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

Neutral Citation: 2010 ONFSCDRS 3

FSCO A08-000388

BETWEEN:

LUIGI MANNARINO Applicant

and

ING INSURANCE COMPANY OF CANADA Insurer

Before: Arbitrator Denise Ashby

Heard: Written submissions were received on October 23, 2009

Appearances: Arthur R. Camporese for Mr. Mannarino Lisa Pool for ING Insurance Company of Canada

Issues:

The Applicant, Luigi Mannarino, was injured in a motor vehicle accident on May 24, 2006. He applied for and received statutory accident benefits from ING Insurance Company of Canada (“ING”), payable under the Schedule.¹ ING has not paid a non-earner benefit. The parties were unable to resolve their dispute through mediation, and Mr. Mannarino added the issue to his previous application 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 Mr. Mannarino precluded from proceeding to arbitration because his application for arbitration was filed beyond the two-year limitation period set out in subsection 281.1 of the Insurance Act and section 51of the Schedule?
Is Mr. Mannarino liable to pay ING’s expenses in respect of the arbitration pursuant to subsection 282(11) of the Insurance Act, R.S.O. 1990, c. I.8?
Is ING liable to pay Mr. Mannarino’s expenses in respect of the arbitration pursuant to subsection 282(11) of the Insurance Act, R.S.O. 1990, c. I.8?

Result:

Mr. Mannarino is not precluded from proceeding to arbitration.
The parties made no submissions with respect to expenses. The issue is deferred to the discretion of the hearing arbitrator. In the event the matter does not proceed to hearing and the parties do not resolve the issue between themselves, they may request an expense hearing before me in accordance with the Dispute Resolution Practice Code.

FACTS:

The parties agree and I find that:

Mr. Mannarino was injured in a motor vehicle accident on May 24, 2006.
On June 2, 2006, Mr. Mannarino completed and submitted an Application for Accident Benefits to ING. As well, Dr. Szarka, Mr. Mannarino’s family physician, completed an OCF‑3, Disability Certificate in which he answered no to the question: “Does the applicant suffer a complete inability to carry on a normal life?” The OCF-3 was signed by Mr. Mannarino on June 6, 2006.²
On June 26, 2006, ING wrote to Mr. Mannarino enclosing an OCF-9, Explanation of Benefits Payable, advising him that based on his doctor’s Disability Certificate he was “not eligible to receive Non-Earner Benefits.”³
Mr. Mannarino mediated the issue of a Non-Earner Benefit on June 22, 2009 and it was added to his previous Application for Arbitration on consent of the parties.

On November 12, 2007, Dr. Roberta G. Koch, D.C., issued a Disability Certificate in which she answered yes to the question: “Does the applicant suffer a complete inability to carry on a normal life?”⁴ This OCF-3 was signed by Mr. Mannarino. He submits and ING has not disputed that this Disability Certificate was sent to ING. The first page of the Disability Certificate indicates that it was addressed to Mr. Mannarino and ING Insurance. A date stamp of November 19, 2007 is found beside a request that the form be returned to ING Insurance. On the basis of the foregoing, I find that the form was submitted to ING by Dr. Koch on or about November 19, 2007.

ANALYSIS:

ING submits that Mr. Mannarino is precluded from proceeding to arbitration because he failed to dispute its denial of his claim for a non-earner benefit within the two-year limitation period prescribed by both subsection 281.1 of the Insurance Act and section 51 of the Schedule.

ING submits that Mr. Mannarino was required to dispute its refusal to pay a non-earner benefit by June 26, 2008. This was the two-year anniversary of its letter and OCF-9 refusing to pay the benefit dated June 26, 2006. The refusal to pay was based on Mr. Mannarino’s family physician’s opinion that he did not suffer a complete inability to carry on a normal life. ING submits that its refusal of June 26, 2006 was valid because it was clear and unequivocal and gave Mr. Mannarino information about the dispute resolution process. ING relies on decisions which find that a non-earner benefit is one benefit and cannot be reapplied for.⁵ As well, ING relies on Macera and Royal & SunAlliance Insurance Company of Canada in which the Arbitrator held that Mrs. Macera was precluded from proceeding to arbitration in respect of her claims for a non-earner benefit and attendant care benefits on the basis that she failed to dispute the insurer’s denial of her claims within the two-year limitation period.⁶

Mr. Mannarino submits that Dr. Koch’s Disability Certificate dated November 12, 2007, in which she expressed her opinion that Mr. Mannarino suffered a complete inability to carry on a normal life, was his application for a non-earner benefit. ING failed to respond to his claim. Therefore, ING is obligated to pay the benefit pursuant to subsection 35(3) of the Schedule.

Mr. Mannarino relies on three Commission cases in respect of his submissions Johnston and Pafco Insurance Company Ltd., Ross and TTC Insurance Company Ltd. and Adami and Wawanesa Mutual Insurance Company.⁷

Subsection 281.1(1) of the Insurance Act and section 51 of the Schedule require an applicant to dispute an insurer’s refusal to pay a benefit within two years of the refusal.

Subsection 12(1)1 of the Schedule requires an insurer to pay a non-earner benefit where an insured suffers a complete inability to carry on a normal life within 104 weeks of the accident and does not qualify for an income replacement benefit.

On June 6, 2006, Mr. Mannarino applied for accident benefits. As well, he signed his family physician’s OCF-3. The doctor expressed the opinion that Mr. Mannarino did not suffer a complete inability to carry on a normal life. It would be “invidious” if Mr. Mannarino’s mere submission of an Application for Accident Benefits was taken as an application for a non-earner benefit that could be validly refused by ING.⁸ There must be some clear indication that an insured has applied for a benefit before an insurer can validly refuse the benefit. Mr. Mannarino’s signature on his doctor’s OCF-3 is evidence that he accepted his family physician’s opinion that he was ineligible for a non-earner benefit. There was therefore no application for ING to refuse. As found by the Arbitrators in Johnson and Pafco and Adami and Wawanesa an insurer cannot deny or refuse what it is not liable to pay. On the basis of the foregoing, I find that ING’s letter and OCF-9 dated June 26, 2006 was not a valid refusal. Therefore, the limitation period did not commence to run and Mr. Mannarino is entitled to proceed to arbitration.

I decline to deal with Mr. Mannarino’s submission that ING’s failure to respond to Dr. Koch’s Disability Certificate in November 2007 requires ING to pay the non-earner benefit pursuant to subsection 35(3) of the Schedule. This is an issue to be dealt with at the arbitration hearing.

EXPENSES:

The parties made no submissions with respect to expenses. The issue is deferred to the discretion of the hearing arbitrator. In the event the matter does not proceed to hearing, I encourage them to resolve the issue, failing which they may request an expense hearing before me in accordance with the Dispute Resolution Practice Code.

January 11, 2010

Denise Ashby Arbitrator

Date