Financial Services Commission of Ontario
Commission des services financiers de l’Ontario
Neutral Citation: 2016 ONFSCDRS 33
Appeal P15-00010
OFFICE OF THE DIRECTOR OF ARBITRATIONS
LYNDA FEDERICO
Appellant
and
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY
Respondent
BEFORE:
David Evans
REPRESENTATIVES:
David S. Wilson for Ms.Lynda Federico
Jonathan Schrieder for State Farm Mutual Automobile Insurance Company
HEARING DATE:
October 26, 2015
APPEAL ORDER
*Minor error on page 3 and Order corrected on April 20, 2016 in accordance with the Dispute Resolution Practice Code and section 21.1 of the Statutory Powers Procedure Act.
Under section 283 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:
Paragraph 3 of the Arbitrator’s order dated January 6, 2015, is rescinded. The issue of entitlement to and, depending on that determination, the amount of a special award, is returned to arbitration for redetermination before a different arbitrator.
If the parties cannot agree on the legal expenses of this appeal, a determination of them may be requested within 30 days of this decision.
January 21, 2016
David Evans Director’s Delegate
Date
REASONS FOR DECISION
I. NATURE OF THE APPEAL
Arbitrator Huberman, in his decision dated January 6, 2015, found that Ms. Federico was entitled to two treatment plans under the SABS–1996.1 However, he found that her insurer, State Farm Mutual Automobile Insurance Company, had not acted unreasonably in denying those plans, so he refused her a special award under s. 282(10) of the Insurance Act.
Ms. Federico appeals that refusal.
II. BACKGROUND
Ms. Lynda Federico was injured in a motor vehicle accident on December 22, 2007. She claimed medical and rehabilitation benefits – such as occupational therapy – pursuant to ss.14 and 15 of the SABS, as set out in two Treatment and Assessment Plans (OCF-18s) of October 2010 and October 2011.
Over 26 pages, the Arbitrator set out the law, the positions of the parties, and his findings with respect to Ms. Federico’s credibility and the reasonableness and necessity of those OCFs.
To take one example, State Farm relied extensively on the Occupational Therapy In-Home Assessment Report of Ms. Marlene Morse, dated February 25, 2011 for its position that the 2010 OCF was not reasonable and necessary. The Arbitrator quoted relevant portions of that report, and then set out why he found the conclusions Ms. Morse reached were unsupported.
The portion of the decision related to the Special Award is much shorter. Again, the Arbitrator set out the law and the parties’ positions, such as Ms. Federico’s submission that State Farm did not conduct any reasonable questioning with respect to Ms. Morse’s conclusions or make any further inquiries.
The Arbitrator’s findings are as follows:
Based on the evidence before me, I find that State Farm has not unreasonably withheld or delayed payments to Ms. Federico within the meaning of subsection 282(10) of the Insurance Act. I am unable to find that State Farm, and its representatives, breached a duty of good faith in the circumstances of this case. I find that State Farm’s behaviour was not unreasonable: it did not go beyond what is reasonable and equitable nor did it fail to be guided by or listen to reason. Its conduct was not excessive, imprudent, stubborn, inflexible, unyielding, or immoderate in respect of withholding or delaying payments to Ms. Federico in respect of the subject OCF-18s.
I am unable to find that State Farm ignored all other evidence, and concentrated only on its own reports. I am not persuaded that State Farm improperly failed to consider the totality of the evidence.
I do not agree with the submission of counsel for Ms. Federico that [the current claims representative] Mr. Kope’s evidence speaks volumes with respect to the intransigence and inflexibility of State Farm, nor do I accept the argument of Ms. Federico that she got no fairness, objectivity, or good faith from Mr. Kope, his predecessor, or from State Farm. I reject these arguments.
III. ANALYSIS
Conclusory reasons are conclusions without explanations for them: R. v. M. (Y.) (2004), 2004 CanLII 39045 (ON CA), 71 O.R. (3d) 388 (C.A.). I find the Arbitrator’s reasons to be conclusory because he did not explain how the evidence lead to his conclusions. He simply stated that, based on the evidence before him, Ms. Federico failed to meet the test for a special award.
Both at arbitration and on appeal, Ms. Federico set out a number of reasons why she feels the evidence warranted a special award. For instance, she submits that State Farm uncritically relied on Ms. Morse’s report. However, the Arbitrator did not deal with any of that evidence specifically but gave boilerplate reasons that could apply equally to any case.
Furthermore, it is not possible to see from the context of the decision why a special award would be denied without more discussion. In that regard, I note that the Arbitrator stated that the “overwhelming weight of the medical and non-medical evidence supports a conclusion that at the time of the submissions of the OCF-18s, dated October 25, 2010 and October 25, 2011, Ms. Federico had not returned to her pre-accident status and she was in need of Rehabilitation Benefits, including occupational therapy, as a result of her accident-related injuries.” It is difficult to square that finding with the finding that State Farm did not improperly fail to consider the totality of the evidence.
I find that the situation in this case is similar to that in Hill and Jevco Insurance Company, (FSCO P13-00017, October 1, 2014), where Delegate Blackman stated:
“Reasons are sufficient if they are responsive to the case’s live issues and the parties’ key arguments:” R. v. Walker, 2008 SCC 34, [2008] 2 S.C.R. 245. This is not a case of the Arbitrator simply failing to properly express himself. The Arbitrator failed to address a live issue and key argument regarding the Appellant’s claim for a special award and, thereby, erred in law.
Accordingly, paragraph 3 of the Arbitrator’s decision dismissing Ms. Federico’s claim for a special award is rescinded. The issue of entitlement to and, depending on that determination, the amount of a special award is returned to arbitration for redetermination before a different arbitrator.
IV. EXPENSES
If the parties are unable to agree about the legal expenses of this appeal, a determination of them may be requested within 30 days of this decision and in accordance with Rule 79 of the Dispute Resolution Practice Code.
January 21, 2016
David Evans Director’s Delegate
Date
Footnotes
- The Statutory Accident Benefits Schedule — Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended.