVIDENCE AND ANALYSIS:

Background

The Applicant, Robert Carpenter, was injured in a motor vehicle accident on September 24, 2004. On October 19, 2004, he applied for statutory accident benefits from Farmers’ Mutual Insurance Company (“Farmers’”), payable under the Schedule.¹ Disputes arose between the parties concerning Mr. Carptenter’s entitlement to certain accident benefits. The parties were unable to resolve their disputes through mediation and Mr. Carpenter applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

As a result of the accident in question, the Applicant’s injuries included (but were not limited to) fractured vertebrae as well as soft tissue injuries. His main and enduring complaints have been of chronic pain in his head, neck, shoulders and back, as well as disrupted sleep and mood changes as a result of the chronic pain.

On January 10, 2005, the Applicant elected to claim non-earner benefits. Pursuant to section 42 of the Schedule, Farmers’ had Mr. Carpenter examined by an orthopaedic surgeon (Dr. Weinberg) on March 9, 2005 and by a neuropsychologist (Dr. Zakzanis) on March 14, 2005. Both Dr. Weinberg and Dr. Zakzanis noted the Applicant’s complaints of constant pain but concluded that, based upon their areas of expertise, their examination of Mr. Carpenter and the available medical documentation, Mr. Carpenter did not suffer a complete inability to carry on a normal life as a result of the motor vehicle accident. Based upon these opinions, on April 1, 2005, Farmers’ denied Mr. Carpenter’s claim for non-earner benefits. Since that date, Farmers’ has never changed its position with respect to Mr. Carpenter’s claim for non-earner benefits.

In response to a report from Dr. Dobkin (the Applicant’s family physician) dated May 1, 2006, Farmers’ had further section 42 assessments conducted in the summer of 2006. Mr. Carpenter was examined by an orthopaedic surgeon (Dr. Weinberg), by a neurologist (Dr. MacDonald) and by an occupational therapist (Sarah Macrae). All three practioners noted Mr. Carpenter’s continuing complaints of severe chronic pain. Dr. Weinberg recorded that Mr. Carpenter had been referred to the Sunnybrook Pain Clinic in March 2006. Ms. Macrae gave no opinion with respect to the Applicant’s entitlement to non-earner benefits. Doctors Weinberg and MacDonald found no “objective” evidence of impairment and concluded that based upon their areas of expertise, their examination of Mr. Carpenter and the available medical documentation, Mr. Carpenter did not suffer a complete inability to carry on a normal life as a result of the motor vehicle accident. Based upon these opinions, on July 21, 2006, Farmers’ wrote to the Appliant to indicate that it was continuing to deny his claim for non-earner benefits. Since, however, Ms. Macrae had suggested that there might be a psychological component to Mr. Carpenter’s ongoing complaints, Farmers’ also had Mr. Carpenter examined by a psychologist (Dr. Young) on August 1, 2006. Dr. Young found no psychological impairments.

On August 9, 2006, the Applicant obtained rebuttal reports from a neurologist (Dr. Dimitrakoudis) and an orthopaedic surgeon (Dr. Kadish). Both doctors found that Mr. Carpenter’s complaints of chronic, disabling pain were directly related to the injuries he suffered in the motor vehicle accident.

In October 2006, Farmers’ had Doctors Weinberg and MacDonald prepare “Addendum” reports (based upon a “paper review” and not based on any new physical examination of Mr. Carpenter) in response to the the rebuttal reports of Dr. Dimitrakoudis and Dr. Kadish.

In February 2007, Dr. Dobkin (the Applicant’s family physician) referred Mr. Carpenter to a physiatrist (Dr. Ko) for treatment and for referral to other specialists. Dr. Ko was not asked to give a medical-legal opinion concerning Mr. Carpenter’s eligibility for non-earner benefits. Dr. Ko found that, amongst other things, the Applicant was suffering from chronic diffuse pain syndrome and mechanical neck pain. Dr. Ko referred Mr. Carpenter to a sleep specialist (Dr. Appleton), to a chiropractor (Dr. Shapero) and a pain specialist (Dr. Goldstein).

The Affidavit filed by Farmers’ in support of this motion is vague as to when exactly Farmers’ first became aware that Mr. Carpenter was being treated by Doctors Ko, Appleton, Shapero and Goldstein. There is some evidence in the motion material filed that Farmers’ knew or ought to have known by May 2007.² On June 12, 2007, Dr. Goldstein wrote a report directly to Farmers’ which included the following statements:

I first assessed Mr. Robert Carpenter at the clinic on March 20, 2007. He was referred by Dr. Gordon Ko, physiatrist, for assessment and treatment of his post traumatic chronic pain syndrome.

At the time, Mr. Carpenter was suffering from:

Myofascial pain syndrome, characterized by diffuse widespread body pains. Indeed he suffers from two distinct areas of pain hyperesthesiae. These are:

a. allodynia at the level of T12-L1. He had suffered a non-operable compression fracture at the level of T12.

b. Shoulder pain of a bilateral nature with possible calcific tendonitis.

Transformed migraine headaches with cervicogenic inputs. At the outset of his headache diathesis, post the motor vehicle accident, he was assessed and treated with a rescue strategy of Acetaminophen and Acetaminophen with Codeine compounds for his escalated pain. These were used on a daily, qid basis. Unfortunately, a rebound phenomenon developed and hence the transformation of Mr. Carpenter’s migraine diathesis to an unrelenting chronic daily headache.

PROGRESS:

Mr. Carpenter has noted an almost complete resolution of his headache diathesis since discontinuation of the analgesics. Certainly, his headaches now have a reduced frequency, reduced intensity and a reduced longevity. Mr. Carpenter is now experiencing a more restful and restorative night’s sleep. Mr. Carter [sic] notes less frequent allodynia of the T12 area.

CONTINUING PAIN CHALLENGES:

Mr. Carpenter notes continuing diffuse pain, especially of his shoulders and along the paravertebral musculature in the upper thoracic area. Mr. Carpenter notes continuing overwhelming fatiguability. On several occasions he has exacerbated his upper body pain by attempting tasks that proved too daunting at this point in treatment. For example, gardening.

Clearly, by mid-June 2007, Farmers’ was aware of the involvement of Dr. Ko and Dr. Goldstein as well as the treatment Mr. Carpenter was receiving and the fact that some improvement in his condition had been noted (although he continued to suffer from diffuse pain and fatigue).

Around this time (May through July 2007), mediation of disputed issues by the parties was taking place at the Financial Services Commission. In September 2007, Mr. Carpenter filed an Application for Arbitration.

The pre-hearing conference took place on February 11, 2008. The parties agreed to set the hearing down for September 22, 23, 24 and 25, 2008.

On April 11, 2008, Farmers’ served a notice upon the Applicant that, pursuant to section 42 of the Schedule, it required him to attend three examinations: one by a physiatrist (Dr. Chow), one by a chiropractor (Dr. Salhas) and a Functional Abilities Evaluation to be conducted by a physiotherapist (Brian Lauzon). The Applicant refused to attend these assessments. In late May 2008, Farmers’ brought this motion (with respect only to the examination by Dr. Chow).

Submissions of the Insurer

Farmers’ takes the position that, pursuant to section 42 of the Schedule, it is entitled to have Mr. Carpenter assessed by a physiatrist in order to determine if Mr. Carpenter is entitled to a non-earner benefit for the following reasons (and I am summarizing here):

It has been almost two years since Farmers’ last had him examined by a medical professional specifically with respect to his entitlement to non-earner benefits;
An up-to-date examination would be consistent with Farmers’ ongoing responsbility to assess the Applicant’s condition and to reassess its refusal of his claim for non-earner benefits;
Farmers’ is entitled to an assessment by a physiatrist to determine if the Applicant is suffering from chronic pain and to rebut the diagnosis of chronic pain made by the Applicant’s treating physiatrist, Dr. Ko;
Farmers’ has not yet had the Applicant assessed by a physiatrist;
Since there is evidence in the report of Dr. Goldstein of some improvement in the Applicant’s condition, Farmers’ is entitled to an assessment in order to explore the extent of this improvement and its impact on his entitlement to non-earner benefits;
There would be no prejudice to the Applicant since the assessment could be concluded prior to the hearing scheduled for September (i.e., no adjournment will be necessary); and
The propsed assessment is reasonable and necessary and fairness dictates that Farmers’ ought not to be forced to proceed to the hearing without having an opportunity to have the Applicant assessed by a physiatrist of its choosing.

Submissions of the Applicant

The Applicant has not taken issue with the adequacy of the notice of the proposed physiatric examination. Similarly, the Applicant has not taken issue with Farmers’ choice of physiatrists.

The Applicant’s main objections to the proposed examination are, in summary, as follows:

Farmers’ has known that Mr. Carpenter was complaining of, and being treated for, chronic pain for a long time — this is not a new issue;
At the request of Farmers’, Mr. Carpenter has undergone assessments by an orthopaedic surgeon (twice), a neuropsychologist, a neurologist, an occupational therapist, a psychologist and a chiropractor. If Farmers’ now believes that it chose the wrong type of specialists to examine the Applicant, that is not the Applicant’s problem. Farmers’ has had more than enough opportunity to assess the Applicant’s condition;
Farmers’ has never paid any non-earner benefits to the Applicant;
Farmers’ was aware that Dr. Ko and Dr. Goldstein were treating Mr. Carpenter since the spring of 2007 but it did not make any requests for new section 42 assessments until almost one year later (and only a few months before the date set for the commencement of the arbitration hearing). Farmers’ did not raise the issue of its desire for new section 42 assessments at the pre-hearing conference that took place on February 11, 2008, when the date for the hearing was agreed upon by the parties. Thus, the timing of Farmers’ request for this assessment suggests that it is being done solely or primarily to bolster the Insurer’s case at the September 22, 2008 arbitration hearing;
The requested report that would result from such an assessment would likely require a rebuttal report and the entire process could well result in a delay of the hearing.

Counsel for the Applicant also points out that the Applicant has claimed benefits other than non-earner benefits in this Application³ and that it would be unfair to stay the entire proceeding for a dispute over an assessment that purportedly only relates to one of the benefits claimed by the Applicant (i.e., his claim for non-earner benefits).

The Law

Section 12 of the Schedule states that an insurer shall pay a non-earner benefit if the applicant suffers a complete inability to carry on a normal life as a result of and within 104 weeks after the accident.

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:

The onus is upon the insurer to establish that the proposed examination is reasonable.⁴
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)?⁵
In assessing the reasonableness of the proposed examination, the Commission will consider all of the relevant circumstances, including:⁶

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.

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;⁷

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;⁸

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;⁹

d. For benefits where the test for entitlement changes at 104 weeks,¹⁰ there is no presumptive right to an insurer’s examination at the 104 week mark when the insurer previously 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.¹¹

With respect to possible prejudice to the parties:

a. It is recognized by the Commission that insurer examinations are “inherently intrusive”;¹²

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;¹³

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.

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.¹⁴

This summary of the law is contained in my decisions in the cases of Al-Shimasawi¹⁵ (in which I granted the requested stay of proceedings and upon which case the Insurer relies in support of this motion) and Martucci¹⁶ (in which I denied the insurer’s motion and upon which case the Applicant relies in response to this motion). From my review of the motion material before me in this case, it appears that both parties generally accept the above-noted principles. To this list of governing principles, I would now add the following:

A stay of the proceedings is an exceptional remedy and not one specifically provided for in either the Schedule or the Commission’s Dispute Resolution Practice Code. It is a remedy that was fashioned by arbitrators, out of their inherent power (as well as their statutory power under s. 23 of the Statutory Powers Procedure Act) to control the proceedings and to make such orders as are necessary to prevent an abuse of process.¹⁷

Situations that may constitute a potential abuse of process include cases where the applicant refuses to provide documentary disclosure to the insurer of relevant and significant medical information or where the applicant "springs" important new information on the insurer and then seeks to deprive the insurer of a fair opportunity to investigate that new information.¹⁸

Analysis

To my mind, the most important factor in this case is the timing of the Insurer’s request for the examination in question. Farmers’ was aware for almost one year that the Applicant was being seen by a physiatrist (Dr. Ko) and a pain specialist (Dr. Goldstein) prior to Farmers’ seeking to have Mr. Carpenter attend a section 42 assessment by a physiatrist. Not only was this request made long after Farmers’ became aware of the relevant facts, the request also came only five months before the hearing in this case was scheduled to commence. There is no evidence of Farmers’ having raised this issue (its desire to conduct further s. 42 assessments) at the pre-hearing conference that was held on February 11, 2008.

There is nothing new in Mr. Carpenter’s complaints of chronic pain. The only “change” in his condition is allegedly an improvement. Since Farmers’ has never paid anything towards non-earner benefits and has always denied that Mr. Carpenter qualifies for such benefits, the assessment in question cannot be sought for the purposes of evaluationg whether he is still entitled to non-earner benefits. The only reasonable conclusion one can draw is that its purpose would be to gather further evidence to use at the hearing to justify Farmers’ decision to deny him these benefits for the last three-and-a-half years.

Farmers’ has had Mr. Carpenter examined by various experts of its choosing on at least five separate occassions to deal specifically with the issues of his ongoing complaints of pain and whether, from a medical standpoint, he qualifies for non-earner benefits. In such circumstances, when the request for further assessments comes this close in time to the commencement of the hearing, the presumption is that it is primarily related to bolstering the defence and not related to adjustment of the file. This presumption has not been rebutted by Farmers’ in this case. Farmers’ has relied upon a number of decisions. While, for the sake of brevity, I will not summarize them all in this decision, I note that most of the cases relied upon by Farmers’ are distinguishable on their facts in important ways from the facts of the present case.

In Bogic¹⁹, new facts (the fact that the applicant had suffered a closed head injury) came to light late in the proceedings and the insurer’s request for an assessment by a neurologist was made in timely fashion (within one week of receiving the new information concerning the applicant’s condition).

In Stanley²⁰, new facts (the OHIP summary disclosed that the applicant had been receiving psychiatric treatments after the accident) came to light late in the proceedings and the applicant failed or refused to produce the clinical notes and records of his psychiatrist and other treating medical practitioners subsequent to the accident and, due to the passage of time, the test for his eligibility to the benefits in question had changed and the applicant had not been examined to ascertain his eligibility under the new, more stringent test.

In Ives²¹, the insurer raised the issue of wanting additional section 42 assessments at the pre-hearing conference and the motion was heard more than 11 months prior to the commencement of the arbitration hearing.

In Glynn²², the insurer acted reasonably promptly once it received new information about the applicant’s condition. Its delay in scheduling the assessments in question was explained by the applicant’s failure to produce relevant medical records. The insurer raised at the pre-hearing the possibility that it might require further assessments but indicated that it would not make a final decision until it received complete disclosure of the relevant medical records. It diligently followed up on productions, stressing the need for urgency but the documents in question were never produced by the applicant. In these circumstances, the Director’s Delegate felt it unfair to hold the delay against the insurer and, on appeal, she overturned the original decision and granted the insurer’s motion.

In Shaw²³, the insurer only had the applicant undergo two medical examinations in the three-and-a-half years since the accident and the assessments only related to the applicant’s entitlement to income replacement benefits under the “pre-104 week” test. By the time of the insurer’s motion, the test had changed (at the 104-week mark) and no assessments had yet been conducted to determine the applicant’s entitlement under the new, more stringent “post-104-week” test.

In Al-Shimasawi²⁴, there was new information that surfaced indicating a possible psychological impairment and the insurer’s request for a psychological assessment was made about 11 months prior to the hearing. All of the insurer’s previous investigations related to physical impairments so the examination being sought was very different in nature from the previous assessments.

In this case, based upon the material that has been filed, I make the following findings:

There is no dramatic new information that only recently came to light;
There has been no change in the test for eligibility to non-earner benefits;
There is no evidence that the Applicant has failed to produce relevant medical documentation;
Farmers’ has had an opportunity to have the Applicant undergo many physical examinations by medical professionals of its choosing;
Farmers’ failed to act promptly to schedule an assessment by a physiatrist when it first learned that he was diagnosed as suffering from myofascial pain syndrome and has failed to offer any explanation for this delay;
While the hearing may or may not have had to be adjourned in order to have the Applicant undergo the assessment demanded by the Insurer, that is not the only prejudice that must be considered. Such examinations are inherently intrusive and the Applicant has already undergone at least five such assessments with respect to his claim for non-earner benefits;
Given the timing of the Insurer’s demand (almost one year after learning of the relevant facts and only five months prior to the hearing) and the other facts of this case, I find that Farmers’ primary purpose for seeking this assessment is to obtain evidence for use at the arbitration hearing rather than adjustment of the claim.

In all of the circumstances of this case, I conclude that the proposed assessment by a physiatrist is not reasonable and necessary at this time.

I am not suggesting that insurers do not have the ongoing responsibility to assess an insured person’s entitlement to accident benefits claimed and the right to conduct such assessments under section 42 of the Schedule as are reasonable and necessary. If, however, an insurer “sits” on its rights for too long, its request (on a motion such as this) for the discretionary and

extraordinary relief of a stay of an arbitration hearing so that it can conduct an assessment that ought properly to have been conducted much earlier may well be denied.

In any event, I find that a stay of the proceedings is not an appropriate remedy here as there is nothing approaching abuse of process in this case; there has been no misconduct by the Applicant (such as an attempt to conceal or withhold important medical information or to unfairly take the Insurer by surprise). Furthermore, there are other issues to be heard (i.e., there are claims in this arbitration other than the Applicant’s entitlement to non-earner benefits) and there is no reason why those claims should not proceed as originally scheduled.

Conclusion

For the reasons set out above, Farmers’ motion is denied.

EXPENSES:

I do not want to add yet another procedural step, add to the cost of this proceeding or risk delaying the hearing that is scheduled to commence in September. 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.

July 31, 2008

Richard Feldman Arbitrator

Date