Jasbir Saini v. Allstate Insurance Company of Canada, 2015 ONFSCDRS 241

Financial Services Commission des

Commission services financiers

of Ontario de l’Ontario

Neutral Citation: 2015 ONFSCDRS 241

FSCO A13-004053

BETWEEN:

JASBIR SAINI

Applicant

and

ALLSTATE INSURANCE COMPANY OF CANADA

Insurer

DECISION ON A PRELIMINARY ISSUE

Before: Arbitrator Maggy Murray

Heard: March 11, 2015, at the offices of the Financial Services Commission of Ontario in Toronto; written submissions completed October 6, 2015.

Appearances: Mike Wentzel and Francesco Blasi for Ms. Saini

Victoria Fraser for Allstate Insurance Company of Canada

Issues:

Jasbir Saini was injured in a motor vehicle accident on June 23, 2011. She applied for statutory accident benefits from Allstate Insurance Company of Canada (“Allstate”), payable under the Schedule.¹ Allstate refused to pay various benefits. The parties were unable to resolve their disputes through mediation, and Ms. Saini 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 issue is:

Is Ms. Saini precluded from proceeding to arbitration on the issue of non-earner benefits because she failed to commence a mediation or arbitration proceeding within two years of the insurer’s denial of this benefit?

Result:

Ms. Saini is precluded from proceeding to arbitration for non-earner benefits because her application for mediation was filed more than two years after the insurer denied this benefit.
Expenses were not addressed at the hearing. 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 — Updated January 2014) within sixty days of the date of this decision.

EVIDENCE AND ANALYSIS:

Witnesses:

No one gave evidence at this proceeding.

Parties Positions:

Allstate’s position is that Ms. Saini applied for mediation more than two years after it denied non-earner benefits and that she missed the limitation period.

According to Ms. Saini: (a) Allstate did not have any medical information advising that she was making a claim for non-earner benefits; (b) the Schedule requires an Applicant to submit a Disability Certificate² along with their Application for Accident Benefits, and Ms. Saini did not do so, therefore, the limitation period did not begin to run until after she submitted the Disability Certificate; (c) Allstate denied non-earner benefits within the 26 week waiting period after the accident, so Allstate’s denial is void.

Background:

The onus is on the insurer to establish that the Applicant received the proper notice of termination. I am satisfied that Allstate’s letter of October 28, 2011 provided adequate notice of the insurer's decision that Ms. Saini is not entitled to non-earner benefits.

Agreed Statement of Facts:

The parties submitted an agreed statement of facts which states:

The Claimant was involved in a motor vehicle accident on or about June 23, 2011, as a back seat passenger in a vehicle that was rear-ended, as a result of which she sustained various injuries the nature of which remain in dispute.
An Application for Accident Benefits was submitted to Allstate by letter of August 10, 2011, date stamped as received on September 8, 2011.
By Explanation of Benefits dated September 20, 2011, Allstate advised the Claimant that it was unable to determine entitlement to a Non-Earner Benefit as a Disability Certificate had not been provided indicating eligibility for the benefit.
The Orthopaedic Insurer Examination Report of Dr. Grosfield dated October 6, 2011, concludes that the Claimant does not suffer a complete inability to carry on a normal life as a result of the accident.
Allstate advised the Claimant by Explanation of Benefits dated October 28, 2011, that she was not entitled to a Non-Earner Benefit.
The Psychological Insurer Examination Report of Dr. John Lee dated October 17, 2011, concludes that the Claimant does not suffer a complete inability to carry on a normal life as a result of the accident.
Allstate advised the Claimant by Explanation of Benefits dated November 9, 2011, of the conclusions of the Psychological Insurer Examination assessor and that entitlement to a Non-Earner Benefit remained stopped as of October 28, 2011.
As per section 12(4) of the Statutory Accident Benefits Schedule, the Insurer is not required to pay a Non-Earner Benefit (a) for the first 26 weeks after the onset of the complete inability to carry on a normal life.
Allstate requested a Disability Certificate (OCF-3) by Explanation of Benefits dated April 20, 2012, previously requested and not received, “to determine your future entitlement to benefits” and again by letter of June 13, 2012.
Allstate received an OCF-3 (Disability Certificate) dated August 14, 2012, on August 27, 2012, completed by Dr. Edgar, D.C., who concludes that the Claimant suffers a complete inability to carry on a normal life as a result of the accident with an anticipated duration of disability of 9 – 12 weeks. This was the 1^st OCF-3 received from the Claimant.
Allstate did not respond to the OCF-3 (Disability Certificate) received on August 27, 2012.
The Claimant applied for mediation by application dated January 23, 2012, with respect to the issue of entitlement to a Cost of Examination Expense in the amount of $595.03 for an Attendant Care Assessment of Jane Yonge Medical Assessments dated September 21, 2011. This issue failed to resolve as detailed in a Report of Mediator dated March 2, 2013 further to a request from the Claimant’s representative that the issues be pre-failed without a mediation taking place.
The issue of entitlement to a Non-Earner Benefit was not included in the Mediation that is the subject of the Report of Mediator dated March 2, 2013.
The issues in dispute in the Application for Arbitration dated April 1, 2013, are the above Cost of Examination Expense and a Special Award.
Entitlement to a Non-Earner Benefit was not mediated within two years of Allstate’s stoppage of the benefit dated October 28, 2011, as required by sections 55 and 56 of the Statutory Accident Benefits Schedule.
The Claimant applied for Mediation on August 12, 2014. The issues in dispute include entitlement to a weekly Non-Earner Benefit in the amount of $185 per week from December 23, 2011, to date and ongoing. This issue has been added to the current arbitration as per Arbitrator Murray’s letter of December 10, 2014, outlining the defence that the insurer is raising to the Non-Earner Benefit issue.

On November 25, 2014, Ms. Saini’s counsel wrote to FSCO and requested that the non-earner benefit be added to the Arbitration.

Analysis:

Ms. Saini claims entitlement to non-earner benefits from December 23, 2011 and ongoing. As outlined above, she submitted an Application for Accident Benefits to Allstate, which Allstate received on September 8, 2011. Ms. Saini’s Application for Accident Benefits indicates she was “unemployed” at the time of the accident.

Allstate’s Explanation of Benefits dated September 20, 2011³ states that Allstate is “unable to determine if [Ms. Saini] is eligible for the Non-Earner Benefit as [they] have not received the Disability Certificate (OCF 3), indicating that [Ms. Saini] suffer(s) a complete inability to carry on a normal life.”

The Treatment Plan from Complete Rehab dated July 29, 2011⁴ listed various activities which the Applicant could not perform. This Treatment Plan, along with four other medical documents, were given to Dr. Grosfield, orthopaedic surgeon, who performed an Insurer’s Examination on October 6, 2011.⁵ Dr. Lee, a psychologist, performed an Insurer’s Examination on October 17, 2011. Dr. Lee also received four medical documents.⁶ Both Drs. Grossfield⁷ and Lee concluded that Ms. Saini did not meet the disability test for non-earner benefits.

Allstate sent Ms. Saini an Explanation of Benefits dated October 28, 2011⁸ which stated: “from an orthopaedic perspective, the assessor concluded that you do not suffer a complete inability to carry on a normal life as a result of the subject motor vehicle accident. Therefore, your entitlement for non-earner benefits will be stop [sic] as of October 28, 2011.” Allstate put a checkmark in a box that stated “Not Eligible/Stoppage of Benefit.”

Allstate sent Ms. Saini another Explanation of Benefits dated November 9, 2011⁹ which stated: “In addition, from a psychological perspective, the assessor concluded that you do not suffer a complete inability to carry on a normal life as a result of the accident. Therefore, your entitlement to non-earner benefits will be stop [sic] as of October 28, 2011 as of [sic] Dr. I. Grosfield’s Orthopaedic examination.” Allstate put a checkmark in a box that stated “Not Eligible/Stoppage of Benefit.”

Both Explanation of Benefits forms advised Ms. Saini that a mediation, as well as an arbitration proceeding, must be commenced within two years from the insurer's refusal to pay the benefit claimed and that the time limit for commencing an arbitration proceeding can be extended by 90 days after the mediator reports to the parties on the outcome of the mediation.

On April 20, 2012,¹⁰ Allstate requested a Disability Certificate to determine Ms. Saini’s “future entitlements to benefits”. It also indicated that Allstate previously requested this information.

The parties agreed¹¹ that Ms. Saini’s entitlement to non-earner benefits was not mediated within two years of Allstate’s stoppage of the benefit dated October 28, 2011, as required by sections 55 and 56 of the Statutory Accident Benefits Schedule. The parties also agreed that an Application for Mediation for non-earner benefits was filed August 12, 2014.

Law:

Issue One: Is Ms. Saini precluded from proceeding to arbitration on the issue of non-earner benefits because her Application for Mediation was filed beyond the two-year limitation period set out in section 281.1(1) of the Act and subsection 56(1) of the Schedule?

Subsection 281.1(1) of the Insurance Act limits an insured's right to proceed to arbitration as follows:

A mediation proceeding or evaluation under section 280 or 280.1 or a court proceeding or arbitration under section 281 shall be commenced within two years after the insurer’s refusal to pay the benefit claimed.

Subsection 56(1) of the Schedule¹² also provides that a mediation, court or arbitration proceeding must be commenced within two years after the insurer’s refusal to pay the amount claimed.

In Kirkham v. State Farm Mutual Automobile Insurance Company,¹³ 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.

In Zeppieri v. Royal Insurance Company of Canada,¹⁴ it was determined that a two-step approach must be used to determine whether the limitation period applies. First, it is necessary to ask whether, and when, there was a refusal to pay benefits; and second, whether the insurer may rely on a limitation period that runs from the date of the refusal.

Findings:

With respect to the Applicant’s submission that Allstate did not have any medical information advising that she was making a claim for non-earner benefits, Allstate cannot be faulted for assessing her claim for non-earner benefits. Allstate provided both doctors Grossfield and Lee with various medical documents prior to them conducting a medical examination of the Applicant. In addition, a claimant cannot delay the start of a limitation period by not submitting documents to the insurer. If the Applicant’s submission were accepted, an Applicant could extend the limitation period indefinitely, which is contrary to the purpose of limitation periods.

With respect to the Applicant’s submission that the limitation period could not begin to run until she submitted a Disability Certificate, this issue was dealt with in Sagan v. Dominion of Canada General Insurance Company¹⁵ in which it was determined that: (a) s. 35(6)(a) of the previous Schedule¹⁶ provides for claims to be considered in cases where no Disability Certificate is filed; and (b) a claimant cannot delay the start of the limitation period by not submitting a Disability Certificate.¹⁷

Section 36 of the current Schedule¹⁸ states:

An applicant who fails to submit a completed disability certificate is not entitled to a specified benefit¹⁹ for any period before the completed disability certificate is submitted.

Although s.35 of the previous Schedule²⁰ is not the same as s.36 of the current Schedule, ²¹ both are similar because they provide for a lack of entitlement to a specified benefit in the absence of a Disability Certificate. Therefore, I find that the Court of Appeal’s determination in Sagan that a claimant cannot delay the start of a limitation period by not submitting a Disability Certificate is applicable.

With respect to the Applicant’s submission that Allstate denied the non-earner benefit prematurely, this issue was dealt with in Katanic v. State Farm Mutual Automobile Insurance Co.,²² in which it was determined:

Mr. Katanic had a denial (even if considered premature) when he had counsel who would be deemed to have known that it was premature, yet nothing was done until March 2010 (Mediation application), and November 21, 2011 (Statement of Claim). Even if the claim crystallized on December 7, 2006 (26 weeks post accident), the claim is commenced well past the statutory limitation periods of two years.²³

In Ms. Saini’s case, she had a denial of the non-earner benefits, even if considered premature, when she had counsel who is deemed to have known that it was premature, yet, nothing was done until August 12, 2014, when she applied for mediation for non-earner benefits, and November 25, 2014, when her counsel wrote to FSCO and requested that the non-earner benefit be added to the Arbitration. Even if Ms. Saini’s claim crystallized on December 23, 2011 (26 weeks post accident), the claim was commenced well past the statutory limitation period of two years.

The Applicant relied upon Garmider and Co-Operators General Insurance Company²⁴ in asserting that the limitation period had not expired. Garmider is distinguishable from this case. After the insurer refused to pay Mr. Garmider housekeeping and non-earner benefits, it sent Mr. Garmider a letter stating that it is “review(ing) (his) entitlement to the Housekeeping and Home Maintenance Benefits and Non-Earner Benefit.” I concluded in Garmider that the insurer’s refusal was invalid and could not be relied upon because it referred to the specific benefits it had previously denied when it stated it is “review(ing) (Mr. Garmider’s) entitlement to the Housekeeping and Home Maintenance Benefits and Non-Earner Benefit.”

In Ms. Saini’s case, Allstate did not refer to any specific benefits in its letters of April 20, 2012 and June 12, 2012. Rather, Allstate requested a Disability Certificate “to determine (Ms. Saini’s) future entitlement to benefits”.

Allstate clearly and unequivocally denied in writing Ms. Saini’s entitlement to non-earner benefits on October 28, 2011 when it advised her that she was “not entitled to the non-earner benefit effective October 28, 2011.” ²⁵ Allstate gave Ms. Saini an Explanation of Benefits form which advised her that a mediation, as well as an arbitration proceeding, must be commenced within two years from the insurer's refusal to pay the benefit claimed and that the time limit for commencing an arbitration proceeding can be extended by 90 days after the mediator reports to the parties on the outcome of the mediation.²⁶ A person is deemed to receive anything delivered by ordinary mail on the fifth business day after the day the document is mailed.²⁷ Therefore, I find that the limitation period for Ms. Saini to dispute her entitlement to non-earner benefits began to run on November 2, 2011.

Using the two-part test in Zeppieri, Allstate first refused to pay non-earner benefits to the Applicant by an Explanation of Benefits dated October 28, 2011, which she is deemed to have received by November 2, 2011. The limitation period would run two years from November 2, 2011 and Allstate can rely on the limitation period which expired on November 2, 2013.

Ms. Saini filed an Application for Mediation for various benefits, including non-earner benefits, on August 12, 2014. This was more than two years after Allstate’s denial of the non-earner benefits. Therefore, Ms. Saini is precluded from proceeding to arbitration on the issue of non-earner benefits.

EXPENSES:

Expenses were not addressed at the hearing. If the parties are unable to agree on the issue 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 – Updated January 2014) within sixty days of the date of this decision.

November 13, 2015

Maggy Murray

Arbitrator

Date