Security National Insurance Co. / Monnex Insurance Mgmt. Inc. v. Manos Hodges, 2012 ONFSCDRS 124

Financial Services Commission of Ontario

Neutral Citation: 2012 ONFSCDRS 124

Appeal P12-00029

OFFICE OF THE DIRECTOR OF ARBITRATIONS

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

and

MANOS HODGES Respondent

BEFORE: Delegate Lawrence Blackman

REPRESENTATIVES: Ms. Linda Matthews and Ms. L. Hodgins for the Appellant, Security National Insurance Co./ Monnex Insurance Mgmt. Inc. Ms. Tammy Ring and Mr. Marc A. Flisfeder for the Respondent, Mr. Manos Hodges

HEARING DATE: By written submissions received by July 23, 2012. Brief telephone conference calls were held July 20 and August 9, 2012

PRELIMINARY APPEAL ORDER

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

1. Pursuant to Rule 51.2(c) of the Dispute Resolution Practice Code (Fourth Edition, Updated − August 2011), this appeal from the Arbitrator’s May 22, 2012 decision on a preliminary issue is presently rejected.

2. If the parties are unable to agree on the legal expenses of this present appeal, pursuant to Rule 79 of the Code an expense hearing shall be requested, as set out below, within thirty days of the date of this decision.

August 13, 2012

Lawrence Blackman Director’s Delegate

REASONS FOR DECISION

I. NATURE OF THE APPEAL AND BACKGROUND

As a result of injuries sustained in an August 5, 2009 motor vehicle accident, the Respondent, Mr. Manos Hodges, applied to his first-party insurer, the Appellant, Security National Insurance Co./Monnex Insurance Mgmt. Inc., for statutory accident benefits payable under the Schedule.¹

The Respondent submits he has sustained a catastrophic impairment as defined in subparagraph 2(1.2)(e)(i) of the Schedule, namely, brain impairment that, in respect of an accident, results in “a score of 9 or less on the Glasgow Coma Scale ... according to a test administered within a reasonable period of time after the accident by a person trained for that purpose.”

An insured person who has sustained a catastrophic impairment is eligible for an enhanced level of statutory benefits. However, as held by the Divisional Court in Liberty Mutual Insurance Company and Young, 2006 CanLII 7286 (ON SCDC), [2006] O.J. No. 952:

It is recognized that the finding of catastrophic impairment does not imply a right to enhanced benefits; it simply does not exclude from consideration for those benefits those persons who meet the s. 2(1.1)(e)(i) definition of catastrophic impairment whose cases then go on to be considered on reasonable and necessary tests.

The Appellant argues that the Respondent does not meet the threshold test under subparagraph 2(1.2)(e)(i) for catastrophic impairment.

In his May 22, 2012 decision, Arbitrator Renahan (the “Arbitrator”) held that the Respondent had suffered a catastrophic impairment within the meaning of subparagraph 2(1.2)(e)(i). The Arbitrator found that the Respondent had sustained brain impairment as a result of the accident. The Arbitrator was not satisfied that a GCS (Glasgow Coma Scale) of 3 early on August 6, 2009, when the Respondent was intubated, satisfied subparagraph 2(1.2)(e)(i), as all three domains of the GCS were untestable and the score was simply notional.

However, the Arbitrator found that on three occasions on August 9, 2009, a nurse, trained for that purpose, had determined a GCS of 9 for the Respondent while the latter was on sedatives and pain killers having the side effect of reducing his level of consciousness. A CT scan had identified that the Respondent had bleeding in his head. The Arbitrator found that it was reasonable to employ the GCS test to determine whether the area of bleeding had shrunk or grown. The Arbitrator held that the GCS testing was administered within a reasonable period after the accident.

The Appellant submits that the Arbitrator erred in law, as follows:

1. GCS scores taken after the Respondent was administered consciousness-lowering medication are not valid in determining catastrophic impairment. In accordance with Liu v. 1226071 Ontario Inc., 2009 ONCA 571, [2009] O.J. No. 3014 (C.A.), it is a brain injury that must result in a GCS score of 9 or less. In the present case, Dr. H. Berry testified that multiple extraneous factors relating to treatment of the Respondent’s orthopaedic and internal injuries likely contributed to the August 9, 2009 GCS scoring of 9.

The Arbitrator further erred in finding there was no reliable evidence as to the level of consciousness-lowering medicine in the Respondent’s body or how that affected his GCS scores. Siegel v. Ontario (Director, Disability Support Program), [2011] O.J. No. 5385, (Div. Ct.), holds that an error of law includes a misapprehension of relevant evidence and/or a failure to consider or appreciate the significance of relevant evidence.

2. The Arbitrator erred in law in concluding that GCS scores taken more than four days following the accident was “a reasonable period of time after the accident,” as required under subparagraph 2(1.2)(e)(i).

The legislative intent, the Appellant submits, is to ensure that GCS scores with virtually no prognostic value in respect of brain impairment are not used to determine catastrophic impairment. Rather than determining whether the August 9, 2009 GCS scores were recorded within a reasonable period after the accident, the Arbitrator incorrectly considered whether it was reasonable to have recorded GCS scores that day.

Dr. Berry testified that after 24 hours from an initial injury there are better prognostic tools to determine brain impairment. The Arbitrator failed to consider that the CT scan and MRI taken a few days after the accident confirmed that the Respondent’s brain injury was improving. The lower GCS scores in question were better explained by other factors, including medication. GCS scores with limited prognostic value, similar to scores taken while one is intubated, are invalid as they offer zero prognostic value and cannot be considered to be taken “within a reasonable period of time after the accident.”

The Appellant requests that this appeal from a preliminary arbitration order be accepted at this time, for the following reasons:

1. The merits of the appeal are strong. As stated in Economical Mutual Insurance Company and Jaggernauth, (FSCO P11-00002, March 4, 2011), “… if catastrophic impairment is deemed to be within the sphere of preliminary procedural or collateral matters, it is at the more substantive end of that range.” Further citing Jaggernauth:

Similar to limitation questions of whether there was an accident as defined in the Schedule, catastrophic impairment is an all or nothing issue. If designated catastrophically impaired, an insured may proceed to have his or her entitlement to a higher threshold of benefits determined. If found not to be catastrophically impaired, that door is sealed shut.

2. The appeal addresses unsettled areas of law respecting the implications of consciousness-lowering medications on the validity of GCS scores in determining catastrophic impairment under subparagraph 2(1.2)(e)(i), as well what constitutes a reasonable period of time after the accident.

3. Receiving the appeal will not prejudice the Respondent. The Appellant is not seeking a stay of the Arbitrator’s Order. Granting leave will not limit any available benefits.

4. The Appellant has complied with the Arbitrator’s order, having paid the Respondent $30,000 in attendant care benefits representing the period December 2009 to September 2010 at the $3,000 a month difference between the non-catastrophic and catastrophic limits. The Appellant’s subsequent monthly attendant care payments of $193.23 are not based on any disregard of the Arbitrator’s order but on the most recent Form 1, received from Ms. T. Shaw of Sibley & Associates.

5. Resolving this preliminary issue prior to arbitrating the benefits in dispute provides certainty to both parties.

The Respondent submits that this appeal should not be accepted, in part, because:

1. The issues raised by the Appellant are questions of fact or mixed fact and law, rather than errors of law as required by subsection 283(1) of the Insurance Act.

2. The Arbitrator was not required to assess the CT and MRI results, as they are not mentioned in subparagraph 2(1.2)(e)(i) of the Schedule.

3. An arbitration hearing is scheduled for October 15 to 18, 2012. If leave is granted for this appeal to be presently heard, it will almost certainly force the arbitration to be adjourned. This delay will prejudice the Respondent.

4. The Appellant has failed to pay interest on the benefits previously withheld and is not paying the proper ongoing attendant care benefits.

II. ANALYSIS

Rule 50.2 of the Dispute Resolution Practice Code (Fourth Edition, Updated − August 2011) (the “Code”), provides that, unless ordered otherwise, 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. Rule 51.2(c) of the Code states that an appeal may be rejected if it is from a preliminary or interim order that does not finally decide the issues in dispute.

As set out in Allstate Insurance Company of Canada and Tesfay, (FSCO P99-00023, June 21, 1999), Allstate Insurance Company of Canada and Al-Obaidi, (FSCO P99-00009, May 2, 2000) and Allstate Insurance Company of Canada and Torok, (FSCO P01-00021, May 29, 2001), the decision whether to hear an appeal from a preliminary or interim order is discretionary. The relevant criteria include:

(a) the apparent strength of the appeal;

(b) the importance or novelty of the issue(s) raised;

(c) whether rejecting or hearing the appeal will prejudice either party;

(d) the preference of the parties;

(e) whether the arbitration decision represents a departure from prior cases; and,

(f) whether rejecting or hearing the appeal would provide the quickest, most just and least expensive way of disposing of the issues between the parties.

I am not persuaded to exercise my discretion to accept this appeal at the present time for the following reasons:

1. The interpretation and application of subparagraph 2(1.2)(e)(i) of the Schedule are important issues. However, the issues raised in this appeal are not novel. The question of what is a reasonable time after the accident was addressed by the Court of Appeal in Liu. The Court held that it is a legal definition to be met by a claimant, not a medical test, and “the fact that there may have been other higher scores also within a reasonable time after the accident is irrelevant.”

The timing of the scoring was also addressed in Young by the Divisional Court that found that the arbitrator “correctly held that the issue of ‘reasonable period of time after the accident’ requires a case-by-case analysis and that the expert evidence called by the applicant, though undeniably from a well-experienced and able source, did not and could not act as a substitute for the finding which the tribunal had to make on all the evidence.”

The issue of what was referred to as “confounding factors” was addressed by Delegate Evans in Liberty Mutual Insurance Company and Young, (FSCO P03-00043, June 20, 2005), upholding Arbitrator Allen in Young and Liberty Mutual Insurance Company, (FSCO A02-000695, November 14, 2003). Delegate Evans stated, in part:

… “catastrophic impairment” means brain impairment that, in respect of an accident, results in a score of 9 or less on the Glasgow Coma Scale. None of the other provisions of the definition require a forecast of the insured’s future condition, so it is unclear why a forecast should be part of the GCS test. The definition on its face requires that the low scores result from a brain impairment, and accordingly the “reasonable period of time” requirement focuses on that point and not on a forecast. [emphasis in the original]

Delegate Evans further stated:

However, as always, the issue is whether a brain impairment led to a low score. If, instead, something else such as extensive bleeding led to a low score, then that would not be as a result of a brain impairment, so the person would not pass the test. [emphasis in the original]

Delegate Evans went on to consider the decision of Keenan J. in Holland v. Pilot Insurance Co., [2004] O.J. No. 2737, where the issue was whether the presence of alcohol and drugs distorted and rendered unreliable a GCS reading. Delegate Evans agreed with the sentiments of Arbitrator Allen and Keenan J. that it was not necessary to read the terms “valid and reliable” into the legislation, which essentially meant ignoring a GCS score if it was affected in any way by possible confounding factors. The definition was already strict. Adding in those words would raise the bar to an impossible level.

2. In addition to the lack of novelty of the issues raised in this appeal, determining catastrophic impairment in this present case does not have the potential of finally deciding all of the substantive issues in dispute.

The issues confirmed in the May 26, 2011 pre-hearing letter include entitlement to weekly non-earner benefits (NEBs) of $185 ongoing from February 5, 2010, weekly housekeeping benefits of $100 ongoing from August 5, 2009 and various medical benefits. Catastrophic impairment is not a prerequisite to NEB entitlement. Weekly housekeeping benefits up to 104 weeks after the onset of the disability do not require a finding of catastrophic impairment, nor do medical expenses up to $100,000.

3. Hearing this appeal at this time prejudices the Respondent. In Jaggernauth, I accepted an appeal from a preliminary arbitration decision regarding catastrophic impairment, stating:

Cognizant of the present debate regarding the broad ranging, important issue of catastrophic impairment and the value of moving the issues raised in this appeal forward expeditiously, I am persuaded that it is sensible that this appeal be heard at this time rather than waiting for the decision on housekeeping and attendant care entitlement following a final arbitration hearing, yet to be set. [Emphasis added]

A final, substantive arbitration hearing date in this case has been set and, as confirmed by counsel, remains scheduled for October 15 to 18, 2012. Pursuant to Rules 39.1, 40.1, 41.1 and 41.3 of the Code, service of any documentary evidence as well as confirmation and notification of witnesses must be completed by September 14, 2012, a month hence. With any remaining appeal written submissions to be finalized, an oral appeal hearing to be set, oral submissions heard and an expeditious but reasonable time line to write the appeal decision, this appeal, if presently accepted, is unlikely to be completed such as to allow the arbitration hearing to proceed as scheduled.

The present arbitration hearing date was set in October 2011, when the preliminary arbitration hearing was initially to have been heard. At the same time, the preliminary issue arbitration hearing was adjourned to April 2012, when the main arbitration hearing was initially to have been held. The purpose of this bifurcated arbitration hearing process throughout would seem to have been to move seamlessly from the preliminary issue to the question of substantive entitlement.

While the Appellant does not seek a stay of the Arbitrator’s order, it sees the arbitration as being put on hold until this appeal is determined. Based on the arbitration hearing dates previously set, one would be realistically looking at a delay of the arbitration of ten months or more, that is, six months from the release of the appeal decision.

The Schedule is a first-party, statutory policy of automobile insurance. It provides a range of possible benefits from medical/rehabilitation to various weekly benefits that may allow for a level of replacement or new services, or a level of compensation for lost earnings. For such benefits, time is of the essence. Early intervention, early access to treatment and assistance and an early, sustainable return to one’s pre-accident life, while avoiding an insured person’s economic ruin in the interim, are legislative goals.

To facilitate these goals, an alternative system of dispute resolution at the Commission was created to provide a meaningful alternative to the courts in a more expeditious, less expensive, more expert, less complicated and, as a result, more just resolution of first-party disputes over entitlement to and the quantum of statutory accident benefits.

As stated by Arbitrator Wilson in Akehurst and Aviva Canada Inc., (FSCO A06-001680, March 27, 2006), citing Delegate Naylor in Sebastian and Canadian Surety Company, (FSCO P96-00032, July 28, 1998), this accident benefit system’s fundamental goal is ensuring “prompt payment of benefits for an injured person’s medical and vocational rehabilitation, their care or their day-to-day financial support” by encouraging the parties to adhere to the Commission’s goal of providing timely hearings and early awards.

Under subsection 282(1) of the Insurance Act, only an insured person may commence an arbitration proceeding. As stated in Saini and CIBC General Insurance Company Ltd., (OIC A96-001752, July 8, 1997), “Arbitrators have held that an applicant is entitled to some control over the process.” Accordingly, recognition in this case should be given to the Respondent’s request that the arbitration hearing proceed, notwithstanding that the Arbitrator’s finding of catastrophic impairment may be ultimately overturned and the Respondent may be liable to return certain benefits otherwise found owing, or may be responsible for certain legal expenses.

I do not control the arbitration hearing. I do have the power to determine the quickest, most just and least expensive resolution of this appeal. In the circumstances of this case, specifically with a longstanding final substantive arbitration hearing presently pending less than ten weeks hence, I am not persuaded to exercise my discretion and vary from the starting point of Rule 50.2 of the Code, that a party may not appeal a preliminary or interim order of an arbitrator until all of the issues in dispute have been finally decided. I stress that I have not disallowed but have simply postponed the hearing of this appeal.

IV. EXPENSES

If the parties are unable to agree on the legal expenses of this present appeal, restricted to whether this appeal should be presently accepted, pursuant to Rule 79.2 of the Code an expense hearing shall be requested within thirty days of the date of this decision. The request shall be accompanied by a Bill of Costs describing the expenses claimed, the services received and the costs, as well as written submissions regarding entitlement to and/or the quantum of legal expenses, as are in dispute.

August 13, 2012

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.