Jodi Monks v. Dominion of Canada General Insurance Company, 2009 ONFSCDRS 55

Financial Services Commission des

Commission services financiers

of Ontario de l’Ontario

Neutral Citation: 2009 ONFSCDRS 55

FSCO A08-001237

BETWEEN:

JODI MONKS

Applicant

and

DOMINION OF CANADA GENERAL INSURANCE COMPANY

Insurer

DECISION ON A PRELIMINARY ISSUE

Before: Arbitrator Denise Ashby

Heard: Written submissions were concluded on April 17, 2009.

Appearances: Robert A. Zigler for Ms. Monks

Jane Cvijan for Dominion of Canada General Insurance Company

Issues:

The Applicant, Jodi Monks, was injured in a motor vehicle accident on September 28, 2003. She applied for and received statutory accident benefits from Dominion of Canada General Insurance Company (“Dominion”), payable under the Schedule.¹ Dominion refused to pay certain medical benefits, an attendant care benefit and a housekeeping and home maintenance benefit. The parties were unable to resolve their disputes through mediation, and Ms. Monks 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:

1. Is Ms. Monks precluded from proceeding to arbitration in respect of her claims for medical benefits, an attendant care benefit and a housekeeping and home maintenance benefit because her application for arbitration was filed beyond the two-year limitation period set out in subsection 281(5) of the Act and subsection 51(1) of the Schedule?

2. Is Dominion liable to pay Ms. Monks’ expenses in respect of this preliminary issue hearing pursuant to subsection 282(11) of the Schedule?

3. Is Ms. Monks liable to pay Dominion’s expenses in respect of this preliminary issue hearing pursuant to subsection 282(11) of the Schedule?

Result:

1. Ms. Monks is not precluded from proceeding to arbitration in respect of her claims for medical benefits, an attendant care benefit and a housekeeping and home maintenance benefit.

2. The issue of expenses is deferred to the discretion of the hearing arbitrator. In the event the matter does not go to hearing and the parties are unable to resolve the issue, they may request an expense hearing before me pursuant to Rule 79 of the Dispute Resolution Practice Code.

EVIDENCE AND ANALYSIS:

Dominion submits and Ms. Monks disputes that she failed to apply for arbitration within the two-year period set out in the Insurance Act and Schedule and is therefore statute barred from proceeding to arbitration in respect of her claims for medical benefits, an attendant care benefit and a housekeeping and home maintenance benefit.

Chronology:

Based on the materials filed by the parties, I accept the following as a chronology of facts relevant to this preliminary issue hearing:

1. On September 28, 2003, Ms. Monks was involved in the accident.

2. On October 2, 2003, Dominion provided Ms. Monks with an application for accident benefits.

3. On April 20, 2005, Inter-Action Rehabilitation Inc. (Inter-Action) faxed a Treatment Plan, OCF 18, to Dominion seeking approval of physical rehabilitation and associated services in the amount of $1,854.00 and manual therapy and associated services in the amount of $1,008.00. Dominion’s representative checked “do not approve” boxes in respect of the recommended treatment on May 2, 2005.²

4. On May 3, 2005, Dominion wrote to Ms. Monks purporting to deny the recommended treatment on the basis that:

5. We are 20 months post accident therefore the treatment seems excessive.

6. Treatment is not per the Med/Rehab Designated Assessment Centre recommendations of November 2004.

7. Physiatry Assessment recommends a regular exercise program with “more physical” exercises.

The letter goes on to set out what might occur if Ms. Monks agrees or disagrees with Dominion’s assessment and provides details of the DAC assessment process. The letter listed the following enclosures: Sections 38, 43, 49 and 53 of the Schedule, DAC information sheet, OCF 9 Explanation of Benefits and WAD II (or WAD I) PAF Guideline. As well, the letter provided a definition of “business day”.³

The enclosed Explanation of Benefits (Explanation) contains the following entry, in Part 4 at page 2, “MR - Tx Plan from Inter Action Rehab dated Apr 12/05, Amount Claimed $1,854.00, Amount Payable $0.00.” Part 6, at page 3, entitled “Applicant’s Rights to Dispute” provides information about the dispute resolution process under the Insurance Act.⁴

5. On September 8, 2005, Dominion received a Treatment Plan seeking approval of recommended orthodontic treatment in the amount of $6,075.00. Dominion’s representative checked the “Do Not Approve” box on September 19, 2005.⁵

6. On September 19, 2005, Dominion wrote to Ms. Monks purporting to deny the recommended treatment on the basis that:

7. Treatment plan appears excessive and is not specific to proposed treatment. No duration noted.

8. Insured being treated pre-MVA for TMJ, unable to determine if reasonable as it relates to MVA related injuries.

The letter goes on to set out what might occur if Ms. Monks agrees or disagrees with Dominion’s assessment and provides details of the DAC assessment process. The letter listed the following enclosures: Sections 38, 43, 49 and 53 of the Schedule, DAC information sheet, OCF 9 Explanation of Benefits and WAD II (or WAD I) PAF Guideline. As well, the letter provided a definition of “business day”.

The enclosed Explanation’s Part 4 has no entry. Part 6, at page 3, entitled “Applicant’s Rights to Dispute” provides information about the dispute resolution process under the Insurance Act.⁶

7. On November 10, 2005, Dominion issued an Explanation purporting to deny Ms. Monks’ claims for an attendant care and a housekeeping and home maintenance benefit as follows:

Please provide us with confirmation of the incurred housekeeping expenses along with the person or persons who assisted you with these tasks. Be sure to include the names, address & phone #’s of those who assisted you along with copies of cancelled cheques/bank statements, etc. In accordance with Section 22(3) of the SABS, no payment is required under this section for expenses incurred more than 104 weeks after the onset of the disability.--- Based on the medical documentation in file, we do not agree the above noted Attendant Care expenses are reasonable & necessary as related to injuries/impairments sustained in the above noted loss. As such, no consideration will be given to the above expenses. If you disagree with this assessment of your claim you may apply for mediation or request a DAC Assessment. We enclose an OCF 14 should you choose to attend a DAC. If it is your intention to dispute these expenses we will also require confirmation (as above) of the incurred expenses. Note - in accordance with Section 18(2), no attendant care is payable for expenses incurred more than 104 weeks after the accident.

Part 6 of the Explanation at page 3 entitled “Applicant’s Rights to Dispute” provides information about the dispute resolution process under the Insurance Act.⁷

8. On December 30, 2005, Dominion issued an Explanation in respect of Inter-Action’s Treatment Plan. In Part 4, at page 2, it refers to the recommended treatment in the amount of $2,862.00 and provides the following explanation as to why the expenses are not payable:

For your records, we enclose a copy of the Medical/Rehabilitation DAC report of West Park Health dated Dec 13, 2005. Results of this assessment conclude the above noted treatment plan presented by Inter-Action is not reasonable or necessary. As such, no portion of this treatment will be funded by The Dominion of Canada General Insurance Company.

As per this same report, we will agree to fund for two(2) Physiotherapy sessions at a total cost of $172.66. No further OT intervention has been recommended nor has any further formal physical treatment.

If you do not agree with this assessment of your claim, you have the right to mediation. Please read below.

Part 6, at page 3, entitled “Applicant’s Rights to Dispute” provides information about the dispute resolution process under the Insurance Act.⁸

9. On January 12, 2006, Dominion issued an Explanation. In Part 4, at page 2, it referenced medical rehabilitation services as follows: OCF 18 - Dr. Schacher dated March 23, 2005, $6,075.00, item not payable; and Inter-Action - Invoice #’s 7199 & 7200 - Service provider paid directly, $1,405.00. It provided the following explanation of why the dental expenses were not payable:

For your records, we enclose a copy of the Medical/Rehabilitation DAC report of West Park Health dated Dec 14, 2005. This report was received Jan.5/06. Results of this assessment conclude the above noted treatment plan presented by Dr Schacher is not reasonable or necessary. As such, no portion of this treatment plan will be funded by The Dominion Of Canada General Insurance Company.

NOTE - on Jan 4/06 we received a copy of Dr. Schachers’ report dated Dec 11/05. We confirm this report has been included for review as part of the enclosed DAC assessment. No further recommendations have been provided from an oral surgery prospective.

If you do not agree with this assessment of your claim, you have the right to mediation. Please read below.

Part 6, at page 3, entitled “Applicant’s Rights to Dispute” provides information about the dispute resolution process under the Insurance Act.⁹

10. On November 9, 2007, Ms. Monks applied for Mediation at the Commission in respect of her claims for attendant care and housekeeping and home maintenance.¹⁰

11. On February 29, 2008, the Mediator released his Report that attendant care in the amount of $49,454.76, medical benefits in respect of recommended orthodontic work in the amount of $6,075.00, physiotherapy in the amount of $2,862.00, and housekeeping and home maintenance benefits in the amount of $11,000.00 remained in dispute. The report was received by the parties on March 4, 2008.¹¹

12. On June 2, 2008, Ms. Monks filed her Application for Arbitration with the Commission.¹²

The Law:

Subsection 281(5), now 281.1(1), of the Insurance Act provides:

A step authorized by subsection (1) must be taken within two years after the insurer’s refusal to pay the benefit claimed or within such longer period as may be provided in the Statutory Accident Benefits Schedule.

Section 51 of the Schedule provides:

(1) A mediation proceeding or evaluation under section 280 or 280.1 of the Insurance Act or a court proceeding or arbitration under clause 281(1)(a) or (b) of the Act in respect of a benefit under this Regulation shall be commenced within two years after the insurer’s refusal to pay the amount claimed.

(2) Despite subsection (1), a court proceeding or arbitration under clause 281(1)(a) or (b) of the Insurance Act may be commenced within 90 days after the mediator reports to the parties under subsection 280(8) of the Act or within 30 days after the person performing the evaluation provides a report to the parties under section 280.1 of the Act, whichever is later.

The limitation is triggered by the insurer’s “refusal” of a benefit. Arbitrators at the Commission have determined that a valid refusal requires that the denial be clear and unequivocal.¹³ As well, a refusal is not valid unless the denial complies with section 71 (now section 49) of the Schedule.¹⁴ Section 49 requires insurers to inform applicants of the dispute resolution process under sections 279 to 283 of the Insurance Act. This information must be provided in straightforward and clear language that can be understood by an unsophisticated person. At a minimum, the information must include a description of the most important elements of the dispute resolution process, such as the right to seek mediation, that a mediation must be conducted before resorting to arbitration or litigation, the right to arbitrate or litigate if mediation fails, and the relevant time limits that govern the entire process.

In Trewin and Wawanesa, the Arbitrator discusses a trilogy of cases which found that, where an insured person is required to attend a section 43 DAC and is therefore prevented from proceeding to mediation until the conclusion of the mediation pursuant to subsection 50(b) of the Schedule, the insurer is required to confirm its denial following receipt of the DAC report.¹⁵ These cases all relate to situations where an insurer continues to pay an income replacement benefit until the release of the Disability DAC report. In my opinion, it is the insured person’s right to pursue a DAC assessment and not the continuing payment which is determinative. I find that the reasoning in Trewin is applicable to all types of DAC assessments. Therefore, an insurer must confirm its denial of a benefit following receipt of the relevant DAC report in language that is clear and unequivocal and meets with the criteria in Smith v. Co-operators.

Medical Benefits:

Physiotherapy and Massage Therapy:

Dominion submits that it refused the treatment recommended by Inter-Action on May 3, 2005.

Its letter purported to deny the treatment recommended by Inter-Action. However, the letter did not contain information about the dispute resolution process set out in the Insurance Act. This information was found in the Explanation which was enclosed with several other lengthy documents.

In Yee and Lambton Mutual Insurance Company, ¹⁶ the Arbitrator ruled that compelling an insured “to piece together the information from scattered documents” does not meet the rule in Smith v. Co-operators. I agree and find that to require Ms. Monks to link the letter to the Explanation and intuit that the dispute resolution process described therein is the process she must follow if she disputes Dominion’s decision not to pay the benefit does not constitute a valid denial of the benefit.

Ms. Monks participated in a Medical Rehabilitation DAC. The DAC report was issued December 13, 2005. Dominion issued a further Explanation on December 30, 2005 in which it relied on the DAC report to confirm its denial of May 3, 2005, except for the two physiotherapy sessions which the DAC had deemed reasonable and necessary.

Dominion’s Explanation, issued on December 30, 2005, provides:

For your records, we enclose a copy of the Medical/Rehabilitation DAC report of West Park Health dated Dec. 13, 2005. Results of this assessment conclude the above noted treatment plan presented by Inter-Action is not reasonable or necessary. As such, no portion of this treatment will be funded by The Dominion of Canada General Insurance Company.

As per this same report, we will agree to fund for two(2) Physiotherapy sessions at a total cost of $172.66. No further OT intervention has been recommended nor has any further formal physical treatment.

If you do not agree with this assessment of your claim, you have the right to mediation. Please read below.

The page that follows provides a description of the dispute resolution process provided for in the legislation which I find to be sufficient to comply with section 49 of the Schedule. However, I do not find the denial to be clear and unequivocal. Inter-Action’s Treatment Plan sought approval for two modes of treatment and administrative services related to each. Dominion states unconditionally that it will not fund treatment while in the next sentence it authorizes treatment. It fails to clearly differentiate between the two modalities and fails to provide information which might assist Ms. Monks to understand whether Dominion considers physiotherapy equivalent to physical rehabilitation. Dominion makes no reference to manual therapy. It fails to define OT intervention and how it relates to either physical rehabilitation or manual therapy, the modalities recommended in the Treatment Plan. These inadequacies render Dominion’s refusal of the treatment recommended by Inter-Action invalid pursuant to the Insurance Act and the Schedule. Therefore, Ms. Monks may proceed to arbitration in respect of her claim for these medical benefits.

Orthodontic Treatment:

For the reasons set out above, respecting Inter-Action’s Treatment Plans, I find Dominion’s letter and Explanation of September 19, 2005 do not constitute a valid denial of the orthodontic treatment.¹⁷

On January 12, 2006, Dominion issued an Explanation confirming its denial of the treatment as follows:

For your records, we enclose a copy of the Medical/Rehabilitation DAC report of West Park Health dated Dec 14, 2005. This report was received Jan 5/06. Results of this assessment conclude the above noted treatment plan presented by Dr Schacher is not reasonable or necessary. As such, no portion of this treatment plan will be funded by The Dominion Of Canada General Insurance Company.¹⁸

Dominion is clear and unequivocal that its denial of the benefit is based on the DAC report. The page which follows provides information regarding the legislation’s dispute resolution process in a manner which I have found to meet with the provisions of section 49. Therefore, I find that Dominion issued a valid refusal to pay and the two-year limitation period commenced to run on January 12, 2006.

Ms. Monks applied for mediation on November 9, 2007. The Report of Mediator was received by the parties on March 4, 2008. Ms. Monks applied for Arbitration on June 2, 2008. Pursuant to the Schedule, Ms. Monks had 90 days from March 4, 2008 to apply for arbitration. Rule 8.1(a) of the Dispute Resolution Practice Code provides for the exclusion of March 4 and the inclusion of June 2, 2008. Therefore, Ms. Monks applied for arbitration on the 90^th day following Dominion’s denial of the benefit and may proceed to arbitration with respect to her claim for orthodontic treatment.

Attendant Care Benefits:

Dominion and Ms. Monks agree that she submitted one claim for these benefits covering the period from September 28, 2003 to September 30, 2005.

In Dominion’s Explanation of November 10, 2005, it explained that:

...Based on the medical documentation in file, we do not agree the above noted Attendant Care expenses are reasonable & necessary as related to injuries/impairments sustained in the above noted loss. As such, no consideration will be given to the above expenses.... Note - in accordance with Section 18(2), no attendant care is payable for expenses incurred more than 104 weeks after the accident.¹⁹

The statement that attendant care benefits are not available beyond the 104 weeks is misleading because it fails to refer to subsection 18(3) of the Schedule which excludes those insured persons who suffer a catastrophic impairment from the provisions limiting the benefit to 104 weeks. This defect is not relevant to this matter as there is no suggestion that Ms. Monks has sustained a catastrophic impairment. I find that Dominion provided a clear and unequivocal refusal. The page which follows provides information about the dispute resolution process which complies with the decision in Smith v. Co-operators. On the basis of the foregoing, I find that Dominion’s refusal of the benefit is valid and the limitation period commenced to run on November 10, 2005 and lapsed on November 9, 2007, the date upon which Ms. Monks applied for mediation.

The parties received the Report of Mediator on March 4, 2008. As with the orthodontic treatment above I find that Ms. Monks applied for arbitration on the 90^th day following Dominion’s denial of the benefit and may proceed to arbitration with respect to her claim for an attendant care benefit.

Housekeeping and Home Maintenance Benefits:

The parties agree that Ms. Monks submitted one claim for these benefits covering the period from September 28, 2003 to September 30, 2005.

The Explanation issued by Dominion on November 10, 2005, stated:

Please provide us with confirmation of the incurred housekeeping expenses along with the person or persons who assisted you with these tasks. Be sure to include the names, address & phone #’s of those who assisted you along with copies of cancelled cheques/bank statements, etc. In accordance with Section 22(3) of the SABS, no payment is required under this section for expenses incurred more than 104 weeks after the onset of the disability.--- ²⁰

The foregoing does not contain a denial of the housekeeping benefit. Quite the contrary, Dominion requests further information regarding the service provider and proof the expenses were incurred. As there is no valid refusal to pay, the limitation period did not commence to run. Ms. Monks may proceed to arbitration.

Again, Dominion has provided erroneous information regarding the limitation of the benefit to 104 weeks by failing to refer to the exclusion of those insured persons who are catastrophically impaired pursuant to subsection 22(4) of the Schedule. As with the issue of attendant care, this defect is not relevant to this issue.

CONCLUSION:

For the foregoing reasons I conclude that Ms. Monks may proceed to arbitration in respect of her claims for medical benefits, an attendant care benefit, and a housekeeping and home maintenance benefit.

EXPENSES:

The parties made no submissions with respect to expenses. I defer this issue to the discretion of the hearing arbitrator. In the event the matter does not go to hearing and the parties are unable to resolve the issue, they may request an expense hearing before me in accordance with Rule 79 of the Dispute Resolution Practice Code.

May 1, 2009

Denise Ashby

Arbitrator

Date

Financial Services Commission des

Commission services financiers

of Ontario de l’Ontario

Neutral Citation: 2009 ONFSCDRS 55

FSCO A08-001237

BETWEEN:

JODI MONKS

Applicant

and

DOMINION OF CANADA GENERAL INSURANCE COMPANY

Insurer

ARBITRATION ORDER

Under section 282 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:

1. Ms. Monks is not precluded from proceeding to arbitration in respect of her claims for medical benefits, an attendant care benefit and a housekeeping and home maintenance benefit.

May 1, 2009

Denise Ashby

Arbitrator

Date

Footnotes

1. 1The Statutory Accident Benefits Schedule - Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended.
2. 2Dominion’s Statement of Fact and Law, Tab 10, pages 5 and 6
3. 3Dominion’s Statement of Fact and Law, Tab 11
4. 4Dominion’s Statement of Fact and Law, Tab 11
5. 5Dominion’s Statement of Fact and Law, Tab 7, page 5
6. 6Dominion’s Statement of Fact and Law, Tab 8
7. 7Dominion’s Statement of Fact and Law, Tab 2, page 2
8. 8Dominion’s Statement of Fact and Law, Tab 12
9. 9Dominion’s Statement of Fact and Law, Tab 9
10. 10Dominion’s Statement of Fact and Law, Tab 3
11. 11Applicant’s Statement of Fact and Law, Tab 1
12. 12Dominion’s Statement of Fact and Law, Tab 14
13. 13Turner and State Farm Mutual Automobile Insurance Company, (FSCO P00-00046, February1, 2002, page 6)
14. 14Smith v. Co-operators General Insurance Co., 2002 SCC 30, [2002] 2 S.C.R. 129
15. 15Trewin and Wawanesa Mutual Insurance Company, (FSCO A07-001852, November 10, 2008, pages 10 to 12)
16. 16(FSCO A07-002597, September 16, 2003, page 9)
17. 17Dominion’s Statement of Fact and Law, Tab 8
18. 18Dominion’s Statement of Fact and Law, Tab 9
19. 19Dominion’s Statement of Fact and Law, Tab 2
20. 20Dominion’s Statement of Fact and Law, Tab 2