Financial Services Commission of Ontario

Commission des services financiers de l'Ontario

Neutral Citation: 2015 ONFSCDRS 114

Appeal P15-00020

OFFICE OF THE DIRECTOR OF ARBITRATIONS

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY Appellant

and

MICHELE FUTRELL Respondent

BEFORE: Delegate Lawrence Blackman

REPRESENTATIVES: Mr. Sachin Kumar for the Appellant, State Farm Mutual Automobile Insurance Company Mr. Allen J. Wynperle for the Respondent, Ms. Michelle Futrell

HEARING DATE: By written submissions due May 22, 2015

PRELIMINARY APPEAL ORDER

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

1. The Appellant's request for a stay of Arbitrator Newland's January 29, 2015 Order is denied.

2. The legal expenses of this preliminary appeal order are deferred to the conclusion of this appeal, subject to any other or further order of an appellate officer.

May 29, 2015

Lawrence Blackman Director's Delegate

Date

REASONS FOR DECISION

I. NATURE OF THE PRELIMINARY APPEAL ISSUE AND ANALYSIS

This preliminary appeal decision pertains to whether the January 29, 2015 letter decision of Arbitrator Newland (the "Arbitrator") should be stayed, as requested by the Appellant.

Subsection 283(6) of the Insurance Act, R.S.O. 1990, c.I.8, provides that an appeal does not stay the order of the arbitrator, unless decided otherwise. In Guardian Insurance Company of Canada and Armstrong, (FSCO P00-00037, July 20, 2000), Delegate McMahon adopted the following criteria in determining whether a stay should be granted:

1. The bona fides of the appeal;
2. The substance of the grounds for appeal; and,
3. The hardship to the respective parties if the stay is granted or refused.

The Respondent, Ms. Michele Futrell, was injured in a November 13, 2010 motor vehicle accident. As a result, she sought first-party accident benefits under the 2010 Schedule¹ from her automobile insurer, the Appellant, State Farm Mutual Automobile Insurance Company.

The Respondent specifically sought attendant care benefits from the Appellant. Regarding such benefits, clause 19(1)(a) of the 2010 Schedule provides:

(1) Attendant care benefits shall pay for all reasonable and necessary expenses,

(a) that are incurred by or on behalf of the insured person as a result of the accident for services provided by an aide or attendant or by a long-term care facility … [Emphasis added]

The term "incurred" is defined in clause 3(7)(e) as:

(e) subject to subsection (8), an expense in respect of goods or services referred to in this Regulation is not incurred by an insured person unless,

(i) the insured person has received the goods or services to which the expense relates,

(ii) the insured person has paid the expense, has promised to pay the expense or is otherwise legally obligated to pay the expense, and

(iii) the person who provided the goods or services,

(A) did so in the course of the employment, occupation or profession in which he or she would ordinarily have been engaged, but for the accident, or

(B) sustained an economic loss as a result of providing the goods or services to the insured person; [Emphasis added]

The provision relevant to this appeal is subclause 3(7)(e)(iii)(B). The non-professional providing the goods or services was Mr. Martin Futrell, the Respondent's spouse. The sole issue for determination by the Arbitrator was whether the mileage and parking expenses sustained by Mr. Futrell in the course of his providing attendant care services to the Respondent constituted an economic loss within the meaning of subclause 3(7)(e)(iii)(B) of the 2010 Schedule.

The Arbitrator stated that Mr. Futrell testified that his wife was initially non-weight bearing after the accident and required the use of a wheelchair outside the home. She also had a driving phobia. Mr. Futrell drove the Respondent to her medical and rehabilitation appointments and provided attendant care during those trips, including assisting in transfers. The Arbitrator found that Mr. Futrell also provided transportation and transfer services for his wife to reintegrate her into the community in attending cultural events and social occasions such as visiting family.

The Arbitrator found the mileage and parking expenses were economic losses sustained by Mr. Futrell and "satisfy the threshold of economic loss required to make attendant care payable."

The standard Notice of Appeal form states that if a stay of the arbitration order is being sought, reasons should be given that are as complete as possible. The February 23, 2015 Notice of Appeal states that the Appellant is asking for a stay of the Arbitrator's order and references its "Schedule A." Schedule "A" devotes five brief paragraphs to the requested stay. Succinctly it states the parties agree that a hearing on the reasonableness of the amounts listed in the Form 1 Assessments of Attendant Care Needs is unnecessary. Therefore, a stay is sought of any order, express or implied, compelling payment of attendant care benefits pending the appeal hearing.

The March 16, 2015 Response to Appeal states that the parties agree that the principal amount outstanding for attendant care is $32,372.71. The only remaining disagreement is calculating the interest owing under the 2010 Schedule. The Respondent is content the appeal be heard prior to the Arbitrator determining the interest owed. My March 23, 2015 letter decision exercised my discretion under Rules 50.2 and 51.2(c) of the Dispute Resolution Practice Code (Fourth Edition, Updated – January 2014) (the "Code") to accept this appeal from an arbitration decision that does not finally decide all of the issues in dispute.

The Response to Appeal submits that the Appellant has the onus of establishing entitlement to a stay and that the Notice of Appeal is completely devoid of any evidence or submissions upon which a stay could be granted.

The Appellant had until April 16, 2015 to provide any reply submission regarding its requested stay. The Appellant did not provide such submissions. Rather, it filed submissions on the substance of its appeal without mentioning its stay request. My April 20, 2015 letter acknowledging receipt of the Appellant's materials stated:

I have not … received any reply submissions from the Appellant on its requested stay due April 16, 2015. I have not received any request for an oral hearing of this preliminary issue. I have not received any request for a time extension.

The Respondent's April 21, 2015 letter, however, provided further submissions opposing the requested stay. The Respondent asked that the time for filing her submissions be extended and that, if so allowed, the Appellant have an opportunity to respond.

The Respondent submits it is now four and a half years since her injury and she has not received any attendant care benefits. This has been a significant hardship to her. The Appellant, however, she submits has suffered no hardship from this delay. Rather, it has had the benefit of holding on to and investing for its own profit the Respondent's attendant care benefits for more than four years. The Appellant should receive no further benefit from its delay in paying these benefits.

My May 1, 2015 letter extended the time for the Respondent's stay submissions and allowed the Appellant until May 22, 2015 to provide any reply submissions. I also set dates for the remaining written submissions on the substantive appeal and an oral hearing date of August 19, 2015.

The Appellant provided 43 paragraphs in reply submissions. Succinctly, it now argues:

1. The Arbitrator made no specific order compelling the Appellant to pay attendant care benefits. The Appellant seeks confirmation from the Appellate Officer that it is not required to pay attendant care benefits pending this appeal.

2. The Appellant's request for a stay of the Arbitrator's overall decision was brought out of an abundance of caution. If, however, there is an implied order compelling it to pay attendant care benefits, the Appellant seeks a stay of such implied order.

3. The Appellant brings this appeal in good faith. The Respondent takes no issue with this.

4. The Arbitrator erred in failing "to consider and follow binding authority concerning the classification of these transportation expenses."

5. There is no evidence the Respondent would suffer any hardship if a stay were granted. There is no evidence the Respondent is impecunious, the benefits are for the necessities of life and/or for treatment or his condition has deteriorated as a result of not receiving attendant care benefits. There are no ongoing attendant care benefits payable. There is no evidence payment of this "historic" benefit would improve the Respondent's condition.

6. The appeal is to be heard August 19, 2015. Both parties would suffer a hardship if a stay were not granted. The parties do not agree on the interest payable. To deny a stay "would force the parties to focus their immediate efforts in attempting to resolve the dispute concerning" interest, leading to unnecessarily increased legal expenses. The Respondent agreed that the appeal be heard before the Arbitrator determined the interest payable.

7. If unsuccessful in this appeal, the Respondent may find it challenging to repay the attendant care benefits. Therefore, "it would be more beneficial to the Appellant" to stay the Arbitrator's order.

The Appellant's main submissions dated April 9, 2015 advance various alternative arguments as to restrictions, qualifications and additional requirements to be read into the words "economic loss" in clause 3(7)(e) of the 2010 Schedule, in addition to the stated statutory requirement that the economic loss be sustained "as a result of providing the goods or services to the insured person."

The Arbitrator, in his decision, noted the Ontario Court of Appeal decision in Monks v. ING Insurance Company of Canada, 2008 ONCA 269, that it "is well-established that insurance coverage provisions are to be interpreted broadly, while coverage exclusions or restrictions are to be construed narrowly, in favour of the insured."

In Simser v. Aviva Canada and FSCO, 2015 ONSC 2363, the Divisional Court accepted the ordinary meaning of "economic loss" of "a financial or pecuniary loss," or a "financial or pecuniary sacrifice," including potential opportunity costs such as deferring graduation resulting in a postponement of paid employment.

At this present stage of this appeal it is not clear from the Appellant's submissions (1) why restrictions on attendant care coverage are to be interpreted broadly in favour of insurers, specifically in having further qualifications read into the ordinary meaning of "economic loss," (2) why the Divisional Court and the Court of Appeal are both in error or (3) what authority an appellate officer has, in any case, to overrule either superior body.

To give an example from its submissions, the Appellant argues that Mr. Futrell's mileage and parking expenses are not "authorized transportation expenses" as defined in subsection 3(1) of the 2010 Schedule and addressed in the Transportation Expenses Guideline, No. 05/10. As none of Mr. Futrell's individual trips exceeded 50 kilometres, the deductible for non-catastrophic cases under subsection 3(1), it is argued that his mileage expenses are not "authorized transportation expenses."

However, Guideline No. 05/10 sets out at its commencement the provisions of the regulations for which it is issued. Those listed provisions do not include clause 3(7)(e) of the 2010 Schedule. In any event, it is presently unclear why the subsection 3(1) deductible, especially when it is specifically stated to apply "in respect of an insured person," applies to a third party provider's "economic loss," in its ordinary meaning, under clause 3(7)(e) of the 2010 Schedule.

The Appellant also submits that clause 19(1)(b) transportation expenses "can only be considered under this umbrella provided that the expenses are 'authorized transportation expenses for which no medical benefit is described in clause 15(1)(g) is payable and no rehabilitation benefit described in clause 16(3)(k) is payable." Again, it is presently unclear why a restriction on benefit entitlement to an insured person applies to a third-party provider's "economic loss," in its ordinary meaning, under clause 3(7)(e) of the 2010 Schedule.

In Henry v. Gore Mutual Insurance Company, 2013 ONCA 480, the Court of Appeal stated:

If an economic loss is sustained, attendant care benefits are payable with respect to all care detailed in the Form 1 provided by the family member, subject to the maximums in s. 19(3) and various other safeguards, including ss. 42 and 33 of SABS-2010. [Emphasis added]

The Appellant appears to take exception to this statement, at least in regard to what it terms "de minimis expenses." I note, as did the Arbitrator, that the 2010 Schedule was amended after Henry, so that paragraph 19(3)(4) now reads:

Despite paragraphs 1, 2 and 3, if a person who provided attendant care services (the "attendant care provider") to or for the insured person did not do so in the course of the employment, occupation or profession in which the attendant care provider would ordinarily have been engaged for remuneration, but for the accident, the amount of the attendant care benefit payable in respect of that attendant care shall not exceed the amount of the economic loss sustained by the attendant care provider during the period while, and as a direct result of, providing the attendant care. O. Reg. 34/10, s. 19 (3); O. Reg. 347/13, s. 2.

The Appellant does not argue that this subsequent amendment applies in this case. Again, at this stage of this appeal it is not clear why the coverage exclusions or restrictions are to be interpreted broadly, why the Court of Appeal in Henry may be in error or what authority an appellate officer may have, in any case, to overrule the Court of Appeal.

The Appellant argues that the Arbitrator failed to follow the binding decision in Simser and Aviva Canada Inc., (FSCO P13-00004, January 9, 2014)(upheld on judicial review, 2015 ONSC 2363), that "transporting an insured person to a medical appointment was not considered to be an approved Form 1 attendant care service." In addition, transportation expenses that reintegrate an insured person into the community have a "rehabilitation nexus" with section 16 of the 2010 Schedule. Accordingly, the Appellant argues that the Arbitrator erred in concluding that Mr. Futrell's expenses resulted from the provision of attendant care services.

However, in Simser, I was referring to an A&W invoice that had a printed note "Julie took off work to drive Kevin to Dr. Amee appointment." Looking at the specific Form 1 that had been completed in that particular case, I stated:

…I was not referred to anything in the applicable Form 1 that included driving the Appellant to medical appointments as an approved attendant care service.

However, in this case the Arbitrator found that the Respondent had suffered, in part, a fractured right upper tibia (the larger of two bones extending from the knee to the ankle). Exhibit Two includes an October 20, 2011 Form 1 (Assessment of Attendant Care Needs) prepared by Ms. K. May. It recommends some 19 hours a week of assistance for transfers and supervising and assisting in walking. Ms. May's supporting comments, at page 18, state under current needs:

Ms. Futrell continues to have difficulty with car transfers and is assisted for this to maximize her safety and comfort; she also relies on assistance to transfer the wheelchair or walker into and out of the car.

The Arbitrator's January 29, 2015 decision states, under "Result:"

The mileage and parking expenses incurred by Martin Futrell, the Applicant's spouse, in providing attendant care services to the Applicant, constitute an economic loss with the meaning of the SABS.

Applying the criteria in Armstrong, I decline to order a stay of the Arbitrator's January 29, 2015 decision, or any order therein express or implied, for the following reasons:

1. While there is no dispute as to the bona fides of this appeal, there are presently questions as to the substance of the grounds for appeal.

2. The Appellant has provided no evidence as to the hardship it would face if a stay were refused. If it were sufficient to order a stay so that benefits or other monies would not be payable, a stay would be ordered in every case in which benefits or any other relief had been ordered to be paid.

3. A fundamental basic purpose of this alternative dispute resolution system is the speedy determination of first-party automobile insurance claims, claims for which a duty of uberrimae fides, that is, utmost good faith, applies. The February 2014 Final Report of the Ontario Automobile Dispute System Review, commissioned by the Provincial Legislature, specifically addressed the question of timeliness in the dispute resolution system stating;

Every stakeholder agreed that timeliness is an important principle in the DRS. The parties need to be able to access a system that can resolve disputes expeditiously.

The Final Report concluded that "[a]ll in-person hearings should take place within 90 days following the receipt of a completed application."

In this case, the Application for Arbitration claiming attendant care benefits was filed April 4, 2013, more than two years ago. Delay in the resolution of a dispute is a significant prejudice. The prejudice in this regard to the Respondent is compounded if there is a stay of the Arbitrator's decision pending this appeal proceeding. Even though the appeal hearing is scheduled two months hence, the date of final resolution after any possible judicial review or further appeal process is presently unknown.

4. As stated in Armstrong, a stay of an arbitrator's order is the exception, not the rule. The onus is on the moving party to establish that a stay should be granted. Where an insurer seeks a stay of a payment order, proof of an insured person's impecuniosity is not a pre-requisite for a stay not being granted. That the benefits are required for the necessities of life and/or for treatment is not a pre-requisite. That the insured person's condition will deteriorate if the benefits are not provided is not a pre-requisite. That the benefits are ongoing rather than "historic" is not a pre-requisite. That the benefits will improve the insured person's condition is not a pre-requisite.

5. Assisting, if not empowering, a party to avoid resolving a dispute is not a legitimate reason to stay an arbitrator's order.

The parties' Agreed Statement of Facts at arbitration states, in part:

• The parties agree that the amount of the Form 1 attendant care assessments were reasonable.

• The parties wish for a preliminary hearing to determine whether [the mileage and associated parking expenses] constitute an economic loss sustained by Mr. Futrell as a result of providing services pursuant to s. 3(7)(e) of the SABS.

I decline to find the Appellant is not required to pay attendant care benefits pending this appeal.

IV. APPEAL LEGAL EXPENSES

The legal expenses of this preliminary appeal order are deferred to the conclusion of this appeal, subject to any other or further order of an appellate officer.

May 29, 2015

Lawrence Blackman Director's Delegate

Date

Footnotes

1. 1The Statutory Accident Benefits Schedule — Effective September 1, 2010, Ontario Regulation 34/10, as amended. Although the Arbitrator applies the provisions in the 2010 Schedule in his decision, he notes The Statutory Accident Benefits Schedule — Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended, as being applicable.