Yolanda Girao v. Allstate Insurance Company of Canada, 2011 ONFSCDRS 64

Financial Services Commission of Ontario

Neutral Citation: 2011 ONFSCDRS 64

Appeal P11-00006

OFFICE OF THE DIRECTOR OF ARBITRATIONS

YOLANDA GIRAO Appellant

and

ALLSTATE INSURANCE COMPANY OF CANADA Respondent

BEFORE: Delegate Lawrence Blackman

REPRESENTATIVES: Mr. Victor Mesta for the Appellant, Yolanda Girao Mr. Eric K. Grossman for the Respondent, Allstate Insurance Company of Canada

HEARING DATE: July 26, 2011

APPEAL EXPENSES ORDER

Under section 283 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:

1. Yolanda Girao shall pay Allstate Insurance Company of Canada its legal expenses of this appeal fixed in the amount of $1,949.96, inclusive of HST.

August 5, 2011

Lawrence Blackman Director’s Delegate

REASONS FOR DECISION

I. NATURE OF THE APPEAL

The Appellant, Ms. Yolanda Girao, was injured in a June 19, 2002 motor vehicle accident. As a result, she sought statutory accident benefits under the Schedule¹ from her first-party automobile insurer, the Respondent, Allstate Insurance Company of Canada.

In his January 14, 2011 preliminary issue decision, Arbitrator Richards (the “Arbitrator”) found that the Appellant was barred by the subsection 281(5) limitation period of the Insurance Act, R.S.O. 1990, c. I. 8 (the “Act”) from pursuing certain of her claims against the Respondent.

The Appellant appealed the Arbitrator’s limitation period decision in respect of her claims for housekeeping services and catastrophic impairment designation. The Appellant further submitted that the Arbitrator’s decision had a typographical error and had erred in failing to address her request for interim dental and transportation benefits.

Rule 50.2 of the Dispute Resolution Practice Code (Fourth Edition – Updated September 2010) (the “Code”) provides that a party may not appeal a preliminary or interim order of an arbitrator until all of the issues in dispute in the arbitration have been finally decided, unless ordered otherwise. Rule 51.2(c) provides that an appeal may be rejected if it is from a preliminary or interim order that does not finally decide the issues in dispute.

Subsection 283(1) of the Act limits appeals from an arbitrator’s order to questions of law. The Appellant concurs with the Arbitrator that an arbitrator does not have jurisdiction to grant relief from forfeiture under section 129 of the Act. Agreeing that relief from forfeiture is an equitable remedy reserved to the courts, the Notice of Appeal states that the Appellant will file for judicial review before the Superior Court immediately after the appeal decision. I was thus not persuaded there was an issue before me as to an alleged error of law regarding the limitation period.

I also found that as Rule 65.5 of the Code allows an arbitrator at any time to correct a typographical error, accepting this appeal on this ground was not warranted. Further applying the criteria in Allstate Insurance Company of Canada and Torok, (FSCO P01-00021, May 29, 2001), I held that the most expeditious and least expensive means of addressing an alleged failure to address an interim benefits motion was to refer the Appellant to her continuing arbitration for any such proper motion.

Accordingly, I exercised my discretion under Rule 51.2(c) of the Code in my April 12, 2011 decision to reject this appeal from a preliminary order. If the parties were unable to agree on the legal expenses of this appeal, an expense hearing was to be requested.

The Appellant claims $2,087.22 in legal expenses. $687.22 is sought for disbursements. 200 hours of lost business opportunity is claimed for the Appellant’s husband, who acted as her agent, in researching and preparing this appeal. A nominal $7 hourly rate is claimed, derived by taking 20% of a junior law student’s hourly rate.

The Respondent seeks $1,949.96 in legal expenses, based on 18.4 hours of legal work at the applicable legal aid hourly rate in addition to $141.43 in disbursements.

II. ENTITLEMENT TO LEGAL EXPENSES

The Relevant Legislation

Subsection 282(11) of the Act provides that:

(11) The arbitrator may award, according to criteria prescribed by the regulations, to the insured person or the insurer, all or part of such expenses incurred in respect of an arbitration proceeding as may be prescribed in the regulations, to the maximum set out in the regulations.

Under subsection 283(7) of the Act, subsection 282(11) applies, with necessary modifications, to appeals before the Director. The Director has appointed me under subsection 6(4) of the Act to hold this appeal and exercise the related powers and duties.

Subsection 12(2) of R.R.O. 1990, Reg. 664 (the “Expense Regulation”) provides that:

(2) An arbitrator shall, under subsection 282 (11) of the Act, consider only the following criteria for the purposes of awarding all or part of the expenses incurred in respect of an arbitration proceeding:

1. Each party’s degree of success in the outcome of the proceeding.
2. Any written offers to settle made in accordance with subsection (3).
3. Whether novel issues are raised in the proceeding.
4. The conduct of a party or a party’s representative that tended to prolong, obstruct or hinder the proceeding, including a failure to comply with undertakings and orders.
5. Whether any aspect of the proceeding was improper, vexatious or unnecessary.
6. Whether the insured person refused or failed to submit to an examination as required under section 42 of Ontario Regulation 403/96 (Statutory Accident Benefits Schedule — Accidents on or after November 1, 1996) made under the Act or refused or failed to provide any material required to be provided by subsection 42 (10) of that regulation.
7. Whether the insured person refused or failed to submit to an examination as required under section 44 of Ontario Regulation 34/10 (Statutory Accident Benefits Schedule — Effective September 1, 2010), made under the Act, or refused or failed to provide any material required to be provided under subsection 44 (9) of that regulation.

The Appellant’s Claim for Appeal Legal Expenses

The Appellant argues that this is a completely novel case where she missed the limitation period due to the more than one year investigation of the Respondent’s allegedly abusive and deceptive acts conducted by the Commission’s Market Conduct Unit.

The Appellant submits that this appeal provides the process for her judicial review application submitted April 27, 2011 seeking relief from forfeiture under section 129 of the Act in respect of her claims for catastrophic designation and housekeeping benefits. The Appellant also submits in support of her claim for her legal expenses her disabled status and limited income.

The Respondent's Claim for Appeal Legal Expenses

The Respondent argues that it was totally successful in this appeal that raised no novel issues.

The Respondent submits that the Appellant has abused this process, including forum shopping and multiple filings for arbitration.

The Respondent further argues that the Appellant initiated an appeal that did not raise a question of law or mixed fact and law and, hence, had no chance of success. Citing Griffiths and State Farm Mutual Automobile Insurance Company, (FSCO P03-00032, February 11, 2004) and Omarashvili and Echelon General Insurance Company, (FSCO P08-00029, December 23, 2010), the Respondent submits that the Appellant knew or ought to have known that this appeal had little chance of success and, therefore, must bear some responsibility for the Respondent’s incurred legal expenses, its actual bill totalling three times its submitted Bill of Costs.

Result

I am not advised as to any written offers. This appeal proceeded expeditiously. I find that the relevant considerations provided by the Expense Regulation in determining entitlement to the legal expenses of this appeal to be (1) each party’s degree of success, (2) whether any novel issues were raised in the proceeding, and (3) whether any aspect of this appeal was improper, vexatious or unnecessary.

The Respondent was completely successful in having this appeal from a preliminary arbitration decision rejected under Rules 50.2 and 51.2(c) of the Code. I was not persuaded that there was broader significance or novelty in the issues raised by the Appellant that warranted accepting this appeal from a preliminary arbitration decision. The novelty of this case is the Appellant’s endeavour to obtain relief from forfeiture under section 129 of the Act for a missed limitation period by proceeding to judicial review by way of an internal Commission appeal.

The Appellant agrees with the Arbitrator that a Commission adjudicator does not have jurisdiction to apply section 129 of the Act. Accordingly, the Appellant implicitly concedes that this appeal is in significant measure simply a pro forma, or a matter of form, step to judicial review.

It is, therefore, difficult to understand the necessity or reasonableness of the Appellant including in the Notice of Appeal, in support of having this appeal accepted, over three hundred pages of documentation relating the long history of this matter, addressed in written submissions which the Respondent would be expected to review and respond to, when the Appellant’s express intent was to proceed to judicial review upon receiving an appeal decision.

The Appellant opted under subsection 281(1) of the Act to arbitrate her statutory accident benefits claim rather than start a proceeding in a court of competent jurisdiction. It is clear that the Appellant has a strong sense of injustice regarding the adjusting and dispute resolution history of this matter. The Appellant, however, has not provided a prima facie, or at first sight basis in law that section 129 of the Act may possibly relieve against a failure to institute a proceeding within the prescribed time period or, in any event, that such remedy may be available through judicial review by way of an internal Commission appeal.

The remaining appeal issues were unnecessarily advanced by the Appellant. Regarding the Appellant’s economic means, I note Delegate Draper’s comments in Dominion of Canada General Insurance Company and Guzman, (FSCO P-007209, January 18, 1996), rendered prior to the present narrowed criteria under the Expense Regulation to a more results based approach:

Reasonable access is also a concern for appeals, but the considerations are somewhat different. An appellant has already had an opportunity to present his or her case to an arbitrator, and has been given a written decision, with reasons. The purpose of the appeal is not to rehear the matter, but rather to determine whether there is some compelling reason to interfere with the decision. Therefore, an appeal is ill-advised unless some error can be demonstrated.

The Appellant failed to establish a basis for a Commission appellate officer to accept this appeal from a preliminary arbitration decision. Agreeing that an appellate officer has no jurisdiction to provide relief from forfeiture, while simultaneously arguing that this appeal be accepted, was ill-considered. I find that the Respondent is entitled to its reasonable appeal expenses incurred in this rejected appeal from a preliminary arbitration decision.

III. QUANTUM OF LEGAL EXPENSES

Arbitrator Makepeace, in Henri and Allstate Insurance Company of Canada, (OIC A-007954, August 8, 1997), confirmed that the main consideration in determining legal expenses is reasonableness. I am persuaded that the 18.4 hours claimed by the Respondent, rather than the Appellant’s claimed 200 hours, is a far more accurate representation of the reasonable time for this appeal that entailed only the initial question of whether this appeal should be accepted and any consequent legal expenses. The involvement of more senior counsel on behalf of the Respondent was largely limited to review. The hourly rate claimed is in accordance with that allowed by the Code.

I further find the online research, copying, courier and facsimile disbursements totalling $141.43, inclusive of HST, to be reasonable. Accordingly, I would allow the $1,949.96 in legal expenses claimed by the Respondent.

August 5, 2011

Lawrence Blackman Director’s Delegate

Footnotes

1. 1The Statutory Accident Benefits Schedule — Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended.