Financial Services Commission of Ontario
Commission des services financiers de l’Ontario
Neutral Citation: 2017 ONFSCDRS 63
Appeal P16-00002
OFFICE OF THE DIRECTOR OF ARBITRATIONS
AHMED SADOZAI
Appellant
and
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY
Respondent
BEFORE:
David Evans
REPRESENTATIVES:
Seta Boyadjian for Mr. Ahmed Sadozai
Mouna Hanna for State Farm Mutual Automobile Insurance Company
HEARING DATE:
On the record by written submissions received by June 17, 2016
APPEAL ORDER
Under section 283 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 Regulation 664, R.R.O. 1990, as amended, it is ordered that:
The Arbitrator’s order of November 30, 2015, is confirmed and this appeal is dismissed.
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.
February 22, 2017
David Evans Director’s Delegate
Date
REASONS FOR DECISION
I. NATURE OF THE APPEAL
Mr. Sadozai appeals the order of Arbitrator Musson that an in-home assessment was not payable by his insurer, State Farm Mutual Automobile Insurance Company.
The essence of his appeal is that State Farm did not respond in time to the request for the assessment, so it has to pay for it regardless of its necessity or reasonableness.
However, I find that, aside from the fact the issue was not put to the Arbitrator, the necessity or reasonableness of an assessment is still a matter that can be determined by an Arbitrator.
II. BACKGROUND
Mr. Sadozai was injured in an accident on August 19, 2010. He sought a number of benefits from his insurer, State Farm, under the 2010 SABS.1
After mediation, the matter came before Arbitrator Musson. A preliminary issue related to Mr. Sadozai’s request to call the Insurer’s Adjuster as a witness. The Arbitrator rejected that request, even though the adjuster was in the hearing room and had been listed as a witness by the insurer, because the witness list was served too late. Further, no witnesses were specifically summonsed. As a result, only Mr. Sadozai testified.
The Arbitrator then rejected all of Mr. Sadozai’s claims, finding that he continually contradicted himself and that his answers were different from those given at an examination under oath.
The only issue under appeal regards an in-home assessment. The Arbitrator dealt with it very briefly and generally under the heading Medical Benefits/Cost of Examinations. He noted that, as was the case with the other claims, there were significant contradictions regarding these:
The onus is on the Applicant to prove his case that the Medical Benefits and Cost of Examinations in dispute are deemed necessary. There was no evidence presented that the Applicant required the treatment and assessments that were in dispute. Therefore, based on the evidence provided at the Hearing, I am of the opinion that the Applicant does not qualify for the Medical Benefits and the Cost of Examinations that are in dispute.
III. ANALYSIS
Mr. Sadozai submits that the Arbitrator failed to give adequate reasons, failed to properly address the issue of whether the assessment was payable regardless of its merit due to the Insurer’s failure to properly respond to it, and erred in not requiring the adjuster to testify.
Regarding the witness issue, witness names are to be provided and witnesses themselves are to be summonsed at least 30 days before the start of the hearing pursuant to R. 41. Under R. 43, if a witness was not identified or notified, the witness may be excused.
The hearing started on August 10, 2016. Thirty days prior to its start was a Saturday, July 11, 2016. The insurer submits Mr. Sadozai should have served his witness list on Friday, July 10, 2016; he actually served it on Monday, July 13, 2016.
Mr. Sadozai relies on Rule 8.1(b). He submits that, under that Rule, he had until the following Monday after the Saturday to deliver the list. However, the Rule only extends the time for doing an act “where the time for doing an act under these Rules ends on a Saturday…” Here, the time for doing the act began on a Saturday, so the Rule does not apply.
Furthermore, even if the list was sent in time, the adjuster was not specifically named. As noted in Hotchkiss and Kingsway General Insurance Company, (FSCO A10-003016, December 16, 2011), simply identifying a nameless position, like “an OT” or “possibly others,” is insufficient.
Mr. Sadozai submits that since the adjuster in question, Mr. Robert Atkins, was there in the hearing room, and had even been identified by the insurer as a witness they were going to call, the Arbitrator should have exercised his discretion to allow Mr. Atkins to be cross-examined. However, I have limited power to interfere with an Arbitrator’s exercise of discretion. Further, Mr. Sadozai did not point me to any case where such a discretion was exercised.
More importantly, the evidence of Mr. Atkins was not required for the main thrust of Mr. Sadozai’s appeal, namely that State Farm’s failure to follow procedure entitled him to the cost of the assessment, regardless of its merits.
The assessment was a proposed In-Home Assessment by Dr. Niousha Gohassani, a chiropractor at the Doctors Assessment & Rehab Clinic in Toronto. On September 20, 2010, she submitted a treatment plan for $987.69. Under s. 38(8) of the New SABS, State Farm had 10 business days to advise Mr. Sadouzai what it did not agree to pay and the medical and any other reasons why not. However, instead of providing that notice, State Farm responded on October 6, 2010 that it was unable to consider the invoice as it had not received Mr. Sadozai’s completed Application for Accident Benefits.
By that point the assessment had already taken place.
Mr. Sadozai therefore relies on s. 38(11)2 of the 2010 SABS, which provides that, if no s. 38(8) notice was given, the insurer has to pay pending notice:
The insurer shall pay for all goods, services, assessments and examinations described in the treatment and assessment plan that relate to the period starting on the 11th business day after the day the insurer received the application and ending on the day the insurer gives a notice described in subsection (8).
Mr. Sadozai submits that Dr. Gohassani sent in the treatment plan, waited 10 days and carried it out without hearing from State Farm, so pursuant to s. 38(11)2 State Farm has to pay. The Arbitrator’s consideration of the assessment’s reasonableness or necessity was therefore irrelevant and in error.
There are two problems with this submission. First, s. 38(11)2 was never put to the Arbitrator, so he could not have erred in failing to apply it. Mr. Sadozai’s counsel submits that one phrase in her opening submissions at arbitration put the issue before him, namely where she stated that Mr. Sadozai was seeking a determination that State Farm did not properly deny. However, the entire discussion before and after that phrase revolved around whether Mr. Sadozai had failed to comply with information requests. There was no reference to s. 38.
Second, I prefer the analysis of Arbitrator Wilson in Ying Al Chen and State Farm Mutual Automobile Insurance Company, (FSCO A13-003892, May 30, 2016). Although he dealt with the Old SABS, the effect of the provisions are identical: if an insurer does not respond within 10 business days to a treatment plan like an assessment plan, it has to pay.2 As he noted, the SABS is not a lottery for treatment providers where the prize is the deemed approval of a meritless treatment plan. Further, the precondition is that the claimed expenses be “reasonable and necessary” before an insured can claim indemnity from an insurer.
Arbitrator Wilson also noted that, in addition to the issue of the statutory preconditions for entitlement to a benefit, the SABS also provides for a series of different reasons for an insurer to resist payment. These include for material misrepresentation, failing to apply for benefits in a timely manner, and failing to attend an insurer’s examination after proper notice. As the Arbitrator put it, the alternative would be a situation where unscrupulous treatment providers could overwhelm an insurer’s claims processing by filing excessive and meritless plans, hoping that the insurer would be unable to respond to all of them in the limited response time.
Mr. Sadozai relies on Halim and Security National Insurance Co./Monnex Insurance Mgmt. Inc., (FSCO P07-00035, August 8, 2008), for the proposition that the in-home assessment was payable regardless. However, that case dealt with the old DAC provisions requiring a DAC referral if certain minimum pre-requisites were met and, if the referral was not made, then the assessment was deemed reasonable and payable. As discussed in that case, the purpose of the DAC referral was to get an independent and expert opinion regarding reasonableness, as it was the DAC that stated if the assessment expense was reasonable. In the absence of the referral, the assessment was deemed reasonable. However, I note that DACs no longer exist, nor does the purpose of the “deeming” provisions that then existed, so I find Halim irrelevant.
Accordingly, Arbitrator Musson was within his rights to determine the reasonableness of the assessment. While his reasons are brief on the particular point under appeal, I find they are sufficient in the context of the entire decision, considering his general findings regarding Mr. Sadozai’s credibility and failure to prove his case:
The Applicant was the only person who testified at the Hearing. He testified under examination in chief for less than 15 minutes. The Applicant did not call any witnesses to testify as part of his case. In addition, no jurisprudence was submitted as part of his submissions. The Insurer, for its part, chose not to call any of the individuals on its witness list.
Throughout the Applicant’s testimony, he continually contradicted himself. At one point, under examination in chief, the Applicant stated that he didn’t remember attending at the Doctors Assessment and Rehabilitation Clinic for treatment, then he said that he did attend and finally he said he couldn’t remember.
I find that the Arbitrator did not err in law in finding that the assessment was not payable. The mandatory payment provision was not put to him, and in any event, I find that assessments are still subject to a reasonableness test.
The appeal is therefore dismissed, and the Arbitrator’s decision is affirmed.
IV. EXPENSES
If the parties are unable to agree about expenses of this appeal, an expense hearing may be arranged in accordance with Rule 79 of the Dispute Resolution Practice Code.
February 22, 2017
David Evans Director’s Delegate
Date
Footnotes
- Effective September 1, 2010, the Statutory Accident Benefits Schedule – Effective September 1, 2010 (the “new SABS”) came into force. Although the incident occurred before then, the transition rules in the new SABS provide that, subject to certain exceptions, benefits that would have been available pursuant to the Statutory Accident Benefits Schedule – Accidents on or after November 1, 1996 (the “old SABS”) shall be paid under the new SABS, but in amounts determined under the old SABS. As a result, both the old SABS and the new SABS are applicable to accidents that occurred on or after November 1, 1996 and before September 1, 2010 and both should be considered.
- See s. 38(8) and 38(8.2) of the Old SABS. For the purposes of this appeal, I have simply assumed that the notice and payment provisions of the New SABS apply.