Abdi Mohamud Elmi v. State Farm Mutual Automobile Insurance Company, 2016 ONFSCDRS 95

Financial Services Commission of Ontario

Commission des services financiers de l’Ontario

Neutral Citation: 2016 ONFSCDRS 95 Appeal: P14-00043

OFFICE OF THE DIRECTOR OF ARBITRATIONS

ABDI MOHAMUD ELMI Appellant

and

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY Respondent

BEFORE: David Evans

REPRESENTATIVES: Mohamed Elbassiouni for Mr. Mohamud Elmi Benjamin Flanagan for State Farm Mutual Automobile Insurance Company

HEARING DATE: November 26, 2015

APPEAL ORDER

Under section 283 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:

1. The appeal of the Arbitrator’s order of October 16, 2014, is allowed, and paragraph 1 of the order is rescinded and replaced with the following:

   1. Mr. Elmi was involved in an “accident” as defined in subsection 2(1) of The Statutory Accident Benefits Schedule — Accidents on or after November 1, 1996.

2. 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.

March 22, 2016

David Evans Director’s Delegate

REASONS FOR DECISION

I. NATURE OF THE APPEAL

Mr. Elmi appeals Arbitrator Mills’ decision of October 16, 2014 that he was not involved in an “accident” as defined by section 2(1) of the SABS–1996.¹

The appeal turns largely on the Arbitrator’s interpretation of an analysis of expert evidence regarding a vehicle’s Electronic Data Recorder (EDR) and whether the Arbitrator properly dealt with the issue before her.

II. BACKGROUND

Mr. Elmi claimed that on August 8, 2010, he was driving with three passengers in his 2003 Buick Rendezvous at about 20 kilometers an hour when he rear-ended a 2000 VW Jetta that unexpectedly stopped for an amber light. The air bags did not deploy. The VW driver, Parham Hamidi, gave his personal details but left for work. Mr. Elmi’s car, which was no longer drivable, was taken to a Collision Reporting Centre (CRC), where Mr. Elmi attended the next day to report the incident. Mr. Hamidi also provided a collision report.

With respect to the issue before the Arbitrator, she stated on page 3 of her decision that State Farm submitted that there was no accident within the meaning of the SABS: “State Farm does not deny that a collision occurred but argues that the collision was staged.”

State Farm hired William Jennings, expert forensic engineer, who analyzed the EDR in Mr. Elmi’s vehicle. He found that the data from the EDR “was not consistent with the collision scenario as reported on the self reporting collision report prepared by either driver” because it “indicated that the [Elmi] vehicle was stationary for some time prior to the collision, then was accelerated into the rear of the Hamidi vehicle.”

After receiving the Jennings report, State Farm sent Mr. Elmi an OCF-9 Explanation of Benefits dated October 20, 2011, stating:

It is our decision to immediately terminate your entitlement to Accident Benefits in that you have willfully misrepresented material facts with respect to your application for Accident Benefits. Specifically, State Farm concludes that you were not involved in a motor vehicle accident on or about August 8, 2011 [sic] which directly caused an impairment entitling you to receive Accident Benefits. State Farm relies upon Section 53 of the Statutory Accident Benefits Schedule (SABS) in denying your entitlement to payment of any Accident Benefits.

In its OCF-9, State Farm referred to s. 53 of the 2010 SABS, the Statutory Accident Benefits Schedule — Effective September 1, 2010, O. Reg. 34/10, the equivalent to s. 48 in the 1996 SABS. These provisions give insurers the right to terminate benefits where insured persons have wilfully misrepresented material facts with respect to an application for a benefit.

At the arbitration hearing, Mr. Jennings testified that while the damage to the two vehicles was consistent with the vehicles having collided in the fashion described by the applicant, the third party driver and the witnesses, the EDR data was not consistent with Mr. Elmi’s description of the accident. As the Arbitrator put it,

In his view, the EDR data is not consistent with a rear end collision because the data demonstrates that there was no braking and that there was acceleration immediately prior to impact. The data is consistent with the vehicle being at idle, then accelerating and then being at idle.

I recognize that the physical damage to the applicant’s vehicle is consistent with the manner in which the incident is said to have occurred. However, the EDR data suggests vehicle acceleration into a stationary object from a stationary position, which is not consistent with an accident as described by the applicant, but is consistent with a staged accident.

In the Analysis portion of her decision, the Arbitrator reached her conclusion that there was no “accident” in the following way:

• she reviewed what she found were “substantial inconsistencies in the evidence of the applicant”
• she set out why she preferred Jennings’ conclusion that the Elmi vehicle had been stopped and then accelerated into the Hamidi vehicle over Mr. Elmi’s contrary evidence
• she rejected Mr. Elmi’s submission that the adjustment of his claim was tainted by racial discrimination
• she found that, while people who are in accidents are not expected to have perfect recall of the accident, Mr. Elmi’s evidence did not overcome the factual findings of the expert report, which she found credible

The Arbitrator concluded:

The burden of proof is on the applicant on a balance of probabilities to establish that there was an accident as defined by s. 2(1) of the Schedule; given the above, he has been unable to do so.

For the foregoing reasons, after carefully considering all of the evidence before me, I find that on a balance of probabilities the applicant has failed to establish that there was an “accident” within the meaning of the Schedule.

III. ANALYSIS

On a preliminary point, Mr. Elmi submits that the Arbitrator erred in law by applying the 1996 SABS instead of the 2010 SABS, so that the relevant definition of “accident” should be that in s. 3(1) of the 2010 SABS instead of s. 2(1) of the 1996 SABS. I find no merit in this submission because the definitions are identical in both SABS and the transitional provisions of the 1996 SABS do not apply to the definition of “accident.” (I note in passing that the transitional provisions do apply to the provision for termination for wilful misrepresentation, s. 48 of the 1996 SABS, so State Farm correctly referred to s. 53 of the 2010 SABS in its OCF-9.)

As to the main point, Mr. Elmi submits that the Arbitrator did not address the issue before her of whether he had been in an accident but rather found that he had been in a staged accident. State Farm submits that the Arbitrator never specifically found there was a staged accident and submits that there can be a collision that is still not an “accident.”

I agree with Mr. Elmi and I find State Farm’s position untenable.

The issue before the Arbitrator was whether or not Mr. Elmi had been in an accident as defined. Thus, the prehearing letter dated August 22, 2013 states that “State Farm has raised the preliminary issue on whether or not Mr. [Elmi] was involved in an ‘accident’ as defined by the SABS.”

The definition of “accident” in s. 2(1) of the 1996 SABS provides that “’accident’ means an incident in which the use or operation of an automobile directly causes an impairment…” The Arbitrator did not address the issue of whether Mr. Elmi suffered an impairment, so the only issue she dealt with was the use or operation of an automobile. The initial inquiry is whether that use or operation occurred in the course of the ordinary and well-known activities to which automobiles are put, known as the Amos test.² In Citadel General Assurance Co. v. Vytlingam, [2007] 3 SCR 373, 2007 SCC 46, where Todd Farmer had dropped boulders from an overpass onto the Vytlingam vehicle, the Supreme Court gave an extreme example of the kind of use or operation that would still meet the Amos test:

However, to take another bizarre example for illustrative purposes. If instead of throwing rocks from the overpass Farmer had tried to jump his car at high speed over the interstate highway, Evel Knievel style, and crashed down on the Vytlingam vehicle, the insurer might want to argue that Farmer was not making an “ordinary and well‑known” use of his vehicle. However, there is no doubt that Farmer would have been driving the vehicle and driving meets the Amos purpose test.

State Farm relies on my decision in Omarashvili and Echelon General Insurance Co., (FSCO P08-00029, November 18, 2009) for the proposition that there can be a collision that is not an accident. However, I did not go that far. Rather, I listed various issues that can arise under the “accident” definition, including whether there was any incident at all. I did note that the arbitrator in that case had not dealt with an expert’s comment that contact may have occurred between the vehicles alleged to be in the incident. However, I found the clear implication was that the arbitrator in Omarashvili found there had been no incident.

In this case, there was an incident, as there was no suggestion that the collision between the Elmi and Hamidi vehicles did not occur. Indeed, Mr. Jennings’ report goes into some detail about how closely matched the damage was between the two cars, and State Farm did not deny the collision occurred. The fact that Mr. Elmi started from a stop and accelerated into the Hamidi vehicle, as the Arbitrator found, did not make the incident any less an “accident” under the definition, as there is no doubt he was driving the car, and driving meets the Amos test.

I find that the Arbitrator erred in law by not answering the question before her. As I stated in Liberty Mutual Insurance Company and Young, (FSCO P03-00043, June 20, 2005), the test for errors of law on appeal “include findings of fact made in the complete absence of supporting evidence, made on the basis of conjecture, or made on the basis of a misapprehension of the evidence caused by a misdirection on a legal principle. The vital distinction is between a conclusion that there was ‘no evidence’ to support a finding and a mere ‘insufficiency of evidence.’” Here, there was no evidence to support the Arbitrator’s finding. There had been an incident, namely a collision between the two cars, and there was no evidence contrary to Mr. Elmi making an “ordinary and well‑known” use of his vehicle.

Accordingly, the Arbitrator erred in law in finding that Mr. Elmi was not in an accident. The appeal is, therefore, allowed. The Arbitrator’s order will be amended to read that Mr. Elmi was involved in an “accident” as defined in the SABS.

Finally, as I stated above, there has been no decision on entitlement to statutory accident benefits nor on misrepresentation under s. 53 of the 2010 SABS, which reads:

53. An insurer may terminate the payment of benefits to or on behalf of an insured person,

(a) if the insured person has wilfully misrepresented material facts with respect to the application for the benefit; and

(b) if the insurer provides the insured person with a notice setting out the reasons for the termination.

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.

March 22, 2016

David Evans Director’s Delegate

Footnotes

1. 1The Statutory Accident Benefits Schedule — Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended.
2. 2Amos v. Insurance Corporation of British Columbia, 1995 CanLII 66 (SCC).