Gulbiye Akbulut v. RBC General Insurance Company, 2015 ONFSCDRS 77

Financial Services Commission des

Commission services financiers

of Ontario de l’Ontario

Neutral Citation: 2015 ONFSCDRS 77

FSCO A13-002858

BETWEEN:

GULBIYE AKBULUT

Applicant

and

RBC GENERAL INSURANCE COMPANY

Insurer

REASONS FOR DECISION

ON A MOTION

Before: Jessica Kowalski

Heard: March 17, 2014 in Hamilton, Ontario. Written submissions received May 26, 2014.

Appearances: No one appearing for Ms. Akbulut

Samia Alam for AssessNet Inc.

Stacey Karellas for RBC General Insurance Company

Nature of this Proceeding

This is a motion by RBC General Insurance Company (“RBC”) for an order dismissing the application for arbitration issued March 7, 2013 on the grounds that the application has been brought by a third party health care service provider that does not have standing to bring it.

Background

Ms. Gulbiye Akbulut was injured in a motor vehicle accident on March 15, 2004. On July 25, 2012, she settled all her claims against RBC, payable under the Schedule¹ arising from that accident. At that time, Ms. Akbulut executed settlement documents including a Release and Settlement Disclosure Notice that, in exchange for an agreed upon amount, ended her past, present and future claims against RBC arising from the accident. RBC forwarded funds to Ms. Akbulut’s counsel, as agreed, and the matter was concluded.

On March 7, 2013, AssessNet Inc. (“AssessNet”), a third party service provider, applied for arbitration at the Financial Services Commission of Ontario (“FSCO”) under the Insurance Act, R.S.O. 1990, c.I.8, as amended. AssessNet commenced this proceeding in the name of the insured person, Gulbiye Akbulut. AssessNet is seeking payment of an alleged outstanding account ($53,021.62 plus interest) for completion of a catastrophic determination rebuttal report² that it prepared as part of Ms. Akbulut’s now-settled claim. Although brought in her name, Ms. Akbulut did not sign the application. There is also no evidence that AssessNet commenced this proceeding with the knowledge or consent of Ms. Akbulut.

Issue

Should this application for arbitration be dismissed on the grounds that it was brought by a third party health care service provider that does not have standing to bring it?

Result

The motion is granted and the application for arbitration is dismissed.

EVIDENCE AND ANALYSIS

The Insurer’s Position

RBC submits that AssessNet has no standing to bring this application. RBC submits that the parties resolved Ms. Akbulut’s claim for all accident benefits arising out of the March 15, 2004 accident on a full and final basis on July 18, 2012. She executed settlement documents, including a full and final release, on July 25, 2012. RBC submits that the dispute resolution process is for disputes between insured persons and insurers.

AssessNet’s Position

AssessNet submits that a broad reading of the Statutory Powers Procedure Act³ (the “SPPA”) and the Insurance Act would allow an adjudicator to add a person other than the insured person or an insurer, if that person had sufficient interest in the issue in dispute. AssessNet has a direct interest in the outcome of this application and says it should therefore be allowed a hearing in its own right. AssessNet has not challenged the settlement.⁴ It concedes that it does not have Ms. Akbulut’s authority to pursue this claim. AssessNet points out, however, that Ms. Akbulut and RBC settled the issues as between themselves at a time when they knew that AssessNet had commenced an application for mediation concerning its outstanding account and that AssessNet was taking the position that it had the right to pursue its claim directly as against RBC.

Analysis

The Insurance Act expressly provides that disputes regarding entitlement to accident benefits, including cost of examinations, are subject to the dispute resolution procedures, from which third party service providers are excluded.⁵

According to s. 280(1) of the Insurance Act, “the insured person or the insurer” can apply for mediation. Arbitration is even more restrictive, with only “the insured person” being given the right to apply for arbitration.⁶

In the appeal decision of Wawanesa Mutual Insurance Company and D’Angelo, Director’s Delegate Makepeace wrote that “third party assessment facilities do not have standing to commence mediation or arbitration at the Commission in their own names or in the name of an insured person.”⁷

The Dispute Resolution Practice Code, at Rule 25.1, specifically contemplates that it is an “insured person” who may apply for arbitration.

In the case of MedCentra Inc. v. Economical Mutual Insurance Company⁸, Justice Roberts held that a third party service provider cannot bring an action against an insurer to compel payment of any amounts that may be owing to a third party service provider for services rendered to the persons insured by the insurer. He wrote that “as a general rule, the well-established common law doctrine of privity of contract provides that a contract can neither confer rights nor impose obligations on third parties.”

I find that AssessNet and RBC have no contractual relationship. There is no evidence that the parties to the contract, namely Ms. Akbulut and RBC, ever intended to extend the benefits in question to AssessNet, nor do AssessNet’s activities fall within the purview of the contractual relationship between Ms. Akbulut and RBC. There is no evidence before me that RBC intended to confer any benefits on AssessNet. The dispute resolution process is one in which an insured person has the right to compel payment from his or her insurer, and not one in which a third party can compel payment from the insurer.

Accident benefits cases are settled every day between insurers and insured persons that involve outstanding service provider accounts. As set out by Director’s Delegate Draper in Tanzos v. State Farm, “It follows that the dispute resolution process is for disputes between insured persons and insurers. It is not meant to serve the needs of creditors, including service providers, who want to collect their accounts.”⁹

The Full and Final Release and the Settlement Disclosure Notice state that in consideration of the settlement funds paid by RBC, Ms. Akbulut released RBC from all causes of action, damages, claims and demands which she had at the time of execution or which she may have against RBC arising out of the March 14, 2004 accident, including all expenses incurred for goods and services as previously approved. AssessNet does not dispute that Ms. Akbulut settled her claims.

I disagree with AssessNet’s submission that public policy concerns favour permitting service providers to commence arbitration proceedings at FSCO. In the decision of Adusei v. Royal Insurance Co. of Canada,¹⁰ Arbitrator Makepeace considered public policy concerns when she wrote:

In my view, stronger policy considerations support the insurer’s interpretation of subsection 281(1). If treatment-providers could commence arbitration proceedings, an insurer could be required to respond to any number of applications from any number of treatment-providers, at a cost of $1,000 per application. If, on the other hand, the proceedings must be initiated by the insured person, it is more likely that all disputes between the insured person and the insurer will be determined in a single proceeding, thus avoiding a multiplicity of proceedings.

Even in the case where Ms. Akbulut would have authorized AssessNet to bring an application for arbitration in her name for payment of its account—and there is no evidence that she has—s. 62 of the Schedule prohibits such an assignment. Section 62 states as follows:

(1) Except as otherwise provided by subsection (2), the assignment of a benefit under this Regulation and the assignment of the right to pursue a mediation, arbitration, appeal or variation proceeding under sections 280 to 284 of the Act are void.

(2) The following assignments are not void:

An assignment under section 267.8 of the Act.
An assignment of a benefit to,

i. the Ministry of Community and Social Services,

ii. a delivery agent under the Ontario Disability Support Program Act, 1997 or the Ontario Works Act, 1997, or

iii. the Minister of Finance under subsection 6.4(4) of the Motor Vehicle Accident Claims Act. O. Reg. 34/10, s.62(2)

Conclusion

This application amounts to no more than an effort by a third party service provider, AssessNet, to collect payment from the insurer of an alleged outstanding account (owed to it by the insured person) after the matter was settled between the insurer and insured person on a full and final basis. For the reasons set out above, I find that AssessNet has no standing to bring this claim against RBC.

EXPENSES:

The parties did not make submissions on expenses. In the event that they are unable to resolve the issue of expenses, they may bring the issue before me in accordance with Rule 79 of the Dispute Resolution Practice Code.

April 17, 2015

Jessica Kowalski Date

Arbitrator