Neutral Citation: 2018 ONFSCDRS 119 FSCO A14-001528

BETWEEN:

KIFAH ABOUZEENI Applicant

and

ALLSTATE INSURANCE COMPANY OF CANADA Insurer

MOTION DECISION

Before: Charles Matheson

Heard: By written submissions completed on May 24, 2018

Appearances: Mr. R. Van Praet, lawyer for Ms. Abouzeeni Ms. S. Bandoquillo lawyer, for Allstate Insurance Company

Issues:

The Applicant, Ms. Kifah Abouzeeni, was injured in a motor vehicle accident on October 8, 2008. She applied for and received statutory accident benefits from Allstate Insurance Company of Canada (“Allstate”), payable under the Schedule.¹ Allstate denied certain claims made by Ms. Abouzeeni. The parties were unable to resolve their disputes through mediation, and Ms. Abouzeeni, through her representative, applied for arbitration at the Financial Services Commission of Ontario (“FSCO”) under the Insurance Act, R.S.O. 1990, c. I.8, as amended.

The issue in this hearing is:

Is the Applicant entitled to a special award arising from this proceeding and, if so, in what amount?

Result:

The Applicant’s motion is dismissed.

Background

An application for arbitration was dated February 11, 2014, which advanced Care Giver Benefits along with several treatment plans, a cost of examination, interest and costs of the arbitration. The parties settled all the medical treatment plans prior to the arbitration on July 18, 2017 for $14,500.00 all inclusive.

On July 26 and 27, 2017 a hearing took place to decide the preliminary issue of whether the Applicant was statute barred from pursuing the care giver benefit to arbitration. The hearing arbitrator found that the Applicant was not statute barred, as a result of the June 2, 2009 OCF-9 as the Applicant had not properly elected a weekly benefit. As such the Applicant could elect a weekly benefit moving forward, without a time limit.

The Applicant seeks a special award on the grounds that the Insurer has refused or failed to adjust the Applicant’s outstanding claim since the release of the award, and the subsequent denial of the Insurer’s appeal, which was released on November 29, 2017.

The Applicant has since the arbitration elected to receive the weekly benefit known as the Non Earner Benefit (“NEB”) and not that of the Care Giver Benefit that was pursued in the original application for arbitration. The Applicant sent the Insurer an election form for NEB on October 11, 2017 and has received that benefit since May 10, 2018. The Insurer has requested an up-dated disability certificate from the Applicant.

Arguments

The Applicant argues that this arbitrator has the ability to order a special award based on the large body of medical treatment plans that were previously settled, and the fact that the Insurer has not properly adjusted the NEB claim. The Applicant argues in their written submissions, that this evidence demonstrates the Insurer’s “excessive, imprudent, stubborn, inflexible, unyielding or immoderate behaviour towards her claim”.

The Applicant argues that the fact that the Insurer has not adjusted and made any payments towards the NEB (which is now being elected by the Applicant) is yet another demonstration of why a special award should be made; because of the Insurer’s adversarial attitude towards her claim.

The Applicant submits that the total retroactive NEB owing at this point in time is in the $85, 000.00 range and that the medical benefits that were settled were worth $18,056.76 in total.

The Applicant argues that s. 282(10) of the Insurance Act² gives me the jurisdiction for making a special award, that section reads as follows;

If the arbitrator finds that an Insurer has unreasonably withheld or delayed payments, the arbitrator, in addition to awarding the benefits and interest to which an insured person is entitled under the Statutory Accident Benefits 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 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. (Underlined for my emphasis)

The Applicant submits that the totality of the Insurer’s conduct throughout the handling of her claims be considered in making a special award; remembering that deterrence is a policy consideration.

Finally, the Applicant argues that FSCO arbitrators have a great latitude in awarding special awards even in situations where substantive benefits have been resolved and paid prior to a hearing. The Applicant relies on Anizor and Royal Insurance Company of Canada³ for this line of argument.

The Insurer argues that it did not unreasonably withhold or delay any payments for any accident benefits to which the Applicant was entitled.

The Insurer argues that the preliminary issue arbitrator did not make a finding of disability with respect to care giver or a NEB as the issue of disability was not before him. He did not make a determination of entitlement. He did not make a finding that any weekly benefit was payable by the Insurer.

The Insurer argues that a special award is not granted merely because the Insurer incorrectly interpreted or failed to comply with provisions of the Schedule; if that were the case, a special award would be granted to every successful Applicant. An Insurer can be wrong without having acted unreasonably. An Insurer is not held to the standard of perfection.

In regards to the NEB, the Insurer submits that a special award cannot be ordered with respect to a benefit which was initiated after the hearing, as there has not been a finding of underlying entitlement to the benefit, nor has there been a recognition by the Insurer that any benefit(s) were owed and paid prior to the hearing.

In regards to the treatment plans, the Insurer submits that no special award is payable as the issues were settled prior to the hearing and no underlying entitlement has been made by an arbitrator. The Insurer argues that where the parties mutually enter into settlement which terminated part of a proceeding, it disposes the question of special award with respect to such benefits. The Insurer relies upon a substantial body of FSCO case law including, An and Intact Insurance Company⁴, for this line of argument.

The Insurer argues, in part, that where there is no entitlement to a weekly benefit, and there is no tangible or measurable weekly benefit owed to the Applicant at the time of the hearing, then, no special award is payable. The Insurer relies upon Whitney and Co-operators⁵, where arbitrator Naylor is upheld by Director Sachs when she found that the Insurer acted unreasonably, but, since no benefits were owing to the Applicant, she had no authority to make a special award under s. 282(10).

Decision

I agree with the Insurer. The extensive case law including Anizor and Royal,⁶ and my reading of s. 282 (10), leaves no doubt that if there are no findings by the arbitrator of an underlying entitlement to benefits under the Schedule, the arbitrator is unable to make a special award.

Accordingly, I find I have no jurisdiction to consider an order for a special award. I therefore dismiss the Applicant’s motion.

June 21, 2018

Charles Matheson Arbitrator

Date

Financial Services Commission of Ontario