Financial Services Commission of Ontario

Neutral Citation: 2011 ONFSCDRS 78 FSCO A10-001970

BETWEEN:

MICHELE GRATTON Applicant

and

ECONOMICAL MUTUAL INSURANCE COMPANY Insurer

DECISION ON A PRELIMINARY ISSUE

Before: Arbitrator Jeffrey Rogers Heard: By written submissions, completed on July 12, 2011

Appearances: Ms. Eliane Lachaine, solicitor for Ms. Gratton Mr. Nicholaus de Koning, solicitor for Economical Mutual Insurance Company

Issues:

1. Is Ms. Gratton precluded from receiving a non-earner benefit, for the period April 19, 2008 to February 10, 2009, because she failed, without reasonable explanation, to provide a Disability Certificate, as required by section 35(2) of the Schedule?

2. Is either party liable to pay the other’s expenses in respect of the preliminary issue hearing under section 282(11) of the Insurance Act, R.S.O. 1990, c. I.8?

Result:

1. Ms. Gratton is not precluded from receiving a non-earner benefit for the period April 19, 2008 and February 10, 2009, for failure to submit a Disability Certificate.

2. I remain seized of the issue of expenses.

EVIDENCE AND ANALYSIS:

Background

The Applicant, Michele Gratton, was injured in a motor vehicle accident on October 19, 2007. In December 2007 Economical Mutual Insurance Company (“Economical”) found out that she was entitled to claim statutory accident benefits, payable under the Schedule.¹ On December 10, 2007, Economical contacted Ms. Gratton by telephone and informed her of her right to make a claim. The next day Economical sent her an Accident Benefits Application package. The package included an Application for Accident Benefits and a Disability Certificate. It also contained information to the effect that “no specified benefit” would be paid if a Disability Certificate was not submitted with the Application.

Ms. Gratton was eligible to receive a non-earner benefit 26 weeks after the accident. Ms. Gratton submitted an Application for Accident Benefits on April 9, 2008. She did not submit a Disability Certificate until February 10, 2009. That was a year and several months after the accident. Economical has paid Ms. Gratton the benefit from the date of the Disability Certificate. It relies on section 35(13) of the Schedule to deny her entitlement prior to that date. Ms. Gratton’s position is that she has a reasonable explanation for her failure to submit a Disability Certificate. She relies on section 31(1) of the Schedule to forgive her breach of section 35.

Scope of this Hearing

A pre-hearing in this matter was held on February 8, 2011. The issues in dispute were agreed to be entitlement to a non-earner benefit for the period April 19, 2008 to February 10, 2009, interest, expenses and a special award. The parties agreed that the dispute would be resolved by a written hearing. They assumed that no facts were in dispute. The written submissions disclosed that Economical does not dispute that Ms. Gratton met the disability test for entitlement to a non-earner benefit on the date of the Disability Certificate, but it does not concede that she met the test on April 19, 2008. That issue could not be decided upon the written record. The parties therefore agreed that the written hearing would be restricted to the preliminary issue of whether Ms. Gratton’s failure to submit a Disability Certificate precluded her from receiving a non-earner benefit for the period April 19, 2008 to February 10, 2009. The parties did not specifically address the question of when the issue of entitlement to a special award would be determined. However, I find it premature to address that issue before determining entitlement to the underlying benefit.

The Legislation

As noted above, Economical relies on section 35 of the Schedule. Section 35(2) requires an insured person who applies for a “specified benefit” to submit a Disability Certificate with the application. A non-earner benefit is a “specified benefit”. Section 35(13) provides that, when an insured person submits an application for a specified benefit, but fails to submit a completed Disability Certificate, the benefit is not payable for the period between receipt of the application and receipt of the completed Disability Certificate.

Ms. Gratton does not dispute that she breached section 35. She relies on section 31 to excuse the breach. Section 31 of the Schedule provides that failure to comply with certain time limits, including the time limit for submitting a Disability Certificate, does not disentitle an insured person who has a reasonable explanation for the delay.

The Explanation

Ms. Gratton’s position is that her drug addiction and mental illness impeded her ability to submit a Disability Certificate. Economical concedes that Ms. Gratton “had issues with addiction in particular, and her mental health in general…”² It is not disputed that Ms. Gratton was addicted to drugs and suffered from mental illness between April 19, 2008 and February 10, 2009. It is not disputed that these conditions affected her ability to function. Economical’s position is that Ms. Gratton could have submitted a Disability Certificate because she was able to pursue other aspects of her claim for accident benefits. For the reasons below, I find that Ms. Gratton’s impaired function after the accident provides a reasonable explanation for her delay in submitting a Disability Certificate.

Even before the accident, Ms. Gratton had functional challenges. At the time of the accident, she was “on disability as a result of being diagnosed with bi-polar”.³ She had been seeing a psychiatrist since 2000 and was enrolled in an 8-week day program for depression at the Montfort Hospital. That program was put on hold while she recovered from her accident-related injuries. Her injuries included a laceration above her left eye that required four stitches and a conminuted fracture of humeral head of the left shoulder.⁴

Ms. Gratton was not a named insured under Economical’s policy. She did not contact Economical after the accident. Economical’s first contact with Ms. Gratton was when its adjuster telephoned her three weeks after the accident. In my view, Ms. Gratton’s subsequent conduct should be assessed in light of the fact that she was not motivated to retain a representative or make a claim immediately after the accident, despite her significant physical injuries.

Ms. Gratton’s post-accident level of function is summarized in the report of Dr. Ken Suddaby, who conducted a psychiatric assessment on Economical’s behalf on January 16, 2009.⁵

Ms. Gratton reported to Dr. Suddaby that in the first few weeks after the accident, she was stoned on Dilaudid, which had been prescribed by the emergency room physician. She did not remember much of this timeframe. She became addicted to Dilaudid and then Percocet. She reported feeling suicidal until two months ago. She should have been going to physiotherapy, but reported that she had no motivation to do so.

Her current daily routine was to wake up, take her pills, drink diet Pepsi and smoke until she went to bed. She mostly drank meal replacements for food. Occasionally, she ordered pizza and froze most of it, to be eaten in the following days. She reported that she had no energy. She left the house only every three weeks to see her doctor for prescriptions. She had cut herself off from friends. She did not wash. She did not get dressed.

Dr. Suddaby’s diagnosis included bipolar affective disorder, benzodiazepine dependence and narcotic dependence. He described Ms. Gratton’s impairment as follows: “Ms. Gratton has a clear narcotic addiction at this time. This contributes to a lack of leaving the household, poor motivation, a poor sense of quality of life, and difficulties carrying out the basic activities of daily living such as grooming and self-care. Ms. Gratton also has impairment in mood, energy, concentration and motivation arising out of the major depressive illness.”

I find that Ms. Gratton’s failure to submit a Disability Certificate until February 10, 2009 is reasonably explained by Dr. Suddaby’s description of her impairment. Ms. Gratton’s ability to pursue other aspects of her claim for accident benefits does not undercut the reasonableness of her explanation. The issue is not whether Ms. Gratton had the capacity to submit a Disability Certificate, but whether there is a reasonable explanation for her failure to do so. Given Ms. Gratton’s history, her generally compromised level of function, and specifically her lack of motivation, it is not surprising that her claim for accident benefits was not diligently pursued.

I find that Ms. Gratton’s failure submit a Disability Certificate does not preclude her from claiming a non-earner benefit for the period April 19, 2008 and February 10, 2009. I make no findings at this time with regard to the cause of Ms. Gratton’s impairment.

OTHER ISSUES:

Ms. Gratton may now pursue her claim that she met the disability test for a non-earner benefit on April 19, 2008. I remain seized of that issue and of the issue of entitlement to a special award. I also remain seized of the issue of expenses. If they are unable to resolve the remaining issues on their own, the parties may contact the case administrator to set a date for a further hearing.

September 16, 2011

Jeffrey Rogers Arbitrator

Financial Services Commission of Ontario

Neutral Citation: 2011 ONFSCDRS 78 FSCO A10-001970

BETWEEN:

MICHELE GRATTON Applicant

and

ECONOMICAL MUTUAL INSURANCE COMPANY Insurer

ARBITRATION ORDER

Under section 282 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:

1. Ms. Gratton is not precluded from claiming a non-earner benefit for the period April 19, 2008 and February 10, 2009, for failure to submit a Disability Certificate.

2. I remain seized of the issue of expenses.

September 16, 2011

Jeffrey Rogers Arbitrator

Footnotes

1. 1The Statutory Accident Benefits Schedule — Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended.
2. 2Insurer’s written submissions, paragraph 26
3. 3Applicant’s submissions, Tab 5
4. 4Medical Brief, Tabs 6 and 7
5. 5Applicant’s submissions, Tab 13