Alex Armean v. State Farm Mutual Automobile Insurance Company, 2016 ONFSCDRS 199

Financial Services Commission des

Commission services financiers

of Ontario de l’Ontario

Neutral Citation: 2016 ONFSCDRS 199

FSCO A15-005494

BETWEEN:

ALEX ARMEAN

Applicant

and

STATE FARM MUTUAL AUTOMOBILE

INSURANCE COMPANY

Insurer

DECISION ON A PRELIMINARY ISSUE

Arbitrator: Caroline King

Heard: By written submissions, completed by May 17, 2016

Counsel: Lawrence H. Calenti counsel for Mr. Armean

Christopher Deeley counsel for State Farm Mutual Automobile Insurance Company

Issue:

The Applicant, Alex Armean, was injured in a motor vehicle accident on July 30, 2012. He applied for and received statutory accident benefits from State Farm Mutual Automobile Insurance Company (“State Farm”), payable under the Schedule.¹ A dispute arose about a medical benefit claimed arising from an OCF-18 dated March 18, 2014. The parties were unable to resolve their dispute through mediation, and Mr. Armean 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 to be determined in this decision:

Is Mr. Armean precluded from arbitrating entitlement to the claimed benefit because he did not attend an insurer examination scheduled for May 13, 2014?

Result:

Mr. Armean is precluded from arbitrating entitlement to the claimed benefit because he did not attend an insurer examination scheduled for May 13, 2014.

EVIDENCE AND ANALYSIS:

The facts in this case are not in dispute. It is agreed that the Mr. Armean, the insured Applicant, did not attend a section 44 insurer examination scheduled for May 13, 2014. The parties disagree about the impact of the non-attendance at this examination on the arbitration of the medical benefit which is the sole issue claimed in this application. The benefit is for a $820.00 incurred treatment related to a March 18, 2014 treatment plan. The Insurer’s position is that the Applicant is barred from proceeding with the arbitration because the Applicant was not entitled to mediate an issue when he did not attend the related section 44 exam. The Applicant’s position is that he is not barred from proceeding with the arbitration as the notice did not satisfy the legal requirements for such a notice.

The Law:

Section 44(1) of the Statutory Accident Benefits Schedule (the “Schedule”) provides that as long as an Insurer does not require an insurer examination more often than is reasonably necessary, the Insurer has the discretion to require an insured to attend an examination by the regulated health professional selected by the Insurer, for the purpose of assessing the Insured’s entitlement to a benefit. The assessment needs to have some sort of nexus with the benefit claimed and the Insurer is required to comply with the notice provisions in the Schedule.

There is a consequence to not attending a section 44 insurer examination when proper notice is given. Section 55 of the Schedule contains mandatory language and operates as a bar to the commencement of mediation proceedings if an insured does not attend a section 44 examination when given notice in accordance with the Schedule. This means that if the insured does not have a reasonable cause for not attending the insurer examination, the insured does not have the right to commence a mediation proceeding. Section 280(2) of the Insurance Act requires that an issue be mediated before arbitration proceedings can start. If an issue cannot be mediated (because the insured did not comply with the legal requirements), then the issue cannot be arbitrated. In other words, the insured is precluded from arbitrating an entitlement for a claimed benefit if the insured, without a reasonable cause, did not attend a section 44 exam for which proper notice was given.

Facts in this Case:

In this case, the accident occurred on July 30, 2012 when the insured Applicant was 12 years old. Since that time the Applicant has attended two in person Insurer’s examinations. The first assessment was done on November 30, 2012 by Dr. Liza Weiser, psychologist. The second assessment was done on June 7, 2013 by Dr. Dharamshi, general practitioner. On March 18, 2014, the Applicant submitted an OCF-18 treatment plan by Physiotherapy Fix. This treatment plan proposed continued physical therapy, chiropractic treatment, and massage therapy in respect of neck pain, upper and lower back pain headaches and bilateral shoulder pain. The $820.00 in dispute in regards to this treatment plan has been incurred.

On April 9, 2014, the Insurer sent a letter to the Applicant stating that the treatment plan had not been approved and that the Insurer would be requiring an assessment examination pursuant to section 38(1) and section 44 of the Schedule to assess the Applicant’s entitlement to the benefit and that further details would be provided. On April 16, 2014, the Insurer set out notice of the insurer examination (the “Notice”), which advised that the Insurer’s section 44 assessment examination would take place on May 13, 2014 at 4:00 p.m. by Dr. Steven Dilkas, a physiatrist. The Notice indicated the location of the assessment, the duration of the assessment (one hour),

the assessor’s name, credentials and speciality, and the reason for the assessment which was to determine:

…if the proposed Treatment and Assessment Plan (OCF-18) dated March 18, 2014 is reasonable and necessary as the frequency of care does not diminish over time and treatment focusses on passive care without an active rehabilitative phase.

In letters dated April 21, 2014, May 6, 2014, and May 16, 2014 from the Applicant’s counsel to the Insurer’s counsel, the Applicant’s counsel took issue with the Insurer’s selection of a different assessor and stated that he felt the Insurer’s reasons for proposing a different assessor was neither reasonable nor necessary. The Applicant’s counsel stated that the Applicant would attend an examination done by the previous assessor, Dr. Dharamshi, general practitioner.

The Insurer did not change its position, and maintained that the assessment was to be done by Dr. Dilkas, physiatrist, in accordance with the Notice. The scheduled assessment was scheduled approximately two months after the OCF-18 was submitted, and approximately three months before the commencement of the hearing. The Application for Mediation occurred after the Applicant failed to attend the May 13, 2014 scheduled assessment.

When I consider these facts, against the statutory and legal requirements, I note that there was no specific objection raised that the Applicant was being required to attend an Insurer Examination more than reasonably necessary, indeed, the issue that the Applicant’s counsel took in his correspondence with the Insurer, was the selection of the assessor. While the Applicant may request a different assessor, it is the Insurer who has the right to choose the assessor, in this case the regulated health professional, physiatrist Dr. Dilkas. Despite the suggestion of the Applicant’s counsel, the Insurer is not obligated to establish that it is reasonable and/or necessary to use a different assessor. Section 44 gives the Insurer the discretion to choose the assessor.

As stated by Arbitrator Sapin in Corbin and Personal Insurance Company of Canada:²

…the Insurer controls the assessment process. The Insurer is entitled to choose the evaluating medical specialist provided there is ‘some nexus’ between the speciality and the injuries claimed. It is entitled to choose as many specialists as are reasonably required and to examine as often as is reasonably necessary.

In this case, there is a nexus between medical and rehabilitation benefits claimed for physical treatment in the new March 18, 2014 treatment plan, and an assessment by a physiatrist, who specializes in physical medicine and rehabilitation. Further, I find requiring an Applicant to attend such an assessment with a new more specialized assessor, in response to a new treatment plan, ten months after the last assessment, twenty months after the date of loss is not unfairly intrusive to the Applicant as suggested by the Applicant. The Insurer has the right to gather its own information, including information from assessments, to properly adjust the file and to respond to a new treatment plan. I find that the Insurer had a right to require the Applicant to attend the assessment with the specialist Dr. Dilkas, and that the May 13, 2014 assessment was not more than reasonably required.

The Applicant raised further issue with the validity of the Notice. The Applicant took issue with the reasons listed in the Notice. There was an error in the Notice as it indicated that there was no an active rehabilitation phase in the treatment plan. The treatment plan did include an active rehabilitation phase, however, when I consider this error in context, I find that it is minor and does not undermine the main reason provided in the Notice (to determine the reasonableness and necessity of the proposed treatment plan). The Applicant argued that the Notice was not in clear and straightforward language understandable to the (then) 14 year old Applicant. However, as the Applicant is a minor, the relevant issue is whether his mother, (his appointed legal representative), can understand the language in the Notice. I am satisfied that the content and language in the Notice was sufficiently clear for the Applicant’s mother to understand the reasoning for the Notice and the examination.

While there may be circumstances where an insured has a reasonable cause not to attend an insurer’s examination, I am not satisfied that this is the case here. I find that the notice was in compliance with the Schedule. There was no allegation of bias, or that the Applicant was not available on the date and time of the scheduled exam, or particulars of any specific concern about Dr. Dilkas, the physiatrist, rather the principle concern expressed in the correspondence from the Applicant’s counsel to the Insurer was that the Insurer had chosen a new different assessor.³

I find that the Insurer gave notice in accordance with the Schedule, and the Applicant, without reasonable cause, did not attend the May 13, 2014 insurer’s exam. This means that by operation of section 55 of the Schedule, the Applicant was not entitled to commence mediation proceedings because he did not attend the Insurer’s section 44 examination and that the issue could not be mediated. Because the issue was not mediated, the Applicant cannot proceed to arbitration because of section 280(2) of the Insurance Act.

The Applicant is precluded from arbitrating entitlement to the $820.00 incurred claimed benefit in the March 18, 2014 treatment plan because he did not attend the insurer examination scheduled for May 13, 2014.

July 26, 2016

Caroline King

Arbitrator

Date