Zully Tello Medina v. State Farm Mutual Automobile Insurance Company, 2010 ONFSCDRS 18

Financial Services Commission des

Commission services financiers

of Ontario de l’Ontario

Neutral Citation: 2010 ONFSCDRS 18

FSCO A09-000033

BETWEEN:

ZULLY TELLO MEDINA

Applicant

and

STATE FARM MUTUAL AUTOMOBILE

INSURANCE COMPANY

Insurer

DECISION ON A MOTION

Before: Joyce Miller

Heard: Written submissions were received on November 3, 2009.

Appearances: Gary Mazin for Ms. Tello Medina

Darrell March for State Farm Mutual Automobile Insurance Company

Issues:

The Applicant, Zully Tello Medina, was injured in a motor vehicle accident on July 31, 2006. She applied for and received statutory accident benefits from State Farm Mutual Automobile Insurance Company (“State Farm”), payable under the Schedule.¹ State Farm denied her claim for two treatment plans. The parties were unable to resolve their disputes through mediation, and Ms. Tello Medina applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

The issue is:

Is State Farm permitted to withdraw its preliminary issue pursuant to Rule 70.3 of the Dispute Resolution Practice Code?

Result:

Pursuant to Rule 70.3 of the Dispute Resolution Practice Code State Farm is permitted to withdraw its preliminary issue, scheduled for October 6, 2009, without terms.

BACKGROUND

At a pre-hearing held on July 30, 2009, State Farm requested a preliminary issue in respect of Ms. Tello Medina’s failure to attend an insurer’s examination on May 14, 2008, pursuant to a Treatment Plan dated April 17, 2008. The preliminary issue in the pre-hearing letter, dated July 31, 2009 states:

Is Ms. Tello-Medina precluded from proceeding to arbitration pursuant to section 50 of the Schedule?

State Farm submits that Ms. Tello-Medina failed to attend a scheduled section 42 examination. State Farm agreed to immediately provide Ms. Tello Medina with the documentation in support of its claim that it provided proper notice to her in respect of making of a section 42 assessment appointment.

The preliminary issue was scheduled for October 6, 2009. On September 9, 2009, State Farm advised the Commission that it is withdrawing the preliminary issue.

Ms. Tello Medina submits that as condition of withdrawal she should be awarded $500 in costs on the basis that State Farm “raised an improper, vexatious and unnecessary preliminary issue.”

Ms. Tello Medina submits that prior to State Farm withdrawing the preliminary issue, her counsel “spent considerable time and effort defending this action by extensively reviewing the file, determining the productions required, corresponding with the opposing counsel, researching relevant case-law and discussing issues with senior counsel.”

State Farm opposes Ms. Tello Medina’s claim for costs as a condition of the withdrawal. State Farm submits that on May 21, 2008 it sent Ms. Tello Medina an OCF-9 denying the treatment plan for non attendance at insurer’s examination. State Farm submits that although the OCF-9 stated that Ms. Tello Medina should contact State Farm to reschedule the examination, no response was received from the Applicant. No explanation was given, until after the pre-hearing why she failed to attend the examination.

State Farm submits that it was only by letter dated August 10, 2009 from Ms. Tello Medina’s counsel that State Farm first learned that the reason Ms. Tello Medina did not attend the insurer’s examination is that a copy of the notice of examination for May 14, 2008, sent to her counsel via facsimile, was not sent to her.

FINDING

On the facts of this case, I do not find that State Farm’s request for a preliminary issue was “improper, vexatious and unnecessary.” In denying Ms. Tello Medina’s April 17, 2008 treatment plan, on May 21, 2008 State Farm in its OCF-9 requested that Ms. Tello Medina contact State Farm and reschedule the examination. There is no evidence that Ms. Tello Medina contacted State Farm to reschedule the examination or to provide an explanation as to why she had not attended the examination. It was only after the preliminary issue, which in my view, was legitimately raised, that Ms. Tello Medina offered an explanation. Once it received this explanation, State Farm accepted it and withdrew the preliminary issue.

Given that State Farm had yet to provide details and submissions for the preliminary issue, I do not see why Ms. Tello Medina’s counsel would need to immediately engage in extensive file review and research the case law when it did not know as yet the particulars of State Farm’s claim.

Accordingly, for these reasons, I find that pursuant to Rule 70.3 of the Dispute Resolution Practice Code, State Farm can withdraw from the October 6, 2009 preliminary hearing without terms.

February 11, 2010

Joyce Miller

Arbitrator

Date