Juliet Morales v. Aviva Canada Inc., 2017 ONFSCDRS 39

Financial Services Commission des

Commission services financiers

of Ontario de l’Ontario

Neutral Citation: 2017 ONFSCDRS 39

FSCO A15-006670

BETWEEN:

JULIET MORALES

Applicant

and

AVIVA CANADA INC.

Insurer

DECISION ON A PRELIMINARY ISSUE

Before: Arbitrator Charles Matheson

Heard: By written submissions due December 8, 2016

Appearances: Mr. David S. Wilson, lawyer, particpated for Ms. Juliet Morales Mr. Petros Yannakis, lawyer, participated for Aviva Canada Inc.

Issues:

The Applicant, Ms. Juliet Morales, was injured in a motor vehicle accident on October 23, 2012. In addition, she was involved in two other motor vehicle accidents, dated August 10, 2009 and November 20, 2009. The Applicant applied for and received statutory accident benefits from Aviva Canada Inc. (“Aviva”), payable under the Schedule.¹ The parties were unable to resolve their disputes through mediation, and Ms. Juliet Morales 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 Preliminary Issue Hearing are:

Are the two 2009 accidents, and the benefits that flow from those accidents, part of this Arbitration?
Is the Applicant statute-barred from arbitrating the Income Replacement Benefit (“IRB”) on the basis that the Application for an IRB was made more than 104 weeks after the accident?

Result:

The two 2009 accidents and the benefits that may or may not flow from them, are not included in this Arbitration.
The Applicant can proceed to arbitrate the October 23, 2012 accident’s IRB issue.

EVIDENCE AND ANALYSIS:

Legislation and Case Law considered

Smith v. Co-operators General Insurance Company, [2002] 2 S.C.R. 129, 2002 SCC 30

Statutory Accident Benefits Schedule – Accidents on or after September 1, 2010, O. Reg. 34/10.

Background

The Applicant was in three accidents: the first accident, dated August 10, 2009; the second, dated November 20, 2009; and the third; dated October 23, 2012. IRBs are an issue with all three accidents.

Decision

1. Are the two 2009 accidents part of this Arbitration?

It is evidenced by the Insurer’s counsel that the Applicant was intending to pursue the IRBs for all three accidents in this single Application for Arbitration. The evidence the Insurer is relying upon is the Application for Mediation which references the two earlier accidents in 2009 and the pursuit of those IRBs.

On the other hand Applicant’s counsel argues that the Pre-Hearing Letter, dated May 30, 2016, clearly indicates that the date of loss for the Application for Arbitration is October 23, 2012. Applicant’s counsel further argues that the two previous accidents in 2009 are not part of this Arbitration in his Factum. Applicant’s counsel suggests that the presiding Pre-Hearing Arbitrator, Arbitrator Shapiro, informally prevented the addition of the two 2009 accidents pursuant to the transitional regulations, thereby limiting this Arbitration to those issues listed within the Pre-Hearing Letter. In my view, it is implied that the Applicant at one time thought of capturing the IRBs from the two 2009 accidents, but now has withdrawn them from this proceeding.

Insurer’s counsel then argues that the Applicant cannot parse out the 2009 accident benefits from this Arbitration unless the Applicant explicitly advises that she has no intention of pursuing an IRB for these two accidents.

In my view, I have no jurisdiction to add issues not contained within the Pre-Hearing Letter as written by the Pre-Hearing Arbitrator. My jurisdiction is derived, at this juncture of the dispute resolution process, from (and limited to) the issues listed within said Pre-Hearing Letter.

I note that the May 20, 2016 Pre-Hearing Letter lists the issues in dispute, which went forward without objection via the Dispute Resolution Practice Code (“DRPC”) by the parties, to the Pre-Hearing Arbitrator for clarification.

I further note that the Report of Mediator, dated March 31, 2016, and the Pre-Hearing Letter, dated May 20, 2016, show that IRBs for the 2012 accident are in dispute.

Therefore, for the above reasons, I find that the two 2009 accidents and the benefits that may or may not flow from them, are not included in this Arbitration.

2. Is the Applicant statute-barred from arbitrating the IRB on the basis that the Application for an IRB was made more than 104 weeks after the accident?

Insurer’s counsel argues, in part, that the Insurer relies upon the Explanation of Benefits (“EOB”) Letter of March 19, 2013, as the unequivocal denial of benefits. The Insurer states that the denial, which triggered the limitation clock to tick, was written in a clear and ordinary language, setting out the Applicant’s right to dispute this determination, the options available for her to do so, and most importantly, the two-year limitation period for commencing an action or Arbitration in respect of the said determination.

The EOB Letter reads as follows:

Income replacement benefit: You are not eligible for this benefit at this time as you stated on your application (OCF-1) you are employed at the time of the accident, and missed no time from work.

Please note there is a seven day waiting period for this benefit.

If your condition should change, please contact this office immediately.

Applicant’s counsel argues that the EOB is not unequivocal but rather there is a sense of indeterminacy in the decision of the Insurer, leaving the reader with the impression that the Insurer may well change its mind should the condition of the Insured change. The Applicant argues why else would the Insurer say “you are not eligible at this time”, and then suggest that there is a seven day waiting period for the benefit.

Applicant’s counsel suggests that if the Insurer really intended to deny the IRB in perpetuity, it could have and should have done so. I also note that the EOB Letter does not say that if your condition changes in the next two years from the date of this letter, please contact this office.

The Applicant continues to argue that it is reasonable for her to believe from the unsophisticated reading of this letter, that she had no claim at the time of the Application for Benefits, but she could claim the benefit later if her condition changed in the future. The Applicant submits that a reasonable reader would likely conclude that the Insurer was keeping the Insured’s options open, in the event her circumstances changed without a time limit.

The Applicant submits that the EOB Letter would have been considered clear and unequivocal if it read as follows, which is markedly different from the original noted above:

Income replacement benefit: You are not eligible for this benefit as you stated on your application (OCF-1) you are employed at the time of the accident and missed no time from work.

In my view, I agree that the EOB Letter is not clear and unequivocal in this instance, for the reasons articulated by Applicant’s counsel. Therefore I conclude that the limitation clock did not start at this time, and as a result, the Applicant can arbitrate the October 23, 2012 accident’s IRB issue.

EXPENSES:

I defer any decision on expenses to the final Hearing Arbitrator, as he or she will be in a better position to make an award, if applicable. Should the parties settle the Arbitration without a final Hearing and become unable to resolve the expenses of this Preliminary Issue Hearing, they shall subsequently schedule an Expense Hearing before me in accordance with the provisions of the DRPC once they have settled all other Arbitration disputes between them.

February 6, 2017

Charles Matheson

Arbitrator

Date