Financial Services Commission des

Commission services financiers

of Ontario de l’Ontario

Neutral Citation: 2013 ONFSCDRS 155

FSCO A12-001507

BETWEEN:

RYAN BOWLER

Applicant

and

PAFCO INSURANCE COMPANY

Insurer

Before: Alec Fadel

Heard: August 19, 20, 21, 22, 2013, in Hamilton, Ontario.

Appearances: J. David Murphy for Mr. Bowler Ryan M. Naimark for Pafco Insurance Company

Issues:

Ryan Bowler, the applicant, was injured in a motor vehicle accident on January 29, 2008. He applied for and received statutory accident benefits from Pafco Insurance Company (“Pafco”), payable under the Schedule.¹ A dispute arose concerning Mr. Bowler’s entitlement to two benefits. He claims he is entitled to the cost of an orthopaedic mattress as a result of ongoing back pain from injuries he sustained in the accident. He is also claiming the cost of retraining which includes tuition, rent, books and other university-related expenses. He claims he is entitled to the cost of retraining to be a teacher because he can no longer fulfill his goal of becoming a police officer as a result of the injuries he sustained in the accident.

Pafco takes the position that a treatment plan was not provided for either of the claimed benefits before the expenses were incurred and therefore the items are not payable pursuant to subsection 38(1.1) of the Schedule. It also submits that neither of the subsequently received treatment plans was signed by the applicant and, pursuant to subsection 38(2), are not payable. In the alternative, the insurer argues that neither of the claimed benefits is reasonable or necessary.

Mr. Bowler suggests that I should overlook the procedural requirements in the Schedule since he substantially fulfilled most of what was required of him. He informed the insurer of the expense, he ultimately did submit a treatment plan (though in each instance after incurring the expense). He also claims that he was not represented by legal counsel in relation to his accident benefit claims at the time and should not be penalized for incurring the expense before submitting a treatment plan. In the alternative, he asks that I remedy the delivery of the treatment plan after the expense was incurred by relying on either section 31 of the Schedule, failure to comply with time limits, or section 129 of the Insurance Act, relief from forfeiture.

The parties were unable to resolve their disputes through mediation, and Mr. Bowler applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

The issues in this hearing are:

Is Mr. Bowler entitled to the cost of a mattress in the amount of $1,389.84?
Is Mr. Bowler entitled to $22,437.19 for retraining expenses?
Is Pafco liable to pay a special award?
Is Mr. Bowler entitled to interest for overdue payments?
Is either party entitled to their arbitration expenses?

Result:

Mr. Bowler is not entitled to the claimed cost of a mattress.
Mr. Bowler is not entitled to the claimed retraining expenses.
Pafco is not liable to pay a special award.
There is no order on the issue of expenses. I remain seized should the parties be unable to resolve this issue on their own.

EVIDENCE AND ANALYSIS:

I find that Mr. Bowler is not entitled to either the mattress or the retraining expense because he did not comply with the requirements of subsection 38(1.1) of the Schedule. This subsection reads:

An insurer is not liable to pay any expense in respect of medical benefits or rehabilitation benefits that was incurred before the insured person submits an application for the benefit that satisfies the requirements of subsection (2) unless the expense is for an ambulance or other goods or services provided on an emergency basis not more than five business days after the accident to which the application relates.

This section was amended on March 1, 2006, and prior to that date read as follows:

An insured person shall submit an application for a medical or rehabilitation benefit to the insurer before incurring any expense in respect of the benefit or an assessment or examination to which this section applies.

The legislative change clarifies that if an insured person submits an application before incurring the expense, “[a]n insurer is not liable to pay.”

Mattress Claim

Mr. Bowler was a front seat passenger of a Volkswagen Golf that was proceeding through an intersection when it collided head-on with a van going in the opposite direction and attempting to turn left. The evidence supports that this was a high-speed collision, with airbags deploying and a total loss for the Volkswagen. The applicant’s legs were trapped under the dashboard and in the midst of his panic he wedged his legs out and had to exit the car by crawling to the backseat. Mr. Bowler was 26 years old at the time of the accident.

The applicant attended at his family doctor, Dr. DeRubeis, three days after the accident on February 1, 2008 complaining of a sore left knee, and a sore neck, chest and shoulders. An x-ray taken of the cervical spine and the left knee were normal. The applicant missed four to five days of school and a shift at his weekend job at a gas bar. The applicant did not seek treatment immediately and testified that he intended to wait a while, not be as active and see if his pain went away on its own.

The pain persisted and the applicant’s back pain became worse after he took a job as a security guard that required a lot of walking. The applicant testified that in the summer of 2008 his major complaint was back and neck pain and that his knees also hurt with some throbbing. As his back pain worsened the applicant went to Dr. Smith, chiropractor, and an OCF-23 (Pre-approved Framework Treatment Confirmation form) dated August 29, 2008 was submitted to the insurer. This was denied on the basis that the applicant had not completed an OCF-1 (application for accident benefits), which was subsequently submitted on September 15, 2008. The applicant began and continues chiropractic treatment with Dr. Smith up to present.

The applicant testified that initially his family doctor suggested that a new mattress would be beneficial after he told his doctor he was having issues sleeping and waking with back pain. A medical note from Dr. DeRubeis dated September 8, 2009 suggested that the applicant “would benefit from a new othropedic [sic] mattress due to ongoing low back pain related to the MVA Jan/08.” The applicant faxed a cover letter and this note to Pafco along with a quote from Sleep Country for a mattress in the amount of $4,762.50. The applicant requested that the insurer advise whether or not this expense was acceptable under his benefits.

The insurer received this fax on November 17, 2009 and responded with a letter dated November 20, 2009 indicating that the mattress was not a medical treatment or expense. The letter also included a blank OCF-18 (treatment plan) requesting that the applicant complete same and indicated that an insurer’s examination may be required. The applicant testified that he did not complete the OCF-18 as he interpreted the accompanying letter to mean that a mattress would not be covered even if he did submit the form.

He purchased a new mattress on July 20, 2010 in the amount of $1,389.84. He did not submit a treatment plan for the mattress before he purchased it. He did subsequently submit a treatment plan along with a receipt from The Brick on October 28, 2010. The insurer did not respond.

I find the applicant to be credible on his own behalf. The evidence supports that he had ongoing complications from this accident made more difficult with a busy, physical schedule.

The mattress was purchased in July 2010 and it was 3 months later that the insurer received a treatment plan for it. It was approximately 8 months from the time the applicant received Pafco’s letter to the time he actually purchased the mattress. I agree that the letter from the insurer dated November 20, 2009 is confusing where it states “a mattress is not considered medical treatment or a medical expense.” This letter was responding to the applicant’s inquiry if a mattress was a covered benefit. However, the insurer’s letter continues with the information that a treatment plan had to be submitted and an insurer’s examination may be required to determine if the mattress was reasonable and necessary.

In that time he chose not to submit a treatment plan for the mattress on the assumption that it would be denied. I find that Pafco did not have to specifically inform the applicant that he could not incur the expense before submitting the treatment plan or it would not be payable. At the time he purchased the mattress, the applicant was aware that Pafco required a treatment plan and may also have required an insurance examination in order to determine if the claim was reasonable and necessary. I find that the applicant chose not to pursue his claim for the mattress by not submitting a treatment plan. I also find that Pafco never waived the requirement that a treatment plan be provided. I cannot now find Mr. Bowler is entitled to payment for the mattress given the wording of section 38(1.1) of the Schedule.

Educational Expenses Claim

Mr. Bowler also seeks his educational expenses for a degree he is obtaining at Brock University. He is characterizing this is a rehabilitation benefit for retraining under section 15 of the Schedule.² This expense is composed of tuition, books, rent in the amount of $625 a month from August 2010 until the end of the school year, a computer and other school-related expenses. All of this, I am informed, relates to a treatment plan dated June 4, 2011. ³

Not only was the treatment plan purporting to deal with these expenses submitted almost a year after the first expense was incurred, it is also incomplete. The applicant did not sign the treatment plan. Also, one of the requirements of a treatment plan is that it actually set out the proposed goods and services. This enables an insurer to know what is being requested for funding so it can decide if an assessment is warranted and what, if any, goods or services it will approve. In this instance Part 12 of the plan, where the goods and services are proposed, was left completely blank.

The evidence supports that the tuition and other school expenses, submitted on an incomplete treatment plan dated June 4, 2011, were paid/purchased in and around August and September 2010, almost one year prior. The insurer is therefore not liable to pay for the expense pursuant to section 38(1.2) of the Schedule.

Failure to Comply with Time Limits

The applicant points to section 31 of the Schedule suggesting that I may remedy the late delivery of the treatment plans if the applicant provides a reasonable explanation. Section 31(1) states:

A person’s failure to comply with a time limit set out in this Part does not disentitle the person to a benefit if the person has a reasonable explanation.

As pointed out by the insurer, the caselaw provided by the applicant deals with the time limit for applying for accident benefits. I agree with the insurer and find that this section is not relevant in this instance given that the issue before me deals with section 38(1.1). The issue in this case concerns a time limit, but deals specifically with the order of doing things. In this case the insurer is not liable if an expense is incurred before the treatment plan is submitted.

Relief from Forfeiture

The applicant also argues that section 129 of the Insurance Act assists in granting relief to the applicant’s failure to provide a treatment plan prior to the expense being incurred. Section 129 of the Insurance Act states:

Where there has been imperfect compliance with a statutory condition as to the proof of loss to be given by the insured or other matter or thing required to be done or omitted by the insured with respect to the loss and a consequent forfeiture or avoidance of the insurance in whole or in part and the court considers it inequitable that the insurance should be forfeited or avoided on that ground, the court may relieve against the forfeiture or avoidance on such terms as it considers just.

The applicant presented no case law to suggest that this section is relevant to my consideration. The insurer referred to the Court of Appeal decision in Williams v. York Fire & Casualty Insurance Company⁴ where it was stated that,

Section 109 [now s. 129] gives the court power to relieve from such forfeiture or avoidance. But it is only in respect of such statutory conditions as to proof of loss or other matters or things that are required to be done or omitted with respect to the loss that the court has this power.

Further in paragraph 31 of Williams the Court stated:

[31] Section 129 does not give judges a broad discretion to "grant relief from forfeiture" generally where the conditions of an insurance policy are breached. To do so would grant the court power to alter the terms of a policy or conditions of coverage; this power was never envisioned by s. 129.

[33] The court's power under s. 129 is only in relation to things or matters required to be done, in relation to the loss, that is, after a loss has occurred. The discretion a court has under s. 129 is a narrow one pertaining only to those policy conditions -- statutory or contractual -- that relate to proof of loss. It does not apply generally to all policy conditions.

Accordingly, I find that section 129 of the Insurance Act is not relevant in this case.

EXPENSES:

The parties did not speak to the issue of expenses and I remain seized should they be unable to determine this issue on their own.

December 3, 2013

Alec Fadel Arbitrator

Date