Neutral Citation: 2016 ONFSCDRS 184

FSCO A13-003432 & A13-003429

BETWEEN:

ILIYAN HUSEIN and IMRAN HUSEIN

Applicants

and

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY

Insurer

REASONS FOR DECISION

Before:

Arbitrator Jeff Musson

Heard:

In person at ADR Chambers on August 4, 2015 and February 24, 2016 and by written submissions due May 7, 2016

Appearances:

Ms. Salina Chagpar participated for Mr. Iliyan Husein and Mr. Imran Husein

Ms. Teresa Martin and Ms. Mouna Hanna participated for State Farm Mutual Automobile Insurance Company

Issues:

The Applicants, Mr. Iliyan Husein and Mr. Imran Husein, were injured in a motor vehicle accident on February 12, 2011. They applied for statutory 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 the Applicants, through their 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 Hearing are:

Are Mr. Iliyan Husein and Mr. Imran Husein entitled to a special award?
Is either party liable to pay expenses in respect of the Arbitration Hearing?

Result:

The Applicants are not entitled to a special award and this claim is dismissed.
State Farm is entitled to their expenses in respect of the Arbitration Hearing. 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:

Prior to the Hearing of August 4, 2015, the substantive issues of medical benefits and cost of examinations for both Iliyan and Imran were settled, thereby leaving only the remaining issues of interest, a special award and costs. Prior to the reconvene of the Hearing on February 24, 2016, the issue of interest was also settled, thereby leaving the remaining issues of a special award and costs. The Applicants wanted to introduce medical reports at this Hearing but failed to comply with Rule 39 of the Dispute Resolution Practice Code (“DRPC”). I therefore ruled that they were not admissible into evidence. The only reports that I allowed to be entered by the Applicants at this Hearing were the Insurer’s own reports, of which the Insurer was aware of the content and conclusions, as they were authored by their own doctors.

BACKGROUND

Mr. Iliyan Husein was 6 years old and his older brother, Mr. Imran Husein, was 9 years old at the time of the accident. As such, their mother, Ms. Kavita Husein, was representing the children at the Hearing as their legal guardian. As stated earlier, all issues other than a special award and costs have been settled, so the focus of this Hearing is strictly on those two remaining issues. No witnesses were called to testify by either side at this Hearing.

SPECIAL AWARD

The Applicants are claiming a special award because they are of the opinion that their claims for accident benefits have been mishandled by the Insurer. Section 282(10) of the Insurance Act outlines an Arbitrator’s authority to grant a special award payment.² The onus of proof rests on the Applicants to prove that a special award is warranted.

ANALYSIS

A special award determination of whether an Insurer unreasonably withheld or delayed paying a benefit is a fact driven exercise. In the case before me, the Applicants did not call any witnesses and there was very little evidence submitted on behalf of the Applicants in order to justify a claim for a special award. In my opinion, when an Applicant puts forward a claim for a special award, they will summons the insurance adjuster to testify at the Hearing or, at a minimum, the adjuster’s log notes are submitted in an attempt to show that an Applicant’s file was mishandled. In the case before me, neither the insurance adjuster was called to testify nor were the adjuster’s log notes entered as evidence.

At the Hearing, there were two main issues that the Applicants were attempting to use as evidence to prove that the Insurer failed to live up to its obligation and as such, a special award should be assessed against it. The first issue was the timing of the settlement of issues prior to the Hearing, and the second issue was the handling of the Applicants’ files based on the medical evidence provided.

The Applicants submitted that by settling some of the issues on the eve of the Hearing, this showed bad faith by the Insurer as it related to the Applicants’ files. In my opinion, it is not unusual to have disputes settle between an Applicant and Insurer right up until the start of a Hearing. There are various factors which cause settlement to occur prior to a Hearing. In order to reach settlement, it requires consent of both parties. One can assume that the Applicants were satisfied with the offer to settle specific issues, otherwise they would not have agreed to the settlement. Neither an Insurer nor an Applicant should be punished based on the timing of when settlement occurred, without some additional factors.

Regardless, a special award is not punishment for payment which is simply delayed because of differing views of the file. If payment has been late in forth coming to the Applicant, as per the Schedule, the Applicant is entitled to receive interest on the amounts which are in arrears. The Schedule contemplates late payments and provides that the remedy for this is specified interest, while a special award is only appropriate when there are “unreasonably withheld or delayed payments.” In my opinion, this matter involves delayed payments because of differing views of the file. I am denying the Applicants’ request for a special award.

Second, the Applicants argued that by denying medical benefits, the Applicants were at a disadvantage when they needed their insurance company the most. In the Applicants’ submission, they are of the opinion that the Insurer did not in good faith give the Applicants the benefit of the doubt. With case law, it has been established that the onus is not on the Insurer; rather the onus is on the Applicant to prove that they require treatment.

After the accident, both Iliyan and Imran visited their family doctor. Both children were assessed by their doctor and advised that medical treatment would be beneficial for both boys to receive. The mother of Iliyan and Imran had collateral benefits from Sunlife through her employer and, as such, both boys had access to treatment and coverage through these benefits. Once the limits from the collateral benefits were exhausted as per the Schedule,³ State Farm would proceed to handle payment which they did.

As per the Schedule,⁴ both boys as part of their claim for accident benefits were sent to Independent Examinations which is standard practice. Iliyan and Imran were assessed by Dr. Dessouki and Dr. Blackstock. At those examinations, the conclusions that the reports came to were different than the conclusions of the children’s family doctor.

The Applicants are treating these differences of opinion as reasons why the Applicants should be entitled to a special award. In my opinion, this is not a reason to order a special award. The Applicants had every opportunity to summons the authors of the Insurer Examinations in order to try and prove that their assessments were improperly completed but, in this case, the doctors who wrote the assessment reports were not called to testify. In fact, there was no evidence presented by the Applicants to show that the Insurer did anything other than properly follow the processes and procedures of the DRPC when handling this dispute and adjusting these files.

I find that a special award cannot be ordered against an Insurer solely on the basis that the Applicants disagreed with an Insurer’s findings. In M.T. and RBC General Insurance Company, Arbitrator Richards stated that “an insurer merely being wrong does not oblige an insurer to pay a special award.”⁵ Based on the evidence presented at the Hearing before me, the Insurer had the proper stoppages in place for both Applicants. The Insurer had completed proper assessment reports and in my opinion did everything required to properly adjust the files of the Applicants.

Without evidence presented by the Applicants to the contrary, I find that the Applicants are not entitled to a special award.

The Applicants failed with both arguments that they presented at the Hearing to prove that the Insurer mishandled their claim for accident benefits and therefore both Applicants are not entitled to a special award.

EXPENSES:

State Farm is entitled to their expenses in respect of the Arbitration Hearing. 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.

July 4, 2016

Jeff Musson Arbitrator

Date

Financial Services Commission des

Commission services financiers

of Ontario de l’Ontario