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

Neutral Citation: 2009 ONFSCDRS 138

FSCO A09-000909

BETWEEN:

ERNESTO CENDOYA-SOTOMAYOR Applicant

and

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY Insurer

Before: Arbitrator Killoran

Heard: September 10, 2009, at the offices of the Financial Services Commission of Ontario in Toronto.

Appearances: Ian Little for Mr. Cendoya-Sotomayor Darrell March for State Farm Mutual Automobile Insurance Company

Issues:

The Applicant, Ernesto Cendoya-Sotomayor, was involved in a motor vehicle accident on September 5, 2007. The parties were unable to resolve their disputes through mediation and Mr. Cendoya-Sotomayor applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

Mr. Cendoya-Sotomayor brought a motion for interim benefits pursuant to subsection 279(4.1) of the Insurance Act pending the resolution of his dispute with State Farm.

The issue on this motion is:

Is Mr. Cendoya-Sotomayor entitled to interim benefits pursuant to subsection 279(4.1) of the Insurance Act?

Mr. Cendoya Sotomayor also claims interest on any amounts owing and his expenses incurred on this motion.

Result:

Mr. Cendoya-Sotomayor is not entitled to interim benefits.
The issue of expenses may now be spoken to.

EVIDENCE AND ANALYSIS:

Subsection 279(4.1) of the Insurance Act gives arbitrators the discretionary authority to make interim orders pending the final order in any matter. Mr. Cendoya-Sotomayor filed a motion seeking interim income replacement benefits of $394.10 weekly. His claim was quantified at the outset of the hearing as including a lump sum representing the arrears of $394.10 in weekly income replacement benefits from October 3, 2008 to May 2009 inclusive and ongoing weekly income replacement benefits from the date of the interim benefits hearing.

Mr. Cendoya-Sotomayor submits that he faces urgent financial hardship coupled with adverse mental and physical consequences as a result of State Farm’s refusal to remit income replacement benefits. Also, he argues that there is good reason to believe that he will be successful at arbitration.

In his sworn affidavit, Mr. Cendoya-Sotomayor stated the following:

As a result of a motor vehicle accident on September 5, 2007, he sustained various injuries. Prior to the accident, he was employed as a truck driver at Builders’ Supplies Limited (“BSL”) which required him to drive a truck to various construction sites, load his truck with building materials and unload them at the next site. He had no modified duties available and was expected to engage in frequent sitting or standing, bending, twisting, lifting and carrying weights of up to 130 pounds.

He returned to work within five days of the accident as he was sponsoring his wife and child who were immigrating to Canada. In November 2007, he moved into a home with his wife and daughter and was the primary financial support for his family. He sustained his level of function by receiving physical and psychological treatment on a weekly basis and taking prescription medication.

Subsequent to an MRI on August 19, 2008, his family physician, Dr. William Black advised him not to continue in his current occupation and provided him with a medical note outlining his physical limitations and restrictions. BSL notified him on October 2, 2008 that it was unable to accommodate his physical restrictions and he was laid off. He applied for short term disability benefits from his collateral benefits insurer and income replacement benefits from State Farm.

His wife and daughter moved to live with family in the United States, with the agreement that he would forward child support on a regular basis.

On November 26, 2008, Great West Life, his collateral benefits carrier, denied his disability claim. By that time, he was using his credit card to pay for his cell phone, car payment and maintenance, auto insurance, parking at medical appointments, groceries, gas and cash advances. Recently, his credit card has been cancelled.¹

He exhausted his savings and his chequing account remains perpetually in overdraft.² In addition to using his credit card, his overdraft protection and his income tax refund, he has turned to friends for loans. On February 19, 2009, he was offered his pre-accident position with BSL, which he was unable to accept as there had been no improvement in his functional abilities since he stopped working in October 2008. He is still unable to drive long distances and perform the heavy lifting and repetitive bending required for his position. He is reluctant to apply for social assistance as he would then be unable to sponsor any family members for immigration to Canada.

In March 2009, he enrolled in a First Aid/CPR course with St. John’s Ambulance. As he was not successful in obtaining employment, he enrolled in a security training course with Genix Security Academy.

On June 1, 2009, he attempted to return to work as a driver with Hansen’s Releasing Company, his employer prior to BSL. The hourly rate of pay was $14 per hour, compared to $21 per hour at BSL. Although the work was not as physically demanding as his work at BSL, he was forced to stop work after a few days as a result of his injuries.³

On June 24, 2009, he registered as a security guard with G4S Security where he is on call with part-time employment. He has a pre-hearing scheduled for October 29, 2009 and does not believe that he can survive for such a long period of time without income.

Mr. Cendoya-Sotomayor’s testimony was helpful in updating and clarifying the information above which was contained in his affidavit. He insisted that it was never his decision to stop working at BSL approximately 1 year after the accident. Rather, it was his family doctor’s advice that he must stop all heavy lifting. He testified that he began working for G4S in May 2009 and has been working as a security guard at Humber River Hospital with approximately 15 12-hour shifts in the past 3 months. He also testified that he worked at Hansen’s Releasing Company from June 1, 2009 to August 22, 2009 but stopped working there when he received more hours from G4S. He testified that his girlfriend was helping him financially.

In its affidavit, State Farm states that in an OCF-9 dated December 15, 2008, State Farm advised Mr. Cendoya-Sotomayor that although it had received a functional abilities evaluation and a psychological report, it was unable to make a determination about his entitlement to income replacement benefits until it received a physiatry report, which was completed on December 26, 2008.

On January 5, 2009, State Farm informed Mr. Cendoya-Sotomayor that the three assessments concluded that he did not suffer from a substantial inability to perform the essential tasks of his employment and income replacement benefits were denied.⁴ By correspondence dated February 9, 2009 and March 3, 2009, State Farm outlined the steps it had taken to address the claims expeditiously.⁵ Also by letters dated May 25, 2009 and June 8, 2009, State Farm’s counsel advised Mr. Cendoya-Sotomayor’s counsel regarding its position.⁶

On cross-examination, Mr. Cendoya-Sotomayor disclosed that he was involved in a second motor vehicle accident in January/February 2009 for which he did not make an application for accident benefits. He also disclosed that he received benefits of about $200 per week for approximately 2 months after leaving his job in October 2008.

Submissions of Parties

Mr. Cendoya-Sotomayor submits that he took steps to minimize his needs but was reduced to relying on his credit card to pay his living expenses. He expressed three related concerns: that an accurate description of his job duties at BSL was not supplied to State Farm’s assessors, no job site assessment was conducted, and there was no notice taken of the findings of restricted function in the functional assessment evaluation.

State Farm relied on the ruling in Ayoub and Aviva Canada Inc.⁷ where the arbitrator ruled that interim benefits are not routine but rather, are awarded in unique circumstances. Although the case law has two divergent trends, State Farm argues that Mr. Cendoya-Sotomayor’s circumstances do not satisfy either approach. One approach is more holistic and views a case in its entirety. The second approach looks at specific criteria, such as whether there is a prima facie case in favour of the applicant and whether the applicant is facing financial hardship.

State Farm submits that Mr. Cendoya-Sotomayor ended his employment in October 2008 after suffering from soft tissue injuries over a year earlier from a motor vehicle accident. There is a causation issue as Mr. Cendoya-Sotomayor has not established that if he was unable to perform his job responsibilities in October 2008 it was necessarily a consequence of the motor vehicle accident in September 2007. There was no testimony from an employer or medical professional to respond to the issue of causation.

As of May 2009, Mr. Cendoya-Sotomayor was working, albeit part-time as a security guard. Recently, he has been working longer hours at Humber River Hospital and hopes to work full time soon. In these circumstances, State Farm questions how he can meet the test for disability. Also, State Farm submits that it is his former job responsibilities at Hansen’s Releasing Company, not BSL, which should be the subject of a job site assessment, as Mr. Cendoya-Sotomayor had only worked at BSL for one week prior to the accident.

State Farm relies on three s. 42 examinations: a functional abilities assessment, a psychological assessment and a physiatry assessment to argue that that it properly denied Mr. Cendoya-Sotomayor’s entitlement to income replacement benefits based on the medical evidence.

CONCLUSION

In Coutu and Wawanesa Mutual Insurance Company⁸, the arbitrator comments that “the overriding principle in most cases is that an order will be made only after a hearing which fully canvasses the evidence and positions of both sides.” In Champagne and Co-operators General Insurance Company⁹, the arbitrator found that where there are significant questions left unanswered, the Applicant is not entitled to interim benefits. In Nguyen and State Farm Mutual Automobile Insurance Company¹⁰, the arbitrator emphasized the importance of looking at cases in a holistic fashion when determining the applicant’s success at persuading an arbitrator that an interim award of benefits is appropriate.

In Ayoub and Aviva Canada Inc.¹¹, the arbitrator outlined some general principles relating to interim benefits decisions. She considered the merits of the case for entitlement, the existence of an element of necessity or urgency, and a blatant disregard by the insurer of the Schedule or the Act. She concluded that the best way to reconcile competing medical opinions in the case before her was through testimony at a full hearing.

I find that Mr. Cendoya-Sotomayor returned to work within 5 days of his motor vehicle accident and did not stop working until more than a year later. In response to his application for benefits, State Farm scheduled a number of assessments, all of which found that Mr. Cendoya-Sotomayor was not substantially disabled. To the extent that the assessments were not based on a proper job site assessment, a question has been raised about which job should be subject to the job site assessment. At the hearing, there was evidence of some benefits, which were not properly identified, being paid in November and December 2008. Based on the material before me, post-accident earnings cannot be quantified. Another complicating factor is Mr. Cendoya-Sotomayor’s involvement in a second motor vehicle accident in January/February 2009. As well, issues of disability have been raised as a result of his return to work at two jobs in June 2009, albeit for a short period of time, and then his ongoing work, with the expectation of a permanent position, as a security guard at G4S.

I find that Mr. Cendoya-Sotomayor is not entitled to interim benefits in the circumstances of the case before me, as he has not satisfied the general principles for entitlement outlined in the case law. There are too many unanswered questions — questions of causation, disability, and post accident income which are complex in nature. This is a case which requires a full hearing in order to resolve these unanswered questions.

EXPENSES:

The parties are encouraged to resolve the issue of expenses. If they are unable to do so, they may request an expense hearing before me, according to the procedure outlined in the Dispute Resolution Practice Code.

October 15, 2009

Judith Killoran Arbitrator

Date