Neutral Citation: 2008 ONFSCDRS 178

FSCO A08-001138

BETWEEN:

NICOLA FEDERICO

Applicant

and

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY

Insurer

DECISION ON A PRELIMINARY ISSUE

Before: Fred Sampliner

Heard: October 1, 2008, at the offices of the Financial Services Commission of Ontario in Toronto.

Appearances: David S. Wilson for Mr. Federico Carla Falkeisen for State Farm Mutual Automobile Insurance Company

Issues:

The Applicant, Mr. Nicola Federico, was injured in a motor vehicle accident on December 20, 2006. State Farm Mutual Automobile Insurance Company (“State Farm”) paid him a weekly income replacement benefit and housekeeping expense under the Schedule¹ until February 15, 2008. The hearing about his claim for ongoing benefits is scheduled to take place in March 2009 at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended. Mr. Federico refused State Farm’s request he attend a neurological examination before the hearing of his claims commences.

The preliminary issue is:

Is State Farm’s request for Mr. Federico to attend a neurological examination under section 42 of the Schedule reasonable?

Result:

State Farm’s request that Mr. Federico undergo a neurological examination is reasonable.

EVIDENCE AND ANALYSIS:

Mr. Federico, a self-employed plumber at the time of the accident, suffered soft tissue injuries in this accident. His neurologist, Dr. Vera Bril, identifies Mr. Federico’s pre-accident history of right hand weakness and what is termed “left foot drop” as a neurological problem that appears to have deteriorated further since this accident.

In December 2007, Mr. Federico was examined by State Farm’s physiatrist, psychologist and kinesiologist. The February 2007 examination by State Farm’s neurologist was concerned with Mr. Federico’s treatment/rehabilitation, and not with causation or the income replacement benefit issue of this arbitration. Since February 2007, State Farm has not had Mr. Federico examined by a neurological specialist.

Mr. Federico argues the neurological specialty is subsumed within the expertise of State Farm’s physiatrist who previously examined him in December 2007. Mr. Federico presented no evidence these two disciplines are so similar that the opinion of a physiatry expert is equivalent to or a substitute for a neurologist. I reject Mr. Federico’s argument that State Farm must be content with its physiatry examination.

State Farm gave Mr. Federico notice to attend the neurological examination by a September 22, 2008 letter from its counsel to Mr. Federico’s lawyer. He argues State Farm’s lawyer is not authorized to give him an examination notice pursuant to subsection 68(2) of the Schedule.

Mr. Federico did not point to wording in section 68 of the Schedule that either explicitly states or implies that lawyers are prohibited to act as agents for their clients or that lawyers are not authorized to give an insured notice of an examination on behalf of their clients. I do not accept Mr. Federico’s argument that a lawyer acting for the client must have specific authority from the Schedule to give examination notices.

Mr. Federico further maintains that State Farm’s notice letter is materially defective because it was not accompanied by the facsimile cover page required by subsection 68(6) of the Schedule. The intent of this procedural requirement is to confirm an examination notice is delivered to an insured.

There is no dispute here that Mr. Federico promptly received the examination notice. Where receipt is acknowledged, I view the procedural defect as inconsequential, and find that State Farm’s lack of a fax cover page is not a material defect respecting the September 22, 2008 notice of examination.²

Mr. Federico further argues the neurological examination is a defence medical that is not legitimately proposed to meet State Farm’s ongoing obligation to assess his claims.³ I agree that the late timing of State Farm’s request after the prehearing certainly suggests the examination is primarily to gather evidence buttressing the defence, rather than adjusting Mr. Federico’s claims.⁴

However, I do not view the litigation motivator as fatal because, in my view, insurers retain the right to legitimately assess a claimant’s specific health condition where the insurer establishes it has been unable to do so during the arbitration proceeding.⁵ The material from Mr. Federico’s neurologist indicates she has been unable to determine the degree to which the accident affected his pre-existing neurological condition. Her recommendation for further neurological testing in January 2007 led to the parties’ more recent exchange of the test results and records of Dr. Bril.

State Farm’s examining physiatrist did not have the neurology records in December 2007 when he determined Mr. Federico had no neurological impairments from the accident, and I agree with State Farm that Mr. Federico’s neurological records are a necessary predicate to obtaining a cogent opinion concerning the nexus between his condition and the accident. I attribute State Farm’s delay in requesting the examination at least partly to its impression Mr. Federico had not sent them all his neurological test results and records. The facts do not indicate State Farm strategically sat on its right to request an examination.

This situation bears resemblance to the facts in Vidinopulos and Liberty Mutual Insurance Company⁶, where Arbitrator Bayefsky determined that the important role the rheumatology opinions play in the arbitration overrode the insurer’s late request in the arbitration process. I find that the parties’ neurological opinions respecting Mr. Federico’s condition are central to this arbitration, and that State Farm has not been afforded the opportunity to obtain a neurologist’s opinion concerning this important medical issue.

Mr. Federico suffers little, if any, prejudice if State Farm conducts a neurological examination at this time. The four month time gap until the March hearing dates appears to allow sufficient time for Mr. Federico to prepare his responding evidence, and will likely not delay the hearing. Whereas it is quite clear to me that State Farm would suffer significant prejudice if it could not obtain a neurology opinion about one of the central medical issues.

CONCLUSION:

State Farm’s previous neurological examination occurred over a year and a half ago, before the termination of the benefits at issue in this arbitration. Since that time the cause of the deterioration in his neurological condition has become an important issue and State Farm should be able to obtain a neurological opinion to assess its risk. I find that State Farm’s request he attend a neurological examination under section 42 of the Schedule is reasonable.

EXPENSES:

I defer the issue of expenses of this preliminary issue to the hearing arbitrator.

November 6, 2008

Fred Sampliner Arbitrator

Date

Financial Services Commission of Ontario