Salandra Tyler v. Pilot Insurance Company, 2010 ONFSCDRS 145

Financial Services Commission des

Commission services financiers

of Ontario de l’Ontario

Neutral Citation: 2010 ONFSCDRS 145

FSCO A09-001694

BETWEEN:

SALANDRA TYLER

Applicant

and

PILOT INSURANCE COMPANY

Insurer

DECISION ON A PRELIMINARY ISSUE

Before: Jeffrey Rogers

Heard: By written submissions, completed on October 20, 2010.

Appearances: Mr. Michael Yermus, solicitor for Mrs. Tyler

Mr. Tom (Szu-Wei ) Yen, solicitor for Pilot Insurance Company

Issue:

Is Mrs. Tyler precluded from proceeding to arbitration of her claim for non-earner benefits, because her application for arbitration was filed beyond the 90-day limitation period set out in section 281.1(2)(b) Insurance Act and section 51(2) of the Schedule?

Result:

Mrs. Tyler is not precluded from proceeding to arbitration of her claim for non-earner benefits.

EVIDENCE AND ANALYSIS:

Introduction

When there is a dispute between an insurer and an insured person over entitlement to accident benefits payable under the Schedule¹, mediation is a mandatory first step in the dispute resolution process. An insured person has two years from the date an insurer refuses to pay a benefit to engage the dispute resolution process. This two-year limit is extended if an insured person applies for mediation within the two-year limit and the parties do not resolve their dispute at mediation and do not choose to engage in neutral evaluation. In these circumstances, section 281.1(2)(b) of the Insurance Act and section 51(2) of the Schedule allow a further 90 days after the mediator reports to the parties for the insured person to either commence a court action or apply for arbitration.

Salandra Tyler was injured in a motor vehicle accident on April 26, 2005. She applied for and received statutory accident benefits from Pilot Insurance Company (“Pilot”). Pilot terminated weekly non-earner benefits on December 15, 2006. Mrs. Tyler complied with the two-year limitation period by applying for mediation on July 28, 2008. The law firm Garfin, Ziedenberg & Partners represented Mrs. Tyler at mediation. Mediation took place on February 23, 2009. The parties were unable to resolve the dispute about entitlement to non-earner benefits.

The mediator prepared a report dated February 23, 2009 and letters of the same date. One letter was addressed to Mrs. Tyler and her solicitors. The other was addressed to Pilot. The letters stated that a copy of the report was enclosed. The practise of the Mediation Unit is to send the report to the parties by ordinary mail. Mrs. Tyler applied for arbitration on July 3, 2009. That was 126 days after the date of the mediator’s report.

Mrs. Tyler’s position is that she applied for arbitration within the 90-day extension because her lawyers did not receive a copy of the mediator’s report until June 24, 2009, 10 days before she applied for arbitration. Pilot argues that her application was made beyond the 90-day extension because she is deemed to have received the mediator’s report five days after the date of the mediator’s report. In the alternative, Pilot submits that Mrs. Tyler has not proven that she did not receive the mediator’s report as she claims.

Therefore, the questions to be answered are:

What triggers the 90-day period? And
When was the 90-day period triggered in the circumstances of this case?

What triggers the 90-day period?

If mediation fails, section 280(8) of the Act requires the mediator to “prepare and give to the parties a report...” Rule 22.2 of the Dispute Resolution Practise Code requires the Dispute Resolution Group to “deliver a copy of the Report of Mediator to the parties”.

In Zuger and Zurich North America Canada², the Arbitrator concluded that the 90-day period is not triggered by the date of the report. The Arbitrator ruled that to trigger the limitation period, the party must receive or be deemed to have received the Report of Mediator.

The Director’s Delegate confirmed this approach in Monks and Dominion of Canada General Insurance Co.³ The Director’s Delegate stated: “I find that the clause 281(1.1)(b) limitation period runs from the date the Report of Mediator is received or, where it is appropriate, is deemed to have been received by the insured person.”⁴

Pilot submitted that the decision in Kurichh and Allstate Insurance Company of Canada⁵ supports its position that the 90-day period starts to run from the date of the report. I disagree. That argument was rejected in the appeal decision in Monks. In deciding Monks, the Director’s Delegate distinguished Kurichh, noting that the facts were different. In Kurichh, the Arbitrator rejected the applicant’s evidence that he did not receive the report and found that the 90-day period started to run from the date of the report. The Kurichh appeal⁶ upheld the Arbitrator’s finding of fact. In Monks, the Director’s Delegate noted that the Kurichh appeal simply confirms the Arbitrator’s finding of fact and does not stand for the wider proposition that the 90-day period is always triggered by the date of the report.

I accept the Monks approach. I agree that the “limitation period runs from the date the Report of Mediator is received or, where it is appropriate, is deemed to have been received by the insured person.” Rule 25.2 requires an insured person to file a copy of the Report of Mediator when applying for arbitration. Accepting Pilot’s approach would lead to the ridiculous result that the limitation period runs while the insured person is unable apply for arbitration because they are unable to comply with the Rule 25.2 requirement.

Applying the Monks approach, the next question to be answered is what is the date on which Mrs. Tyler either received the Report, or is deemed to have received the Report?

When was the 90-day period triggered?

(a) Report Mailed to Mrs. Tyler directly

In its Reply submissions, Pilot incorrectly stated that it was Mrs. Tyler’s contention that neither she nor her counsel received a copy of the report until June 24, 2009. In fact, I received no evidence or submissions from Mrs. Tyler on the issue of receipt of the copy of the Report of Mediator that might have been sent directly to her. Her submissions assumed that, because she was represented by solicitors at mediation, the critical date was the date her solicitors received the report.

The Rules of Civil Procedure clearly provide that service of a document that is not required to be served personally, must be served on a party who has a lawyer on record by serving the lawyer. ⁷ Our Rules do not address the issue directly. Rule 9 specifically provides for appointment of a representative and requires that, where a party appoints a representative, the party must give the Dispute Resolution Group, the name, address, telephone number and electronic transmission address (if any) of the representative. Rule 5.7 provides that, where the Rules require delivery of a document by the Dispute Resolution Group, delivery is deemed to have occurred where one of the permitted methods of delivery is used, and the document is sent to the last known address of the party.

I interpret Rules 5.7 and 9 in conjunction to mean that, where a party has appointed a representative, delivery occurs where the document is sent to the address of the representative. That interpretation is consistent with the assumption Mrs. Tyler made in her submissions.

(b) Deemed receipt

The Rules allow the Dispute Resolution Group to deliver a copy of the Report of Mediator by any approved methods for service of documents. The permitted methods include personal delivery, courier service, facsimile, electronic transmission, regular mail, registered mail and certified mail. By operation of Rule 7.3, if a document is sent by regular, registered or certified mail, delivery is deemed to take place “on the fifth day after the post office stamps the mailed document”. The Rule addresses the question of when a document that is proven to have been mailed is deemed to be received. It is of no assistance in proving that the document was mailed or when it was mailed.

As I noted in Moschonissios and Security National Insurance Co.⁸ , a party cannot take advantage of the deeming provision, without proof of the date the post office stamped the mailed document. I have no evidence in this case that the post office stamped the Report of Mediator at any time. I therefore find that Mrs. Tyler is not deemed to have received it.

In Zuger, the Arbitrator found that the report was received on the fifth day after it was dated, without the benefit of evidence regarding the post-mark. However, the situation was different. There, although uncertain about the exact date, the insured person admitted receiving the report shortly after it was dated. There was no uncertainty about when it was mailed. The issue was whether the 90-day period starts on the date of the report, when it was presumably mailed, or five days later. The Arbitrator applied Rule 7.3 in finding that the period starts five days later.

Section 11(5) of the Act provides that a mediator cannot be required to testify in a civil proceeding or in a proceeding before any tribunal respecting any mediation conducted under the Act or respecting any information obtained in the discharge of the mediator’s duties under the Act. My ruling therefore means that, under the current practise, an insurer seeking to rely on the 90-day limitation will continue to be unable to provide direct evidence of mailing. However, the alternative requires ignoring the specific requirement of Rule 7.3 and assuming that the Dispute Resolution Group has in place an infallible system for mailing letters the mediator prepares. That would more likely lead to an unfair result wherein an insured person is barred from pursuing a claim for accident benefits based on an untested assumption.

I note that there are other, more traceable methods of delivery available to the Dispute Resolution Group under Rule 7.3. The report could be delivered by registered or certified mail, facsimile, or electronic transmission. Delivery by any of these methods would generate a written record that the report was sent and likely also confirmation of receipt.

Mrs. Tyler relied on the affidavit of Joy Manuel, a legal assistant in her solicitors’ office, to prove the date they received the Report of the Mediator. Ms. Manuel states that, realizing that her office had not received the report on or around June 22, 2009, she telephoned the Commission and requested the report forthwith. She then received a copy of the report, by regular mail, on June 24, 2009. Ms. Manuel’s evidence is the only evidence that directly addresses the issue of receipt.

There is some circumstantial evidence that suggests that Mrs. Tyler’s lawyer could have received the report earlier. As I noted above, the report is dated February 23, 2009 and the Commission’s mediation file contains a letter of the same date stating that a copy of the report is enclosed.

Further circumstantial evidence suggests that counsel for Mrs. Tyler did not request a copy of the report, as alleged. By letter dated October 15, 2010, the manager of Mediation Services advised the parties that, where a party requests a copy of the mediator’s report, an “unsigned electronic version...may be provided...” The manager also stated that “[C]over letters are normally attached to the document being requested and mailed out.” The mediation file does not contain cover letters, except for ones dated February 23, 2009. However, the manager also advised that a copy of the report obtained in this way would be stamped “COPY”. The report filed with the application for arbitration is unsigned and is stamped “COPY”. That fact tends to support Ms. Tyler’s position.

Pilot filed the affidavit of James M. Brown, a lawyer at the firm that represents Pilot. Mr. Brown conveys information he received from the lawyer with carriage of this file. That lawyer gave Mr. Brown information he received from the mediator. The information from the mediator is that the letter of February 23, 2009 would have been mailed out with a copy of the report, on or about the same date. The affidavit does not describe the process for mailing the letter after the mediator prepares it or suggest that the mediator has a recollection of mailing this particular letter.

I have no direct evidence that the Report of Mediator was mailed to Mrs. Tyler’s solicitors on or around February 23, 2009 or, if mailed that it was delivered. I prefer the direct evidence of Ms. Manuel to the circumstantial evidence that tends to show otherwise. I give no weight to the double-hearsay information on mailing, contained in Mr. Brown’s affidavit. It confirms that the usual practice is to mail the report on or about the day it is dated. It is of no assistance in determining how consistently that practice is followed or whether it was followed in this case. The absence of the cover letter that could have accompanied a second copy of the report is inconclusive, since the manager does not indicate that a cover letter is invariably prepared and, consistent with the information provided, the report Mrs. Tyler filed is stamped “COPY”. I find that Mrs. Tyler did not receive the report until June 24, 2009. That was the date that triggered the 90-day period.

I conclude that Mrs. Tyler is not precluded from proceeding to arbitration of her claim for non-earner benefits because she applied for arbitration less than 90 days after receiving the Report of Mediator.

Special Award

The suggestion that Mrs. Tyler’s solicitors have attempted to mislead the Commission regarding the date of receipt of the Report of the Mediator is implicit in the position that Pilot took on this issue. Mrs. Tyler’s solicitors took “great umbrage” at the suggestion. They expanded their submissions to include a claim for a special award. I decline to address that issue. It was not an issue that was identified as part of this preliminary issue hearing and Pilot has not responded to the claim. Further, I find no jurisdiction to consider making a special award, without first determining entitlement to benefits that have been unreasonably withheld or delayed. That issue was also not part of this preliminary issue hearing.

EXPENSES:

In order to avoid a multiplicity of interlocutory proceedings, I reserve the decision on expenses of this preliminary issue hearing to the hearing arbitrator. If the parties resolve all remaining issues without a hearing, but are unable to resolve this issue, either party may make an appointment for me to determine the matter in accordance with Rules 75 to 79 of the Dispute Resolution Practice Code.

December 16, 2010

Jeffrey Rogers

Arbitrator

Date