Arnand Murtty v. Security National Insurance Co./Monnex Insurance Mgmt. Inc., 2011 ONFSCDRS 60

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

Neutral Citation: 2011 ONFSCDRS 60

FSCO A00-001078

BETWEEN:

ARNAND MURTTY Applicant

and

SECURITY NATIONAL INSURANCE CO./ MONNEX INSURANCE MGMT. INC. Insurer

DECISION ON A PRELIMINARY ISSUE

Before: Rosemary Muzzi

Heard: April 15, 2011, at the offices of the Financial Services Commission of Ontario in Toronto.

Written submissions were received from Mr. Murtty on December 24, 2010 and April 7, 2011. I have also considered his submissions in a letter dated February 10, 2011. The affidavit of Troy Asselin, a factum and a book of authorities received from Security National on March 30, 2011.

Appearances: Mr. Murtty representing himself Patrick Ho for Security National Insurance Co./Monnex Insurance Mgmt. Inc.

Issues:

There are two preliminary issues to be decided in this matter:

1. Is Mr. Murtty precluded from proceeding to arbitration because he entered into an enforceable agreement which releases Security National from any action to claim statutory accident benefits?

2. Is the applicant precluded from proceeding to arbitration given that he withdrew an earlier Application for Arbitration concerning the motor vehicle accident of November 17, 1995?

Background:

Arnand Murtty, the applicant, was injured in a motor vehicle accident on November 17, 1995. He applied for and received income replacement benefits from Security National Insurance Co./ Monnex Insurance Mgmt. Inc. (“Security National”), payable under the Schedule¹ for 16 months. Security National terminated weekly income replacement benefits on May 11, 1997. The parties were unable to resolve their disputes through mediation, and Mr. Murtty applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended, in December 1997.

The matter was purportedly settled in August 1998. Mr. Murtty filed a motion for interim benefits in relation to his 1997 Application for Arbitration. That motion was dismissed on August 26, 1998 at which point the parties entered into a discussion with a Commission arbitrator that resulted in a settlement agreement.²

In 1999, Mr. Murtty applied to the Commission for mediation of a claim for a “disability pension”.³ A mediation took place in August 2000 at which Security National relied on the settlement agreement of 1998 to oppose the application. Mr. Murtty applied for arbitration in October 2000. An arbitrator ordered a preliminary issue hearing on the question of whether the settlement agreement of 1998 precluded Mr. Murtty from proceeding with his Application for Arbitration. In March 2001, Mr. Murtty advised the Commission that he was not proceeding with this arbitration and that the file should be closed. The file was closed in April 2001.

In July 2010, Mr. Murtty filed an Application for Arbitration for benefits after age 65 to which he attached the Report of Mediator from the August 2000 mediation.⁴ The parties proceeded to a pre-hearing discussion on October 12, 2010 when these issues were set down for hearing.

Submissions

Mr. Murtty argues that the settlement agreement, signed by him on August 28, 1998, is not valid because:

• it did not comply with the applicable Settlement Regulation because he was not provided with a Settlement Disclosure Notice that included the commuted value of his income replacement benefit;
• it contains contradictory paragraphs;
• it does not include the changes he made preserving his rights to claim benefits after age 65;
• he did not understand his rights when he decided to withdraw the 2001 Application for Arbitration; and
• he was under emotional, physical and financial duress when he signed it and when he withdrew the first Application for Arbitration in 2001.

Security National argues the following:

• The onus is on Mr. Murtty to prove not only the invalidity of the settlement but also that he did not receive a Settlement Disclosure Notice containing the commuted value of his income replacement benefit. He has failed to do so.
• Security National has been prejudiced by the passage of time from proving or responding to the issue.
• Mr. Murtty’s current allegations should not be believed because his past conduct belies these allegations.
• Mr. Murtty’s subsequent re-filing of the Application for Arbitration is: (i) an abuse of the Commission’s process; and (ii) statutorily barred