Rita Boateng v. State Farm Mutual Automobile Insurance Company, 2015 ONFSCDRS 233

Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2015 ONFSCDRS 233 Appeal P15-00002

OFFICE OF THE DIRECTOR OF ARBITRATIONS

RITA BOATENG Appellant

and

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY Respondent

BEFORE: Delegate Lawrence Blackman

REPRESENTATIVES: Mr. Ian A. Little and Mr. Dale Rosenberg for the Appellant, Ms. Rita Boateng Mr. Michael W. Smith for the Respondent, State Farm Mutual Automobile Insurance Company

HEARING DATE: October 8, 2015

APPEAL ORDER

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

1. Paragraphs 6 and 7 of the Arbitrator’s December 2, 2014 decision are rescinded. The issues of entitlement to and the quantum of the legal arbitration expenses are returned to arbitration for redetermination.

2. Paragraph 1 of the Arbitrator’s decision is confirmed.

3. The Respondent shall pay the Appellant his legal expenses of this appeal fixed in the amount of $500 inclusive of all fees, disbursements and taxes.

November 6, 2015

Lawrence Blackman Director’s Delegate

REASONS FOR DECISION

I. NATURE OF THE APPEAL AND BACKGROUND

As a result of her injuries sustained in a July 1, 2011 motor vehicle accident the Appellant, Ms. Rita Boateng, sought statutory accident benefits available under the 2010 Schedule¹ from her first-party automobile insurer, the Respondent, State Farm Mutual Automobile Insurance Company.

Subsection 5(1) of the 2010 Schedule provides that the initial entitlement test for income replacement benefits (IRBs) is “substantial inability to perform the essential tasks” of one’s pre-accident employment. IRBs are not payable the first week of disability.

Paragraph 6(2)(b) provides that after the first 104 weeks of disability the IRB entitlement test changes to a “complete inability to engage in any employment or self-employment for which [the insured person] is reasonably suited by education, training or experience.”

For 13 years up to the accident date the Appellant worked full-time for a food supplier at Toronto Pearson Airport. Her prior employment included work on factory assembly lines and at a meat-packing plant. As a result of her accident-related injuries the Respondent paid her weekly IRBs of $400 from July 8, 2011 (one week post-accident) to June 13, 2013 (just short of two years).

In his December 2, 2014 decision, Arbitrator Smith (the “Arbitrator”) found the Appellant entitled to certain benefits, but not to any further IRBs. Based on the mixed results of the arbitration, the Arbitrator decided that each party should bear their own legal costs of the arbitration.

The Appellant appeals the Arbitrator’s IRB and legal expense orders. Regarding his IRB award, the Arbitrator held:

… the evidence is at best equally weighted for and against the applicant’s claims. Therefore, the applicant has failed in her onus to provide a preponderance of clear, convincing and cogent evidence that subsequent to June 13, 2013 she suffers from a substantial inability to perform the essential tasks of her pre-accident employment, let alone a complete inability to engage in any employment or self-employment for which she is reasonably suited by education, training or experience. Therefore, the application for income replacement benefits is dismissed. [Emphasis added]

The Appellant submits that any of the following argued errors of law in the Arbitrator’s IRB determination “could have been the peppercorn on the tray that would tip the balance” in providing the further 1% necessary for the Appellant to succeed on that issue:

1. The Arbitrator erred in not mentioning in his decision the March 3, 2014 report of Dr. S.W. J. Wong, physiatrist, who addressed employability. “It is inconceivable that any Arbitrator discharging his or her function would overlook or ignore this report.”

2. The Arbitrator erred in not mentioning in his decision the June 27, 2014 vocational assessment report of Dr. L. Steiner, psychologist, and R. Francis, psychometrist. The Appellant argues that this was a specialist assessment of the very issue in dispute, entitlement to post-104 week IRBs. The report concluded: “Ms. Boateng is completely disabled from any employment for which she may reasonably be suited by education, training or experience.” The Appellant submits that “no Applicant would consider that he or she received a fair and complete consideration of her claim in the circumstances.”

3. The Arbitrator’s failed to reference or consider the bulk of the documentary evidence, which amount to a denial of natural justice. While it “is trite law that an arbitrator need not refer to every document … it is an error in law not to fairly and properly consider and take into account all relevant evidence.” A party has every right, the Appellant argues, to expect the reasons for the decision will demonstrate that consideration was given to the documents filed. This is especially so when the August 15, 2013 pre-hearing letter encouraged the filing of reports in lieu of having their authors testify.

The Appellant submits the Arbitrator specifically erred in failing to mention the December 1, 2011 Insurer Medical Examination (“IME”) report of Dr. A. Peterkin, psychiatrist, that the Appellant was “highly motivated to recover and to return to work.”

4. The Arbitrator erred in drawing an adverse inference from the Appellant’s failure to try to return to work, without addressing her vocational limitations and the medical reasons why such an endeavour would have been futile or detrimental to her.

5. Contrary to public policy, the Arbitrator erred in considering that a person in a lower economic bracket might not be motivated to seek out employment rather than collect IRBs. There was no evidential foundation for the bald statement there was no financial incentive for the Appellant to return to work. Rather, the evidence was that the Appellant’s IRBs were less than 50% of her gross pre-accident income.

6. The Arbitrator incorrectly stated there was no specialist medical evidence offered by either party to verify or contradict the Appellant’s allegations of pain.

The Appellant submits that the Arbitrator erred in his decision regarding legal expenses in:

1. Determining the issue in the absence of receiving submissions.

2. Not following Arbitrator Richards’ decision in Tendenilla and Allstate Insurance Company of Canada, (FSCO A06-001684, February 4, 2009):

… an applicant does not need to be entirely successful to be entitled to full expenses. Such a scheme would lessen the need for an insurer to serve a meaningful offer to settle and enhance the pressure for an insured to settle, even improvidently.

The Appellant submits that the Arbitrator awarded expenses such as MRIs, a psychological assessment and certain assistive devices because the evidence was clear the Respondent’s own IME found them reasonable and necessary. As such issues should never have been in dispute, Rules 75.2(d) and (e) of the Code (consideration of conduct that prolonged the procedure and whether any aspect of the proceeding was unnecessary) should have been applied.

II. ANALYSIS

In Liberty Mutual Insurance Company and Young, (FSCO P03-00043, June 20, 2005), application for judicial review dismissed, 2006 CanLII 7286 (ON S.C.D.C.), Delegate Evans cited Delegate McMahon in Lombardi and State Farm Mutual Automobile Insurance Company, (FSCO P01-00022, February 26, 2003):

… errors of law include findings of fact made in the complete absence of supporting evidence, made on the basis of conjecture, or made on the basis of a misapprehension of the evidence caused by a misdirection on a legal principle. The vital distinction is between a conclusion that there was “no evidence” to support a finding and a mere “insufficiency of evidence.”

[Emphasis added]

I am not persuaded there was no evidence to support the Arbitrator’s IRB finding.

The Arbitrator provided his reasons for his IRB determination at pages 21 to 23 of his decision. In significant measure, his decision was based on his concerns as to the accuracy of the Appellant’s testimony regarding her “true medical status, functional abilities, and overall employability.” The Arbitrator found the Appellant’s testimony regarding her level of pain, lack of skills especially regarding communication in English and her ability to be re-employed “vague and, at times, somewhat evasive.”

The Respondent cites the binding decision of Kanareitsev and TTC Insurance Company Limited, 2008 CanLII 26262 (ON SCDC):

Particularly when results turn on the first instance decision maker’s view of the credibility of witnesses and involves a fact-driven analysis, appellate review must take “proper account of the distinct advantage” of the first-instance decision maker's assessments. The appeal judge must not try the case de novo or simply substitute his or her views for those of the trial judge: R. v. G.W. 1996 CanLII 427 (ON CA), [1996] O.J. 3075 (C.A.) at paras.18 and 57. [Emphasis added]

In Quattrocchi and State Farm Mutual Automobile Insurance Company, (OIC A-006854, September 29, 1997), Arbitrator Makepeace set out general principles that had emerged in the arbitration decisions regarding IRB entitlement. These included:

1. Pain on its own is not compensable in the statutory accident benefit scheme. However, an insured may be found entitled to benefits because of disabling pain, despite there being no objectively confirmable impairment.

2. It is not necessary for an Arbitrator to accept any particular diagnosis of the Applicant’s complaints. Arbitrators have shown little interest in debates between medical experts as to the legitimacy or significance of a diagnosis of a chronic pain syndrome.

3. Where there is no objective evidence of impairment or the objective evidence does not explain the degree of pain reported by the insured person, the insured’s credibility becomes important.

Dr. Wong’s March 3, 2014 report opined that the Appellant had suffered a myofascial injury of her cervical, thoracic and lumbar spine, and diagnosed a chronic pain syndrome. However, under sections 5 and 6 of the 2010 Schedule, IRBs are payable not on the basis of diagnosis but on the basis of function.

At page 12 of his report, Dr. Wong stated: “I would be unable to comment on the amount of pain as this is a subjective sensation.” Nonetheless, he continued: “Ms. Boateng has been experiencing ongoing pain problems that prevent her from returning to her employment, housekeeping and home maintenance activities.”

Answering whether the Appellant had suffered a substantial inability to engage in the employment she had performed pre-accident and whether she had suffered a complete inability to engage in any employment for which she was reasonably suited by education, training or experience (without stating what that wider range of employment might be), Dr. Wong’s one word answer in his report was, “Yes.” The Appellant argues the Arbitrator’s three pages of reasons regarding his IRB determination were inadequate. It is difficult to see how Dr. Wong’s one word conclusion would assist an adjudicator.

The Appellant asked rhetorically in oral submissions whether this was a great medical report. “You get what you get” he answered. However, the Appellant stated that had the Arbitrator mentioned Dr. Wong’s report he would have been satisfied that at least it was considered.

It would have been preferable had the Arbitrator specifically addressed Dr. Wong’s report in his decision. I am not, however, persuaded that the Arbitrator’s failure to do so constitutes an error of law. The Respondent notes the binding Divisional Court decision in State Farm Mutual Automobile Insurance Co. v. Movahedi, [2001] O.J. No. 5099, that not reciting all the evidence does not mean that the arbitrator failed to consider it. The Respondent also notes my decision in Bains and RBC General Insurance Company, (FSCO P09-00005, June 3, 2010):

…as stated in F.H. and McDougall, 2008 SCC 53, [2008] 3 S.C.R. 41, “[n]or are reasons inadequate because in hindsight, it may be possible to say that the reasons were not as clear and comprehensive as they might have been.”

The June 27, 2014 vocational assessment report of Dr. Steiner and R. Francis simply accepted the Appellant’s statement she was not capable of returning to work due to her pain condition.

Although the authors assessed the Appellant as having limited English skills and having no reading or writing skills in her native language, they listed occupations consistent with her measured interest pattern as pre-school teacher, home economist, social worker and television director and cosmetologist. Respectfully, it is difficult to see the Appellant as being reasonably suited by education, training or experience for these occupations.

Having considered occupations not reasonable for the Appellant, it is difficult to see what weight could be given to the assessors’ conclusion at page 12 of their report that, from a tested vocational standpoint, the Appellant was completely disabled from any employment for which she may reasonably be suited by education, training or experience.

The Respondent submits that the Arbitrator also failed to refer in his decision to IMEs upon which it relied. It is to be noted that Dr. Peterkin’s IME report, upon which the Appellant relies regarding her motivation, was written a year and a half prior to the period of disputed IRBs. In any event, adjudicators cannot delegate to medical experts the determination of credibility.

The Respondent notes page six of the Arbitrator’s decision that the Appellant had not spoken with her employer or her union representative since the accident. The Appellant had a note from her family doctor, Dr. A.A. Otoo, approving her to attempt modified duties at work, that she had faxed the note to her employer, but she had not received any response. There had been no follow-up in the Respondent’s submission. I am not persuaded that the Arbitrator’s consideration of whether the Appellant endeavored to return to work to constitute an error of law.

The evidence before the Arbitrator was that although the Appellant was receiving $400 a week in IRBs, her 2009 net after-tax income was about $30,000, some 50% higher than the IRBs she was receiving. In 2010 the Appellant’s net after–tax income was $25,000, greater than the $20,800 a year she was receiving in IRBs. While the Arbitrator’s finding the Appellant lacked a financial incentive to return to work was without an evidentiary basis, I am not persuaded that this warrants a new hearing as there were other reasons for the Arbitrator’s IRB decision.

The Appellant cites Lawson v. Lawson, 2006 CanLII 26573 (ON CA), on the adequacy of reasons:

It is the duty of a judge to give reasons for decision; it is an inherent aspect of the discharge of a judge's responsibilities … The appellant is entitled to reasons that are sufficient to enable him to know why issues were decided against him. The reasons need to be adequate also so that he can bring a meaningful appeal and this court is able to properly review the Order. The reasons do not need to be perfect. Nor do they necessarily need to be lengthy. But, they must be sufficient to enable the parties, the general public and this court, sitting in review, to know whether the applicable legal principles and evidence were properly considered.

While recognizing the trial judge's obligation to give adequate reasons, however, it is important to note that the appellant is effectively asking this court to re-try the case. That is not the function of an appellate court …

I am not persuaded that the Arbitrator’s reasons regarding IRB entitlement were insufficient to enable the Appellant to know why that issue was decided against him. I am not persuaded that the Arbitrator simply baldly stated his conclusion. I am not persuaded that the Arbitrator’s reasons were inadequate to allow a meaningful appeal and a proper review of his order.

I noted in Bains:

The Ontario Court of Appeal, in Rothwell v. Raes (1990), 2 O.R. 332, likewise held that it is not for an appellate level “to weigh conflicting evidence or to reassess the relative merits of contradictory expert testimony.” Subsection 283(5) of the Insurance Act allows an appellate officer to vary the arbitrator’s order appealed from or substitute his or her order for that of the arbitrator. There is no provision for the appellate officer varying or substituting his or her findings of fact for that of the arbitrator.

In this case the Arbitrator stated that the evidence was “at best” equally weighted. As the Respondent submits, we do not know what the Arbitrator’s view of the evidence was “at worst” for the Appellant. I take note of the Arbitrator’s distinct advantage in his important finding on credibility in a fact-driven analysis. In any event, in oral submissions the Appellant stated she was not asking me to change the Arbitrator’s findings regarding the oral evidence of the three witnesses, including her own.

I have no authority to try this case de novo, substituting my views on findings of fact for those of the Arbitrator. Nor would I be persuaded to assign some “peppercorn” weight to tip the balance allowing the Appellant to succeed on her IRB claim. I am not persuaded by the Appellant’s appeal of the Arbitrator’s IRB order. Accordingly, I confirm paragraph 1 of the Arbitrator’s December 2, 2014 decision dismissing the Appellant’s claim for further IRBs.

Regarding the Arbitrator’s legal expense determination, the Respondent submits the Arbitrator simply exercised his discretion to find that expenses do not necessarily follow the result. The Respondent argues that to set aside the Arbitrator’s decision would be to grossly undermine an arbitrator’s authority and set a dangerous precedent.

The Respondent did not dispute the Appellant’s submission that the Arbitrator did not receive any submissions on the question of legal expenses. The Respondent had no objection to my taking judicial notice (with twenty years of experience at this Tribunal) that the usual procedure at arbitration at this Commission is for an adjudicator to first render his or her decision on the substantive issues, providing a timeline in that decision for the parties to request an expense hearing should they be unable to agree on legal expenses. That did not happen in this case. Rather, in the absence of receiving any submissions on the contested question of arbitration legal expenses (or providing a timeline to provide submissions), the Arbitrator determined that issue.

Director Draper, in Wilson and Liberty Mutual Insurance Company, (FSCO P04-00007, July 2, 2004) stated:

While arbitration hearings are less formal than court, they are adversarial proceedings that must be conducted fairly. They are subject to legislation, rules of procedure and common law principles of natural justice and fairness. It is up to the arbitrator to apply these rules and, more generally, control the process.

In Scarlett v Belair Insurance, 2015 ONSC 3635, the Divisional Court held:

The basic principle underlying the duty of procedural fairness is that parties affected by a decision should have the opportunity to present their case fully and fairly, and have decisions affecting their rights, interests or privileges made using a fair, impartial, and open process [see Baker v. Canada (Minister of Citizenship and Immigration), 1999 CanLII 699 (SCC), 1999 CarswellNat 1124].

I am persuaded that the Arbitrator failed to provide the parties with a reasonably expected opportunity to provide submissions on the issue of legal expenses. I am persuaded that this constituted a failure to provide natural justice regarding this specific issue.

Accordingly, paragraphs 6 and 7 of the Arbitrator’s December 2, 2014 decision pertaining to the question of arbitration legal expenses are rescinded. The issues of entitlement to and the quantum of the legal arbitration expenses are returned to arbitration for redetermination.

III. EXPENSES

My September 30, 2015 letter faxed to the parties stated that in the absence of any offer to settle to be considered, the parties should be prepared at the October 8, 2015 oral hearing to speak to both entitlement to and the quantum of appeal legal expenses.

Both parties sought their legal expenses in the event of success.

The Appellant provided a Bill of Costs of $2,871.65 for this appeal, including all fees (15 hours at $150 an hour), disbursements (including her $250 filing fee) and HST. The Respondent submitted that its hours were similar. It does not object to the quantum of this account other than $10 for mileage and parking.

Natural justice in the determination of arbitration legal expenses necessitated an appeal. The parties, however, agree that the vast majority of the appeal pertained to the IRB entitlement issue, on which the Appellant was not successful.

Applying Rule 75 of the Dispute Resolution Practice Code (Fourth Edition, Updated – January 2014), and specifically each party’s degree of success in the outcome of this appeal, I award the Appellant $500 in appeal legal expenses, inclusive of all fees, disbursements and taxes.

November 6, 2015

Lawrence Blackman Director’s Delegate

Footnotes

1. 1The Statutory Accident Benefits Schedule — Effective September 1, 2010, Ontario Regulation 34/10, as amended.