Neutral Citation: 2015 ONFSCDRS 259

FSCO A14-004422

BETWEEN:

FRANCESCA DIPASQUALE Applicant

and

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY Insurer

DECISION ON A PRELIMINARY ISSUE

Before: Arbitrator Andrew M. Diamond

Heard: By written submissions due August 21, 2015

Appearances: Ms. Wendy Sokoloff for Ms. Francesca Dipasquale Mr. Calvin Virtanen for State Farm Mutual Automobile Insurance Company

Issues:

The Applicant, Ms. Francesca Dipasquale, was injured in a motor vehicle accident on November 7, 2007 and sought accident benefits from State Farm Mutual Automobile Insurance Company ("State Farm"), payable under the Schedule.¹ The parties were unable to resolve their disputes through mediation, and Ms. Dipasquale, through her representative, applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c. I.8, as amended.

The issue in this Preliminary Issue Hearing is:

Is the Applicant's request to have claims for Income Replacement Benefits, Housekeeping and Home Maintenance Benefits, Attendant Care Benefits and the cost of an assessment by Dr. Young of June 27, 2011 added to the Arbitration barred by the limitation periods set out in Section 281.1 of the Insurance Act, R.S.O. 1990, c. I.8 and Section 56 of the Schedule?

Result:

The Applicant's claims for Income Replacement Benefits, Housekeeping and Home Maintenance Benefits, Attendant Care Benefits and the cost of an assessment by Dr. Young of June 27, 2011 are barred by the limitation periods set out in Section 281.1 of the Insurance Act, R.S.O. 1990, c. I.8 and Section 56 of the Schedule and may not proceed to Arbitration.

EVIDENCE AND ANALYSIS:

Background

On May 21, 2014, the Applicant filed an Application for Arbitration through her counsel in which she claimed, inter alia, for medical benefits. The Pre-Hearing in this matter was conducted by me on May 27, 2015. At the Pre-Hearing, counsel for the Applicant sought to have claims for entitlement to Income Replacement Benefits, Housekeeping and Home Maintenance Benefits, Attendant Care Benefits, and an assessment of Dr. Young added to the Arbitration. The Insurer took the position that the matters that the Applicant was attempting to add to the Arbitration were time barred, and wished to have this question determined by way of a Preliminary Issue Hearing.

The parties agreed that the Preliminary Issue Hearing could be conducted in writing. As is set out in my Pre-Hearing letter of June 3, 2015, the parties agreed to the following schedule for the exchange of materials:

State Farm would deliver its written submissions by August 1, 2015;
The Applicant would deliver her responding submissions by August 15, 2015; and
State Farm would deliver its reply, if any, by August 21, 2015.

On reviewing the file on or about August 26, 2015, I could not locate the Applicant's materials for the Preliminary Issue Hearing and attempted to contact counsel for the Applicant, but received no response. In turn I contacted counsel for State Farm who advised me that counsel for the Applicant had advised him in writing on August 17, 2015 that they did not oppose the relief being sought by the Insurer except for the issue of costs. Unfortunately that information was never communicated to me.

Evidence

In support of its position, the Insurer filed the Affidavit of Calvin Virtanen. However, in light of the fact that the Applicant does not oppose the order being sought, only the briefest review of the chronology needs to be set out here.

As set out in paragraphs 3 to 15 of the Affidavit of Calvin Virtanen, by OCF-9 dated April 14, 2009, the Insurer reduced the Applicant's monthly Attendant Care Benefit. This OCF-9 was sent to the Applicant by mail on April 14, 2009. By OCF-9, dated April 28, 2009, the Insurer refused to pay further Income Replacement Benefits. This OCF-9 was sent to the Applicant by mail on April 28, 2009. By OCF-9, dated October 7, 2009, the Insurer refused to pay further Housekeeping and Home Maintenance Benefits and Attendant Care Benefits as the Applicant was not entitled to these benefits more than 104 weeks after the date of the accident. By OCF-9, dated June 27, 2011, the Insurer refused to pay for part of the treatment plan, dated March 2, 2011. This OCF-9 was faxed to the Applicant on July 4, 2011. The Applicant filed an Application for Mediation, dated January 5, 2011, listing the following items in dispute: a. Income Replacement Benefits; b. Housekeeping and Home Maintenance Benefits; and c. Attendant Care Benefits. The Applicant sent a letter to the Financial Services Commission of Ontario ("FSCO") that a treatment plan, dated March 2, 2011, was partially denied by the Insurer on June 27, 2011 and asked that the treatment plan be added to the Arbitration. Mediation was conducted and FSCO produced a Report of Mediator, dated May 8, 2012. The issues could not be resolved and the Applicant is deemed to have received the Report of Mediator on May 13, 2012, five days after the date of the Report of Mediator.

The Applicant did not file an Application for Arbitration for Income Replacement Benefits, Attendant Care Benefits, Housekeeping and Home Maintenance Benefits, a Mental Health Assessment from Dr. Young dated June 27, 2011, or a treatment plan, dated March 2, 2011. Three years later, at the Pre-Hearing discussion for a subsequent Arbitration on May 14, 2015, the Applicant's Representative advised that the Applicant wished to add the above issues to the Arbitration. The Insurer refused to add these issues on the basis that the limitation period had expired.

Analysis

As set out in State Farm's factum, the Insurance Act, the Schedule, and the Dispute Resolution Practice Code ("the DRPC") set limitation periods to dispute an Insurer's refusal to pay a benefit.

Section 281.1 of the Insurance Act states:

281.1 (1) 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.

(2) Despite subsection (1), a proceeding or arbitration under clause 281 (1) (a) or (b) may be commenced,

(a) if there is an evaluation under section 280.1, within 30 days after the person performing the evaluation reports to the parties under clause 280.1 (4) (b);

(b) if the mediation fails but there is no evaluation under section 280.1 within 90 days after the mediator reports to the parties under the subsection 280 (8).

Section 56 of the Schedule states:

(1) A mediation proceeding or evaluation under section 280 or 280.1 of the Act or a court proceeding or arbitration under clause 281 (1) (a) or (b) of the Act in respect of a benefit shall be commenced within two years after the insurer's refusal to pay the amount claimed.

(2) Despite subsection (1), a court proceeding or arbitration under clause 281 (1) (a) or (b) of the Act may be commenced within 90 days after the mediator reports to the parties under subsection 280 (8) of the Act or within 30 days after the person performing the evaluation provides a report to the parties under section 280.1 of the Act, whichever is later. O. Reg. 34/10, s. 56 (2).

The Act and the Schedule require that the Applicant either commence Arbitration within two years of the Insurer's refusal to pay a benefit, or within 90 days after receiving the Report of Mediator where the Application for Mediation is filed within two years. This was not done in this case.

EXPENSES:

If the parties are unable to agree on entitlement to, or the amount of, expenses, the parties may request a determination in accordance with Rule 79.2 of the DRPC.

November 30, 2015

Andrew M. Diamond Arbitrator

Date

Financial Services Commission of Ontario