Neutral Citation: 2017 ONFSCDRS 75

FSCO A16-004914

BETWEEN:

TAMMY HODGINS

Applicant

and

CO-OPERATORS GENERAL INSURANCE COMPANY

Insurer

DECISION ON A PRELIMINARY ISSUE

Before: Arbitrator Jeff Musson

Heard: In person at Sudbury, Ontario on November 21, 2016 and December 9, 2016 and by written submissions due January 9, 2017

Appearances:

Mr. Nicola Romano participated for Ms. Tammy Hodgins

Mr. Jonathon Kahane-Rapport participated for Co-operators General Insurance Company

Issues:

The Applicant, Ms. Tammy Hodgins, was injured in a motor vehicle accident (“MVA”) on October 10, 2008 and sought accident benefits from the Co-operators General Insurance Company (“Co-operators”), payable under the Schedule.¹ The parties were unable to resolve their disputes through mediation, and Ms. Hodgins, 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 issues in this Preliminary Issue Hearing are:

Is Ms. Hodgins statue-barred from applying for Income Replacement Benefits (“IRBs”) as per section 51 of the Schedule?
Is either party liable to pay expenses in respect of the Preliminary Issue Hearing?

Result:

Ms. Hodgins is statue-barred from applying for IRBs as per section 51 of the Schedule.
Co-operators is entitled to its expenses in respect of the Preliminary Issue Hearing. If the parties are unable to agree on the quantum of the expenses of this matter, the parties may request an appointment with me for determination of same in accordance with the Rules 75 to 79 of the Dispute Resolution Practice Code (“DRPC”).

EVIDENCE AND ANALYSIS:

BACKGROUND

Both the Insurer and the Applicant are in agreement that the Applicant received IRBs up until her termination date of June 2, 2009. The Insurer terminated the Applicant’s IRBs based on an occupational therapy assessment and a physiatry assessment. The Applicant subsequently filed for Mediation on February 23, 2016 and subsequently applied for Arbitration on March 15, 2016. These facts are not disputed by either party.

Based on the above-noted termination, the Insurer is putting forward the position that the Applicant must have filed for Mediation by June 2, 2011 in order to dispute the termination of her IRBs. It is the Applicant’s position that the termination of her IRBs was not valid and therefore, the time limitation did not begin to run as of June 2, 2009. The Applicant submits that the termination notice form (OCF-9) she received did not comply with the standard for notification established by the Supreme Court of Canada decision in Smith v. Co-operators.² As a result of the improper notification, the Applicant is taking the position there is no valid termination date and therefore the Applicant is not statue-barred from proceeding to dispute her IRB.

MS. SHAWNA MILNE – CLAIMS REPRESENTATIVE

Ms. Milne is an accident benefits claims representative for Co-operators who was assigned the Applicant’s accident benefits file. She has worked for Co-operators for 20 years and specifically 13 years in the area of accident benefits. Ms. Milne testified that at the time (in 2008), she handled approximately 30 to 40 files per year. According to her records, she stated that she spoke to the Applicant by phone on October 14, 2008 and subsequently met with the Applicant in person on October 17, 2008.

Ms. Milne testified that she went above and beyond in her treatment of the Applicant’s accident benefits file when compared to the level of effort of most of her colleagues in the industry. She made a conscious effort to assist the Applicant in order to explain the procedures and forms required for her to claim accident benefits. As an example, Ms. Milne testified that she made a point of setting up a face to face meeting with Ms. Hodgins at her residence. Ms. Milne thought that since the Applicant’s injuries were so severe, meeting face to face would be easier on the Applicant rather than spending 1-2 hours on the phone. By meeting in person, the Applicant could immediately commence filling out the required paperwork to start her accident benefits claim. Ultimately, at the end of the day, Ms. Milne felt she could best provide a detailed explanation to the Applicant related to the benefits allowed as part of the accident benefits package if she met with the Applicant in person.

Throughout her testimony, I found that Ms. Milne was genuine in her desire to assist the Applicant to get through this process. After the occupational and physiatry assessments, the medical evidence of the Insurer concluded that the Applicant no longer qualified for IRBs along with Housekeeping and Home Maintenance Benefits. Ms. Milne confirmed in her testimony that upon termination, she sent the Applicant an OCF-9 explaining the changes to the Applicant’s entitlement to benefits. She sent the Applicant the Insurer’s Examination reports, the explanation of benefits, the after denial of benefits information sheet, and the Applicant’s final cheque for the IRBs owing from June 1-5, 2009.

The Applicant is putting forward the position that Ms. Milne is a claims representative and not a claims adjustor. As a result, the Applicant did not know who her claims adjustor was in order to file a dispute for accident benefits as listed in the OCF-9 that the Insurer sent to the Applicant upon termination. Under cross-examination, Ms. Milne was asked if she knew what the difference was between being a claims adjustor and a claims representative. The Applicant’s representative asked Ms. Milne if she knew that she could only be a claims adjustor if she paid a licence fee to the government. Adjustors are required by law to be licensed and to remit an annual fee to the Province of Ontario. Ms. Milne answered that she wasn’t a claims adjustor and in fact, her business card states her title as accident benefits claims supervisor. Ms. Milne confirmed under cross-examination that she was paid as a salaried employee and accordingly, claims adjustors were not salaried employees.

The Applicant’s representative asked Ms. Milne if she agreed that, based on the letters sent by Co-operators and on the fact that she was a salaried employee along with having no knowledge of paying a licence fee to be an adjustor, the evidence suggests that Co-operators did not assign an adjustor to this case because Ms. Milne could not be both an adjustor and a claims representative at the same time. Ms. Milne stated that whatever her job title may or may not be, at the end of the day, the Applicant never told her or anyone else at Co-operators or even the Applicant’s own doctor that she wanted to dispute her June 2, 2009 termination of benefits. Ms. Milne also testified there is nothing in the Schedule that says an Applicant must notify the Insurer before submitting an application to dispute a termination of benefits. She also confirmed that many people do not notify their Insurer when they decide to dispute a termination of benefits; they just proceed to file the application with FSCO. As part of her testimony, Ms. Milne stated that the OCF-9 she used was created by the Superintendent of FSCO and as an accident benefits claim representative, she has no ability to edit the sections or the wording of the OCF-9.

The purpose of the OCF-9 is to communicate a change of benefits for the Applicant and within the OCF-9, it lists steps that an Applicant may take if they decide that they want to dispute the change. Ms. Milnes’ testimony withstood a strong cross-examination by the Applicant’s representative. I found her testimony to be truthful, her answers to be straightforward and her conduct to be professional towards the Applicant since the time she was first assigned this file.

MS. TAMMY HODGINS – THE APPLICANT

The Applicant testified that she was off of work on short term disability (“STD”) in order to deal with her depression starting on August 8, 2008. At the time of the MVA, the Applicant was still on STD having not returned to work yet. Coincidently, she was scheduled to return to work but for the MVA occurring.

Since the MVA, the Applicant testified that she has suffered through some non-accident related life altering episodes. Mainly, her layoff from her employer in April of 2009 and the subsequent money related issues.

The Applicant was employed full time at Inco Mines as an assistant mining engineering technician. She would complete underground surveys and issue computer prints as part of her job responsibilities. The Applicant testified that she understands English well and is fully literate. Based on her job description, I believe it is safe to assume that she also has a certain degree of computer literacy as well.

The Applicant testified that she knows that up until her STD was terminated, the amount of IRBs to which she was entitled was $0. This was because the amount she received from STD negated any IRB payment. It was only after her STD ceased that she would be entitled to any IRBs. As it turned out, the Applicant was granted long term disability (“LTD”) after her STD terminated. However, there was a small shortfall which was covered by IRBs for the period of February 14, 2009 to May 31, 2009 in the amount of $129.29. There was also a small amount of IRBs paid for the period of June 1, 2009 to June 5, 2009.

The Applicant testified she believed that Ms. Milne was fair in terms of how Co-operators was adjusting her claim and that she accepted the dollar amount of IRBs they said she was allowed. The Applicant testified that once her IRBs and LTD benefits were terminated, unfortunately, there was no longer a job for her to return to as she had been laid off by her most recent employer. As a result, the Applicant was forced to pick up odd jobs and worked sporadic hours to try and make financial ends meet.

The Applicant confirmed with her testimony that she received the OCF-9 notice from the Insurer and that Ms. Milne explained the termination of benefits. The Applicant also testified that she didn’t bother to read the section of her OCF-9 as to the steps required if she disputed the IRB termination. She confirmed she never notified the Insurer that she was not in agreement with her termination of benefits and she also confirmed that she did not file an Application for Mediation in order to dispute the termination.

The Applicant testified there were no barriers preventing her from getting legal advice with regards to her accident and there was legal aid available to her. Regardless of this, she stated that based on her claim, she did not feel she had any power to go against Co-operators. This, despite the letters and notifications she was sent by Co-operators which stated that she in fact was able to dispute her stoppage of benefits if she so chose.

ANALYSIS

As Justice Braid stated in his decision of Watkins v. Western, “This is not simply a matter of an Insured person missing a deadline. Instead of imperfect compliance, this was non-compliance.”³ Based on the evidence, I am of the opinion that the same can be said for the Applicant. The Applicant’s position is that although notice was provided, the notice was not correct. In order for the notice to be correct, the notice must be in accordance with the legislation related to claiming accident benefits in the province of Ontario.

The Applicant argued that in Step 2 of the OCF-9 it states that, “If you are unable to resolve your dispute by speaking to your adjustor, you may apply to mediate your dispute.” By extension, the line of thinking by the Applicant continues that she never had an adjustor assigned to her file because Ms. Milne is a claims representative.

Based on the evidence presented before me, where this line of thinking is flawed is that the Applicant never did Step 1 in order to get to Step 2. Step 1 states, “Notify your Insurer/Further Examination”. It goes onto state, “contact your insurance adjustor, health professional or legal representative for further information about the additional examination.” The Applicant testified that she never did this even though she had multiple opportunities to do so.

By making this argument, the Applicant is insinuating that the OCF-9 takes priority over the Schedule. I disagree with this position. The Applicant is taking the position that they must notify the Insurer as stated in the OCF-9 as the first step to dispute benefits. What the Applicant fails to realize is that section 281.1(1) of the Insurance Act and section 51(1)(2) of the Schedule take priority over the OCF-9 because it is the Insurance Act and the Schedule which govern the administration of accident benefits in this province, not the OCF-9. The OCF-9 does nothing more than trigger the two-year limitation period when served on the Applicant. The form communicates a change/denial of benefits.

The Supreme Court of Canada in Smith v. Co-operators sets out the factors required for Insurers to be able to rely on the limitation period. Insurers have to provide a valid refusal of benefits; this refusal must state a clear and unequivocal denial; and it must give reasons for the denial, including accompanying medical documentation if applicable, and provide a description of the dispute resolution process.⁴

The question to ask of the Applicant is did she receive proper notice? The answer is yes and the Applicant confirmed this with her testimony. The next question is whether the legislation is clear and unequivocal in section 51(1)(2) of the Schedule as to the time limits in which to file a dispute. The answer is yes. The Court of Appeal is steadfast in its position that as long as the Insurer provides a valid refusal, the limitation period should be strictly adhered to. Decisions from cases such as Turner v. State Farm⁵ or Sietzema v. Economical⁶ reaffirm this.

There were no extenuating circumstances preventing the Applicant from disputing her termination of benefits. Many people file their benefit disputes at FSCO without first notifying their Insurer because it is not mandatory. The OCF-9 is an advisory and information form created for the benefit of the Applicant to provide notice of changes of benefits in addition to providing guidance throughout the process if the Applicant chooses to dispute their change in benefits.

Further, in the case of the Applicant, the Insurer sent five separate OCF-9s throughout the lifetime of the file before it was closed and the Applicant never questioned the wording or asked for clarification in terms of the meaning of the various parts of the form. The Applicant testified that she read the OCF-9 forms but not carefully. She also testified that the way Ms. Milne went through the forms, it was pretty basic and obvious. The Applicant also testified that she understood that the Insurer was refusing to pay her benefits after her date of termination.

The mere fact that the Applicant stated that the notices sent to her could be brought into compliance by the Insurer’s employee simply stating that she is an adjustor is not reasonable. The Applicant was sent the assessment and information sheets that provided details if she disagreed with the Insurer’s assessments and the process she could follow to dispute the decision. The evidence and the testimony of the Applicant confirmed that she willingly chose not to dispute the termination of her benefits until it was past the two-year limitation period; in fact, it was six years past the date of termination when she decided to dispute the ceasing of her benefits.

CONCLUSION

There was no evidence presented at the Hearing that the Applicant had issues with reading or writing in the English language. She was able to read and understand the provisions stated in the denial letters sent to her. If she had questions, she could have raised them with the Insurer, but she didn’t. If she required clarification, she could have retained legal counsel, but she didn’t. Ultimately, the Applicant was informed of her choices. I find that the Applicant had ample opportunity to dispute her case within the confines laid out in the legislation, and her lack of action rests solely with her. I also find that the denials sent by the Insurer were clear and unequivocal in addition to the Applicant testifying she received them. I also find that these letters conform to the Supreme Court of Canada decision of Smith v. Co-operators.⁷ Despite the Applicant’s representative’s hardnosed position that “FSCO got it wrong” when creating the OCF-9 form, I believe, based on the evidence presented, the OCF-9 forms are correct and comply with the standard set in Smith v. Co-operators.⁸ As a result, based on the evidence presented, the Applicant is statute-barred from applying for IRBs.

EXPENSES:

Co-operators is entitled to its expenses in respect of the Preliminary Issue Hearing. If the parties are unable to agree on the quantum of the expenses of this matter, the parties may request an appointment with me for determination of same in accordance with the Rules 75 to 79 of the DRPC.

March 13, 2017

Jeff Musson Arbitrator

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:

Ms. Hodgins is statue-barred from applying for Income Replacement Benefits as per section 51 of the Schedule.
Co-operators is entitled to its expenses in respect of the Arbitration Hearing. If the parties are unable to agree on the quantum of the expenses of this matter, the parties may request an appointment with me for determination of same in accordance with Rules 75 to 79 of the Dispute Resolution Practice Code.