Financial Services Commission of Ontario
Neutral Citation: 2011 ONFSCDRS 83 FSCO A09-003158
BETWEEN:
KATHERINE KOSTYNYK Applicant
and
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY Insurer
DECISION ON MOTION
Before: Arbitrator Jeffrey Rogers Heard: September 16, 2011, at the offices of the Financial Services Commission of Ontario in Toronto.
Appearances: Mr. Allan Chapnik, solicitor for Mrs. Kostynyk Mr. Joseph Griffiths, solicitor for State Farm Mutual Automobile Insurance Company
Issues:
Is it reasonable and necessary for State Farm to require Mrs. Kostynyk to attend an In-Home assessment by Jeff Ford, a psychological assessment by Dr. Bodenstein and an orthopaedic assessment by Dr. Hercia, pursuant to section 42 of the Schedule?
If Mrs. Kostynyk’s attendance is reasonable and necessary, should this arbitration be stayed pending her attendance?
Result:
It is reasonable and necessary for State Farm to require Mrs. Kostynyk to attend an In-Home assessment by Jeff Ford, a psychological assessment by Dr. Bodenstein and an orthopaedic assessment by Dr. Hercia, pursuant to section 42 of the Schedule.
This arbitration is stayed pending Mrs. Kostynyk’s attendance.
Mrs. Kostynyk may move to lift the stay, if State Farm does not schedule the assessments within 90 days of the date of this decision.
The decision on expenses of this motion is reserved to the hearing Arbitrator. If the parties settle the arbitration, but are unable to agree on expenses of the motion, either party may request that I decide the issue as set out in Rule 79 of the Dispute Resolution Practice Code.
EVIDENCE AND ANALYSIS:
Introduction
State Farm moves for an order determining that it is reasonable and necessary to require Mrs. Kostynyk to attend an In-Home assessment by Jeff Ford, a psychological assessment by Dr. Bodenstein and an orthopaedic assessment by Dr. Hercia, pursuant to section 42 of the Schedule.1 It requests that this arbitration be stayed until she attends. Mrs. Kostynyk argues that the assessments are not reasonable and necessary.
For the reasons that follow, I find that to maintain fairness in the arbitration process, Mrs. Kostynyk is precluded from now arguing that the assessments are not reasonable and necessary. I also find that the assessments are reasonable and necessary for a fair hearing.
Facts
A detailed history of this matter is required to appreciate why Mrs. Kostynyk should now not be permitted to argue that the assessments are not reasonable and necessary and why fairness requires that they take place.
Mrs. Kostynyk was injured in a motor vehicle accident on December 11, 2006. She applied for and received statutory accident benefits from State Farm Mutual Automobile Insurance Company (“State Farm”), payable under the Schedule. State Farm initially determined that Mrs. Kostynyk was entitled to caregiver benefits. The test for entitlement changes after 104 weeks of disability. Just before the 104-week anniversary, State Farm served Mrs. Kostynyk with a notice requiring her to attend an In-Home/Functional Abilities Evaluation, to be performed by Jeff Ford, an occupational therapist. The purpose of the assessment was to determine whether she met the post-104 week test for caregiver benefits. The assessment was scheduled to take place on December 19, 2008.
Mrs. Kostynyk’s representative spoke to State Farm’s adjuster on December 9, 2008 and advised that Mrs. Kostynyk had already arranged her own assessments and she was too fragile to undergo two sets of tests at the same time. The adjuster advised that State Farm had also arranged further examinations for December 21, 2008. Mrs. Kostynyk did not attend State Farm’s assessments. State Farm terminated caregiver benefits on January 8, 2009
State Farm then served notices for rescheduled assessments. The In-Home assessment by Jeff Ford was rescheduled for January 26, 2009. A psychological assessment by Dr. Bodenstein was rescheduled for February 3, 2009 and an orthopaedic assessment by Dr. Hercia was rescheduled for February 4, 2009. Upon receiving the notices Mrs. Kostynyk’s representative advised State Farm that her own assessments were scheduled to take place in March, April and May 2009 and asked State Farm to cancel its assessments. Mrs. Kostynyk again did not attend State Farm’s assessments. She attended her own. She also applied for mediation at the Commission.
Mediation took place on November 19, 2009. State Farm’s adjuster raised the issue of Mrs. Kostynyk’s non-attendance. State Farm was under the impression that Mrs. Kostynyk’s request to “cancel” its assessments meant that she was not prepared to make herself available in the future. Mrs. Kostynyk’s representative explained that she had simply “required a breather” between two sets of assessments and was now prepared to attend. State Farm’s adjuster took the position that it did not require assessments because the opinion of one of Mrs. Kostynyk’s own assessors supported its denial of further caregiver benefits.
The parties did not resolve their dispute at mediation. Mrs. Kostynyk applied for arbitration on December 14, 2009. She claimed caregiver benefits from the date of termination to present and ongoing. In its Response to the Application for Arbitration, State Farm pleaded that caregiver benefits were not payable because Mrs. Kostynyk failed to attend its assessments.
Counsel for State Farm wrote to counsel for Mrs. Kostynyk on March 4, 2010 advising that it intended to ask to have the issue of non-attendance decided at a preliminary issue hearing. Counsel for Mrs. Kostynyk replied on April 14, 2010. He reiterated that Mrs. Kostynyk had not refused to attend. He also advised of the adjuster’s position that State Farm did not require assessments.
I held a pre-hearing on September 22, 2010. Counsel for State Farm requested that I schedule a preliminary issue hearing on the non-attendance issue. I declined the request because counsel for Mrs. Kostynyk indicated that his client was prepared to attend. He requested that the assessments be scheduled again. I scheduled the hearing to start on June 20, 2011.
On December 23, 2010, State Farm’s adjuster wrote to counsel for Mrs. Kostynyk requesting productions in order to reschedule the assessments. There was no response. On January 26, 2011, the adjuster again wrote, requesting a response. There was none. On February 24, 2011, counsel for State Farm requested a date for a motion to stay the arbitration as a consequence of Mrs. Kostynyk’s non-attendance. The motion was scheduled for May 27, 2011. The hearing was then adjourned, at Mrs. Kostynyk’s request, from June 20, 2011 to October 24, 2011. Given the adjournment of the hearing, the parties agreed to adjourn the motion to a later date. As a result, the motion was heard on September 16, 2011, with the hearing still scheduled to start on October 24, 2011.
Analysis and Conclusion
Section 42(1) of the Schedule gives an insurer the right to require an insured person to be examined by one or more health professionals of the insurer’s choice for “the purposes of assisting an insurer determine if an insured person is or continues to be entitled to a benefit…” These examinations may take place as often as is reasonably necessary.
The Divisional Court defined an insurer’s right to examinations under section 42 in two recent decisions. They are State Farm Mutual Automobile Insurance Company v. Ramalingam2 and Certas Direct Insurance Company v. Gonsalves.3 Three principles from those cases determine the outcome of this motion:
Fairness is fundamental to any administrative process. Procedural fairness requires that a party be able to respond to the position taken against it;
A section 42 assessment may be required in order to have a fair hearing; and
A change in the test for entitlement to a benefit post-104 weeks is a change in circumstances, giving an insurer a prima facie right to require an insured person to be assessed.
Mrs. Kostynyk argued that State Farm’s assessments were not reasonable and necessary. She submitted that they duplicated the assessments she conducted, that State Farm’s adjuster conceded they were not needed and that State Farm filed no medical evidence to support its position. This position, taken for the first time during submissions at the motion, is not consistent with the position Mrs. Kostynyk took at the pre-hearing where she advised that she was prepared to attend if the assessments were rescheduled. She reiterated that position in the material she filed for the motion on September 13, 2011.
If Mrs. Kostynyk’s position was that State Farm waived its right to assessments when its adjuster indicated that it would rely on the opinion of one of her assessors, she should have stated it earlier. Instead, she agreed at the pre-hearing that she would attend the assessments. Had she not done so, State Farm would have been able to present evidence regarding the alleged waiver. It would also have been able to pursue its position that the issue of non-attendance should be decided in a preliminary issue hearing.
In the circumstances, it is not surprising that State Farm filed no material to show that the assessments were reasonable and necessary. I find that, in agreeing that she would attend and in maintaining that position, Mrs. Kostynyk conceded that the assessments were reasonable and necessary. Allowing Mrs. Kostynyk to reverse that position during argument of the motion denies State Farm the opportunity to respond to it and renders the process unfair.
In any event, I find that State Farm’s assessments are reasonable and necessary. Ramalingam and Gonsalves establish that an insurer has a prima facie right to require an insured person to be assessed, upon a change in the test for entitlement. Nothing in the record rebuts that presumption.
If State Farm’s rescheduling of its assessments could be seen as a concession that the dates conflicted with assessments Mrs. Kostynyk had arranged, the concession was made without knowing the dates of those assessments. In fact, Mrs. Kostynyk’s assessments did not conflict with State Farm’s. Mrs. Kostynyk’s earliest scheduled assessment was for March 4, 2009. That did not conflict with the assessments State Farm initially scheduled for December 2008. Nor did it conflict with the rescheduled assessments, the last of which was scheduled for February 4, 2009. Mrs. Kostynyk had a month to recover between assessments. If she believed that she required more time, the more reasonable approach was to attend State Farm’s assessments and postpone her own. Mrs. Kostynyk’s argument that State Farm’s assessments are not necessary because they duplicate her own is unreasonable in the circumstances of her failure to attend the assessments that were scheduled long before her own.
State Farm did not lose its right to pursue the assessments by not unilaterally scheduling new dates after the pre-hearing. Having already twice cancelled assessments because of claimed inconvenience, and having Mrs. Kostynyk’s agreement to attend if the assessments were again rescheduled, it was reasonable for State Farm to seek Mrs. Kostynyk’s co-operation before scheduling new dates. In the circumstances, State Farm reasonably interpreted Mrs. Kostynyk’s failure to co-operate as rescinding her agreement to attend.
State Farm first sought these assessments as early as it could. They have not taken place as a result of Mrs. Kostynyk’s unreasonable conduct. State Farm took timely steps to have this motion heard. If the hearing proceeds on October 24, 2011 without the opinions from the proposed assessments, Mrs. Kostynyk will have the unfair advantage being able to rely on the opinions from her assessments, with State Farm not being able to respond. State Farm bears no blame for the fact that it is unlikely that the hearing will proceed on that date, if the assessments are now again scheduled.
I conclude that the arbitration should be stayed, pending Mrs. Kostynyk’s attendance at the proposed assessments. In order to ensure that State Farm acts promptly, I have ordered that Mrs. Kostynyk may move for an order lifting the stay, should State Farm not schedule the assessments within 90 days of the date of this decision.
EXPENSES:
The decision on expenses of this motion is reserved to the hearing Arbitrator. If the parties settle the arbitration, but are unable to agree on expenses of the motion, either party may request that I decide the issue as set out in Rule 79 of the Dispute Resolution Practice Code.
September 28, 2011
Jeffrey Rogers Arbitrator
Date
Financial Services Commission of Ontario
Neutral Citation: 2011 ONFSCDRS 83 FSCO A09-003158
BETWEEN:
KATHERINE KOSTYNYK Applicant
and
STATE FARM MUTUAL AUTOMOBILE 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:
It is reasonable and necessary for State Farm to require Mrs. Kostynyk to attend an In-Home assessment by Jeff Ford, a psychological assessment by Dr. Bodenstein and an orthopaedic assessment by Dr. Hercia, pursuant to section 42 of the Schedule.
This arbitration is stayed pending Mrs. Kostynyk’s attendance.
Mrs. Kostynyk may move to lift the stay, if State Farm does not schedule the assessments within 90 days of the date of this decision.
The decision on expenses of this motion is reserved to the hearing Arbitrator. If the parties settle the arbitration, but are unable to agree on expenses of the motion, either party may request that I decide the issue as set out in Rule 79 of the Dispute Resolution Practice Code.
September 28, 2011
Jeffrey Rogers Arbitrator
Date
Footnotes
- The Statutory Accident Benefits Schedule - Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended.
- 2009 ONSC 44115
- 2011 ONSC 3986