Yanina Danzig v. St. Paul Fire & Marine Insurance Company, 2016 ONFSCDRS 142

Financial Services Commission of Ontario

Financial Services Commission des Commission services financiers of Ontario de l’Ontario

Neutral Citation: 2016 ONFSCDRS 142

FSCO A14-009654

BETWEEN:

YANINA DANZIG

Applicant

and

ST. PAUL FIRE & MARINE INSURANCE COMPANY

Insurer

DECISION ON A MOTION

Before:

Arbitrator Jeffrey Shapiro

Heard:

By written submissions and in person at ADR Chambers on Feburary 5, 2016 and via telephone conference on February 12, 2016

Appearances:

Mr. Ian A. Little and Ms. Dianna Morello for Mrs. Yanina Danzig

Ms. Sarah Deol and Ms. Katherine E. Kolnhofer for St. Paul Fire & Marine Insurance Company

Issues:

The Applicant, Mrs. Yanina Danzig, was injured in a motor vehicle accident on March 21, 2013, and sought accident benefits from the St. Paul Fire & Marine Insurance Company (“St. Paul”), payable under the Schedule.¹ The parties were unable to resolve their disputes through mediation and Mrs. Danzig, 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.² This now comes before me on a Motion for interim benefits.

The issues in this Motion are:

1. Is Mrs. Danzig entitled to interim medical, rehabilitation and attendant care benefits in an amount up to $4,425.00 per month until the release of the decision following an Arbitration Hearing?

2. Is either party entitled to their expenses for this Motion, and if so, in what amount?

Result:

1. Mrs. Danzig is entitled to combined interim medical, rehabilitation and attendant care benefits on a monthly basis at the rate of up to $3,000.00, commencing with the date of this decision through the issuance of the decision following the Hearing of this matter, payable directly to the 3^rd party independent service providers. Interim benefits are not awarded for any period prior to this award.

2. The question of expenses related to this Motion is deferred to the Hearing Arbitrator.

EVIDENCE AND ANALYSIS:

Background

Mrs. Danzig is currently an 88-year-old retired gynecologist. She lives in a seniors building, with a similarly aged husband, a war amputee from World War II. Mrs. Danzig’s native language is Russian and she speaks broken English.

At the time of the March 21, 2013 accident, Mrs. Danzig was 85 years old. She was a pedestrian standing at a corner, when a truck ‘cut a corner, knocked over two poles, one of which struck her.’³ The truck was insured with St. Paul. For purposes of this interim benefits Motion, it’s important to note that Mrs. Danzig does not drive and is uninsured. Thus, via the policy of insurance covering the truck, St. Paul is the Insurer for both the ‘no fault’ accident benefits claim and the pending tort claim out of the same policy of insurance.

Mrs. Danzig was located at the scene by paramedics, who noticed immediate injury to her head. She was said to be asking repetitive questions and had no memory of being involved in an accident.⁴

Mrs. Danzig sustained several fractures including her ribs, pelvis and hip, among impairments to her neck, back and right side, particularly her right shoulder. She sustained a closed head injury, which resulted in immediate amnesia and confusion. She was hospitalized for over three weeks, and then spent four weeks in St. John’s Rehabilitation Hospital, after which she returned home, receiving attendant care services in her home twice per week, for two hours per visit, paid for by St. Paul, with additional care provided by her daughter Rosa Danzig (“Rosa”), and grandsons Serge (Rosa’s adult son) and Daniil (Rosa’s nephew), and to some degree, her husband. More recently, she has received attendant care benefits in the amount of $3,000.00 a month and medical and rehabilitation benefits of $1,425.00 a month.⁵

The main issue in this Arbitration proceeding is whether Mrs. Danzig is designated as catastrophically impaired as defined in the Schedule, together with entitlement to attendant care benefits, and certain medical benefits and assessments. The issue in this Motion is whether Mrs. Danzig is entitled to interim benefits – specifically attendant care and medical/rehabilitation benefits – thus accessing benefit levels beyond the non-catastrophic benefits, prior to the full Hearing on the determination of catastrophic designation.

The parties are in disagreement about Mrs. Danzig’s pre-accident condition, as well as the cause of what daughter Rosa describes as her mother’s “severe and rapid decline in her level of function, cognitive ability, memory, judgment and personality,”⁶ following the accident, or even the full degree of impairment.

Nevertheless, there does not seem to be much dispute – at least for the purposes of this Motion – that prior to the accident, Mrs. Danzig had at least some cognitive and psychological decline, but was relatively independent and able to care for her husband, while subsequent to the accident she has been in need of and receiving 24-hour per day care provided by a combination of paid caregivers and family members. In the process, “she has exhausted the non-catastrophic medical, rehabilitation and attendant care benefits available to her,”⁷ and while St. Paul does not explicitly concede that she needs ongoing care or at the rate that she’s been receiving that care, St. Paul in fact paid the requested attendant care benefits right up to the non-catastrophic limits, and at this time, does not have any Insurer Examinations refuting the Applicant’s contention that she presently has ongoing need for 24-hour care. There is very little medical evidence that she will improve.

While the parties do disagree about the extent of her impairment and whether Mrs. Danzig meets the test for the catastrophically impaired designation, regarding criterion 7, the Insurer places her Whole Person Impairment (“WPI”) rating at 44% WPI⁸ and the Applicant’s rating is “a minimum of 64% whole person impairment.”⁹

Most interestingly, St. Paul, in its capacity as the “tort” or “third-party” Insurer, provided “without prejudice” advanced payments to Mrs. Danzig of $50,000 in January 2015 and $25,000 in October 2015. Applicant’s counsel submits that St. Paul, however, for “tort” purposes has not conceded that Mrs. Danzig is not catastrophically impaired, but rather contends that she may be catastrophically impaired.¹⁰ In the simplest terms, different departments of the same company are arguing diametrically opposed positions. As the “tort” Insurer, St. Paul is arguing that Mrs. Danzig may well be catastrophically impaired and thus the “1^st party” Insurer would be primarily responsible for the increased medical and attendant care benefits that are at issue in this arbitration. St. Paul, as the “1^st party” Insurer, however, is arguing she is not catastrophically impaired.

As of the Motion Hearing, the Hearing of this accident benefits matter is set for the determination of catastrophic designation in December 2016. For context, Applicant’s counsel submits that the tort matter is not scheduled for a Hearing. Nevertheless, the tort Insurer is not prepared to advance further payments.

Timeline and Overview of Medical Evidence

The central medical assessments in this matter can be grouped in to 3 types. First, Mrs. Danzig’s treating physicians. Second, the Insurer’s Catastrophic Assessment Team – consisting of four assessments, culminating in an Executive Summary, offering a WPI rating of 39%, and an apparently amended report offering a 44% rating, still below the 55% threshold. Third, Applicant’s Catastrophic Assessment by Dr. Harold Becker, offering a minimum WPI rating of 64%, in addition to emotional testing scores that “fall with the marked to extreme categories… impairment ranges.”¹¹

In terms of treating physicians, on July 23, 2013, Mrs. Danzig was seen for a Psychiatric Assessment with Dr. Zener at Baycrest Hospital, on an OHIP referral from her family physician due to anxiety, depression symptoms and head injury. Dr. Zener opined that regarding AXIS V, the Applicant had a GAF score of 20-30.¹² The Applicant contends that using the “California method” of converting GAF scores into WPI ratings, this equates to a 70 to 77% WPI, thus exceeding the catastrophic test of 55%.¹³

On August 27, 2013, five months post-accident, the Applicant’s family physician, Dr. Gottesman, completed the Application for the Determination of Catastrophic Impairment designating impairment under criteria 8 – marked (class IV) or extreme (class V) impairment due to mental or behavioural disorder, and indicated on the Application “cognitive impairment – loss of independence from MVA… Personality change, memory decline, paranoid, panic attacks, no initiative, negative, not doing any household duties.”¹⁴ The Insurer then arranged for and conducted independent medical examinations examining criteria 7 and 8.

On September 13, 2013, the Applicant underwent a Neurological Assessment – an Independent Medical Examination – with Dr. Gawel, who opined, “this lady presents with further cognitive decline which was apparently rapid after her accident and head injury.” He suggested the prognosis was poor. ¹⁵ It’s not clear who requested this assessment.

From October 25, 2013 to May 2014, Evolve Assessments conducted the multidisciplinary Insurer Examination Catastrophic Assessment, as follows: Mr. Jeff Ford conducted an Occupational Therapy Assessment on October 25, 2013, Dr. Sekyi-Out conducted an Orthopaedic Assessment on November 22, 2013, Dr. C. West conducted a Psychological Assessment on December 18, 2013, and Dr. G. Moddel conducted a Neurological Assessment in February 20, 2014. Reports were issued, dated April 23, 2014, with an Executive Summary Report also dated on April 23, 2014, offering a 39% WPI rating. An updated Executive Summary was issued on May 5, 2014, offering a 44% WPI rating.

On May 5, 2014, Mrs. Danzig initiated mediation proceedings.¹⁶ By September 2014, Mrs. Danzig had exhausted medical rehabilitation policy limits of $50,000 and attendant care limits of $36,000.¹⁷

By report, dated September 22, 2014, Dr. H. Becker of Omega Medical Associates issued his Catastrophic Assessment on behalf of Mrs. Danzig. He opined that Mrs. Danzig had sustained a minimum WPI rating of 64% and that she also suffers from marked or extreme emotional (i.e. mental or behavioural) disorders.¹⁸ Dr. Becker did not actually examine the Applicant, but rather conducted a paper review.

In January 2015, St. Paul, as the tort Insurer, made “a general” advanced payment of $50,000.¹⁹

On July 13, 2015, the Pre-Hearing discussion took place in this matter and the Hearing was scheduled for December 2016. The Applicant contends her counsel “repeatedly requested that the Insurer provide early availability for an Arbitration Hearing, requesting a Hearing to be scheduled for January 2016 since well in advance of the Pre-Hearing. Counsel for the Insurer had refused to provide dates for the Arbitration Hearing prior to December 2016.”²⁰

In October 2015, the tort Insurer issued an additional advance payment of $25,000.²¹

Against that background, the parties’ positions, including factual assumptions by each side, are summarized immediately below, and then additional facts and argument set-forth by topic in the decision.

Position of the Parties

The Applicant argues this is an appropriate case for interim benefits under existing jurisprudence. The Applicant contends that as a direct result of this accident, the Applicant’s condition has deteriorated rapidly, that she is in need of – and has been receiving – 24-hour care. Until her catastrophic impairment determination is made, her benefits are exhausted, leaving her in a dire situation of medical and financial need. She believes that irreparable harm will occur if she does not receive these benefits in a timely manner. She also argues that this case has the unique factor of undisputed tort liability, coupled with the accident benefits and tort Insurer being the same, which means that an interim benefit award would not create prejudice to the Insurer. Mrs. Danzig submits that should she ultimately fail to meet her burden of proving that she is catastrophically impaired, that any overpayment will simply be a credit to the tort Insurer – which in this case is the same entity. She further argues that payment can be made directly to the third party service providers, thus reducing potential prejudice to the Insurer and showing her good faith. Finally, she argues that she requested an earlier Hearing date but due to the unavailability of Insurer’s counsel is being forced to wait more than a year for a determination.

The Insurer contends that the standard for interim relief is more stringent than put forth by the Applicant. The Insurer contends, first and foremost, that the Applicant will not meet the test for catastrophic impairment, pointing to many factors including the Applicant’s reliance on the “California method,” mistaken assumptions about the Insurer’s multidisciplinary assessment, and the fact that the author of the Applicant’s report supporting catastrophic designation never actually examined the Applicant. The Insurer also contends that the Applicant hasn’t properly established her financial need by providing supporting records and full disclosure of assets, and falls short on the other factors that are typically considered in interim benefit motions.

The standard for interim benefits

The parties expended a significant amount of time addressing what is the standard for interim benefits before the Commission, and cited many decisions supporting their positions. By all accounts, there isn’t a universally accepted standard, and various trends are found in the jurisprudence.

The starting point of the analysis is Section 279(4.1) of the Insurance Act and Rule 67 of the Dispute Resolution Practice Code - 4^th edition (“the DRPC”) which give Arbitrators the discretionary authority to make interim orders pending the final order in any matter.²² Neither of those sections, however, provide any guidance for interim awards, simply stating in pertinent part, as follows:

Insurance Act - Section 279

Interim orders

(4.1) The Director and every arbitrator appointed by the Director may make interim orders pending the final order in any matter before the Director or arbitrator. 1993, c. 10, s. 32 (2); 1996, c. 21, s. 34 (3).

[DRPC] Rule 67. Orders within proceeding: motions

67.1 An adjudicator may make preliminary or interim orders within a proceeding, pending a final order. 67.2 A party may request a preliminary or interim order, at any stage within a proceeding, pending a final order. […]

67.6 The adjudicator may determine the request on the basis of the documents and written submissions filed, or in such manner as the adjudicator considers appropriate.

That being said, it is commonly accepted that “these awards are not made lightly,”²³ and are “an exceptional remedy…not a routine part of the accident benefit claims process.”²⁴ Generally, interim awards are considered to be “a summary matter” to be dealt with on limited evidence.²⁵

Arbitrators at the Commission, therefore, have taken several approaches. The “holistic” or “look at the whole case” approach, for example, disfavours rigid criteria or “strict pre-conditions,”²⁶ as none are stated in the [Insurance Act],²⁷ but rather utilizes a flexible and discretionary approach, looking as various factors. For this approach, benefits are to be “examined in the context of the social policy behind the accident benefit system,”²⁸ although “[w]here a claim is frivolous and had no chance of success no order would be made.”²⁹ This approach was espoused by Arbitrator Wilson in Nguyen (2005) and Bui (2012). For example,

In Nguyen, [Arbitrator Wilson] considered the balance of the evidence, potential success, urgency and need and the failure to respect the provisions of the Schedule, inter alia, while viewing no single element of the above as a specific pre-condition, the absence of which will necessarily lead to the rejection of an interim application for benefits.³⁰

Another approach is the “compelling case,” and similar approaches which require that there is a “compelling case” or similar minimum standards in terms of the (1) merits, (2) urgency or (3) other factors,³¹ the absence of any of which will be fatal to an interim application for benefits. For example, in T.S. and Intact Insurance Company, Arbitrator Sone found that since the Insurer had agreed to pay ongoing attendant care and other benefits on an interim basis, regarding the past due benefits remaining at issue, there was no “urgency,” and the merits of the claims was “not clear,” and she thus denied the motion.³²

In considering the element of “merit,” many decisions find that the Applicant must establish at least a prima facie case. Black’s Law Dictionary defines prima facie case as “a case which has proceeded upon sufficient proof to the stage where it will support a finding, if evidence to the contrary is disregarded.” Thus, it is the establishment of a fact in the absence of evidence to the contrary.³³

Yet, even regarding merit, Arbitrators have disagreed about the standard of proof i.e. whether a mere showing of a prima facie case is enough, or whether it must be a “strong” prima facie case, convincing case, or as noted above a “compelling case.” The standard of proof has also been expressed as one which is “somewhat higher than at a Hearing.”³⁴ For instance, in Cripps and AXA Insurance (Canada), Arbitrator Rotter remarked that an Arbitrator should find it “very probable” that an Applicant will be found entitled to the benefits sought; in Kolonjari and Co-operators General Insurance Company, Arbitrator Bayefsky described the standard as “probably be successful”; in Gomez and Pilot Insurance Company, Arbitrator Makepeace held it needs to be a “convincing case” for entitlement; and in T.S., Arbitrator Sone described the threshold as requiring a compelling case.³⁵

Given this divergence of jurisprudence, of all the cases cited by the parties, the one I find provides the most guidance – and which I will follow – is Boyd and St. Paul Fire & Marine Insurance Company (FSCO A14-005186, November 13, 2014), for several reasons. First, both parties agree Boyd is the most on point in terms of the benefits sought and decision rendered. Second, it is among the most recent of the decisions cited, thus reflecting recent trends. Third, and perhaps most important, it was approvingly discussed and relied upon by the Director’s Delegate in Cook and RBC General Insurance Company.³⁶ Fourth, I find several aspects of the facts of the Boyd decision to be relatively similar.

In terms of the interim benefits involved in Boyd, Arbitrator Sapin awarded interim attendant care benefits past the two-year non-catastrophic mark, pending a determination of catastrophic determination at the full Hearing. Arbitrator Sapin rejected the argument that interim benefits should only be restricted to the most serious injuries, such as traumatic brain injuries or major physical impairments, or that such a motion will lead to an increase in the number of applications for interim benefits. Arbitrator Sapin provided the following overview of the law (citations omitted):³⁷

Interim Benefits – General Principles

Subsection 279(4.1) of the Act is a discretionary provision. In Ionnaidis and Canadian General Insurance Group, Arbitrator Manji summarized the principles for the exercise of this discretion, established in a number of arbitration decisions that emphasize the exceptional nature of interim relief:

• Generally an insured person’s entitlement to benefits is to be determined after a full hearing of all of the evidence.

• Novel or difficult questions of law should be dealt with in a full hearing and not within an interlocutory proceeding.

• Interim benefits are not to be awarded on a routine basis, but only in certain unusual circumstances.

• An interim order, by its very nature, is intended to cover a short period of time between the making of the order and the final order.

• An application for an interim order must be heard in a summary fashion and the order made expeditiously. At the arbitration hearing, after a full hearing of all of the evidence, the arbitrator may well come to the conclusion that a substantially different order should be made.

• An interim order is subject to the final order and an arbitrator may order interim benefits be repaid.

• Subsection 279(4.1) of the Act does not change the onus of proof. The onus of proof remains the insured person’s.

Although there are differing views, I find it is generally accepted by adjudicators in interim benefits cases that the onus is on the applicant to establish a prima facie case for entitlement, on a balance of probabilities. A prima facie case has been defined as one where the applicant’s evidence, if unanswered and believed, is sufficient to render reasonable conclusion in favour of entitlement. An applicant must also establish some need or urgency, which need not be financial in nature.

Other potentially relevant factors to take into account would be the strength of the claim versus the strength of the defence; potential success; the legislative purpose of the Schedule, which include consumer protection and timely access to benefits at reasonable cost; and the insurer’s failure to respect any of its provisions — with no single element as a pre-condition to entitlement.

I find the most helpful approach to the question of whether interim benefits should be awarded is to consider all of the above factors in the context of the case as a whole, as suggested by Arbitrator Wilson in Nguyen and again in R.J., bearing in mind the central issue in all cases for interim relief - assessing the relative risk of harm to the parties from granting or withholding interlocutory relief.

Prima facie Case:

I find Mrs. Boyd has presented sufficient evidence, on a balance of probabilities, that her case for catastrophic impairment has a reasonable chance of success at arbitration.

The Boyd decision considered the following factors: Medical Evidence, Novel or Difficult Question of Law, Hardship, and the Insurer’s Disregard of the Schedule.

I note that the Insurer agrees that the Boyd decision is generally on point, but tried to distinguish it as not dealing with the difficult definition of catastrophic impairment under criterion number seven – i.e. whole person impairment – which is much more complicated than the loss of use criteria involved in Boyd. I agree there is some merit to that distinction, and that the “merit” factor is the weakest link in the Applicant’s interim benefit motion as discussed below, but I don’t find that distinction to be dispositive. More importantly, an important aspect of the Boyd decision is that it is the first case that awarded interim benefits beyond the non-catastrophic limits be paid pending a determination of the catastrophic designation. Thus, I will generally follow the Boyd case.

What are the relevant factors in issue in this case?

The parties identified and addressed the relevant factors in this case as prejudice, financial hardship (urgency), delay and merit. Regarding merit, the parties focused on whether the Applicant will meet the test for catastrophic impairment under criterion seven, which is the whole person impairment test.

Prejudice to the Insurer

It is generally accepted that the potential prejudice to an Insurer must be considered, because, as the Insurer correctly argues, “an order for interim benefits prejudices an Insurer in those cases where an arbitrator later determines that the Insurer is entitled to a repayment which the Insurer cannot recover.”³⁸ The Insurer contends that, in fact, prejudice is obvious, and thus need not be proven, but rather it can be inferred.³⁹ Given the risk of prejudice, the Schedule provides provisions to compensate an Applicant for delayed payments by way of a high compounded interest rate.⁴⁰

As applies to this case, the Insurer argues that the $4,500+ a month in benefits being sought in this matter is significantly more than $1,000 a month that was awarded in the Boyd decision, thus increasing the chance for prejudice. Thus, it concludes, because it believes the Applicant hasn’t made out a prima facie case of catastrophic impairment and won’t be able to do so at Hearing, “…the Respondent would suffer considerable prejudice were it required to pay interim benefits. As is typically the case where interim relief of this nature is sought, the Respondent would be faced with the arduous task of having to pursue repayment once the arbitrator concludes that the Appellant is not catastrophically impaired.” ⁴¹

In contrast, the Applicant contends, “We have a somewhat rare scenario [in this case] where the catastrophic determination basically decides whether these claims are paid ‘out of the Insurer’s left pocket (accident benefits) or right pocket (tort)’ yet even that has not been insufficient to prevent the Insurer putting Ms. Danzig in jeopardy.”⁴² Thus, the Applicant argues that the risk of prejudice is uniquely low in this case, given that the same Insurer is both the 1^st party carrier and the tort Insurer, liability is not an issue (the Applicant was a pedestrian when the insured’s vehicle struck a streetlamp, which in turn struck the Applicant), and the Insurer’s doctors do not dispute causation of the medical impairments.⁴³ In fact, the Applicant points to the fact that the Respondent, in its capacity as the tort Insurer, has already advanced two payments totalling $75,000 for medical benefits and/or attendant care benefits. In response to my inquiry, the Applicant asserts, and the Respondent does not dispute, that under the Insurance Act, if there is an overpayment by the 1^st party carrier, those payments will be an automatic credit to the tort carrier, negating ‘the arduous task of having to pursue repayment’ if the Applicant doesn’t prevail at the Hearing.

On this last point, the Insurer argues because of the internal “Chinese wall” between its 1^st party and tort divisions, that I cannot make the full inferences that the Applicant suggests, but rather I can only properly infer that the tort carrier has reached its upper limit of what they see is the exposure to be paid, and nothing more. The Applicant, however, states that such is not case – and that “wall” is designed to protect the Applicant, not hurt her. Rather, the Applicant submits, based on its communications with the tort Insurer, that the issue is the tort Insurer is not prepared to concede that the Applicant won’t make the catastrophic designation. In other words, the tort carrier is under the assumption that the Applicant may be deemed catastrophically impaired, and thus, the tort carrier is not going to advance further payments or benefits it believes would ultimately be paid by the 1^st party carrier under catastrophic benefits limits.

In considering this factor, certainly there is risk of prejudice in every case where interim benefits are sought and awarded. I’m persuaded, however, for purposes of this Motion that the risk of prejudice, while still present, is unusually low for the reasons put forth by the Applicant – e.g. any payments that are ultimately deemed overpayments will be an automatic credit to the tort carrier, which in this case is the same company.

Financial Hardship/Urgency

As noted in Boyd above, an “…Applicant must also establish some need or urgency, which need not be financial in nature.” While some of the cases address these considerations independently, others address them together. Similarly, as the parties did not mention urgency as a stand-alone topic but sufficiently addressed it terms of financial hardship, I will address them together. The jurisprudence does not set forth a clear test on what is sufficient financial hardship or urgency.

The jurisprudence is, nevertheless, fairly well settled that “routine financial suffering” one expects when weekly income benefits are terminated, particularly for an Applicant of modest or low income, is not by itself grounds to satisfy the requirements.⁴⁴ The same would apply with medical benefits or attendant care benefits. Thus, many of the decisions note that the Schedule provides provisions to compensate an Applicant for delayed payments by way of a high compounded interest rate.⁴⁵

Typically, decisions awarding interim benefits – particularly income replacement benefits – involve an Applicant experiencing severe financial distress, such as losing their house or being rendered destitute.⁴⁶ Other cases, such as Boyd, have granted interim benefits where extensive attendant care is needed, and the Applicant has an inability to pay for it. Boyd also involved the concern that the financial hardship would result in the “very real possibility of an irreversible move to a long term care assisted living facility, a prospect which is very unappealing to her.” ⁴⁷

In terms of proof, from the cases cited, detailed financial accounting does not appear to be necessary as interim benefit motions are typically summary proceedings. Likewise, bank records don’t appear to be required, but some cases have found them supportive of a successful interim motion claim, such as in Ramalingam and State Farm, while other cases have noted their absence – particularly in absence of any other proof. Thus, in the absence of any (1) objective evidence, such as financial records, or (2) particulars of the need, however, an Applicant’s bald assertion of financial need is not enough.⁴⁸

At first blush, the Applicant’s Affidavits of daughter Rosa Danzig and lawyer Dianna Morello make out the case of financial hardship. As set forth above, the Applicant needs 24-hour care which is being taken care of by the Applicant’s family, and some third-party providers, and medical care, at the rate of $4,425.00 a month, against the Applicant and her husband’s household fixed income of approximately $2,164 per month. The Affidavit of the Applicant’s daughter Rosa describes the 24-hour care needed, including the care provided by the family members, and the adult grandchild who has moved in so that they can ensure the Applicant has immediate care. At least by way of Affidavit, the situation appears dire.

The Insurer argues that the Applicant presents an “incomplete picture of the Applicant’s financial state,”⁴⁹ and points to several alleged missing pieces of information. For instance, the Insurer notes that there was a prior motor vehicle accident with accident benefit and tort claims, and yet there was no accounting provided for that money, nor an accounting for the $75,000 advance payment by the tort Insurer. While such an accounting was not presented in the other cases cited where interim benefits were awarded, I do have some pause as to why the Applicant has not directly stated that her savings are depleted. In the context of evidence presented such as daughter Rosa’s Affidavit, however, I’m satisfied there is immediate need, and serious financial hardship.

Regarding the Insurer’s arguments that bank credit card records are not present, such as in Ramalingam and State Farm, I note that in the other cases cited by the parties awarding interim benefits no such evidence was presented and I don’t find the absence to be fatal to this claim.

The Insurer also pointed out that the Applicant was and is receiving non-earner benefits which have not been terminated, and that she did not initially disclose that fact in her submissions. The Applicant points out, however, that due to the ramp down, the total amount that will be received is $25,000, and $18,000 of that amount has been paid. Thus, starting within about a week of the oral submissions of this case, the Applicant counsel represents that the Applicant will be paid a mere $55 per week – essentially a negligible amount, not a glaring omission. Considering all the Affidavits materials presented, I’m satisfied this criterion has been met.

Finally, while I generally agree with the Insurer’s assertion that the Schedule provides provisions to compensate an Applicant for delayed payments by way of a high compounded interest rate⁵⁰ – a factor that mitigates against interim benefits in most cases – I believe that rationale falls short in this case because an after-the-fact interest payment is of little consequence to Applicant, who like the Applicant in Boyd, is of an advanced age, is in need of constant care, and may have to be moved to a hospital facility and separated from her own apartment and husband (or the months of her family’s time that is dedicated to her care in the interim) if interim benefits are not paid.

Alleged Delay

The Applicant contends that this matter has been significantly delayed due to the Insurer and its counsel, while the Insurer attributes much of the delay to the Applicant.

The Pre-Hearing conference took place on July 13, 2015. The record was unclear, but I understand from the materials, supplemented by oral arguments, that this matter was not scheduled for the full Arbitration Hearing until December 2016, due primarily to the unavailability of Insurer’s counsel. The Applicant contends that as of the Pre-Hearing, her counsel was available for virtually any week from July 2016 on, with the exception of one week. Of significance, by letter dated March 27, 2015 – approximately 4 months prior to the Pre-Hearing – Applicant’s counsel wrote to the Insurer seeking to agree to set Hearing dates prior to the Pre-Hearing “due to the client’s age,” and followed-up, but deposes that no response was received. The Applicant contends that ultimately the Insurer refused to provide a date prior to December 2016.⁵¹

Certainly, the usual custom and practice is that in the overwhelming majority of cases, dates are set based on the agreement of and the availability of counsel, which often means a date a year or more in the future. At times, neither counsel want an earlier date as there is no urgency or the matter isn’t ready for Hearing, such as when assessments have not be scheduled.

This case is troubling, however, where there is a real imminent need for benefits to be adjudicated in a prompt manner, but yet there is a delay due to the busy trial schedule of the Insurer’s counsel. The Applicant comments that “The Insurer certainly has the right to choose its own counsel, but not to the detriment of the Applicant’s right to have her case adjudicated a timely and fair manner and the prejudice she will suffer due to unnecessary delay.”⁵² In this regard, I am mindful of “the context of the social policy behind the accident benefit system” – i.e. the issue is about timely benefits to an elderly, retired Applicant who needs those benefits the most, not the scheduling concerns of counsel.

Master Sproat, in Hollo v. Toronto Transit Commission,⁵³ articulated similar comments in a different, but analogous situation, admonishing counsel for failing to provide production requests due to his busy schedule. The Master concluded that if counsel is not able to fill his duties to the litigation process then he should decline representation. Counsel’s trial schedule is not always a valid basis to delay obligations to the Commission. To the contrary, the Hollo decision states that counsel who does not have time to address a case, should turn it over to other counsel.

In this regard, I found the Applicant’s case to be similar to the fact of Nguyen and State Farm,⁵⁴ where there was a delay in the scheduling of the Hearing due to the Insurer counsel’s unavailability, over objection of the Applicant’s counsel. In Nguygen, the Arbitrator found that delay mitigates in favour of interim benefits. I find this factor, too, weighs in favour of an interim benefit award.

I find some merit to the Insurer’s allegation that the Applicant and her representatives may have contributed to the delay of these proceedings prior to the filing of the Application for Arbitration, but with some important distinctions. Keeping with the summary nature of this Motion, it does appear that some delay can be attributed to the Applicant and that the Applicant’s reference to the total time of the proceeding is a bit misleading. What I find most relevant, however, is the delay that occurred since the Pre-Hearing. As noted above, the Applicant put the Insurer on notice nearly four months before the Pre-Hearing that early dates were being sought, and yet, at the July 29, 2015 Pre-Hearing, the earliest hearing dates that the Insurer offered – as alleged by the Applicant – were in December 2016. Moreover, that delay comes with an 85+ year-old Applicant who was rapidly exhausting non-catastrophic medical and attendant care benefit limits. In my opinion, the Hearing of this matter has been unnecessary delayed to the Applicant’s prejudice.

Merit – Does Mrs. Danzig meet the test for designation of catastrophically impaired on a prima facie basis?

I find that Mrs. Danzig has made out a prima facie case for establishing a catastrophic impairment, and has a reasonable chance of success at Arbitration, as set forth below. Rather than address each medical report in this summary proceeding, I will focus on a few key points.

The Applicant argues that Mrs. Danzig sustained physical injuries and a rapid cognitive decline as a result of the accident. The Insurer argues⁵⁵ that before the accident and thereafter, the presence of prescription medications used to treat nonrelated symptomatology, including depression, support a finding that the Applicant’s cognitive decline is not related to this accident. The Insurer, relying on its own assessor, Dr. West, also disputes the extent of the cognitive decline, and thus submits that the Applicant did not suffer class four or five impairment.⁵⁶ Generally, each party takes serious issue with assumptions or methodologies of the others assessors, and discusses the alleged flaws of the other’s reports.

The Insurer’s Criticisms of Dr. Becker’s Report

The Insurer argues that Dr. Becker improperly relies on the California method as part of his assessment, arguing that the California method has been a highly criticized in jurisprudence before the Commission.⁵⁷

The Insurer also points out that Dr. Becker did not actually examine or meet with the Applicant, and so it argues, Dr. Becker’s report should be given less weight. I agree that fact does weaken his report, but not excessively. In this regard, I note Arbitrator Feldman’s comments in Jaggernauth and Economical⁵⁸ that:

While this is not necessary in every case (and I recognize that the Guides suggest that anyone trained in the Guides should be able to review and comment on another practitioner’s assessment), in a complex case of this sort, firsthand observations are important. This is especially true where the credibility of the person being assessed is an issue. Dr. Leclair stated that he believes the credibility is an important issue in this case. (Emphasis added)

In this case, neither party submits that the Applicant’s credibility is an issue, and in fact the parties agree that her cognitive and mental conditions make her unreliable, with resort necessary to medical records and family members. Thus, as the Guides themselves contemplate paper reviews, I do not find this criticism defeats a prima facie case.

Likewise, at this stage, I don’t give credence to the Insurer’s argument that the fact that Dr. Becker is only a general practitioner serves as a grounds to reject his report, for several reasons. First, that argument goes to weight of opinion, which is largely inconsistent with the prima facie standard. Second, catastrophic determinations under the WPI test are by their nature often a multi-disciplinary endeavour, and thus a duly trained general practitioner is reasonably suited to author such a report. Finally, Dr. Becker’s opinions have been accepted in some cases before the Commission, and he is one of the leaders in the field of catastrophic determination.

One concern that the Insurer didn’t raise is that Dr. Becker’s report incorrectly states on page 1 that “The trailer rolled over the sidewalk and struck Mrs. Danzig knocking her to the ground.” While a relatively small issue, nevertheless, it raises some concerns as to what other errors are present in his report.

The Applicant’s Criticism of the Insurer’s Catastrophic Report

While the Applicant certainly had some pre-existing conditions, some of which appear to be related to aging, I generally agree with the Applicant’s position that the Insurer’s allegations of causation are not particularly well founded. While I accept the Insurer’s assertion that the Applicant had some degenerative changes at the time of the accident and that perhaps they contributed to her decline, I agree with the Applicant that there have been enough medical opinions expressed on both sides that the rapid decline is secondary to the car accident. That conclusion is supported by considering how severe the decline appears when considering the before and after pictures. In other words, at least for purposes of this Motion, the medical evidence points strongly to the conclusion that Mrs. Danzig’s rapid decline was caused by the car accident.

Dr. Moddel

The Applicant takes much issue with the way Dr. Moddel’s Neurological Assessment findings were incorporated – or more accurately not incorporated – into the Insurer’s multidisciplinary assessment culminating into the Executive Summary, despite that Dr. Moddel was part of that multidisciplinary team. Dr. Moddel opines on page 5 of his report that the Applicant suffered a closed head injury, and that, “I find this woman has a significant dementia and is now quite incapacitated following a motor vehicle accident.” In answers to the specific referral questions, he is clear that the diagnosis is related to the accident, and according to my reading, appears to dispute that the Applicant’s condition – e.g. her cognitive decline – is an aggravation of a pre-existing condition. The Applicant focuses, in particular, on Dr. Moddel’s finding that:

From a neurological point of view, Ms. Danzig suffered a severe cognitive impairment secondary to the motor vehicle accident. Please refer to the executive summary for the whole person impairment rating. (Emphasis added)

The Applicant argues that Dr. A. Sekyi-Otu’s Executive Summary omits that finding and fails to incorporate it into a WPI rating. The Insurer contends that Dr. Moddel’s findings are picked-up through psychologist Dr. West’s findings, and specifically referenced in the Executive Summary. Yet on the summary record before me, I don’t find the Insurer’s explanation satisfying. Without the aid of full cross-examination, it does appear that Dr. Moddel’s key findings are missing from the Executive Summary. The Executive Summary only briefly mentions Dr. Moddel’s involvement on page 5, and that he found there “was significant impairment compatible with a dementia rating,” a closed head injury, some fractures and other physical injuries, and then the “Quantification of mental status impairment was deferred to Dr. West.” While the Executive Summary mentions “significant impairment,” Dr. Moddel’s comments quoted above about “severe cognitive impairment” which he opined as ‘secondary to the accident’ are omitted.

I am also troubled that the Dr. Moddel’s quantification of mental status was deferred to Dr. West, because in this case Dr. West’s findings conflict with Dr. Moddel’s findings in several regards. For example, the Respondent’s Factum at paragraphs 37 to 42 details Dr. West’s conclusions regarding the Applicant’s mild or moderate impairment in the various mental and behavioural domains, when Dr. Moddel found severe cognitive impairment and described her as “now quite incapacitated.” Thus, Dr. Moddel’s clear findings of direct causation and severe decline do not appear to have been incorporated into the Insurer’s WPI rating, nor even discussed and distinguished – but rather ignored. Given the Insurer’s WPI rating of 44% based in part on Dr. West’s mild and moderate ratings, I find the absence of Dr. Moddel’s more “severe” opinion from the combined rating to be a key omission in this Motion.

Finally, it is also interesting to note that although Dr. Moddel performed a “Mini-Mental State Examination,” the result of that test is not disclosed in Dr. Moddel’s report. While Dr. Moddel notes that language difficulties make the test difficult to assess, as the Applicant points out, other assessors did not state such difficulties.

Dr. West

The Applicant also argues that the report of Dr. West, a neuropsychologist, indicates a lack of willingness to accept objective data, which raises questions of bias. While I found his report to have an air of comprehensiveness to it, when considering it against the other evidence, some of the Applicant’s criticisms appear well-founded. For example, Dr. West comments that Mrs. Danzig “may have sustained a mild closed head injury, although this was not clear,” despite that all the other medical data suggests that she did sustain such injury. As noted above, Dr. Moddel unequivocally concluded she did sustain such an injury. Even Dr. West noted Sunnybrook Hospital seems clear that she suffered a “mild closed head injury” and bystanders observed she went in and out of consciousness. Yet, despite the evidence, Dr. West ultimately only states “erring on the side of caution, it would seem” that she did sustain such injury.

Interestingly, Dr. West also states that the Applicant “perhaps fell to the ground” spontaneously, when there’s little debate that a truck entered the pedestrian sidewalk and struck a pole which struck Mrs. Danzig. It also seems odd to me that a simple fall to the ground resulted in a fractured pelvis, fractured ribs and a head injury. Dr. West also describes his tests as more of a screening nature rather than full assessments.

In reviewing Dr. West’s report with the Applicant’s criticism in mind, I found it unusual that he notes that the truck that either directly or indirectly hit her, was avoiding another vehicle.⁵⁹ In the rest of the material submitted by the parties, there is no other reference – whether by the parties or in a medical record – to a 2^nd vehicle or emergency maneuvers of “the truck.” I’m not sure of the relevance to a medical exam of the potential non-liability of the truck.

Likewise, Dr. West’s overall impression of Mrs. Danzig’s mental and behavioural conditions as mild, seems to be out of line with the other medical evidence, including his own assessment team member, Dr. Moddel, as noted above. In fact, Dr. West himself notes that Mrs. Danzig was unaware of the age of her grown up children among other basic things, yet he is the only physician who seems to find her well orientated.⁶⁰ He notes her stated history is different from family physician entries,⁶¹ and does not believe Mrs. Danzig intentionally misreported information but the differences are likely due to her dementia.⁶² The mildness of his findings appears out of synch with some of his own observations.

Conclusion

In balancing the various factors, I’m convinced that there is strong financial need with a sense of urgency and risk of irreparable harm – such as the inability for 88-year-old Mrs. Danzig to receive the 24-hour care that she is alleged to need, likely necessitating being placed in a nursing home. I am particularly mindful of the fact that Mrs. Danzig’s counsel placed the Insurer on notice of the need for an earlier Hearing date, and yet the earliest date provided for Hearing was the better part of two years from that request, and a year and a half from the Pre-Hearing. Another factor which weighs heavily in my decision is that the Respondent is both the first party Insurer and the tort Insurer.

I do acknowledge that the weakest link in the Applicant’s request for interim benefits is the “merit” factor – i.e. the strength of which the Applicant will prove its case at Hearing. Both parties have raised concerns that ought to be properly determined at a Hearing of the matter. In consideration of the parties’ submissions, among the various arguments put forth by the Applicant, however, it does appear to me that the Insurer’s own Neurological Assessment by Dr. Moddel has not been properly taken into account, that if it was, it would tip the scale of its own multidisciplinary assessment in favour of a catastrophic designation. Without the aid of cross-examination, that omission from the WPI rating – i.e. a neurologist’s finding of “severe cognitive impairment secondary to the motor vehicle accident” – is a very significant factor in my decision.

Again, I like to reiterate that I come to my conclusion on a summary basis, and that the Hearing Arbitrator with the benefit of the oral testimony may come to a different conclusion.

Finally, while I do believe that an award of interim benefits is appropriate in the circumstances, I do agree with the Insurer that the amount sought by the Applicant would be significantly more than has been awarded in existing jurisprudence, and which may create a greater risk of prejudice to the Insurer. Thus I’m setting my award at $3,000.00 per month, based in part on the amount of the invoices provided in the Applicant’s materials which is lower than the amount requested.

EXPENSES:

The question of expenses related to this Motion is deferred to the Hearing Arbitrator.

May 16, 2016

Jeffrey Shapiro Arbitrator

Date

Financial Services Commission des Commission services financiers of Ontario de l’Ontario

Neutral Citation: 2016 ONFSCDRS 142

FSCO A14-009654

BETWEEN:

YANINA DANZIG

Applicant

and

ST. PAUL FIRE & MARINE INSURANCE COMPANY

Insurer

ARBITRATION ORDER

Under section 282 of the Insurance Act, R.S.O. 1990, c.I.8, as it read immediately before being amended by Schedule 3 to the Fighting Fraud and Reducing Automobile Insurance Rates Act, 2014, and Ontario Regulation 664, as amended, it is ordered that:

1. Mrs. Danzig is entitled to combined interim medical, rehabilitation and attendant care benefits on a monthly basis at the rate of up to $3,000.00, commencing with the date of this decision through the issuance of the decision following the Hearing of this matter, payable directly to the 3^rd party independent service providers. Interim benefits are not awarded for any period prior to this award.

2. The question of expenses related to this Motion is deferred to the Hearing Arbitrator.

May 16, 2016

Jeffrey Shapiro Arbitrator

Date

In contrast, the April 23, 2014 Executive Summary of Dr. Ato Sekyi-Otu of Evolve Assessments and Diagnostics, attached as Tab 3.X to the Applicant’s Motion Record and Tab 1.B, to the Respondent’s Motion Record, places that WPI rating at 39%. The difference in the revised score appears to be that the lower score attributed dementia to the pre-existing condition, while the later rating did not. See page 6 of the May 5, 2014 Executive Summary of Dr. Ato Sekyi-Otu.

Footnotes

1. 1The Statutory Accident Benefits Schedule - Effective September 1, 2010, Ontario Regulation 34/10, as amended.
2. 2Mr. Little participated throughout. Ms. Morello participated in written submissions only, and was present, but did not participate, on February 12, 2016. Ms. Kolnhofer participated in written submissions only. Ms. Deol participated during oral submissions.
3. 3Affidavit of Dianna Morello, at para. 2, Tab 3 to Applicant’s Motion Record.
4. 4Applicant’s Factum, at page 4.
5. 5These amounts are estimates. The Applicant’s Factum, at page 1 for instance, refers to the latter as “average month cost of these benefits,” while the Applicant’s Motion Record, at Tab 2, paras. 12-15 and Exhibits thereto, state similar, but slightly different amounts.
6. 6Affidavit of Rosa Danzig at paras. 3-5, Tab 2 to Applicant’s Motion Record.
7. 7Affidavit of Dianna Morello, at para. 2, Tab 3 to Applicant’s Motion Record.
8. 8Two separate Executive Summaries are provided without explanation. The 44% WPI rating appears in the May 5, 2014 Executive Summary of Dr. Ato Sekyi-Otu of Evolve Assessments and Diagnostics, attached as part of Tab 1.B to the Respondent’s Motion Record.
9. 9September 22, 2014 Catastrophic Impairment Review of Dr. Harold Becker of Omega Medical, attached as Tab 3.Y to the Applicant’s Motion Record and Tab 1.C to the Respondent’s Motion Record.
10. 10Affidavit of Dianna Morello, at para. 8, Tab 3 to Applicant’s Motion Record.
11. 11The Respondent’s Factum, at paras. 77 and 78, alleges that the Applicant’s Factum quotation of Dr. Becker is a ‘blantant misstate[ment]’ of Dr. Becker’s report. In reading the quoted page of Dr. Becker’s report, in fact, I find no such quote, but do see the thrust of the information alleged. It appears to be sloppy paraphrasing of his report.
12. 12Applicant’s Factum, at page 5.
13. 13Applicant’s Factum, at page 6.
14. 14Applicant’s Factum, at page 2.
15. 15Applicant’s Factum, at page 8.
16. 16Applicant’s Factum, at page 3.
17. 17Applicant’s Factum, at page 3.
18. 18Applicant’s Factum, at page 3.
19. 19Applicant’s Factum, at page 3.
20. 20Applicant’s Factum, at page 3-4.
21. 21Applicant’s Factum, at page 3.
22. 22T.S. and Intact Insurance Company (A12-004348, December 24, 2012).
23. 23T.S. and Intact (A12-004348, December 24, 2012), at page 5.
24. 24Nguyen and State Farm Mutual Automobile Insurance Company (A05-000305, December 22, 2005), at pages 3 & 4.
25. 25Nguyen and State Farm (A05-000305, December 22, 2005), at page 4. See also Coutu and Wawanesa Mutual Insurance Company (FSCO A01-001446, June 21, 2002) (“Most of the decisions on interim benefits of the Commission are made on the basis of Affidavit evidence.”)
26. 26Bui and State Farm Mutual Automobile Insurance Company (A10-003081, May 9, 2012), at page 3.
27. 27In Nguyen and State Farm (A05-000305, December 22, 2005), at page 3 & 4, Arbitrator Wilson commented that “Typical of this process has been the addition of the precondition that resort to interim payment orders is limited to cases of merit, need or urgency and where a prima facie case for entitlement has been made out.”
28. 28Bui and State Farm (A10-003081, May 9, 2012), at page 3.
29. 29Bui and State Farm (A10-003081, May 9, 2012), at page 3.
30. 30Bui and State Farm (A10-003081, May 9, 2012), at page 4.
31. 31T.S. and Intact (A12-004348, December 24, 2012), at page 5-6.
32. 32T.S. and Intact (A12-004348, December 24, 2012), at page 7-8
33. 33Nguyen and State Farm (A05-000305, December 22, 2005), at page 5.
34. 34Ramalingam and State Farm Mutual Automobile Insurance Company (FSCO A02-001646, September 5, 2003), at page 4-5.
35. 35Respondent’s Factum at paras. 82-90, citing Cripps and AXA Insurance (Canada), [1997] O.I.C.D. No. 95; Kolonjari and Co-operators General Insurance Company (FSCO A97–002059, November 18, 1998); Gomez and Pilot Insurance Company (FSCO A-013080, May 10, 1995); and T.S. and Intact (A12-004348, December 24, 2012).
36. 36Cook and RBC General Insurance Company (P14-00036, May 4, 2015). While I understand that the Cook decision is being appealed, it is being appealed on other grounds.
37. 37Boyd and St. Paul Fire & Marine Insurance Company (A14-005186, November 13, 2014), at pages 3-6.
38. 38Coutu and Wawanesa Mutual Insurance Company (FSCO A01-001446, June 21, 2002), [2002] O.F.S.C.I.D. No. 89, at para. 10.
39. 39Respondent’s Factum, at paras. 82-86, citing Coutu and Wawanesa (FSCO A01-001446, June 21, 2002), [2002] O.F.S.C.I.D. No. 89, at para. 10.
40. 40Respondent’s Factum, at para. 93.
41. 41Respondent’s Factum, at para. 6.
42. 42Applicant’s Factum, at page 12.
43. 43The core issue in dispute appears to be whether the impairments meet the Schedule’s test for catastrophic impairment.
44. 44Coutu and Wawanesa (FSCO A01-001446, June 21, 2002), [2002] O.F.S.C.I.D. No. 89, at para. 11.
45. 45Respondent’s Factum, at para. 93.
46. 46See Respondent’s Factum, at para.106.
47. 47Boyd, at page 15.
48. 48Nadarajah and RBC General Insurance Company (FSCO A10-003724, December 16, 2014), p. 15. See also, Ayoub and Aviva Canada Inc. (FSCO A05-001045, May 12, 2006) , p. 16.
49. 49Respondent’s Factum, at para. 111 and also para. 7.
50. 50Respondent’s Factum, at para. 93.
51. 51Applicant’s Factum, at page 13; See also Applicant’s Motion Record, Tabs 3F, 3G, and 3H.
52. 52Applicant’s Factum, at page 13.
53. 53Hollo v. Toronto Transit Commission, 2010 ONSC 1656.
54. 54Nguyen and State Farm, at page 18.
55. 55Respondent’s Factum, at para. 103.
56. 56Respondent’s Factum, at para. 37.
57. 57See, for example, Ellis and Guarantee Company of North America (FSCO A12-001073, April 13, 2015), at page 9 (“The California method has been rejected by Arbitral jurisprudence here at FSCO.”)
58. 58“First, Dr. Leclair and others assessors and impairment resources never actually met with the Applicant.” Jaggernauth and Economical Mutual Insurance Company (FSCO A08-001413, December 20, 2010), at page 30.
59. 59Psychological Assessment Report of Dr. West, at page 3 (Tab 3.T. of Applicant’s Motion Record).
60. 60Psychological Assessment Report of Dr. West, at page 5.
61. 61Psychological Assessment Report of Dr. West, at page 6.
62. 62Psychological Assessment Report of Dr. West, at page 7.