Neutral Citation: 2016 ONFSCDRS 153

FSCO A14-006660

BETWEEN:

DAWAR TAYLOR

Applicant

and

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY

Insurer

DECISION ON A PRELIMINARY ISSUE

Before: Arbitrator Deborah C. Anschell

Heard: In person at ADR Chambers on March 17, 2016

Appearances: Mr. Carlos Ortiz, Licensed Paralegal, for Mr. Dawar Taylor Mr. Jean-Claude Rioux, Counsel, for State Farm Mutual Automobile Insurance Company

Issues:

The Applicant, Mr. Dawar Taylor, was injured in a motor vehicle accident on June 5, 2011 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 Mr. Taylor, through his 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 issues in this Preliminary Issue Hearing are:

Is Mr. Taylor precluded from proceeding to Arbitration with his claim for attendant care benefits under section 56 of the Schedule because the Application is statute-barred?
Is either party entitled to its expenses of the Preliminary Issues Hearing?

Result:

Mr. Taylor is precluded from proceeding to Arbitration with his claim for attendant care benefits under section 56 of the Schedule because the Application is statute-barred.
If the parties are unable to agree on the entitlement to, or quantum of, the expenses of this matter, the parties may request an appointment with me for determination of same in accordance with Rules 75 to 79 of the Dispute Resolution Practice Code.

EVIDENCE AND ANALYSIS:

Agreed Statement of Facts

The parties prepared an Agreed Statement of Facts. Essentially, Mr. Taylor is a 38-year-old man. On June 5, 2011, he was driving along Highway 401 in Toronto, headed to the airport, when someone drove into the rear end of his car. Mr. Taylor claims an attendant care benefit of $1,029.30 per month for the period of time from November 8, 2011 through June 5, 2013.

State Farm denied Mr. Taylor’s claim for attendant care benefits on or about May 9, 2012. The Mediator issued a Report of Mediator on April 30, 2013, that lists as a failed issue, entitlement to attendant care benefits in the amount of $1,029.30 per month from November 8, 2011, to date and ongoing. The Mediator issued a Report of Mediator on July 31, 2014 that lists as a failed issue, entitlement to attendant care in the amount of $1,029.30 from November 8, 2011 and ongoing. Mediator Flynn noted, on the July 31, 2014 Report of Mediator, that the Insurer raised a preliminary issue maintaining that the Applicant had previously mediated this issue in Mediation M13-000566 and that there was no jurisdiction to mediate the issue again.

Mr. Taylor issued the Application that commenced this Arbitration on August 13, 2014. The only issue in dispute in this Arbitration is entitlement to attendant care benefits in the amount of $1,029.30 from November 8, 2011 through June 5, 2013. August 13, 2014 is more than two years after the May 9, 2012 denial.

Respondent’s Submissions

Mr. Rioux submits that pursuant to s. 281.1(1) of the Insurance Act,² a claimant has two years from the date of an Insurer’s refusal to pay a benefit to commence an Arbitration or court proceeding with respect to that benefit. As an exception, a claimant may commence an Arbitration or court proceeding within 90 days of the failed Mediation addressing that benefit, even where the arbitration would otherwise fall outside of the two-year limitation period.³

It is the insurer’s refusal that triggers the limitation period.⁴

Mr. Rioux submits that the only issue in dispute in this Arbitration is attendant care in the amount of $1,029.30 from November 8, 2011 through June 5, 2013. State Farm unequivocally denied Mr. Taylor’s claims for attendant care on May 9, 2012. The Report of Mediator, dated April 30, 2013, states that the issue of attendant care in the amount of $1,029.30 failed. Mr. Taylor issued this Application for Arbitration on August 13, 2014. Mr. Taylor’s Application for Arbitration is thus statute-barred because it was issued outside of the limitation period.

Mr. Rioux submits that to rely on the limitation period, an Insurer’s termination of benefits must 1) include a clear and unequivocal refusal; and 2) advise the insured person of the dispute resolution process.⁵ Mr. Rioux states that State Farm unequivocally refused to pay attendant care in an Explanation of Benefits, dated May 9, 2012. The language of the Explanation of Benefits stated as follows: “Based on the Section 44 Assessment of Attendant Care Needs Form 1 dated April 18, 2012, you do not require Attendant Care. Therefore State Farm will not consider these expenses beyond May 16, 2012.” The Explanation of Benefits also advised Mr. Taylor of his right to dispute the refusal.

Mr. Rioux submits that the submission of a new application for a benefit following a clear refusal of the benefit does not restart the limitation clock. He submits that in the Blake v. Dominion of Canada General Insurance Company case,⁶ the Applicant continued to apply for caregiver benefits after they were terminated by Dominion on January 31, 2004. The Applicant mediated the issue of caregiver benefits twice and then issued a statement of claim more than two years after the initial denial, but less than two years after the subsequent denials. The trial judge in Blake held that the date of the initial termination, January 31, 2004, was the date of Dominion’s refusal to pay caregiver benefits and that the limitation period began to toll on January 31, 2004. On appeal, the Ontario Court of Appeal agreed that the action was statute-barred.

Applicant’s Submissions

Mr. Ortiz submits that Mr. Taylor applied for attendant care benefits and requested State Farm to issue a payment in the amount of $18,527.40 on May 7, 2013. State Farm replied by issuing an Explanation of Benefits, dated May 9, 2013, refusing to pay the amount claimed on the basis that the attendant care expenses had not been incurred pursuant to section 3 of the Schedule.

Mr. Ortiz submits that Mr. Rioux is incorrect when he states that the application was made in 2011. Mr. Taylor’s Form 1 was sent to State Farm on November 8, 2011. However, the actual invoices for attendant care were sent to State Farm on May 7, 2013. On May 7, 2013, Mr. Taylor’s attendant care invoices for the period from November 2011 to April 2013, totalling $18,527.40, were sent to State Farm. A week later, State Farm replied by issuing an Explanation of Benefits, dated May 9, 2013, refusing to pay the amount claimed on the basis that the attendant care expenses had not been incurred. Mr. Ortiz submits that there was only one application for attendant care benefits, i.e. the application made May 7, 2013.

A failed telephone Mediation was conducted on July 31, 2014. Mr. Taylor’s position was that the attendant care expenses had been incurred given that his service provider sustained an economic loss as a result of providing attendant care assistance for Mr. Taylor.

Mr. Taylor filed for Arbitration on August 13, 2014, 83 weeks after State Farm’s refusal to pay the amount claimed on May 9, 2013, which is less than two years later, and therefore, Mr. Ortiz submits that the Arbitration is not statute-barred pursuant to s. 56 of the Schedule.

Mr. Ortiz submits that at the July 31, 2014 Mediation, his position was that Mr. Taylor’s attendant care expenses had been incurred. His service provider, his wife, had sustained an economic loss as a result of providing attendant care assistance to Mr. Taylor.

Mr. Ortiz relies on the case of Guarantee Company of North America v. Do.⁷ In that case, the Director’s Delegate noted that a letter, dated May 2007, did not contain any denial of a monetary payment or amounts such as interest, and specifically did not refuse payment of attendant care or housekeeping and home maintenance expenses. The Divisional Court found that the time limit does not run from the date any decision has been made. It runs from the Insurer’s refusal to pay the benefit claimed.

Mr. Ortiz submits that the Application for Arbitration was filed in a timely manner and that Mr. Taylor is not precluded from proceeding to Arbitration with his claim for attendant care benefits.

Analysis

Based upon my consideration of the submissions of both representatives, I have determined that Mr. Taylor’s application for attendant care benefits is statute-barred. As set forth in the Agreed Statement of Facts, State Farm denied Mr. Taylor’s claim for attendant care benefits on May 9, 2012. The first Report of Mediator is dated April 20, 2013. With respect to attendant care benefits, the Mediator Kertesz states as follows:

Dawar Taylor was involved in a motor vehicle accident on June 5, 2011, and submitted an application for benefits to State Farm Mutual Automobile Insurance Company (“State Farm”), pursuant to the Statutory Accident Benefits Schedule (SABS).

Mr. Taylor claimed entitled to an attendant care benefit, pursuant to s. 2 (2) or s.19 of the SABS, at the rate of $1029.30 per month from November 8, 2011 to date and on-going, no further particulars provided.⁸

Based upon this Report of Mediator, I cannot agree with Mr. Ortiz’s statement that the only application for attendant care benefits was made May 7, 2013. The Report of Mediator precedes that second application date, and it clearly deals with an application for attendant care benefits. It therefore defies logic to state that the only application for attendant care benefits was the one made on May 7, 2013.

I find that State Farm’s initial denial with respect to attendant care benefits was dated May 9, 2012 as found in the OCF-9.⁹ The two-year limitation period with respect to filing an Application for Arbitration expired on May 9, 2014. Mr. Taylor’s Application for Arbitration was filed August 21, 2014 and is therefore more than three months out of time.

I cannot accept Mr. Ortiz’s submissions that State Farm’s second denial of May 9, 2013 triggered the beginning of the two-year limitation period. In this regard, I am guided by the Blake decision, relied upon by Mr. Rioux.

With respect to this issue, the Ontario Court of Appeal stated as follows at p. 14:

Ms. Blake also submits that the limitation period did not start to run until Dominion’s August, 2006 denial of caregiver benefits. I do not accept that argument. First, the submission of new applications for benefits by the claimant following a clear refusal by the insurer to pay benefits does not re-start the limitation clock. Where an insurer has denied statutory accident benefits, the claimant’s remedy is to seek recourse for the termination of benefits within the limitation period, not to submit further applications for benefits.

As in the Blake case, I find that the May 9, 2012 OCF-9 was a clear and unequivocal denial of attendant care benefits by State Farm.

The Do case relied upon by Mr. Taylor is not relevant to these proceedings, and therefore does not assist Mr. Taylor. That case stands for the proposition that a refusal of a CAT¹⁰ application was not a refusal of benefits under the Insurance Act. In the present case, we are not dealing with a CAT application, and thus I find that the Do case has no bearing on my decision.

In sum, I find that the May 9, 2012 OCF-9 was a clear and unequivocal denial by State Farm of the attendant care benefits, and thus the Application for Arbitration filed August 13, 2014 is statute-barred.

EXPENSES:

If the parties are unable to agree on the entitlement to, or quantum of, the expenses of this matter, the parties may request an appointment with me for determination of same in accordance with Rules 75 to 79 of the Dispute Resolution Practice Code.

May 24, 2016

Deborah C. Anschell Arbitrator

Financial Services Commission of Ontario