Ali Madinei and Maryam Alizadeh-Ebadi v. TD General Insurance Company, 2017 ONFSCDRS 315

Financial Services Commission of Ontario

Financial Services Commission des Commission services financiers of Ontario de l’Ontario

Neutral Citation: 2017 ONFSCDRS 315

FSCO A12-007408 & A12-004267

BETWEEN:

ALI MADINEI and MARYAM ALIZADEH-EBADI

Applicant

and

TD GENERAL INSURANCE COMPANY

Insurer

REASONS FOR DECISION

Before: Arbitrator Morris J. Winer, Q.C.

Heard: In person at ADR Chambers on October 2, 2017

Appearances: Mr. Ali Madinei, for himself Ms. Maryam Alizadeh-Ebadi, for herself Ms. Tricia McAvoy, lawyer for the Insurer

Issues:

The Applicants, Mr. Madinei and Ms. Alizadeh-Ebadi, were injured in a motor vehicle accident on July 23, 2010, and sought accident benefits from TD General Insurance Company the (“Insurer”), payable under the Statutory Accident Benefits Schedule.¹ The parties were unable to resolve their disputes through mediation, and the Applicants, through their representatives, 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:²

For Mr. Madinei:

1. Is Mr. Madinei entitled to a weekly income replacement benefit?

2. Is Mr. Madinei entitled to attendant care benefits?

3. Is Mr. Madinei entitled to payments for housekeeping and home maintenance services?

4. Is Mr. Madinei entitled to payments for costs of examinations?

5. Is Mr. Madinei entitled to interest for overdue payments of benefits?

6. Is Mr. Madinei entitled to expenses of this arbitration?

For Ms. Alizadeh-Ebadi:

1. Is Ms. Alizadeh-Ebadi entitled to a weekly income replacement benefit?

2. Is Ms. Alizadeh-Ebadi entitled to weekly caregiver benefits?

3. Is Ms. Alizadeh-Ebadi entitled to receive a medical benefit of $998.60 for nutritional supplements?

4. Is Ms. Alizadeh-Ebadi entitled to receive $2,613.72 for cost of examination by Finch Health Centre?

5. Is Ms. Alizadeh-Ebadi entitled to attendant care benefits?

6. Is Ms. Alizadeh-Ebadi entitled to payments for housekeeping and home maintenance services?

7. Is Ms. Alizadeh-Ebadi entitled to interest for overdue payments of interest?

8. Is Ms. Alizadeh-Ebadi entitled to expenses of this arbitration?

For the Insurer (added at this Hearing):

1. Is the Insurer entitled by reason of s. 52 of O Reg. 34/10 to repayment of monies totalling $34,964.38 for benefits paid to or on behalf of Mr. Madinei?

2. Is the Insurer entitled by reason of s. 52 of O Reg. 34/10 to repayment of monies totalling $43,848.78 for benefits paid to or on behalf of Ms. Alizadeh-Ebadi?

3. Is the Insurer entitled to expenses of this arbitration?

Result:

For Mr. Madinei:

1. Mr. Madinei is not entitled to a weekly income replacement benefit.

2. Mr. Madinei is not entitled to attendant care benefits.

3. Mr. Madinei is not entitled to payments for housekeeping and home maintenance services.

4. Mr. Madinei is not entitled to payments for costs of examinations.

5. Mr. Madinei is not entitled to interest for overdue payments of benefits.

For Ms. Alizadeh-Ebadi:

1. Ms. Alizadeh-Ebadi is not entitled to a weekly income replacement benefit.

2. Ms. Alizadeh-Ebadi is not entitled to weekly caregiver benefits.

3. Ms. Alizadeh-Ebadi is not entitled to receive a medical benefit of $998.60 for nutritional supplements.

4. Ms. Alizadeh-Ebadi is not entitled to receive $2,613.72 for cost of examination by Finch Health Centre.

5. Ms. Alizadeh-Ebadi is not entitled to attendant care benefits.

6. Ms. Alizadeh-Ebadi is not entitled to payments for housekeeping and home maintenance services.

7. Ms. Alizadeh-Ebadi is not entitled to interest for overdue payments of interest.

For the Insurer:

1. The Insurer is not entitled by reason of s. 52 of O Reg. 34/10 to repayment of monies totalling $34,964.38 for benefits paid to or on behalf of Mr. Madinei.

2. The Insurer is not entitled by reason of s. 52 of O Reg. 34/10 to repayment of monies totalling $43,848.78 for benefits paid to or on behalf of Ms. Alizadeh-Ebadi.

EVIDENCE AND ANALYSIS:

Evidence:

The Applicants, who are married to each other, were participants in an incident on July 23, 2010, found to be a staged accident, detailed by Arbitrator Kelly in Madinei and Alizadeh-Ebadi and TD General Insurance Company.³ I will provide further details as the original decision of Madinei was overturned by the Director’s Delegate on Appeal.

The Applicants sought and were paid accident benefits under the Statutory Accident Benefits Schedule as follows:

Madinei:

• Medical $11,064.34

• Cost of Examinations $7,514.99

• Housekeeping $2,600.00

• Attendant Care $712.00

• S.44 Examinations $13,076.47

Total: $34,964.38

Alizadeh-Ebadi:

• Medical $15,277.62

• Cost of Examinations $8,171.35

• Income Replacement Benefits $4,765.02

• Housekeeping $2,528.58

• Attendant Care $1,878.08

• S.44 Assessments $11,228.13

Total: $43,848.78

No payments were made by the Insurer after 2011, and the Applications for Arbitration for each of the Applicants were commenced in the year 2012. The Pre-Hearings were completed in April 2013, and did not include the above claims by the Insurer for repayment. The Applicants were represented by a law firm. A Hearing date was set for May 2014, but the parties, through their lawyers at the time, agreed to turn the Hearing date into a Preliminary Issue Hearing to determine whether the accident was staged, and the actual Hearing date was adjourned. Then the Applicants’ lawyers at the time applied to be and were removed from the record in August 2014.

The Applicants conducted the Preliminary Issue Hearing before Arbitrator Kelly, unrepresented. Arbitrator Kelly adjourned the Hearing for the Applicants to get a lawyer. No lawyer or paralegal was retained. Arbitrator Kelly eventually decided that the incident was staged, and as such it did not come under the definition of “accident” in s. 2(1) of O Reg. 403/96.⁴ The Applicants then appealed, again, in person, to the Director, and Delegate Evans held that the term “accident” is a defined term, and the incident need not be an accident as used in common parlance.⁵

This date for the Hearing was set. The notice of this Hearing date, mailed to the address on record, was returned. The Applicants moved from the address given to ADR Chambers without notifying of a change of address contrary to Rule 9.1, shown below, of the Dispute Resolution Practice Code (“DRPC”). They may not have notified the post office to forward their mail to their new address or addresses. They kept little contact with ADR Chambers as to the status of the case. Notices of this Hearing were sent to the Applicants to the last known address on record with ADR Chambers. On September 1, 2017, Ms. Alizadeh-Ebadi emailed the Insurer’s lawyers telling them that she and her husband would not be in Toronto until November 2017. A settlement conference was set up for September 19, 2017 which the Applicants attended. On September 15, 2017 they had emailed requesting an interpreter for the settlement conference. On September 19, 2017 the Applicants requested an adjournment of the Hearing on the basis that they were looking to retain a lawyer. The request was denied on September 29. 2017. The Hearing commenced before me as scheduled on October 2, 2017. The address they had given the Settlement Officer was a different address than the one they provided at the Hearing of October 2, 2017.

The Applicants attended, but declined to give evidence, to give opening or closing remarks, or to be cross-examined. They claimed they were looking for a lawyer. Ms. Alizadeh-Ebadi said that lawyers have refused to accept their case. A Persian interpreter was present, sworn in, and participated in the discussions. The Applicants stated they didn’t know the reason for the Hearing. The Insurer appeared with counsel and witness/client, an insurance adjuster from the Insurer, who testified on behalf of the Insurer. The Hearing which was scheduled to run for five days went for one half day.

The Insurer raised the issue of demanding repayment under s. 52 of the Schedule, referred to below. When I mentioned the requirement of notice under s. 52, I was told that there was a notice sent in February 2017, but (strangely), it wasn’t available; however, counsel contended that the Amended Response dated August 10, 2017 is also a notice which complies with s. 52.⁶ Actually, the Amended Response quoted s. 53. The Insurer did not raise this issue at the Pre-Hearings or resumptions, but I believe it necessarily arises from the issues in dispute, and I am prepared to deal with it.

Analysis:

Decision to Proceed with the Hearing:

The Applicants are intelligent. They had no problem conversing with me in English, which is not their first language. The Persian interpreter did give some assistance. They were able to participate in the Preliminary Issue Hearing, with the help of an interpreter, before Arbitrator Kelly and the Appeal Hearing before Delegate Evans. The pleading of ignorance of procedures is suspect. They should have been more diligent and informed themselves of the procedures and rules. Much more than sufficient time has passed for them to obtain the services of another lawyer or paralegal. They did not inform ADR Chambers of their switch in addresses. Rule 9.1 of the DRPC provides as follows:

9.1 A party may represent him or herself....

(b) A party must provide his or her own name address, telephone number, and ...email address...

(c) Parties... must provide written notice of their change of address... The Dispute Resolution Group is entitled to rely upon the last known address...contained in its records.

Claim of the Applicants:

Because the Applicants have elected not to give evidence or participate in the Hearing, I am dismissing the Application and denying the benefits claimed as follows:

For Mr. Madinei:

1. Mr. Madinei is not entitled to a weekly income replacement benefit.

2. Mr. Madinei is not entitled to attendant care benefits.

3. Mr. Madinei is not entitled to payments for housekeeping and home maintenance services.

4. Mr. Madinei is not entitled to payments for costs of examinations.

5. Mr. Madinei is not entitled to interest for overdue payments of benefits.

For Ms. Alizadeh-Ebadi:

1. Ms. Alizadeh-Ebadi is not entitled to a weekly income replacement benefit.

2. Ms. Alizadeh-Ebadi is not entitled to weekly caregiver benefit.

3. Ms. Alizadeh-Ebadi is not entitled to receive a medical benefit of $998.60 for nutritional supplements.

4. Ms. Alizadeh-Ebadi is not entitled to receive $2,613.72 for cost of examination by Finch Health Centre.

5. Ms. Alizadeh-Ebadi is not entitled to attendant care benefits.

6. Ms. Alizadeh-Ebadi is not entitled to payments for housekeeping and home maintenance services.

7. Ms. Alizadeh-Ebadi is not entitled to interest for overdue payments of interest.

Claim for Repayment to the Insurer:

Section 52 of O. Reg. 34/10 provides as follows:

52(1) Subject to subsection (3), a person is liable to repay the insurer,

(a) any benefit described in this Regulation that is paid to the person ... or as a result of wilful misrepresentation or fraud.

(2) If a person is liable to repay an amount to an insurer under this section,

(a) the insurer shall give the person notice of the amount that is required to be repaid;

(3) If the notice required under subsection (2) is not given within 12 months after the payment, of the amount that is to be repaid, the person...ceases to be liable to repay the amount unless it was originally paid...as a result of wilful misrepresentation or fraud. (Emphasis added).

The question that arises is whether the payments of the benefits were made as a result of wilful misrepresentation or fraud. As indicated by the many attempts in this case, the staging of a car collision is fraught with danger, and can result in serious injuries. The Insurer contends that because the crash was fraudulent, then all benefits paid, even if the injuries may have been legitimate, are not recoverable, as a result of this section. I disagree. It certainly would be suspicious, but it is quite conceivable that a person could plot a crash for the purpose of making a fraudulent injury claim, but, unluckily for him or her, sustain serious legitimate injuries, and thus be entitled to benefits, because the person was in an “accident” as defined in the legislation.⁷ No evidence of wilful misrepresentation or fraud was provided by the Insurer as to the legitimacy of the injuries, treatments, and expenses with regard for the benefits claimed.

The definition of “accident” in O. Reg. 34/10 is as follows:

3. (1) In this Regulation, “accident” means an incident in which the use or operation of an automobile directly causes an impairment....

In the appeal case Ali Madinei et al and TD General Insurance Company,⁸ Delegate Evans said, “I find that the Arbitrator erred in finding that an accident under the SABS has to be ‘accidental’”. In other words, there can be an intentional accident because of the definition of “accident”. That is the actual decision (ratio decidendi) of the appeal. In this case there has been no evidence that the benefits were paid as a result of misrepresentation or fraud in claiming them. Counsel relies on the following added comment in the Reasons, not actually necessary for the decision (obiter dictum).

As for policy grounds to find otherwise, s. 53 of the 2010 SABS provides that an insurer may terminate the payments and benefits... if the insured has wilfully misrepresented material facts with respect to an application for a benefit... As discussed in Szabo and CAA Insurance... (FSCO P0 3-00015, March 31, 2104), s. 53... is a powerful anti-fraud tool. It is intended to impose a penalty beyond replacement in cases of wilful material misrepresentation, the penalty being the denial of benefits, even if no benefits were ever paid.

The insurer should have applied under s. 53 here, instead of trying to distort the meaning of “accident”...

This case is about s. 52, “Repayment to the Insurer”, and not s. 53, “Termination of Benefits for Material Misrepresentation”. The Szabo case was actually about the Applicant lying that he wasn’t working in connection with the claim for payment of an actual benefit. With respect, the obiter in the appeal case does not assist the Insurer here. No evidence of fraud or misrepresentation in the claiming of the actual benefits has been provided. I conclude that the Insurer’s Application for repayment is dismissed.

CONCLUSION:

In the result for the above reasons, I conclude that the claims of the Applicants and the Insurer are dismissed.

EXPENSES:

Success is divided, however any of the parties may request an appointment with me for determination of their expenses, in accordance with Rules 75 to 79 of the Dispute Resolution Practice Code.

November 27, 2017

Morris J. Winer, Q.C. Arbitrator

Date

Financial Services Commission des Commission services financiers of Ontario de l’Ontario

Neutral Citation: 2017 ONFSCDRS 315

FSCO A12-007408 & A12-004267

BETWEEN:

ALI MADINEI and MARYAM ALIZADEH-EBADI

Applicant

and

TD GENERAL INSURANCE COMPANY

Insurer

ARBITRATION ORDER

Under section 282 of the Insurance Act, R.S.O. 1990, c. I. 8, as amended, it is ordered :

For Mr. Madinei:

1. Mr. Madinei is not entitled to a weekly income replacement benefit.

2. Mr. Madinei is not entitled to attendant care benefits.

3. Mr. Madinei is not entitled to payments for housekeeping and home maintenance services.

4. Mr. Madinei is not entitled to payments for costs of examinations.

5. Mr. Madinei is not entitled to interest for overdue payments of benefits.

For Ms. Alizadeh-Ebadi:

1. Ms. Alizadeh-Ebadi is not entitled to a weekly income replacement benefit.

2. Ms. Alizadeh-Ebadi is not entitled to weekly caregiver benefits.

3. Ms. Alizadeh-Ebadi is not entitled to receive a medical benefit of $998.60 for nutritional supplements.

4. Ms. Alizadeh-Ebadi is not entitled to receive $2,613.72 for cost of examination by Finch Health Centre.

5. Ms. Alizadeh-Ebadi is not entitled to attendant care benefits.

6. Ms. Alizadeh-Ebadi is not entitled to payments for housekeeping and home maintenance services.

7. Ms. Alizadeh-Ebadi is not entitled to interest for overdue payments of interest.

For the Insurer:

1. The Insurer is not entitled by reason of s. 52 of O Reg. 34/10 to repayment of monies totalling $34,964.38 for benefits paid to or on behalf of Mr. Madinei.

2. The Insurer is not entitled by reason of s. 52 of O Reg. 34/10 to repayment of monies totalling $43,848.78 for benefits paid to or on behalf of Ms. Alizadeh-Ebadi.

EXPENSES:

Success is divided, however any of the parties may request an appointment with me for determination of their expenses, in accordance with Rules 75 to 79 of the Dispute Resolution Practice Code.

November 27, 2017

Morris J. Winer, Q.C. Arbitrator

Date

Footnotes

1. 1Effective September 2010, the Statutory Accident Benefits Schedule-Effective September 1, 2010 (the “New Regulation”) came into force. The transition rules in the New Regulation provide that, subject to certain exceptions that would have available pursuant to the Statutory Accident Benefits Schedule-Accidents on or after November 1, 1996 (the “Old Regulation”) shall be paid under the New Regulation, but in amounts determined under the Old Regulation. As a result, both the Old Regulation and the New Regulation are applicable to accidents that occurred on or after November 1, 1996 and before September 1, 2010 and both should be considered.
2. 2Pre-Hearing letter, April 15, 2013.
3. 3Ali Madinei and Maryam Alizadeh-Ebadi and TD General Insurance Company, FSCO A12-007408 and A12-004267, August 14, 2015.
4. 4Ibid. at p. 22.
5. 5Ali Madinei and Maryam Alizadeh-Ebadi and TD General Insurance Company, FSCO Appeal P15- 00053, February 10, 2017.
6. 6Ex. 1, Tab 2.
7. 7O. Reg. 34/10.
8. 8Supra, note 5.