Stephanie Johnson v. Personal Insurance Company of Canada, 2017 ONFSCDRS 21

Financial Services Commission des

Commission services financiers

of Ontario de l’Ontario

Neutral Citation: 2017 ONFSCDRS 21

FSCO A16-000636

BETWEEN:

STEPHANIE JOHNSON

Applicant

and

PERSONAL INSURANCE COMPANY OF CANADA

Insurer

DECISION ON A MOTION

Before:

Arbitrator Tatiana Wacyk

Heard:

By written submissions completed on January 23, 2017

Appearances:

Mr. P. Michael Rotondo for Ms. Stephanie Johnson

Ms. Jocelyn Tatebe for Personal Insurance Company of Canada

Issues:

The Applicant, Ms. Stephanie Johnson, was injured in a motor vehicle accident on March 24, 2014 and sought accident benefits from Personal Insurance Company of Canada (“Personal), payable under the Schedule (“SABS”).¹ The parties were unable to resolve their disputes through mediation, and the Applicant, through her 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 Insurer paid the Applicant Non-Earner Benefits (“NEBs”) at a rate of $185.00 per week from September 4, 2014 to April 10, 2015, when they were terminated based on a section 44 Insurer Examination (“IE”) conducted by Dr. Walters, GP, dated March 2, 2015. The termination was maintained following the completion of a second IE by Dr. Walters, dated December 16, 2015.

An Application for Arbitration, dated January 10, 2016, was filed at FSCO on January 27, 2016.

The sole issue in dispute in the Application is a claim for NEBs to date, and ongoing.

The Arbitration was originally scheduled for January 26 and 27, 2017.

The Insurer initially sought an Order staying the Arbitration pending the Applicant’s attendance for two additional IEs to be conducted by an orthopedic surgeon and psychologist to assess the Applicant’s entitlement to NEBs.

The Applicant subsequently agreed to attend the IE with the psychologist, scheduled for February 6, 2017.

Consequently, on consent, the Arbitration Hearing was rescheduled for April 27 and 28, 2017.

The Applicant refused to attend the orthopedic IE originally scheduled for January 17, 2017. The Insurer cancelled that orthopedic IE, and subsequently advised it had been rescheduled for February 9, 2017.

The remaining issues in this Motion are as follows:

1. Is Personal entitled to a stay of the Arbitration proceeding if the Applicant fails to attend the orthopedic IE currently scheduled for February 9, 2017?

2. Is either party entitled to expenses respecting this Motion, pursuant to the Dispute Resolution Practice Code?

Result:

1. Personal’s request for a stay of the Arbitration proceeding scheduled for April 27 and 28, 2017, pending the Applicant’s attendance at the orthopedic IE, currently scheduled for February 9, 2017, is granted.

2. The question of expenses related to this Motion is deferred to the Hearing Arbitrator.

EVIDENCE AND ANALYSIS:

PARTIES’ POSITIONS

Personal

The Insurer indicates the Applicant recently served the following new medical information:

• Ontario Works File (October 31, 2016)

• Updated OHIP Summary (November 1, 2016)

• CNRs of Trillium (November 3, 2016)

• ODSP file (November 16, 2016)

• CNRS of Dr. Harry, GP (November 21, 2016)

• CNRS of Dr. Stone (December 2, 2016)

• OCF-18 for $2,486.00 in psychological treatment (December 6, 2016)

• s. 25 medical-legal orthopedic report of Dr. Langer (December 6, 2016)

• s. 25 medical-legal psychological report of Dr. Gladshteyn (December 6, 2016).

The Insurer points out this new medical information is subsequent to Dr. Walters’ IEs in March and December 2015, and includes a substantive s. 25 report, dated December 6, 2016. That s. 25 report, for the first time, diagnosed the Applicant with accident-related chronic pain, and a possible rotator cuff tear resulting from the accident, all of which, the Insurer contends, supports a change in the Applicant's condition and her entitlement to NEBs.

The Insurer maintains an IE by a physical assessor is required to ensure that it receives a fair Hearing.

The Law

Legislation

The Insurer points out that section 44 of the SABS authorizes IEs as often as is reasonably necessary for the purpose of assisting an Insurer to determine if an Insured continues to be entitled to a benefit under the Regulation. Section 44(1) states:

44. (1) For the purposes of assisting an insurer to determine if an insured person is or continues to be entitled to a benefit under this Regulation for which an application is made, an insurer may, as often as is reasonably necessary, require an insured person to be examined under this section by one or more persons chosen by the insurer who are members of a health profession or are social workers or who have expertise in vocational rehabilitation. [emphasis added]

Although an Arbitrator has no authority to order an Applicant to attend an IE, the Insurer points out Arbitrators have broad implicit powers to control their process to ensure a fair Hearing.²

Jurisprudence

The Insurer points out that in F.S. and Belair Insurance Company Inc.,³ the Director's Delegate held that an Insurer may require an IE after benefits are terminated and the insured person applies for Mediation and Arbitration, in the case of a continuing and evolving claim for ongoing benefits.

Further, in State Farm and Ramalingam,⁴ the Director's Delegate reviewed the issue of adjourning a Hearing pending section 42 [now section 44] assessments, and commented that the FSCO decisions have created an arbitral rule that allows an Arbitrator to adjourn a Hearing to allow for an IE in the case of an ongoing claim where, considering all the circumstances, fairness requires it and the section 42 requirements are otherwise met.

In State Farm and Ramalingam, the Director’s Delegate opined that the enquiry on the Insurer's request for section 42 [now 44] assessments should focus on objective factors including timing, disclosure of relevant materials, the available information, new medical information, reasonable nexus between the requested examination and the alleged injuries, and the Insurer's right and obligation to assess the claim vs. privacy.

Timing of the Request

The Insurer points out that in State Farm and Ramalingam, Director's Delegate Makepeace suggested that several Arbitration decisions reflect a misunderstanding of the prohibition against "trial brinkmanship" within the Arbitration process in determining the reasonableness of IEs.

Many arbitration decisions contain statements to the effect that the purpose of an insurer examination is to allow an insurer to fairly adjust and assess a claim, not to "buttress" or "bolster" the insurer's position at arbitration. If this suggests that an IE request cannot be found reasonable after the Application for Arbitration unless the insurer proves it is actively reassessing the claim outside the arbitration process, or that medical reports produced during the arbitration process cannot inform the insurer's request for an insurer examination for the purpose of determining entitlement to benefits claimed, this misinterprets Delegate Naylor's statement that "trial brinkmanship is not a feature of the Dispute Resolution Process". I take Delegate Naylor's statement to mean that both parties are to avoid "battle of the experts" tactics, like piling up expert reports just before the hearing, delaying disclosure of a report so the other side has no time to respond, or delaying an IE request to force a last-minute adjournment. I agree these tactics should be discouraged. However, an insurer examination may be authorized by Section 44 despite the insurer's mixed motivations in requesting it.⁵

In State Farm and Ramalingam, the Director's Delegate also commented that IEs should be requested as early as reasonably possible.⁶

The Insurer submits that in the instant case, in direct response to the receipt of the new medical documentation outlined above, and the Applicant's s. 25 orthopedic report, dated December 6, 2016, it promptly arranged for the orthopedic IE, initially scheduled for January 17, 2017.

The Insurer takes the position that the Applicant's decision to wait until 49 days before the Arbitration Hearing initially scheduled for January 26 and 27, 2017 to secure and serve new medical documentation, including the s. 25 reports in support of her claim for NEBs, should not affect its right under section 44 to have the new medical documentation and reports reviewed by its own assessor.

The Insurer points out that in Ismail and State Farm Mutual Automobile Insurance Company, Arbitrator Kowalski ruled that “while the applicant is entitled to choose the timing of his assessments, the decision to do so at the last moment should not act to disentitle the insurer from a reasonable response.”⁷

Disclosure, Available Information and New Medical Information

The Insurer points out that in State Farm and Ramalingam, the Director's Delegate commented that the disclosure of relevant materials by the Applicant, other available information and new medical information, were also important factors in considering the request for IEs.⁸

The Insurer submits that its obligation to continue to assess the Applicant's ongoing claim to NEBs, even after termination of benefits, requires it to give fair and reasonable consideration to new information it receives, including medical reports provided by the Applicant throughout the Arbitration process.⁹

The Insurer points out that despite its twelve requests to the Applicant for medical documentation, between the dates of April 25, 2014 and October 11, 2016,¹⁰ the Applicant did not fully comply until November 2016 - some 3 years and 6 months after its first request for medical documentation.

The Insurer indicates it did not become aware the Applicant was advancing a claim for NEBs based on chronic pain related to the accident, as opposed to her extensive pre-accident medical complaints, or the possible diagnosis of a torn rotator cuff injury, until it was served with Dr. Langer’s s. 25 report, dated December 6, 2016. [emphasis added by Insurer]

The Insurer submits the disclosure of medical information, the new or updated clinical notes, and the s. 25 reports, dated December 6, 2016, all support the Insurer's request for the scheduled IE in 2017 as reasonably required in the circumstances.

Reasonable Nexus

In State Farm and Ramalingam and State Farm Mutual Automobile Insurance Company and Ismail, the Director's Delegate and the Arbitrator held that another important factor in considering the request for IEs is whether there is a reasonable nexus between the proposed assessments and alleged injuries.¹¹

The Insurer submits that in this case, there is a reasonable nexus between the assessments proposed, the alleged new injuries sustained by the Applicant as a result of the accident, and the benefits being claimed. More specifically, the Insurer submits the Applicant’s allegation that she has developed chronic pain as a result of the accident, appears to have developed since the prior IEs conducted in March and December 2015.

The Insurer further points out the proposed orthopedic IE will be the Insurer's first opportunity to address the alleged development of chronic pain as a result of accident-related complaints, and the first IE by a physical assessor to review the new medicals the Applicant served in October and November 2016.

Insurer's Right vs. Privacy

The Insurer further submits it has the right and obligation to continue to assess the Applicant's ongoing claim for entitlement to NEBs despite the termination of benefits, and beyond the Mediation and initiation of Arbitration.¹²

The Insurer maintains its obligation to continue assessing the Applicant's ongoing claim requires it to give fair and reasonable consideration to the new medical documentation and the s. 25 reports by Drs. Gladshteyn and Langer, served on December 6, 2016.

The Insurer points out it is possible its own assessors may agree with the Applicant that she met or continues to meet the test for entitlement to NEBs based on the new medical information and s. 25 reports. It suggests this would avoid the resource expenditure of proceeding to Arbitration.

Fairness and Prejudice

The Insurer points out that in State Farm and Ismail, Arbitrator Kowalski confirmed that “recent jurisprudence has also made it clear that insurer examinations are not deemed unreasonable simply because they might also prove useful in ongoing litigation and that procedural fairness is an overriding consideration.”¹³

The Insurer further points out that in Certas Direct Insurance Company v. Gonsalves,¹⁴ the Divisional Court emphasized that procedural fairness is important in the consideration of whether an Insurer is entitled to an examination, and the timing of the Hearing. Justice Lederer ruled:

8Fundamental to any administrative process, is the requirement that it be fair. At its most basic, procedural fairness requires that a party have an opportunity to be heard and that it be able to respond to the position taken against it.

9In the circumstances of this case, if this arbitration is allowed to proceed in the absence of a further orthopedic examination by a doctor of the insurer's choosing, the insurer will have no practical ability to respond to the opinions with which it was provided thirty-one days before the commencement of the arbitration.

10In our view, the insurer would be denied the right to make a full response and would not be heard as the dictates of procedural fairness require. It is not enough to say that the delivery of these reports was made within the permitted time frame (in this case one day before the last day the Code, clause 39.1 says is acceptable) when, as the arbitrator found, they provide new evidence supporting a new position. This is trial by ambush.

11In understanding our concern, it is helpful to consider what is likely to happen in the absence of the adjournment. The arbitration will proceed. The most recent orthopedic reports will be presented. The insurer will have nothing current with which to respond.

The Insurer submits the facts in this case are similar to those in Certas v. Gonsalves, and that it would be unfair to require it to proceed to Arbitration without the opportunity to assess the Applicant's s. 25 orthopedic report, dated December 6, 2016, and the new medical documentation it received in October and November 2016.

The Insurer maintains that in the absence of the opportunity to assess the new medical information and s. 25 reports in an orthopedic IE, a fair Hearing would not be possible.

Ms. Stephanie Johnson

The Applicant points out she has already undergone two musculoskeletal IEs in the context of her claim for NEBs. They were conducted by Dr. Walters, dated March 2, 2015 and December 16, 2015. Accordingly, the proposed orthopedic IE on February 9, 2017 would constitute a third musculoskeletal assessment for the purposes of NEBs.

The Applicant points out the primary thrust of the Insurer's Motion is that the Applicant has served various medical and other documentation which were not available to its assessor, Dr. Walters, for the purposes of his IEs, and that the Insurer now purportedly requires an additional IE with an orthopedic surgeon to further consider the additional medical information provided after Dr. Walters’ assessments.

The Applicant maintains this argument is wholly without merit. The Applicant indicates that by cover letter, dated April 9, 2014, the Insurer was provided with a completed Application for Benefits (OCF-1), as well as an executed Permission to Disclose Health Information Form (OCF-5),¹⁵ authorizing the Insurer to access the records of Dr. Harry, her family physician.

The Applicant indicates that by IE, dated May 22, 2014, Dr. Walters¹⁶ determined a chiropractic treatment plan, dated April 9, 2014, was not reasonable and necessary. He further determined the Applicant's injuries fell within the Minor Injury Guideline (“MIG”).

The Applicant further points out that in her Statutory Declaration, sworn September 4, 2014,¹⁷ she describes injuries in the nature of partial dislocation of the right shoulder, as well as other physical injuries, in addition to emotional and psychological injuries in the form of Post-Traumatic Stress Disorder.

She also confirms attendance at the hospital by ambulance consequent to the accident, and describes pre-existing health conditions.

The Applicant points out that a file copy of a letter from the Insurer to Dr. Harry, dated June 27, 2014,¹⁸ requesting his records for the period of January 1, 2007 to July 1, 2014, is date stamped by the Insurer "Received September 24, 2014" with the handwritten notation "family Drs. Records". The Applicant submits this receipt stamp, together with the notation, demonstrates the Insurer received Dr. Harry's records for a seven year period from July 1, 2007 [sic] to July 1, 2014.

The Applicant points out that by correspondence, dated November 5, 2014,¹⁹ enclosed with an Explanation of Benefits of the same date, the Insurer denied Medical and Rehabilitation Benefits, as well as other benefits on the basis that the Applicant had sustained a "minor injury".

The Applicant points out Dr. Walters’ second IE, conducted on March 2, 2015, was described as a "Musculoskeletal" assessment, with one of the purposes being to determine the Applicant's eligibility for NEBs. Dr. Walters opines in his report that the Applicant does not meet the "complete inability test" relevant to NEBs. The Applicant points out the "Documentation List", set out at page 3 of the report, demonstrates the Insurer failed to furnish Dr. Walters with any clinical notes and records, despite having received those records as of September 24, 2014.

As indicated earlier, the Applicant received NEBs for the period of September 4, 2014 to April 10, 2015.

By cover letter, dated April 10, 2015, the Insurer enclosed a Standard Benefit Statement advising the Applicant's Medical and Rehabilitation Benefits were set at the non-catastrophic limits of $50,000.00, signaling her removal from the $3,500.00 MIG limit.

On December 16, 2015, the Applicant was once again personally assessed by Dr. Walters. According to Dr. Walters’ IE report of the same date, titled "Musculoskeletal Examination", the sole purpose of the assessment was to determine the Applicant's entitlement to NEBs.²⁰ The Applicant points out this IE was conducted subsequent to the denial of NEBs, and constituted her second personal attendance for a "Musculoskeletal" IE, for the purpose of determining her entitlement to NEBs. The "Document List" at pages 4 and 5 of the report, indicate that in this instance, the Insurer did provide Dr. Walters with various clinical notes and records.

Dr. Walters reiterates in his IE report that the Applicant does not satisfy the “complete inability test” so as to warrant entitlement to NEBs.

The Insurer's Flawed Notice of Examinations

The Applicant points out that under the cover letter, dated December 6, 2016, the Applicant served the Insurer with the orthopedic report of Dr. Langer, together with the psychological report of Dr. Gladshteyn.²¹

In support of the proposed orthopedic IE, the Insurer delivered the Notice of Examination (“NOE”), dated January 5, 2017, for the assessment initially scheduled for January 17, 2017. The Applicant points out that at Part 2 of the NOE, the Insurer indicates the Reasons for the Examination as "Medical and Rehabilitation Benefits; Applicability of Minor Injury Guideline”.²² The Applicant points out this is despite the Insurer having already determined, as of April 10, 2015, that the Applicant's injuries did not fall within the MIG. Nor did the NOE make any reference to NEBs.

By correspondence, dated January 8, 2017, the Applicant advised the Insurer it would not attend the orthopedic IE on the basis the proposed examination does not relate to any issue before ADR Chambers.²³

On January 9, 2017, the Insurer delivered a second NOE in respect to the same proposed IE, still scheduled for February 17, 2017. In that instance, at Part 2, there continues to be reference to Medical and Rehabilitation Benefits and a determination of the applicability of the MIG, with the additional reference to NEBs.

The Applicant's counsel, by correspondence dated January 9, 2017,²⁴ reiterates that the Applicant would not attend the orthopedic IE.

The Applicant states, and I agree, that it is rather perplexing that the Insurer did not include the above NOEs for the proposed orthopedic IE in its Motion materials, while seeking a remedy to stay proceedings based on the Applicant's refusal to attend at this proposed assessment.

Law and Argument

Fairness and Reasonableness of the Requested IE

The Applicant points out that in State Farm and Ramalingam,²⁵ the Director's Delegate endorsed the reasoning of F.S. and Belair, which held that a determination of an IE rights entailed a balancing of interests in the context of the particular facts of the case. Further, the nearer the Insurer's request for an IE is made to the Hearing date, the greater scrutiny will be placed on the Insurer's request. In practice, the arbitral analysis consists of a determination of procedural and substantive fairness.²⁶

The Applicant also relied on the Appeal decision of the Director's Delegate in Personal Insurance Company of Canada and Thevaranjan, dismissing an Insurer's appeal of an Arbitrator's Order, refusing an adjournment initiated one month before the Hearing date, so as to allow the Insurer to conduct various IEs.²⁷

In Personal and Thevaranjan, the Insurer did not conduct any IEs to assess the Applicant's entitlement to Income Replacement Benefits at the post 104 week mark, and posited that the assessments were required to respond to several medical reports served after the Pre-Hearing. In upholding the Arbitrator's Order, the Director's Delegate endorsed the Arbitrator's determination that "fairness did not require the IE and that objective factors did not support it", with the timing of the request serving as a notable factor.

The Applicant submits the Insurer's position in the instant case is far less compelling than the position of the Insurer in Personal and Thevaranjan. Specifically, she points out the Insurer in this instance has already had the benefit of assessing her twice for NEBs by way of Dr. Walters' two "Musculoskeletal" assessments of March 2 and December 16, 2015.

The Applicant submits that, as elucidated in Personal and Thevaranjan, a request to conduct IEs is not justified on the basis of an Applicant's service of reports, even where the Insurer has not secured any report regarding the issues in dispute. Rather, it is the issue of procedural and substantive fairness and reasonableness that dictates the resolution of the issue. The Applicant further submits it is of interest that the Insurer has not claimed the Applicant's condition has materially changed, as this factor would militate towards granting the Insurer its requested remedy, when balanced against the interests of protecting an Applicant's right to privacy.²⁸

The Applicant further submits that allowing the Insurer to stay the proceedings to conduct a third musculoskeletal IE for NEBs would grossly breach principles of fairness, by providing the Insurer with yet another medical opinion in the armament of its adversarial arsenal against the Applicant in juxtaposition to the Applicant's single musculoskeletal report of Dr. Langer. As cautioned in State Farm and Ramalingam, Arbitrators should take heed to avoid "trial brinkmanship" and "battle of the experts".²⁹

The Applicant specifically disputes the Insurer’s position that it requires an additional IE to address medical documentation produced after the commencement of this Arbitration. The Applicant maintains this is not supported on a pragmatic level or by virtue of the Insurer's past practices and omissions. The Applicant points out that from an institutional perspective, it is commonplace in cases such as this, that medical documents flowing from arbitral production obligations continue to be received up to the date of Hearing.

The Applicant submits that if adjournments to conduct IEs on the basis of productions were routinely granted, cases would be significantly delayed, and institutional backlogs would quickly follow. She submits this factor becomes even more important due to deadlines placed upon the Commission and ADR Chambers to conclude adjudication in 2017 by reason of the regime shift to the Licence Appeal Tribunal.

The Applicant also argues the Insurer's irresponsible conduct with respect to the marshalling of medical records and their provision to its assessor, Dr. Walters, also strongly militates against the Insurer's requested remedy.

Defective Notice

The Applicant submitted that sufficiency of notice of an IE is always relevant, such that to negate an Insurer's remedy for a Applicant’s non-attendance, where notice defectively lacks the medical and other reasons as prescribed by section 44(5)(a) of the SABS. That provision states:

44(5) If the insurer requires an examination under this section, the insurer shall arrange for the examination at its expense and shall give the insured person a notice setting out,

(a) the medical and any other reasons for the examination;

In addition, the Applicant relies on the decision in Li and Deng and State Farm Mutual Automobile Insurance Company.³⁰

The Applicant reiterates that the Insurer's first notice of the proposed IE, dated January 5, 2017, provided "reasons" at Part 2 which did not in any way engage NEBs, but merely referenced Medical and Rehabilitation Benefits and the applicability of the MIG. The Applicant submits that after receiving her refusal to attend on January 8, 2017 on the basis the NOE made no mention of NEBs, the Insurer surreptitiously attempted to correct its errors in the January 5, 2017 notice, but wholly failed.

In its most recent version of the Insurer's notice, dated January 8, 2017, the Insurer has added the words “Non-Earner Benefits”. The Applicant submits this notice is also defective to the extent that it still purports to assess the Applicant for the MIG, despite the fact the Insurer has already removed the Applicant from the Guideline. Accordingly, the Applicant submits there is no obligation to attend, as once an Applicant is removed from the MIG, he or she remains removed from the Guideline for the duration of the claim.³¹

The Applicant submits this third musculoskeletal IE with respect to NEBs is wholly unwarranted on the basis of reasonableness, and procedural and substantive fairness.

Further, as the Insurer purports to arrange its intended assessment with a defective notice, this Motion lacks a condition precedent, namely a proper notice, to be even considered.

Personal’s Reply

In its Reply, the Insurer reiterated that the medical information it received from the Applicant from October to December 2016 (hereinafter "the new medicals”) provides new diagnoses of chronic pain and a possible rotator cuff tear, which support the Applicant's entitlement to NEBs – and that they have not been reviewed by an assessor.

The Insurer points out that prior to the receipt of Dr. Langer's report, the only medicals in the Insurer's possession which specifically opined on the Applicant's accident-related impairments, were two OCF-3s, dated September 4, 2014 and October 20, 2014. They conclude she sustained sprains and strains of the cervical, lumbar and thoracic spine, along with a strain of the rotator cuff, arthritis of the knees and headaches.³²

The Insurer conceded that when IEs were conducted by Dr. Walters on March 2 and December 16, 2015 (hereinafter "the IEs by Dr. Walters"), the Insurer did have some pre-accident records of Dr. Harry, GP. However, the Insurer states those records only contain three months of post-accident records, i.e. from March 24, 2014 to November 25, 2014, indicating the following:³³

Date

Description

March 26, 2014

Miraculously, she is physically unhurt.

March 26, 2014

No serious injury.

May 2, 2014

Multiple muscle strains involving the neck, dorsal & lumbar spine, upper arms, forearms and left knee.

“I have advised Mrs. Johnson that solving her current problem will probably take 3-6 months but I have no doubt whatsoever that she will eventually be back to normal.”

June 25, 2014

She is generally well.

September 2, 2014

Weird feeling in left knee? There is no pain and no swelling and no tenderness; but she is more aware of mild discomfort.

October 8, 2014

Brain CAT scan is completely normal. No symptoms apart from muscle aches and pain.

October 23, 2014

Stephanie is well.

“Full biochemical assessment is unremarkable… I sure [sic] that she is doing very well and I advised her to continue with her exercise program.”

The Insurer submits Dr. Harry’s post-accident records, available when Dr. Walters conducted his IEs, are consistent with the accident-related sprains and strains found in the OCF-3s, dated September 4 and October 20, 2014, referenced earlier.

The Insurer reiterates that the new diagnoses of chronic pain and a possible rotator cuff tear found in Dr. Langer's report, are a marked departure from the opinions and accident-related diagnoses in the OCF-3s and Dr. Harry's post-accident records, that it had in its possession when Dr. Walters completed his IEs.

The Insurer maintains this marked departure in the Applicant's possible accident-related diagnoses can be considered a material change in her condition, and supports its request for an IE.

The Insurer states it did not receive any updated post-accident records of Dr. Harry until November 21, 2016,³⁴ when it was served with his records from January 20, 2015 to October 5, 2016. The Insurer points out this is almost two additional years of records not available when Dr. Walters conducted his IEs. Nor have they been reviewed by an IE assessor of any discipline.

The Insurer confirms the Applicant has been removed from the MIG. It indicates the reference to the MIG in the NOE, dated January 9, 2017, was an inadvertent error and should be disregarded.

Rather, the Insurer indicates the IE is intended to review the OCF-18, dated November 9, 2016, for an orthopedic assessment, the new diagnoses found in Dr. Langer's report, and the other new medicals it received from October 31, 2016 to December 6, 2016.

As indicated above, the Insurer has since filed a copy of the NOE, dated January 18, 2017, indicating the orthopedic IE has been scheduled for February 9, 2017.³⁵

This NOE states in Part 2:

Type(s) of Examination

Medical and Rehabilitation Benefits; Non-Earner Benefits

Reasons and Description of the Examination

This is a rescheduled examination

The prior medical information on file indicates you sustained soft tissue injuries as a result of the accident. We received new medical documentation from October to December 2016 including, but not limited to, a 5.25 orthopedic report of Dr. Langer which contains new diagnoses of chronic pain, right rotator cuff tendinitis and a possible rotator cuff tear that were reportedly sustained as a result accident (sic). The proposed assessment will address the new medical documentation and diagnoses which support that the OCF-18 dated November 9, 2016 in the amount of $2,486.00 for an orthopedic assessment is reasonable and necessary and that you have sustained a complete inability to carry on normal life as a result of the accident.

The Insurer points out the rescheduled orthopedic IE will not delay the new Hearing dates in April 2017.

The Insurer reiterates its submission that the principle of fairness, confirmed by the Divisional Court in Certas v. Gonsalves,³⁶ requires that it be accorded an opportunity to have the Applicant, as well as the new diagnoses and medical information, be the subject of an orthopedic IE in February 2017.

Ms. Stephanie Johnson’s Surrebuttal

The Applicant responded to this most recent NOE, advising of the IE scheduled for February 9, 2017. She reiterated the confusion resulting from the Insurer’s attempts to arrange for a third musculoskeletal examination. The Applicant further submits the various iterations of the NOE demonstrate the Insurer never intended to have her assessed by an orthopedic surgeon for NEBs, but conveniently added this reason for the sole purpose of supporting its Motion.

The Applicant also points out that only the NOE dated January 16, 2017, includes a reference to "the s. 25 orthopedic report of Dr. Langer which contains new diagnoses of chronic pain, right rotator cuff tendinitis and a possible rotator cuff tear that were reportedly sustained as a result accident" [sic]. The Applicant maintains the Insurer did not rely upon an allegation of a "new diagnosis" in its initial written submissions, and only raises this argument in response to the Applicant’s submissions pointing to the absence of such an allegation.

The Applicant further submits the suggestion that she has a "new diagnosis" in the form of chronic pain, right rotator cuff tendonitis and possible rotator cuff tear, so as to necessitate a third musculoskeletal examination, is inaccurate and cannot legitimately or fairly form the basis for yet another intrusive examination.

Specifically, the Applicant maintains the suggestion that "chronic pain" is somehow a new diagnosis is unfounded. While the Applicant concedes Dr. Langer has determined her ongoing complaints have evolved to constitute chronic pain, she maintains this is far from a new development. She points out that in his IE report, dated December 16, 2015, Dr. Walters notes she has upper back/shoulder pain at the same site as when the EMS attendant placed her on a spinal board, that she has lower back pain on most days, that the pain accelerates and radiates into the region of the shoulders, and that pain is caused at night by rolling onto her shoulders.

The Applicant submits the fact Dr. Walters does not offer a diagnosis of chronic pain incidental to her pain does not suggest a new diagnosis, but rather a different opinion on the basis of the same complaints. She submits this ought not to form the basis for yet another musculoskeletal IE.

The Applicant also takes issue with the reference in the January 16, 2017 NOE to a "new diagnosis" in the form of right rotator cuff tendonitis and possible rotator cuff tear. The Applicant concedes that at page 7 of Dr. Langer's report, under the subheading "Discussion", there is a suggestion she has ongoing right shoulder tendonitis, a diagnosis epitomized by an aggravation of the tendon, and a possible tear of the rotator cuff. However, the Applicant points out Dr. Langer does not cite any diagnostic imaging tests, but rather, these observations arise as a result of Dr. Langer's physical assessment of the Applicant.

The Applicant again submits there has not been a "new diagnosis" in respect to her right shoulder, but rather a “different” opinion on the basis of the same complaints provided to or elicited by Dr. Walters in his two musculoskeletal IEs. Indeed, the Applicant points out that according to Dr. Walters' Musculoskeletal Examination of March 24, 2014 [sic] [should be May 22, 2014],³⁷ she presented with a chief complaint of a right shoulder injury that was aggravated by basic household tasks. The Applicant further points out that in response to question 5 of this report, at page 4, Dr. Walters concedes her right shoulder continues to be symptomatic "even with minor household tasks such as vacuuming and sweeping", but nevertheless fails to offer a diagnosis.

Finally, the Applicant points out that Dr. Walters, in his subsequent musculoskeletal IE report, dated December 16, 2015, notes she exhibited end range pain bilaterally of the shoulders.³⁸

The Applicant submits the SABS should be interpreted primarily to facilitate consumer protection and should not be used as a means to foster an adversarial relationship with an Insured, or as a basis to justify unnecessary examinations.

ANALYSIS

The first issue to be determined is whether, pursuant to section 44(1) of the SABS, the orthopedic IE is reasonably necessary and/or whether procedural and substantive fairness requires the Applicant to attend an orthopedic IE.

These considerations are not mutually exclusive, but are often companion considerations in the dispute resolution process under the SABS.

In making that determination, I am persuaded the medical documentation recently served on the Insurer is the first articulation of a chronic pain diagnosis, and a possible rotator cuff tear resulting from the accident. I further find this is an indication of a possible change in the Applicant’s condition, with potential impact on the Applicant’s entitlement to NEBs.

While the Applicant characterizes these as simply different conclusions based on the same complaints considered by Dr. Walters, I find they are more accurately described as new diagnoses, or at the very least, a change in the Applicant’s condition or a new direction in the medical investigation of her complaints. The Insurer has not had the opportunity to consider these developments in the context of the passage of time since its last musculoskeletal IE in March 2015.

Indeed, contrary to the Applicant’s submission that the Insurer alleged such a change only in Reply, I find this was essentially the thrust of the Insurer’s Motion at the outset. The Insurer’s position that it did not become aware the Applicant was advancing a claim for NEBs based on chronic pain related to the accident, or the possible diagnosis of a torn rotator cuff injury until it was served with Dr. Langer’s s. 25 report, is uncontroverted. In my view, it would be unfair to force the Insurer to arbitrate these issues with no opportunity to address what appears to be at least a possible change in the Applicant’s condition.

In this instance, as demonstrated by the Insurer’s twelve requests for productions, including the one noted in my Pre-Hearing Letter of October 11, 2017, the Insurer has consistently and repeatedly expressed the need for timely production from the Applicant. When that production was finally completed in early December 2016, the Insurer took steps to secure an IE date which would not delay the Arbitration dates. Similarly, the new IE date of February 9, 2017 ought not to result in any delay in the new Arbitration dates of April 27 and 28, 2017.

Indeed, as pointed out by the Insurer, the new medical information and s. 25 reports, may result in its own assessor agreeing with the Applicant that she met or continues to meet the test for entitlement to NEBs. If so, this would avoid the unnecessary resource expenditure of proceeding to Arbitration, and allow for a more timely resolution of this dispute.

Accordingly, considering all the circumstances, I find the Insurer’s request for an IE to be conducted by an orthopedic surgeon is reasonably necessary, both in terms of its responsibility to continue to adjust the claim, and also with regard to its ability to answer the Applicant’s claim.

This does not, however, end the matter. The issue of the NOEs served upon the Applicant is addressed below.

Notices of Examination

Section 44(5) mandates an Insurer, in giving notice to the Insured, to include medical and any other reasons for the examination.

As stated in Augustin and Unifund Assurance Company,³⁹ referred to at page 7 in Li and Deng and State Farm:⁴⁰

Given the serious consequences to an insured person of refusing to attend an IE for which proper notice has been given – barred from commencing a mediation proceeding to dispute an insurer’s denial of medical treatment – the notice requirements set out in s. 44(5) should be strictly construed and the insurer’s notice should be closely examined to ensure it complies. The requirements are mandatory. They are there to balance the naturally intrusive nature of an IE and to ensure fairness. The insured person is entitled to make an informed decision about whether they wish to pursue their claims and attend the IE, or not. The legislature has determined that, in fairness, an insured person is entitled to specific information, including medical reasons, about why they are being required to attend an IE. I find it would be unreasonable and unfair to require them to attend without first being in possession of that information.

The NOE, dated January 5, 2017, indicated the Reasons for the Examination were "Medical and Rehabilitation Benefits; Applicability of Minor Injury Guideline (MIG)". [emphasis added]

However, as conceded by the Insurer, and was apparent to the Applicant, the Insurer had already determined, as of April 10, 2015, that the Applicant's injuries did not fall within the MIG. Nor was there any reference to NEBs, the only issue in dispute between the parties.

Similarly, while a reference to NEBs was added to the reasons for the second NOE, dated January 9, 2017, there remained a reference to the requirement to determine the applicability of the MIG.

The result is that both the above NOEs required the Applicant to attend for an examination for which there was no purpose, i.e. the applicability of the MIG, when that was not in dispute. This is confusing and unreasonable on its face.

Accordingly, I find the NOE’s, dated January 5 and January 9, 2017, did not comply with the requirements of section 44(5). As a result, I find it was not reasonable for the Insurer to attempt to compel the Applicant to attend the IE for the reasons set out in the January 5 and January 9, 2017 NOEs.

This brings me to the NOE, dated January 16, 2017.

Let me begin by indicating I appreciate the Applicant’s frustration with the Insurer’s repeated failure to articulate appropriate reasons, resulting in the series of separate NOEs. This has created unnecessary confusion and expenditure of resources by both parties.

However, while I will not speculate about the reasons for what appears to be an unfortunate lack of attention to detail, I am not persuaded that, as suggested by the Applicant, the lack of clarity demonstrates the Insurer never intended to have her assessed by an orthopedic surgeon for NEBs, but conveniently added this reason for the sole purpose of supporting its Motion. This is simply not consistent with the Insurer’s numerous efforts to get productions in the context of this Arbitration proceeding.

Accordingly, while it took three attempts, I find the January 16, 2017 NOE meets the requirements of section 44(5), in that it provides the required clarity regarding why the Applicant is being required to attend the orthopedic IE.

DETERMINATION

For all the reasons set out above, the Insurer’s request for a stay of the proceeding pending the Applicant’s attendance at the orthopedic IE, currently scheduled for February 9, 2017, is granted.

EXPENSES:

The question of expenses related to this Motion is deferred to the Hearing Arbitrator.

January 31, 2017

Tatiana Wacyk Arbitrator

Date

Financial Services Commission des

Commission services financiers

of Ontario de l’Ontario

Neutral Citation: 2017 ONFSCDRS 21

FSCO A16-000636

BETWEEN:

STEPHANIE JOHNSON

Applicant

and

PERSONAL INSURANCE COMPANY OF CANADA

Insurer

ARBITRATION ORDER

Under section 282 of the Insurance Act, R.S.O. 1990, c.I.8, as it read immediately before being amended by Schedule 3 to the Fighting Fraud and Reducing Automobile Insurance Rates Act, 2014, and Ontario Regulation 664, as amended, it is ordered that:

1. Personal’s request for a stay of the Arbitration proceeding scheduled for April 27 and 28, 2017, pending the Applicant’s attendance at the orthopedic IE, currently scheduled for February 9, 2017, is granted.

2. The question of expenses related to this Motion is deferred to the Hearing Arbitrator.

January 31, 2017

Tatiana Wacyk Arbitrator

Date

Footnotes

1. 1The Statutory Accident Benefits Schedule - Effective September 1, 2010, Ontario Regulation 34/10, as amended.
2. 2In that respect, the Insurer relies on section 23(1) of the Statutory Powers Procedures Act, R.S.O. 1990 c. S.22; State Farm Mutual Automobile Insurance Company and Ramalingam, FSCO Appeal P05-00026, August 13, 2007, Leave to Appeal refused, 2009 44115, August 25, 2010; Granic and Allstate Insurance Company of Canada, OIC A-006615, January 30, 1995.
3. 3FSCO Appeal P96-00039, June 11, 1996; referenced in State Farm and Ramalingam, supra, at page 9.
4. 4State Farm and Ramalingam, supra, at page 13.
5. 5State Farm and Ramalingam, supra, at pages 11-12.
6. 6Ibid, at page 15.
7. 7Ismail and State Farm Mutual Automobile Insurance Company, supra, at page 6.
8. 8State Farm and Ramalingam, supra, at page 12.
9. 9Ibid, at page 18.
10. 10Ibid., Tabs 11 and 12.
11. 11State Farm and Ramalingam, supra, at page 12; State Farm Mutual Automobile Insurance Company and Ismail, supra, at pages 4 and 5.
12. 12F.S. and Belair, supra, at page 7; State Farm and Ramalingam, supra, at page 17.
13. 13State Farm and Ismail, supra, at page 5.
14. 14Certas Direct Insurance Company v. Gonsalves, 2011 ONSC 3986.
15. 15The Applicant’s Document Brief, Tab 3.
16. 16Ibid., Tab 4.
17. 17Ibid., Tab 5.
18. 18Ibid., Tab 6.
19. 19Ibid., Tab 7.
20. 20Ibid., Tab 10.
21. 21Ibid., Tab 11.
22. 22Ibid., Tab 12.
23. 23Ibid., Tab 1.
24. 24Ibid., Tab 2.
25. 25State Farm and Ramalingam, supra, at pages 10 to 11.
26. 26Phillipaiya and TD Home and Auto Insurance Company, FSCO A12-001040, October 9, 2013, at page 4.
27. 27FSCO Appeal P07-00022, April 16, 2009, at pages 2, 4-5.
28. 28Hill and Jevco Insurance Company, FSCO A11-003909, April 30, 2013, at page 15.
29. 29State Farm and Ramalingam, supra, at pages 10 to 12.
30. 30Li and Deng and State Farm Mutual Automobile Insurance Company, FSCO A13-002953 & A13-002954, November 9, 2015, at pages 7-8.
31. 31Ferawana and State Farm Mutual Automobile Insurance Company, FSCO A13-005319, August 29, 2016, at pages 9 -10.
32. 32Insurer’s Document Brief, Tab 15.
33. 33Insurer’s Document Brief in Reply, Tab 1.
34. 34Ibid., Tab 2.
35. 35Apparently a second, identical NOE, except for the date of January 16, 2017, was provided to the Applicant. While adding to the confusion, this second NOE has no impact on my decision and will not be referred to further.
36. 36Certas v. Gonsalves, supra.
37. 37Applicant’s Document Brief, Tab 4.
38. 38Ibid., Tab 10.
39. 39Augustin and Unifund Assurance Company, FSCO A12-000452, November 13, 2013.
40. 40Li and Deng and State Farm, supra, at page 7.