Neutral Citation: 2014 ONFSCDRS 168 FSCO A12-006193

BETWEEN:

MIKHAIL GARMIDER Applicant

and

CO-OPERATORS GENERAL INSURANCE COMPANY Insurer

DECISION ON A PRELIMINARY ISSUE

Before: Arbitrator Maggy Murray Heard: April 9, 2014, at the offices of the Financial Services Commission of Ontario in Toronto. Telephone conference on July 14, 2014. Written submissions completed July 22, 2014.

Appearances: Mr. Garmider appeared on his own behalf Bruce A. Keay for Co-operators General Insurance Company

Issues:

Mikhail Garmider was injured in a motor vehicle accident on June 8, 2009. He applied for statutory accident benefits from Co-operators General Insurance Company (“Co-operators”), payable under the Schedule.¹ Co-operators refused to pay various benefits. The parties were unable to resolve their disputes through mediation, and Mr. Garmider applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

The preliminary issues are:

Is Mr. Garmider precluded from proceeding to an arbitration hearing on the Treatment Plan of Evident Diagnostics dated March 2, 2010 in the amount of $7,877.47² because he failed to mediate or arbitrate within the time frame set out in section 56 of the Schedule?
Is Mr. Garmider precluded from proceeding to an arbitration hearing on the Treatment Plan of Top Rehab dated July 8, 2010 in the amount of $1,999.92³ because he failed to mediate and arbitrate within the time frame set out in section 56 of the Schedule?
Is Mr. Garmider precluded from proceeding to an arbitration hearing because he failed to attend Insurer Examinations pursuant to section 44 of the Schedule?
Is either party entitled to its expenses of this preliminary issue hearing?

Result:

Mr. Garmider is not precluded from proceeding to arbitration on the Treatment Plan of Evident Diagnostics dated March 2, 2010 in the amount of $7,877.47.
Mr. Garmider is not precluded from proceeding to arbitration on the Treatment Plan of Top Rehab dated July 8, 2010 in the amount of $1,999.92.
This issue was adjourned. The parties agreed that if Mr. Garmider does not attend the Insurer examinations that are currently scheduled for May 2014, the Insurer will request that the hearing be stayed.
If the parties are unable to agree on the issues of entitlement to or amount of the expenses, they may make submissions on both issues in accordance with Rule 79 of the Dispute Resolution Practice Code — Fourth Edition within sixty days of the date of this decision.

EVIDENCE AND ANALYSIS:

These proceedings were interpreted in Russian by Ms. Mary Jakovceva of Able Translations.

Procedural Issues:

The Financial Services Commission of Ontario’s letter to the parties dated December 17, 2013 outlining the issues in dispute in this preliminary issue hearing did not include the Treatment Plan of Top Rehab dated July 8, 2010 in the amount of $1,999.92. The Insurer requested at the outset of this hearing that this issue be dealt with in this hearing. I gave the Applicant the choice of either adjourning this proceeding for at least 30 days so that he could prepare for this issue to be addressed along with the Treatment Plan in the amount of $7,877.47, or proceeding on the hearing date with both Treatment Plans. The Applicant chose to proceed with the hearing on the issues of both Treatment Plans because he did not want this proceeding adjourned.

The issues addressed in the within proceeding were not dealt with in the previous hearing held on July 30, 2013 because the Applicant did not have Notice that the Insurer was raising these issues.

Following the within hearing, I requested that a telephone conference be convened. I asked the parties to provide me with the Application for Mediation and the Report of Mediator for the issues herein because neither were provided at the hearing.

Each party provided me with this information which was contained in their respective Affidavits. Mr. Garmider’s Affidavit was not in the correct format. Despite this, I relied on the Exhibits contained therein because he is not represented by either a lawyer or a licensed paralegal, nor is he a lawyer knowledgeable about procedural matters. The Application for Mediation that the Applicant filed for use on this proceeding is date stamped as received at FSCO on April 26, 2011 and does not contain the issue of Top Rehab’s Treatment Plan as an issue in dispute.

The Application for Mediation that the Insurer filed for use on this proceeding is date stamped as received at FSCO on July 16, 2012 but contains the issue of Top Rehab’s Treatment Plan as an issue in dispute. I relied on the Report of Mediator from the Applicant when addressing the issue of the Treatment Plan of Evident Diagnostics. The parties served each other with their respective Affidavits, and neither party objected to use of the other party’s material. I relied on the Report of Mediator from the Insurer when addressing the issue of the Treatment Plan of Top Rehab.

Witnesses:

Mr. Garmider testified on his own behalf and called no other witnesses. Co-operators did not call any witnesses but filed the Affidavit of Maria Keramaris-Siomis, an accident benefits claims representative with Co-operators, who handled Mr. Garmider’s file.

Background:

Mr. Garmider claims entitlement to the Treatment Plan of Evident Diagnostics dated March 2, 2010 in the amount of $7,877.47 and the Treatment Plan of Top Rehab dated July 8, 2010 in the amount of $1,999.92. Co-operators argued that Mr. Garmider could not proceed to arbitration on these issues because they were commenced more than two years after these benefits were denied by the Insurer.

Parties’ Positions:

According to Mr. Garmider, he applied for all benefits on time and submitted all documents to Co-operators on time.

Co-operators’ position is that Mr. Garmider applied for arbitration more than two years after it denied the Treatment Plan of Evident Diagnostics dated March 2, 2010 in the amount of $7,877.47 and the Treatment Plan of Top Rehab dated July 8, 2010 in the amount of $1,999.92 and that he missed the limitation period specified in section 281.1 of the Insurance Act and s.56 of the Schedule.

Dates:

Co-operators’ letter of March 4, 2010⁴ notified Mr. Garmider of the Insurer's decision to deny payment for the Treatment Plan of Evident Diagnostics. Following Mr. Garmider’s attendance at an Insurer’s Examination, Co-operators’ letter of April 23, 2010⁵ to Mr. Garmider maintained its denial of payment for the Treatment Plan of Evident Diagnostics.

Co-operators’ letter of July 9, 2010⁶ notified Mr. Garmider of the Insurer's decision to deny payment for the Treatment Plan of Top Rehab. Following Mr. Garmider’s attendance at an Insurer’s Examination, Co-operators’ letter of August 16, 2010⁷ to Mr. Garmider maintained its denial of payment for the Treatment Plan of Top Rehab.

Mr. Garmider’s first Application for Mediation containing Evident Diagnostics Treatment Plan was filed with FSCO on April 26, 2011.⁸ A second Application for Mediation containing the Treatment Plan of Top Rehab was filed with FSCO on July 16, 2012.⁹

The Report of Mediator¹⁰ in this matter is dated October 11, 2012.¹¹ It states that mediation has failed in respect of both the Treatment Plan of Evident Diagnostics dated March 2, 2010¹² in the amount of $7,877.47 and the Treatment Plan of Top Rehab dated July 8, 2010¹³ in the amount of $1,992.92.

On October 16, 2012,¹⁴ five days after the Mediator issued her Report of Mediator, Mr. Garmider filed his Application for Arbitration with the Financial Services Commission with respect to the Treatment Plans of Evident Diagnostics dated March 2, 2010 in the amount of $7,877.47 and the Treatment Plan of Top Rehab dated July 8, 2010 in the amount of $1,992.92. Both the Treatment Plan of Evident Diagnostics and the Treatment Plan of Top Rehab are listed as unresolved.

Law:

The onus is on the Insurer to establish that the Applicant received the proper notice of termination from the Insurer.

Section 56 of the Schedule¹⁵ provides that a mediation, court or arbitration proceeding must be commenced within two years after the Insurer’s refusal to pay the amount claimed.

Section 281.1(1) of the Insurance Act states:

(1) A(n)… arbitration under section 281 shall be commenced within two years after the Insurer's refusal to pay the benefit claimed (emphasis added).

(2) Despite subsection (1), a proceeding or arbitration … may be commenced,

(b) …within 90 days after the mediator reports to the parties under subsection 280 (8) (emphasis added).

Subsection 281(5) of the Insurance Act sets out the following limitation period:

A step authorized by subsection (1) must be taken within two years after the Insurer's refusal to pay the benefit claimed or within such longer period as may be provided in the Statutory Accident Benefits Schedule (emphasis added).

Section 281.1(2)(b) of the Insurance Act allows for the extension of the limitation period by a further 90 days from the date of the Report of Mediator. As stated above, Mr. Garmider filed his Application for Arbitration with the Financial Services Commission with respect to this accident on October 16, 2012.

By letter dated April 23, 2010,¹⁶ Co-operators advised Mr. Garmider that it “determined that the Treatment Plan (of Evident Diagnostics) dated March 2, 2010 is not reasonable and necessary…” On Part 6 of form “OCF-9” “Explanation of Benefits” dated April 23, 2010,¹⁷ under the heading “Applicant's Rights to Dispute”, Co-operators advised Mr. Garmider that he had two years from the Insurer’s refusal to pay for this Treatment Plan to apply for mediation at the Financial Services Commission and to arbitrate or commence a lawsuit.

In Smith v. Co-operators General Insurance Co.,¹⁸ the Supreme Court described the Insurer's obligations to claimants when it refuses to pay benefits. Among other things, the Insurer is obliged to inform the claimant of the dispute resolution process in a clear, straightforward manner, directed towards an unsophisticated person in layman’s language.

Although Mr. Garmider did not raise the adequacy of the refusal, I find that Co-operators complied with its obligation to inform Mr. Garmider of his right to dispute its refusal with respect to the Treatment Plan of Evident Diagnostics dated March 2, 2010 in the amount of $7,877.47. Specifically, the OCF-9 in relation to the Treatment Plan of Evident Diagnostics clearly advised Mr. Garmider of the two year time limit. This Notice complies with the notice requirements in Smith v. Co-operators.¹⁹

I am satisfied that Co-operators’ letters of March 4, 2010²⁰ and April 23, 2010,²¹ which the Applicant testified that he received, provided adequate notice of the Insurer’s decision to deny payment for the Treatment Plan of Evident Diagnostics.

Mr. Garmider filed his Application for Mediation with respect to the Treatment Plan of Evident Diagnostics dated March 2, 2010 in the amount of $7,877.47 on April 26, 2011,²² which is less than two years after Co-operators notified him that it would not pay for it. The Report of Mediator notifying the parties that this issue was not resolved at mediation is dated October 11, 2012.

On April 23, 2010, the Insurer refused to pay for the Treatment Plan of Evident Diagnostics. On April 26, 2011, one year and three days later, Mr. Garmider filed an Application for Mediation with FSCO. This is within two years of the Insurer’s refusal to pay this benefit. It lists as an issue in dispute the cost of the Treatment Plan of Evident Diagnostics in the amount of $7,877.47.²³ The Report of Mediator that lists the Treatment Plan of Evident Diagnostics as having failed is dated October 11, 2012.²⁴ On October 16, 2012,²⁵ five days following the date of the Report of Mediator, Mr. Garmider filed his Application for Arbitration in respect of the Treatment Plan dated March 2, 2010 of Evident Diagnostics in the amount of $7,877.47.

Therefore, Mr. Garmider filed his Application for Arbitration within two years of the Insurer’s refusal to pay this benefit and within 90 days after the mediator reported to the parties on the outcome of the mediation. The limitation period for Mr. Garmider to proceed to arbitration on the Treatment Plan of Evident Diagnostics in the amount of $7,877.47 has not expired.

By letters dated July 9, 2010²⁶ and August 16, 2010,²⁷ Co-operators advised Mr. Garmider that it “determined that the Treatment Plan (of Top Rehab) dated July 8, 2010 is not reasonable and necessary …”

On Part 6²⁸ of form “OCF-9” “Explanation of Benefits” dated August 16, 2010,²⁹ under the heading “Applicant’s Rights to Dispute”, Co-operators advised Mr. Garmider that he had two years from the Insurer’s refusal to pay the benefit claimed and apply for mediation at the Financial Services Commission and that he had two years from the Insurer’s refusal to pay to arbitrate or commence a lawsuit.

Although Mr. Garmider did not raise the adequacy of the refusal, I find that Co-operators complied with its obligation to inform Mr. Garmider of his right to dispute its refusal with respect to the Treatment Plan of Top Rehab dated July 8, 2010 in the amount of $1,999.92. Specifically, the OCF-9 in relation to the Treatment Plan of Top Rehab clearly advised Mr. Garmider of the two year time limit.

I am satisfied that Co-operators’ letters of July 9, 2010³⁰ and August 16, 2010,³¹ which the Applicant testified that he received, provided adequate notice of the Insurer’s decision to deny the benefits. These Notices comply with the notice requirements in Smith v. Co-operators.³²

In Kirkham v. State Farm Mutual Automobile Insurance Company,³³ it was found that the Insurer’s refusal is the “triggering event” and an insured who wants to pursue a claim must commence a proceeding within two years of the Insurer’s refusal to pay, or the claim is statute-barred. The limitation period began to run on August 16, 2010 and Mr. Garmider was required to file his Application for Mediation or Application for Arbitration within two years of August 16, 2010, pursuant to Francis and Allstate Insurance Co. of Canada.³⁴

A second Application for Mediation³⁵ was filed by Mr. Garmider. It is date stamped as received at FSCO on July 16, 2012. It lists as an issue in dispute the Treatment Plan of Top Rehab in the amount of $1,992.92. This is within two years of the Insurer’s refusal to pay this benefit, which was on August 16, 2010. The Report of Mediator that lists the Treatment Plan of Top Rehab as having failed is dated October 11, 2012.³⁶

Five days later, on October 16, 2012, Mr. Garmider filed his Application for Arbitration for the Treatment Plan of Top Rehab dated July 8, 2010 in the amount of $1,992.92. This is within 90 days of the Mediator reporting to the parties that the issue was not resolved. Therefore, Mr. Garmider filed his Application for Arbitration within two years of the Insurer’s refusal to pay this benefit and within 90 days after the mediator reported to the parties on the outcome of the mediation.

Consequently, the limitation period for filing an Application for Arbitration for both the Treatment Plans of Evident Diagnostics dated March 2, 2010 and Top Rehab dated July 8, 2010 has not expired.

EXPENSES:

If the parties cannot agree on the issues of entitlement to or amount of expenses, they may make submissions on both issues in accordance with Rule 79 of the Dispute Resolution Practice Code — Fourth Edition within sixty days of the date of this decision.

October 15, 2014

Maggy Murray Arbitrator

Financial Services Commission of Ontario