Rezvan Mahjourian v. TD Home and Auto Insurance Company, 2009 ONFSCDRS 111

Financial Services Commission des

Commission services financiers

of Ontario de l’Ontario

Neutral Citation: 2009 ONFSCDRS 111

FSCO A08-001115

BETWEEN:

REZVAN MAHJOURIAN

Applicant

and

TD HOME AND AUTO INSURANCE COMPANY

Insurer

DECISION ON A PRELIMINARY ISSUE

Before: Lloyd (J.R.) Richards

Heard: October 16, 2008 and January 28 and 29, 2009, at the offices of the Financial Services Commission of Ontario in Toronto. Motion by teleconference on January 14, 2009. Further teleconferences on April 17, 2009 and May 14, 2009.

Appearances: Rene A. Clonfero for Ms. Mahjourian

Maurice Benzaquen and Paul J. Barnes for TD Home and Auto Insurance Company

Issues:

The Applicant, Rezvan Mahjourian, was injured in a motor vehicle accident on July 6, 2006. She applied for and received statutory accident benefits from TD Home and Auto Insurance Company (“TD Home”), payable under the Schedule.¹ TD Home denied Ms. Mahjourian’s claim for attendant care benefits and terminated weekly housekeeping and home maintenance benefits effective on May 9, 2007. The parties were unable to resolve their disputes through mediation, and Ms. Mahjourian applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

The preliminary issue is:

Is Ms. Mahjourian precluded from applying for and receiving statutory accident benefits under subsection 59(2) of the Schedule because she elected to bring an action referred to in section 30 of the Workplace Safety and Insurance Act, 1997 (“WSIA”), and that election was made primarily for the purpose of claiming benefits under the Schedule?

Result:

Ms. Mahjourian is precluded from applying for and receiving statutory accident benefits under subsection 59(2) of the Schedule because she elected to bring an action referred to in section 30 of the Workplace Safety and Insurance Act, 1997, and that election was made primarily for the purpose of claiming benefits under the Schedule.

EVIDENCE AND ANALYSIS:

Background

Ms. Rezvan Mahjourian was a part-time school bus driver employed by Stock Transportation Ltd. (“Stock”) and was involved in a motor vehicle accident on July 6, 2006. Ms. Mahjourian gave evidence that at around 9:30 a.m. on July 6, 2006, she arrived in her school bus at the Stock bus yard to pick up her pay cheque. After stopping the school bus, she put the gear shift in park and put the parking brake on. She turned off the ignition, removed her seat belt, opened the bus door, got up, stepped down about two steps to the ground and then began to step away from the bus. Suddenly and without warning, the school bus started to roll forward. She reacted by reaching her arm through the driver’s door to grab the steering wheel and emergency brake. The bus continued to roll forward and dragged her body forward as well. She attempted to stop the bus as it crashed into other vehicles that were parked nearby. The bus finally came to a stop after crashing into a number of other buses.

In reviewing the evidence presented by Ms. Mahjourian, I find that her employer, Stock, reported her injury to the Workplace Safety and Insurance Board (“WSIB”) on July 11, 2006. Without much delay, Ms. Mahjourian applied for accident benefits under the Schedule on July 26, 2006. A memo in Ms. Mahjourian’s WSIB file dated August 16, 2006 states that “wkr’s (sic) claim was registered”…“she [Ms. Mahjourian] does not wish to pursue WSIB claim at this time, as is going through private insurance.”

TD Home paid some benefits to Ms. Mahjourian at the outset of her accident benefits claim but terminated those benefits, effective May 9, 2007. Ms. Mahjourian and TD Home mediated the issues in dispute. On March 28, 2008, Ms. Mahjourian signed an assignment of workplace benefits.² The WSIB completed the assignment form on April 2, 2008. A note on the file remarks that the assignment does not replace required motor vehicle accident election forms.³ Neither Ms. Mahjourian nor Stock had filed a WSIB claim by April 3, 2008. A memo to Ms. Mahjourian’s WSIB file dated May 1, 2008 notes that no election had been filed and declares the WSIB file abandoned.

Ms. Mahjourian filed an arbitration application dated May 13, 2008. By response dated June 24, 2008, TD Home responded to the arbitration application and raised subsection 59(1) of the Schedule as a defence. Ms. Mahjourian commenced a lawsuit against Stock as well as against the manufacturer of the school bus, Ford Motor Company (“Ford”) on July 7, 2008.

The Law

The WSIA provides insurance benefits to workers injured at work. In exchange for providing workplace insurance the WSIA prohibits injured workers from commencing actions against their employers. Subsection 28(1) of the WSIA reads:

(1) A worker employed by a Schedule 1 employer, the worker’s survivors and a Schedule 1 employer are not entitled to commence an action against the following persons in respect of the worker’s injury or disease:
Any Schedule 1 employer.
A director, executive officer or worker employed by any Schedule 1 employer.

Subsection 28(1), therefore, prohibits a worker from commencing an action against his or her employer.

However, subsection 28(4) of the WSIA goes on to state:

(4) Subsections (1) and (2) do not apply if any employer other than the worker’s employer supplied a motor vehicle, machinery or equipment on a purchase or rental basis without also supplying workers to operate the motor vehicle, machinery or equipment.

This subsection provides an exception under the WSIA insurance plan. It permits an action against any employer if that employer supplied a motor vehicle without supplying drivers for that vehicle. The WSIA therefore allows actions against automobile manufacturers, leasing companies and others that provide vehicles to employers. Ford supplied the motor vehicle in which Ms. Mahjourian was injured and therefore fits into this exception under subsection 28(4) of the WSIA.

Section 59 of the Schedule addresses the relationship between statutory accident benefits and workers’ compensation. It reads as follows:

(1) The insurer is not required to pay benefits under this Regulation in respect of any insured person who, as a result of an accident, is entitled to receive benefits under any workers’ compensation law or plan.

(2) Subsection (1) does not apply in respect of an insured person who elects to bring an action referred to in section 30 of the Workplace Safety and Insurance Act, 1997 so long as the election is not made primarily for the purpose of claiming benefits under this Regulation.

The Schedule’s interaction with the workplace insurance scheme recognizes workplace insurance as the presumed accident benefits provider where an accident occurs in the workplace. Automobile insurers are not required to pay benefits where an injured person is entitled to workers’ compensation benefits. An insured person who is entitled to workplace benefits is entitled to make an election under workers’ compensation legislation to sue the person alleged to be responsible for his or her injury. When the worker elects to sue, the worker is then not entitled to claim workers’ compensation benefits. An automobile insurer, from whom the worker would be entitled to claim benefits, must pay the benefits, provided that the election was not made primarily for the purpose of claiming accident benefits under the Schedule.

Ms. Mahjourian’s position

Ms. Mahjourian argues that even if her action against Stock is barred as a result of subsection 28(1) of the WSIA, the other party to her action, Ford, fits squarely into the subsection 28(4) exception under the WSIA. Therefore, her claim against Ford is both valid and viable.

Ms. Mahjourian submits that the test in subsection 59(2) of the Schedule concerns whether she elected to bring a suit against Ford primarily for the purpose of claiming accident benefits. She relies on the decisions of Gebru⁴ and Mahadeo⁵ in support of this position. The arbitrators in Gebru and Mahadeo held that assessing the purpose for making an election requires a consideration of subjective and objective factors. Ms. Mahjourian also agrees with the Gebru⁶ arbitration decision finding that the only timing relevant to the motivation of an applicant’s election is the point at which he or she made the election. It is the Applicant’s position that at the time of the accident she never pursued workplace benefits and therefore the point in time relevant to the issue of her motive is shortly after the accident.

Ms. Mahjourian alleges that at the time of the accident she believed, and continues to believe, that something was wrong with the school bus parking mechanism. This failure in the parking mechanism caused the bus to move forward, damage the other buses and injure her. She states that she sought counsel shortly after the accident to represent her with all of her claims against Stock and Ford.

TD Home’s position

TD Home agrees with Ms. Mahjourian that the relevant time period to consider whether her action is bona fide is the time when she made her election. In TD Home’s view, since Ms. Mahjourian did not formally make an election (meaning she did not complete the proper election forms at the WSIB), section 30 of the WSIA deems that she elected not to claim workplace benefits 90 days after the motor vehicle accident.⁷

Section 30 of the WSIA reads as follows:

(4) The election must be made within three months after the accident occurs or, if the accident results in death, within three months after the date of death.

(5) The Board may permit the election to be made within a longer period if, in the opinion of the Board, it is just to do so.

(6) If an election is not made or if notice of election is not given, the worker or survivor shall be deemed, in the absence of evidence to the contrary, to have elected not to receive benefits under the insurance plan.

Section 30 of the WSIA permits an injured worker to elect to sue the person allegedly responsible for his or her injuries. Where the worker does not formally elect to sue or does not otherwise indicate his or her desire to claim WSIB benefits, then the WSIA deems, within 30 days of the injury, that the worker chose not to claim WSIB benefits. In such a case the worker would be disentitled from WSIB benefits.

TD Home also relies on Champaigne and Co-operators General Insurance Co.⁸, stating that the arbitrator in that case held that evidence that no action being commenced at the time of an election may be evidence that an election is not bona fide. TD Home argues that Ms. Mahjourian’s lawsuit against Ford is not bona fide because she did not commence her action at the time she elected not to pursue workplace benefits. In fact, TD Home argues, Ms. Mahjourian did not initiate her claim against Ford until after TD Home raised subsection 59(1) of the Schedule as a defence in response to Ms. Mahjourian’s arbitration application.

In addition, TD Home submits that Ms. Mahjourian’s action is not bona fide as she took no steps to preserve the bus after the motor vehicle accident, nor was there any record of the identity of the bus involved in the collision. Further, Ms. Mahjourian has made bald assertions about the mechanical fitness of the bus all while not being able to confirm that she put the bus into park or engaged the emergency brake prior to exiting the bus. Furthermore, Ms. Mahjourian’s claim against Ford is time barred as she brought it two years and one day after the motor vehicle accident. According to TD Home, Ms. Mahjourian’s claim is not bona fide because it is not viable.

Analysis

Initially, at the hearing on October 16, 2008, Ms. Mahjourian claimed that at the time of the accident she worked primarily as a babysitter. Further, since she was not in the course of her primary employment at the time of the accident, she is properly covered by no-fault accident benefits and not workplace benefits. Ms. Mahjourian did not point me to specific sections of the WSIA to support this proposition.

Later, in a teleconference on May 14, 2009, Ms. Mahjourian conceded that the subject accident in this case was a workplace accident, and it is therefore appropriate for me to consider the application of subsections 59(1) and (2) of the Schedule to her claim for accident benefits.

Ms. Mahjourian and TD Home disagree on when Ms. Mahjourian elected to commence a court action. Ms. Mahjourian’s position is that her election occurred shortly after the accident because she never pursued workplace benefits. However, her WSIB file has no record of an election and a note in that file states that an assignment of benefits is no substitute for a formal election. I find that Ms. Mahjourian never formally elected to commence a court action. Her WSIB file indicates that she never completed the required election forms. TD Home asserts that where there is no formal election, subsection 30(6) of the WSIA deems Ms. Mahjourian to have elected not to receive WSIA benefits 90 days after the motor vehicle accident.

I have no jurisdiction to make determinations under the WSIA concerning Ms. Mahjourian’s deemed election. There are no notes or memos in Ms. Mahjourian’s WSIB file to indicate that the WSIB deemed Ms. Mahjourian to have elected to commence a court action. In addition, subsection 30(5) of the WSIA permits an election to be made outside of the 90 day period if the WSIB determines that it is just to do so. These are issues best left to the WSIB. Accordingly, the WSIB is the proper forum to determine a deemed election under the WSIA.

However, the statement of claim issued against Ford on July 7, 2008 is conclusive evidence that Ms. Mahjourian elected to commence a court action. As stated in Gebru⁹, I do not need to decide when Ms. Mahjourian’s election took place except to find that it occurred prior to when the statement of claim was issued. Accordingly, I find that Ms. Mahjourian elected to commence a court action at some point prior to July 7, 2008.

In Mahadeo and Aviva Canada Inc.,¹⁰ the Director’s Delegate held that:

The claimant’s action or inaction, before and after making the election, provides important evidence of his purpose in making the election. Delay in bringing an action or failure to prosecute it are likely to undermine a claimant’s accident benefits claim.

Ms. Mahjourian did not initiate the court action against Ford until July 7, 2008, some two years after the accident. The statement of claim was issued only after TD Home, in its response on June 24, 2008, raised subsection 59(1) of the Schedule as a defence to Ms. Mahjourian’s claims. In fact, TD Home argues that Ms. Mahjourian is barred from bringing her action against Ford because she is outside of the two-year limitation period within which to bring an action. Whether Ms. Mahjourian is within the limitation period does not settle the issue in this case. However, the fact that she delayed in bringing her action until after TD Home raised subsection 59(1) of the Schedule as a defence to her claims leads me to draw an adverse inference about her motive in bringing the action against Ford.

At the hearing, Ms. Mahjourian gave evidence that she believed that the bus manufactured by Ford had mechanical failures and that these failures led to the motor vehicle accident. Furthermore she stated that one of the reasons she wished to sue Ford was to prevent further accidents of this nature. I do not find Ms. Mahjourian’s statements about her reasons for bringing the lawsuit to be credible. If one of the reasons for her bringing the suit was to protect her and other drivers from future injury, in my view she would have brought her action against Ford sooner.

Ms. Mahjourian pursued her accident benefits almost immediately after the accident. However she did not sue Ford for two years. Moreover, her pursuit of Ford seems to be in response to TD Home’s defence to her claims.

Both Ms. Mahjourian and TD Home gave evidence about the viability of Ms. Mahjourian’s claim against Ford. Ms. Mahjourian concedes that her lawsuit against Stock might be barred, but that her claim against Ford is very much alive. Even if I were to accept this fact, the chronology of Ms. Mahjourian’s claim weakens her case. In considering the evidence both before and after Ms. Mahjourian brought the action against Ford, I find that Ms. Mahjourian initiated her claim against Ford in direct response to TD Home’s response to her claims. The chronology of her accident benefits claim, the fact that she sued Ford some two years after the motor vehicle accident and her failure to prosecute her suit against Ford in any meaningful way, demonstrate that she brought her suit against Ford primarily for the purpose of claiming accident benefits.

As a final matter, I considered two additional pieces of evidence that did not affect my conclusion and were not determinative in this case. The first was TD Home’s request that I admit Jason Kerr’s evidence in affidavit form. Mr. Kerr is an associate in the law office representing TD Home. Ms. Mahjourian objected to the affidavit. The information contained in Mr. Kerr’s affidavit is relevant to the issue in dispute. Mr. Kerr deposes about Ms. Mahjourian’s status as an employee, the date Ms. Mahjourian filed a claim against Ford, and other issues.

I have no issue with the reliability of the information deposed by Mr. Kerr. However, I do not believe the contents of Mr. Kerr’s affidavit are necessary to the hearing. The information contained in the affidavit shed no new light on the issue in dispute. In fact, the same information contained in Mr. Kerr’s affidavit was elicited by TD Home through Ms. Mahjourian’s cross-examination as well as through various exhibits entered into evidence.

I also allowed TD Home to call as a witness, Mr. Hugh DesBrisay, counsel for Ford. TD Home sought to demonstrate that Ms. Mahjourian had done nothing to prosecute her statement of claim since issuing it. I considered Mr. DesBrisay’s evidence and decided that even without his testimony it is clear that at the time of the hearing Ms. Mahjourian had done little to prosecute her claim.

EXPENSES:

The parties made no submissions on expenses. They are encouraged to resolve the issue. 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.

August 6, 2009

Lloyd (J.R.) Richards Arbitrator

Date