Neutral Citation: 2017 ONFSCDRS 95

FSCO A14-007100

BETWEEN:

BOZZ ZAZI

Applicant

and

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY

Insurer

REASONS FOR DECISION

Before: Anita Idemudia

Heard: August 31, 2016 at the offices of the Financial Services Commission of Ontario in Toronto.

Appearances: Vikram Bhandari for Mr. Zazi Josh R. Knox for State Farm Mutual Automobile Insurance Company

The Applicant, Bozz Zazi, was injured in a motor vehicle accident on September 29, 2011. He applied for and received statutory accident benefits from State Farm Mutual Automobile Insurance Company ("State Farm"), payable under the Schedule.¹ The parties were unable to resolve their disputes through mediation, and Mr. Zazi applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

On or around May 6, 2016, the parties agreed that the following issues remained in dispute:

Cost of examination - Functional Abilities Evaluation, in the amount of $1,752.00, as per treatment plan dated August 13, 2014, submitted by Assess Medical Diagnostics Inc.
Medical Benefits – Physiotherapy/Massage Therapy in the amount of $5,065.80, as per treatment plan dated September 11, 2012, submitted by Focus Physiotherapy.²

Prior to the arbitration hearing scheduled for August 29-30, 2016, State Farm, by way of an OCF-9, dated August 12, 2016, approved and paid for the above treatment plans with interest. State Farm also conceded that Mr. Zazi's injuries fell outside of the Minor Injury Guideline.

Despite the payment of the two treatment plans, Mr. Zazi is seeking a special award claim against State Farm on the following basis:

(a) State Farm unreasonably withheld or delayed payment of the first treatment plan from September 11, 2012 and the second treatment plan from August 13, 2014, until their recent approvals on August 12, 2016.

(b) State Farm failed to assess and re-assess the claim on an on-going basis by:

i. Failing to consider pertinent medical information provided;

ii. Improperly relying on biased section 44 examiners;

iii. Failing to consider the totality of evidence available to it/re-assess the claim as new information is provided;

iv. Failing to refer him to qualified medical assessors.

State Farm submits that Mr. Zazi is not entitled to a special award for the following reasons:

(a) State Farm acted reasonably in commissioning multiple section 44 Insurer's Examinations.

(b) Mr. Zazi failed to meet his onus of proof by not requesting the adjusting log notes or calling the adjuster to give evidence.

(c) Mr. Zazi is not entitled to a special award because the substance of the special award claim is a difference of opinion.

(d) Dr. Kebede's clinical notes and records did not demonstrate causation between Mr. Zazi's pain symptoms and the subject motor vehicle accident.

The issue in this hearing is:

Is Mr. Zazi entitled to a special award pursuant to subsection 282(10) of the Insurance Act? If so, in what amount?

Result:

Mr. Zazi is entitled to a special award of $2,510.98 pursuant to subsection 282(10) of the Insurance Act.
If the parties are unable to agree on the entitlement to, or quantum of the expenses of this matter, they may make written submissions in accordance with Rules 75 to 79 of the Dispute Resolution Practice Code.

EVIDENCE AND ANALYSIS:

Background

Mr. Zazi was 44 years old at the time of the accident. He is married and a father of four children. At the time of the accident, he was working full-time as a taxi cab driver for Co-op Cabs in Toronto, for approximately 60 hours per week.

He was operating a 2000 Toyota Sienna at the time of the accident and was rear-ended at a stop light. His car was the first in line at the red light and was pushed forward on impact. However, he did not hit another vehicle. His three year old son was seated in the rear middle passenger seat. He did not lose consciousness and the air bags did not deploy. Emergency personnel attended at the scene, but he did not go to the hospital. His vehicle was driven from the scene.

Mr. Zazi visited his family doctor the following day and was referred for an X-ray. He was also referred for an MRI. He received physiotherapy and massage therapy at Focus Physiotherapy and attended two to three times per week for the first four months.

Mr. Zazi's Submissions

Mr. Zazi submits that State Farm's conduct falls within the purview of subsection 282(10) of the Schedule because State Farm unreasonably withheld or delayed payment for two treatment plans that were in dispute until their very recent approvals on August 12, 2016. The first treatment plan dated September 11, 2012 and denied on October 20, 2013 was subsequently approved on August 12, 2016 – 3 years, 9 months and 23 days later. The second treatment plan dated August 13, 2014 was denied on October 27, 2014 and subsequently approved 1 year, 9 months and 16 days later.

Mr. Zazi further submits that the information contained in Dr. Kebede's July 22, 2016 letter stating that the applicant "continues to suffer from accident related injuries and would benefit from further physiotherapy and chiropractic treatment to help improve his accident related conditions"³ was not new to State Farm.

State Farm failed to assess and re-assess the claim on an on-going basis. Mr. Zazi referred to case law that supports the principle that an insurer has an ongoing duty to assess and reassess a claim as new information is available.⁴

Mr. Zazi submits that the clinical notes and records of Dr. Kebede are replete with objective diagnoses as well as consistent subjective complaints of on-going pain and that Dr. Kebede's July 22, 2016 letter represents a simple synopsis of everything that is already contained in his clinical notes and records. Mr. Zazi further submits that the various iterations of Dr. Kebede's records were provided to State Farm on August 10, 2012, December 10, 2014, January 7, 2016 and February 12, 2016. Mr. Zazi further submits that contrary to the insurer's position that Dr. Kebede's clinical notes and records do not speak to causation, the Insurer's own assessor, Dr. Tepperman, documented the on-going complaints of neck pain, bilateral shoulder pain, low back pain, headaches, numbness and right middle finger pain and concluded that the Applicant suffered myofascial strain of his cervical and lumbar paraspinal musculature, bilateral shoulder strain and strain of his right middle finger as a direct result of the motor vehicle accident of September 29, 2011.

On the above basis, Mr. Zazi submits that State Farm not only failed to give appropriate weight to the information contained in Dr. Kebede's clinical notes and records in an even-handed manner, but turned a blind eye to very significant medical evidence regarding his disability.

Mr. Zazi also addressed my jurisdiction to order a special award where the benefits are paid by the insurer prior to the start of the hearing. He cited the following cases – Graper and Liberty Mutual Automobile Insurance Company (FSCO A00-000133, March 21, 2001) and Nicolle and State Farm Mutual Automobile Insurance Company (FSCO A13-003207, November 27, 2014).

However, State Farm did not dispute my jurisdiction to consider a special award claim as a stand-alone issue and accordingly, I have no need to deal with these cases.

State Farm's Submissions

State Farm submits that Mr. Zazi is not entitled to a special award because State Farm did not act unreasonably in its handling of Mr. Zazi's claim. State Farm submits that it acted reasonably by commissioning multiple section 44 Insurer's Examination reports to investigate Mr. Zazi's claimed injuries and obtaining reports from Dr. Tepperman, Dr. Dharamshi and Dr. Debow. It also submits that all three assessors came to similar conclusions. State Farm further submits that it acted reasonably in approving the treatment plans in dispute just before the hearing, based on the new medical information contained in Dr. Kebede's letter.

State Farm further submits that Mr. Zazi has not requested the adjusting log notes or called the adjuster for testimony and, as a result, has not presented evidence of the unreasonable decisions by State Farm on Mr. Zazi's file. State Farm submits that without this information, Mr. Zazi has not met his onus of proof to substantiate his special award claim.

State Farm submits that the evidence relied upon by Mr. Zazi and State Farm shows a simple difference of opinion and is not sufficient to award a special award. State Farm further submits that it commissioned ten examinations from three different assessors, all of which consistently concluded that the MIG applied to the applicant's injuries and when new medical evidence was provided, State Farm obtained addendum or paper reports from its assessors and relied on their expertise. State Farm submits that Mr. Zazi commissioned two examinations, one from a chiropractor and the second one from a social worker, and neither of the examinations addressed the MIG but both concluded that further examinations and treatment were warranted. State Farm further submits that prior to the July 25, 2016 letter, Dr. Kebede's CNR's did not demonstrate causation between the Applicant's pain symptoms and the subject motor vehicle accident.

State Farm requested an order dismissing the proceedings and costs in the amount of $5,000.00.

The Law

Subsection 282 (10) of the Insurance Act provides that if the arbitrator finds that an insurer has unreasonably withheld or delayed payment of a benefit, the arbitrator, in addition to awarding the benefits and interest to which the insured person is entitled under the Schedule, shall award a lump sum of up to 50 per cent of the amount to which the person was entitled at the time of the award together with interest on all amounts owing to the insured (including unpaid interest) at the rate of 2 per cent per month, compounded monthly, from the time the benefits first became payable under the Schedule.

Entitlement to a Special Award

State Farm submits that in the absence of the adjuster's log notes or oral testimony, Mr. Zazi has not met his onus of proof to substantiate a special award claim. I disagree. I find that the burden of proof for entitlement to a special award can be discharged through medical and/or other evidence and my analysis of the medical evidence available to State Farm vis-a-vis the content of Mr. Kebede's July 22, 2016 letter, satisfies me that Mr. Zazi has proven that on a balance of probabilities, he is entitled to a special award.

Dr. Kebede's letter dated July 22, 2016[^5]

Dr. Kebede's letter provides a summary of his clinical notes and assessment reports relating to Mr. Zazi's on-going complaints. The letter highlights the following:

Chronic shoulder tendinitis, carpal tunnel syndrome and chronic lower back pain as a result of the motor vehicle accident.
MRI of the lower back conducted February 16, 2012, which revealed moderate to severe spinal stenosis at L4-5 level and moderate spinal stenosis which Dr. Kebede noted as being aggravated by the motor vehicle accident.
Dr. Temple's consultation note reporting numbness and tingling in the hands and fingers.
Ultrasound of the shoulder, showing calcific tendinitis of the rotator cuff.

State Farm's Medical Evidence

State Farm commissioned a total of nine section 44 Insurer Examinations. Seven of the assessments were conducted by Dr. Tepperman, a general physician. One was conducted by Dr. Debow, a psychiatrist, to address a treatment plan for a psychological assessment and another was conducted by Dr. Dharamshi, a general physician, to address the treatment plan dated August 13, 2014.

The first insurer examination (IE) was conducted by Dr. Tepperman to address the treatment plan submitted October 11, 2011 for physical therapy. In a report dated November 28, 2011, Dr. Tepperman indicated that Mr. Zazi suffered a myofascial strain of the cervical and paraspinal musculature, bilateral shoulder strain and strain of the right middle finger as a result of the accident. He concluded that Mr. Zazi's injuries fell within the Minor Injury Guideline.⁶

Mr. Zazi takes issue with the fact that Dr. Tepperman concluded that there was no neurological impairment despite such a finding being outside the scope of Dr. Tepperman's expertise. I agree with Mr. Zazi. Dr. Tepperman should have recommended that Mr. Zazi be seen by a neurologist to investigate "complaints of numbness in his arms and left leg which he described as steady."⁷

A section 44 paper review IE was carried out by Dr. Tepperman on December 19, 2011, to address the reasonableness of a treatment plan dated November 17, 2011 for physical therapy and whether Mr. Zazi's injuries fell within the MIG. Dr. Tepperman concluded that there was no new information that would remove Mr. Zazi from the MIG and that the treatment was not reasonable and necessary.

Mr. Zazi pointed out similar flaws with other assessments carried out by Dr. Tepperman in 2012. I find it concerning that Dr. Tepperman would arrive at the same consistent conclusion over time despite Mr. Zazi's repeated complaints about "steady numbness in his arms and left leg".

Lastly, I turn to Dr. Tepperman's Independent Medical Assessment dated February 18, 2016. I note that despite reviewing the updated clinical notes and records of Dr. Kebede and acknowledging that various diagnoses were listed, including right rotator cuff tendinitis, low back pain, neck strain and right tennis elbow tendinitis, Dr. Tepperman concluded that these conditions had no direct causal relationship to the subject motor vehicle accident.

I find that Dr. Tepperman failed to consider that the above diagnosis had been noted in Dr. Kebede's clinical notes as far back as 2012. Dr. Tepperman also failed to consider that Dr. Kebede's records contained further diagnoses such as chronic shoulder pain, chronic lower back pain, carpal tunnel syndrome and numbness.

State Farm submits that the decision to approve the treatment plans dated September 11, 2012 and August 13, 2014 was based on "new information" provided by Dr. Kebede in his July 22, 2016 letter.

I reject State Farm's submission that Dr. Kebede's July 22, 2016 letter contained new information that it (State Farm) did not already have. The said July 22, 2016 letter is a summary of the medical information contained in Dr. Kebede's clinical notes and records, submitted to State Farm on various dates. The information contained in Dr. Kebede's letter can be found in the following:

The Clinical notes and records of Dr. Kebede provided to State Farm on various dates – August 10, 2012, December 10, 2014, January 7, 2016, and February 12, 2016⁸ which shows consistent complaints of shoulder pain, lower back pain, chronic pain, rotator cuff tendinitis following the motor vehicle accident of September 29, 2011.
A consultation report by Dr. Bryan Temple (Neurologist) dated April 5, 2012, stating that two to three weeks after the accident, Mr. Zazi developed numbness in both arms. The numbness involved the whole of the arm from the shoulder to the fingers.⁹
The Medical Assessment by Dr. Tepperman dated November 28, 2011 reports complaints of intermittent tightness in the neck and shoulders, low back pain, numbness in his arms and left leg and the right middle finger. The same assessment reports that Mr. Zazi "suffered a myofascial strain of his cervical and lumbar paraspinal musculature, bilateral shoulder strain and strain of the right middle finger as a direct result of the motor vehicle accident of September 29, 2011"¹⁰

Furthermore, I find that State Farm failed to provide important medical information to their IME assessors. The clinical notes and records of Focus Physiotherapy, where Mr. Zazi had been receiving physical treatment, were not provided. As well, two section 25 assessment reports — a Functional Abilities Evaluation conducted by Dr. Justin Guy (chiropractor) on October 6, 2014 and a Social-Emotional Assessment conducted by Dr. Pugen on March 8, 2016¹¹ were withheld from the IME assessors.

Upon review of the Functional Abilities Evaluation, I note that Dr. Guy concluded that Mr. Zazi's accident related injuries are yet to resolve. His examinations revealed findings to substantiate an impairment that goes beyond the natural history of most post-accident soft injuries. Dr. Guy also found that the severity of Mr. Zazi's impairment require further medical/ therapeutic intervention and recommended further treatment and assessments including an active rehabilitation program, a chronic pain assessment, an orthopaedic assessment and a neurological assessment to address Mr. Zazi's loss of concentration and radiating pain and numbness from the cervical and lumbar spine.

By not providing this information to their assessors, State Farm failed to both consider the totality of evidence available to it and to properly reassess the claim as new information was provided.¹²

Findings of Fact

I find that State Farm's actions in denying Mr. Zazi the medical treatment recommended in 2012 and 2014 were unreasonable. State Farm had ample medical evidence prior to July 22, 2016 to conclude that Mr. Zazi's injuries fell outside the Minor Injury Guideline and that further physiotherapy treatment as well as a Functional Assessment were warranted.

I am guided by the comments of Arbitrator Seife in Maas and State Farm Mutual Automobile Insurance Company (OIC A-015935, October 16, 1996) that:

In my view, when considering termination of benefits, an insurer must not rely selectively on reports that tend to support termination. It must consider the totality of the evidence available to it.

I find that State Farm failed to provide proper and complete medical information to their assessors and that it over-relied on the section 44 reports that supported a denial of the benefits. State Farm also failed to consider other medical evidence and recommendations on file in a timely manner and thereby unreasonably withheld medical treatment and assessments to which Mr. Zazi was entitled until the last possible moment prior to the commencement of the hearing of this matter.

The Amount of the Special Award

Subsection 282(10) of the Insurance Act provides that the special award shall be:

…up to 50 per cent of the amount to which the person was entitled at the time of the award together with interest on all amounts then owing to the insured (including unpaid interest) at the rate of 2 per cent per month, compounded monthly, from the time the benefits first became payable under the Schedule.

Mr. Zazi submits that the amount of the special award in this case should be the full 50 per cent of the amount Mr. Zazi was entitled to at the time of the award.

Arbitrators have frequently held that the higher end of the percentage scale should be reserved for especially egregious conduct on an insurer's part without mitigating factors and have often reserved the maximum special award of 50 per cent for flagrant misconduct or bad faith on the part of the Insurer.¹³

I find no evidence of deliberate misconduct, egregious conduct or bad faith on the part of State Farm in withholding medical benefits from Mr. Zazi. However, I find that State Farm withheld information from its own assessors and relied selectively on reports that tended to support termination of Mr. Zazi's benefits while failing to consider the totality of the medical information available to it.

For the above reasons, I find that State Farm's actions in denying Mr. Zazi medical treatment he required for several years amounted to unreasonable behaviour.

However, I have also concluded that the Insurer's decision to approve the treatment plans, with applicable interest, prior to the start of the hearing is a mitigating factor because it saved Mr. Zazi the expense and effort involved in preparing for a hearing on those issues.

I have considered all the circumstances of this case and balanced the strength of the medical evidence supporting Mr. Zazi's claim, and the length of time for which the benefits were denied, against the absence of bad faith or malice on the part of State Farm.

On balance, I find Mr. Zazi entitled to a special award and I have calculated the amount of the award as follows:

The amount of the treatment plans - $5,065.80 + $1,752.00 = $6,817.80

$6,817.80 + $3,226.15 (applicable interest on the two treatment plans as calculated by State Farm in its OCF-9 dated August 12, 2016 = $10.043.95

$10,043.95 x 0.25 (25% entitlement for a special award) = $2,510.98

Accordingly, I hereby order a special award of $2,510.98, pursuant to subsection 282(10) of the Insurance Act to be paid to Mr. Zazi.

EXPENSES:

If the parties are unable to agree on the entitlement to, or quantum of the expenses of this matter, they may make written submissions in accordance with Rules 75 to 79 of the Dispute Resolution Practice Code.

March 27, 2017

Anita Idemudia Arbitrator

Financial Services Commission of Ontario