Farhat Abbas v. Security National Insurance Co./Monnex Insurance Mgmt. Inc., 2008 ONFSCDRS 162

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

Neutral Citation: 2008 ONFSCDRS 162

FSCO A07-000374

BETWEEN:

FARHAT ABBAS

Applicant

and

SECURITY NATIONAL INSURANCE CO./ MONNEX INSURANCE MGMT. INC.

Insurer

REASONS FOR DECISION

Before: Edward Lee

Heard: June 16, 17, 18, 19, 2008, at the offices of the Financial Services Commission of Ontario in Toronto.

Appearances: Arvin Gupta for Mr. Abbas

Christopher Caston and Alexander Lempp for Security National Insurance Co./Monnex Insurance Mgmt. Inc.

The Applicant, Farhat Abbas, was injured in a motor vehicle accident on October 15, 2005. He applied for and received statutory accident benefits from Security National Insurance Co./ Monnex Insurance Mgmt. Inc. (“Security National”), payable under the Schedule.¹ Security National also denied other benefits claimed. The parties were unable to resolve their disputes through mediation, and Mr. Abbas applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

The issues in this hearing are:

Is Mr. Abbas entitled to receive medical benefits in the outstanding amount of $4,163.76 for treatment provided by Focus Rehabilitation Group between November 30, 2005 and August 2, 2006, claimed pursuant to section 14 of the Schedule?
Is Mr. Abbas entitled to payments for housekeeping and home maintenance services in the amount of $100 per week from January 9, 2006 onwards, pursuant to section 22 of the Schedule?
Is Security National liable to pay a special award pursuant to subsection 282(10) of the Insurance Act because it unreasonably withheld or delayed payments to Mr. Abbas?
Is Security National liable to pay Mr. Abbas’ expenses in respect of the arbitration under section 282(11) of the Insurance Act?
Is Mr. Abbas liable to pay Security National's expenses in respect of the arbitration under section 282(11) of the Insurance Act?
Is Mr. Abbas entitled to interest for the overdue payment of benefits pursuant to section 46(2) of the Schedule?

Result:

Mr. Abbas is not entitled to receive medical benefits in the outstanding amount of $4,163.76 for treatment provided by Focus Rehabilitation Group.
Mr. Abbas is not entitled to payments for housekeeping and home maintenance services.
Security National is not liable to pay a special award pursuant to subsection 282(10) of the Insurance Act.
Security National is entitled to its expenses in respect of the arbitration under section 282(11) of the Insurance Act.
Mr. Abbas is not entitled to interest for the overdue payment of benefits pursuant to section 46(2) of the Schedule.

PRELIMINARY MATTERS:

At the outset of this hearing, Security National requested that I declare the present application dismissed, withdrawn, or abandoned on the grounds that the Applicant did not attend the hearing, had not attended two previous pre-hearings, and had not even signed the Application for Arbitration. It was Security National's contention that the Applicant no longer wished to pursue his application and had, through his behaviour, implicitly withdrawn or abandoned his claim.

In addition, Security National informed me that they had attempted to serve a summons on the Applicant to allow for his cross-examination at this hearing, but had not been able to find him at his last known addresses. Security National filed the Affidavits of Service of their agent, Robbie Li (Ex. R-1), wherein the affiant declared that he had attended at the two addresses given for the Applicant, and was told by the superintendents of both buildings that the Applicant had moved away over a year earlier without leaving a forwarding address.

Further, Security National submitted that Counsel for the Applicant had neither a current address nor any other means to contact the Applicant. Unable to receive instructions, Counsel could not proceed with the present arbitration. Security National suggested that Counsel’s only proper course of action was to withdraw from their role as the Applicant’s representative.

In response, Counsel for the Applicant admitted that he had no explanation for the Applicant's absence at the hearing, and stated that he himself had never communicated with the Applicant. The address his firm provided for the Applicant was one which had been visited by Security National's agent seeking to serve a summons on the Applicant. Nevertheless, he assured me that his firm did have the authority to act on behalf of the Applicant and instructions to conduct the present hearing.

A review of the arbitration file reveals that this case has an unusual and circuitous history. The Applicant was indeed absent without explanation at the first pre-hearing discussion held on September 6, 2007. After that pre-hearing discussion, Security National expressed its concerns regarding Counsel's authority to represent the Applicant. In his letter of November 19, 2007, Arbitrator Feldman ordered Counsel for the Applicant to comply with his undertakings for production, to advise whether he had an updated address for the Applicant, and to declare whether the firm still had instructions to proceed with the arbitration.

Counsel for the Applicant responded to Arbitrator Feldman on November 20, 2007. That response provided the address which was later visited by Security National's agent while trying to serve a summons. The response also stated that draft authorizations had been sent to the Applicant, and added: “…we have not received fresh instructions from the client contrary to the instructions to pursue the matter in Arbitration.”

In May 2008, Security National wrote again suggesting that Counsel had not communicated with the Applicant for over a year and a half, and questioning Counsel’s authority to conduct the hearing.

Another pre-hearing discussion was resumed on June 13, 2008 before Arbitrator Kominar. At that pre-hearing, the Applicant was again absent without reason, but Counsel for the Applicant advised the arbitrator that he had instructions to proceed with the arbitration. Arbitrator Kominar then determined that the Applicant had never properly disclosed the names of their witnesses, and ordered them to make that disclosure. Counsel then advised that he would call three witnesses at the hearing: the Applicant, the housekeeping service provider, and Dr. Dimitrios Polyvos, a chiropractor who prepared a medical report.

In a further letter to the parties on June 18, 2008, Arbitrator Kominar confirmed that his letter of June 13, 2008 was indeed an accurate record of what transpired at that pre-hearing discussion of June 13, 2008.

Despite the assurances and the undertakings made by Applicant's counsel to Arbitrator Kominar, neither the Applicant nor the housekeeping service provider attended at the hearing before me. The only witness for the Applicant was Dr. Polyvos.

There is no doubt that Counsel for the Applicant failed to produce the Applicant and the housekeeping provider at the hearing. Many of the medical records and clinical notes requested by Security National were also not produced, although I heard no evidence in regard to Counsel’s attempts to obtain those records.

It is highly unusual for an Applicant not to appear at his own hearing. Nevertheless, despite this apparent difficulty, Counsel for the Applicant stated that they had the authority to represent their client at this hearing. They also informed me that they had instructions to proceed with this hearing.

Security National provided me with a law brief containing a number of decisions where arbitrators have dismissed an application without holding a hearing. In Sellathurai and MVAC Fund², the arbitrator made the following ruling after determining that the Applicant had been absent without explanation at two previous pre-hearing discussions and a motion hearing:

If Mr. Sellathurai was ever engaged in this arbitration process, it is now clear that he no longer is. Consequently, I am comfortable that it is in the sprit of the dispute resolution system to dismiss Mr. Sellathurai’s arbitration claim at this stage in the proceedings, on the basis of an ongoing abuse of process.

Nevertheless, there is an important and obvious distinction between the cases cited in Security National’s law brief and the case before me. In all those cases, neither an applicant nor a person purporting to represent the applicant appeared before the Arbitrator. In most of those cases, the applicant's counsel had withdrawn from the record before the commencement of the actual hearing.

That is not the case before me. Despite Security National’s urging, Counsel for the Applicant has not withdrawn from the record. Although I do not have the Applicant before me, I have his legal counsel insisting that he has the requisite authority and mandate to conduct a hearing on his behalf. Given these assertions, I am not prepared to dismiss the application without holding a hearing or to declare the application abandoned, despite the Applicant's absence today and at previous pre-hearing discussions.

EVIDENCE AND ANALYSIS:

Four treatment plans were disputed in the present application. The first treatment plan of October 17, 2005 for $2,952.00 was partially approved and the Insurer paid $2,373.44 to the Applicant. The second treatment plan of November 30, 2005 for $1,942.00 was also partially approved and the Insurer paid $892.00. The third treatment plan of January 25, 2006 for $1,702.00 was almost entirely denied and $50.00 was paid. The final treatment plan of May 18, 2006 for $1,352.00 was also almost entirely denied. The Insurer paid $63.72 for this plan.

All four treatment plans were prepared by Dr. David Huang, chiropractor, of Focus Rehabilitation Group (“Focus Rehab”). Each plan contemplated the provision of sessions of chiropractic treatment, functional exercise, passive modalities, and massage therapies, as well as sundry charges for the completion of different forms and assessments.

The balance of the amounts in each of the treatment plans is sought by the Applicant. To establish entitlement to these medical benefits, Mr. Abbas must prove that the benefits claimed were reasonable and necessary.

Mr. Abbas' Evidence:

The only witness called by the Applicant was Dr. Polyvos. His report is found at Ex-1. Dr. Polyvos’ report was not based on a physical examination of the Applicant but on a paper review of the documents set out in his list of sources.

Dr. Polyvos concluded that Mr. Abbas had suffered chronic injuries that were “highly atypical” in that they had not resolved within the expected six to ten weeks following his motor vehicle accident. Dr. Polyvos’ conclusion was that the Applicant's case fell within that small subset of accidents where patients developed chronic pain conditions. He found the four treatment plans were reasonable and necessary to facilitate recovery and independence in day-to-day activities.

In testimony before me, Dr. Polyvos added that Treatment Plan One was reasonable and necessary in its entirety because Dr. Huang had observed limited range of motion and other problems. This treatment plan was tailored to meet those symptoms. Dr. Polyvos agreed that twelve sessions of passive modality would help the patient return to a functional state.

Concerning Treatment Plan Two, Dr. Polyvos stated that Dr. Huang had tailored the durations of the therapy sessions based on his re-evaluation of November 2005. There had been improvement in the cervical spine, low back, and left ankle. There had been objective and subjective signs of improvement. Dr. Polyvos agreed with Dr. Huang's assessment, and found that Treatment Plan Two was also reasonable and necessary.

In regard to Treatment Plan Three, Dr. Polyvos stated that Dr. Huang’s evaluation of January 25, 2006 determined that the Applicant’s range of motion had increased and that his ankle had resolved 100 per cent. There were still limits in the cervical spine and the low back, and residual findings of pain. Given these results, he felt that the third treatment plan was also reasonable and necessary.

Finally in regard to Treatment Plan Four, Dr. Polyvos observed that the therapy was occurring with a reduced frequency and it was still helping the Applicant. Therefore, this plan was also reasonable.

Security National's Evidence:

Dr. Sandra O’Connor, a chiropractor, was a DAC assessor and Security National's first witness. She examined Mr. Abbas on December 13, 2005, approximately two months post accident. She conducted a full physical examination of his chiropractic posture, range of motion, muscle strength, and nerve tension. She conducted tests for pain and neurological signs. Her conclusion was that Treatment Plan One was reasonable at the time it was submitted, and that the disputed number of sessions of passive therapies was also reasonable.

Nevertheless, Dr. O’Connor disputed the total cost of the plan. Based upon her discussions with Mr. Abbas, she found that the fees charged by the treatment centre exceeded the maximums permitted under the Fees Guidelines issued by FSCO. She also found that Mr. Abbas did not undergo as much treatment as was suggested in the treatment centre's invoices. She found that Mr. Abbas typically received only 10-15 minutes of electrotherapy, 20-30 minutes of massage therapy, no manipulative therapy, and 30 minutes of functional exercises during his visits to the treatment centre. In contrast, the invoices from the centre suggested that Mr. Abbas’s sessions sometimes lasted as long as two-and-a-half hours.

Dr. O’Connor concluded the total amount charged for Treatment Plan One was far in excess of the amount permissible under the Fees Guidelines issued by Financial Services Commission of Ontario. Using the approved fees structure, the maximum total cost of the services rendered in the plan should have been $1,634.16. As Security National had already paid $2,373.44 to the Applicant the full cost of the entire plan had already been covered and no further amounts were owing by Security National.

Dr. O’Connor also testified in regard to the second treatment plan. Treatment Plan Two was issued November 30, 2005 and proposed sessions of chiropractic, functional exercise, passive modalities, and massage therapy at a total cost of $1,942.00. When this treatment plan was assessed by Dr. O’Connor, it was determined that the plan was partially reasonable and necessary. Using the approved Fees guidelines, Dr. O’Connor testified that 10 to 12 sessions of exercises and chiropractic treatment were necessary, for a total of $1,023.72.

The third treatment plan was submitted on January 25, 2006 and proposed similar therapies for a total of $1,702.00. This was denied in its entirety by Security National. Dr. O’Connor conducted a DAC (Ex-R-2 at Tab 22) assessment for this plan on March 30, 2006, and agreed with the Insurer’s position. She noted that in December 2005 the Applicant had already reported 70 per cent improvement. By January 25, 2006, the Applicant was fourteen to fifteen weeks post accident. He had passed the twelve-week period with no extenuating circumstances. Dr. O’Connor concluded that Treatment Plan Three was not reasonable and necessary.

Mr. Abbas also attended an Insurer's Medical Examination on February 14, 2006 before Dr. Gregory Soon-Shiong, an orthopaedic surgeon. Dr. Soon-Shiong’s report includes the following comments about the Applicant:

His current clinical examination is completely devoid of any significant positive objective clinical findings. He has no signs of any significant physical disability or impairment.

I have advised him that symptoms dating to the soft tissue injury are best managed with return to all pre-accident physical activities, as well as ongoing home exercises. He is encouraged to return to all of his pre-accident work and recreational activities without restrictions.

I can find no objective reason to justify further facilities-based treatment beyond the extensive programme already received.³

The Applicant attended another Insurer’s Medical Examination on June 21, 2006 before Dr. Stephen Balsky, a chiropractor, to review Treatment Plan Four dated May 18, 2006. This plan was priced at $1,352.00 and consisted of treatments similar to those proposed in the previous plans.

Dr. Balsky attended at the hearing and confirmed that he examined Mr. Abbas some eight months post accident. His report is at Tab 28 of Ex. R-2. He testified that he found no active inflammation and no trauma. The Applicant's range of motion, cervical spine, and shoulder were normal. The limbs were unremarkable with no trigger points. He diagnosed that Mr. Abbas had suffered a simple strain and some soft tissue injury from his accident. In his opinion, passive therapies which included heat, ice, massage, and acupuncture were best applied during the acute stage from zero to four weeks. The treatment Mr. Abbas had already received was more than adequate given his lack of major injuries.

Dr. Balsky was of the opinion that no further facilities-based therapy, either passive or active, was reasonable and necessary at the time of his examination. He also commented on the excessive fees charged by the treatment centre.

The Applicant attended another Insurer’s Medical Examination in April 2006 before Dr. Todd Walters, a practitioner of family medicine. His report is found at Tab 23 of Exhibit R-1. Dr. Walters appeared before me and testified that at the time of the examination, Mr. Abbas had already stopped receiving therapy for a month and was no longer undergoing formal treatment. Dr. Walters’ testimony was that there were no limitations in his capacity and that he required no further facilities-based treatments.

ANALYSIS:

In general, I found that the evidence presented by Security National was more convincing than that presented by the Applicant. First, the opinion and report produced by Dr. Polyvos, the Applicant’s only witness, stemmed from a paper review of reports created by persons who had previously examined the Applicant. Dr. Polyvos neither spoke with, nor conducted a physical examination of Mr. Abbas.

In contrast, all of Security National’s witnesses conducted actual physical examinations of Mr. Abbas. The expertise of these witnesses was also more varied, being composed of two chiropractors, a family medicine specialist, and a report of an orthopaedic surgeon. These assessments were also conducted at various times over the course of Mr. Abbas’ recovery and painted what I felt was a more complete picture of Mr. Abbas’ therapeutic needs and progress.

Further, although Dr. Polyvos discussed the Applicant’s need for pain management and pain relief, the Applicant never appeared before me to testify in regard to this very subjective element of treatment.

I find that Security National’s witnesses were in a better position to evaluate the Applicant’s medical condition. The quality, not the quantity, of Security National’s evidence led me to prefer the conclusions of the DAC assessors, Dr. O’Connor, Dr. Soon-Shiong, Dr. Walters, and Dr. Balsky over those tendered by Dr. Polyvos and Dr. Huang.

Further, I am also convinced that the amount of treatment billed by the treatment facility did not correspond to the treatment the Applicant actually received. Based on interviews conducted by Dr. O’Connor, the Applicant received approximately one hour to one hour and fifteen minutes of treatment during his sessions, rather than the two or more hours that were sometimes invoiced by the treatment facility. Again, no witnesses were called by the Applicant to rebut this evidence. For these reasons, I accept Dr. O’Connor's estimates regarding the durations of the treatment sessions, and that the fees charged by the facility were far in excess of the maximums permitted by the Fees Guidelines generated by the Financial Services Commission of Ontario.

Although Dr. O’Connor concluded that the number of proposed treatment sessions set out in Treatment Plan One was initially reasonable, she found that due to the excessive fees charged, the whole of Treatment Plan One had been funded by the payments already made by Security National to the Applicant. I accept this evidence and her conclusion, and find that no further amounts are owed to the Applicant in regard to Treatment Plan One.

In regard to Treatment Plan Two, Dr. O’Connor found that it was partially reasonable and necessary. She added that the amounts already paid to the Applicant for this plan would have funded the treatment sessions that were reasonable and necessary. For this reason I also find that no further amounts are owed to the Applicant in regard to this plan.

Housekeeping and Home Maintenance:

The Applicant directed my attention to invoices for housekeeping (Tab 4 of Exhibit 2) in their submissions at the conclusion of the hearing. This matter was never addressed during the evidentiary portion of the hearing, and neither the housekeeper nor Mr. Abbas testified before me, despite the undertakings made by Applicant's counsel only two days before the commencement of this hearing.

In response, Security National argued that no weight should be given to these invoices because no witness had appeared to support them. Security National suggested that I should also draw a negative inference from the fact that neither the housekeeper nor the person who purported to receive the housekeeping benefit testified before me.

I accept Security National’s argument. The persons who made these invoices did not appear before me. No housekeepers testified, despite the Counsel’s undertaking to have them available at the hearing for cross-examination. I also draw an adverse inference based upon their nonattendance. In these circumstances, I give no weight to the housekeeping invoices presented by the Applicant. I do not find that the Applicant is entitled to payments for the housekeeping and home maintenance services claimed.

SPECIAL AWARD:

Counsel for the Applicant argued that he was entitled to a special award because the denials issued by Security National in regard to the treatment plans were inadequate. Counsel suggested that the notice refusing⁴ Treatment Plan One was insufficient because it did not contain a medical reason. Counsel suggested that the arbitration decision in Sorokin and Wawanesa Mutual Insurance Company⁵ held that the reasons for a denial of a medical benefit must be based on a medical opinion. Because the notices in the present case were not based on medical opinions, they could not be used to deny the payment of the benefit in question. There was thus an unreasonable delay in the payment of those medical benefits.

No mention of these notices was made during the evidentiary portion of the Applicant’s case. In fact, Counsel never directed my attention to the notices until he made his submissions. Security National submitted that the particulars of the special award case had never been disclosed prior to Counsel’s submissions.

I have already determined that no money is owed by the Insurer in regard to these four treatment plans or housekeeping. If no payment has to be made, then there cannot be an unreasonable withholding or delay.

Nor do I find the Sorokin case of help to the Applicant. In that decision, the arbitrator, before turning to the issue of special award, determined that the Applicant was entitled to the disputed medical treatment (in contradiction to the instant case). Further, the deficiency of the notice was only one of several reasons motivating the making of the special award. The arbitrator's rationale is found at page 32 of that decision:

I do not seem to have before me a notice refusing the September 6, 2000 treatment plan. I am not clear as to whether one exists or not, neither party referred to such a document in evidence or submissions. The notice refusing the May 6, 2002 treatment plan provides no reason for refusal besides saying that the treatment is unreasonable and unnecessary. Subsection 38(18) of the Schedule requires the [I]nsurer to give the insured person notice of its reasons for not paying the expenses. Since it is a medical benefits being refused, I find it stands to reason that the reason for the denial should be supported by a medical opinion. As noted earlier, in answer to questions about the basis for refusing medical benefits, Ms. Ponitieri could not refer to a document reflecting these decisions and responded that she did not know the bases of the decisions. Ms Ponitieri appeared unaware of the assessments of Dr. Tchernov, Dr. Alpert and Dr. Khoury.

I find that Ms Pontieri’s failure: to identify the basis of the denial of benefits; to take into account assessments ordered by the Applicant subsequent to those ordered by Wawanesa; and to provide proper notice to the Applicant is unacceptable conduct. I conclude this conduct has resulted in an unreasonable withholding of the funding for the September 6, 2000 and May 6, 2002, treatment plans by Integrated Health and should attract a special award [emphasis mine].

Clearly, the impugned behaviour exceeded the deficiency of the notice. Not only was there confusion as to the very existence of the notice, but the arbitrator also cited the Insurance Company’s representative’s inability to identify the basis of the denials, and her failure to take into account certain assessments as contributing to the making of the special award. Finally, I find that the notices in the present case are more explicit than the one criticized in the Sorokin case. They do provide a basis for the denials and do not merely state that the treatment plans are neither reasonable nor necessary. For all these reasons, I find that the claim for a special award has not been made out by the Applicant.

EXPENSES:

I find that Security National is entitled to its reasonable expenses incurred in respect of this arbitration proceeding.

At the conclusion of this hearing, Security National submitted that I make an order requiring the representatives of Mr. Abbas to personally pay all or part of the expenses awarded to Security National pursuant to section 282(11.2) of the Insurance Act.

Section 282(11.4) of the Insurance Act prohibits an arbitrator from making an order under section 282(11.2) unless the representative is given a reasonable opportunity to make representations to the arbitrator.

Accordingly, I am prepared to hold an expense hearing to allow the parties to make representations in regard to the issue of the personal liability of the representative for the expenses arising from this proceeding. In the interim, I suggest that the parties make efforts to determine the amount of the expenses of this proceeding. They may contact me in accordance with Rule 79 of the Dispute Resolution Practice Code.

October 1, 2008

Edward Lee Arbitrator

Date