State Farm Mutual Automobile Insurance Company v. A.B., 2019 ONFSCDRS 29

Dispute Resolution Services

Services de règlement des différends

Neutral Citation: 2019 ONFSCDRS 29

Appeal P18-00035

OFFICE OF THE DIRECTOR OF ARBITRATIONS

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY

Appellant

and

A.B.

Respondent

BEFORE:

David Evans

REPRESENTATIVES:

Todd J. McCarthy for State Farm Mutual Automobile Insurance Company

Jeffrey Raphael for A.B.

HEARING DATE:

December 17, 2018

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:

1. The appeal is dismissed and the Arbitrator’s orders of May 3, 2018, May 31, 2018 and June 22, 2018 are affirmed.

2. State Farm Mutual Automobile Insurance Company shall pay A.B. her legal expenses of the appeal in the amount of $2,500, inclusive of fees and disbursements and HST.

June 14, 2019

David Evans Director’s Delegate

Date

REASONS FOR DECISION

I. NATURE OF THE APPEAL

A.B. was injured in an accident on July 18, 2005. She made claims from State Farm Mutual Automobile Insurance Company of Canada for statutory accident benefits under the SABS–1996.¹ She was initially paid income replacement benefits, but the IRBs were terminated in 2008. Disputes about whether A.B. was entitled to IRBs more than 104 weeks after the accident, had suffered a catastrophic impairment for a mental or behavioural disorder, or was entitled to a special award proceeded to a hearing.

Given A.B.’s pre-accident medical and mental health problems, as summarized below, State Farm took the position at the hearing that causation was the fundamental issue dividing the parties. The claims had not been initially denied for causation.

The arbitration hearing proceeded before Arbitrator Sone in September 2014 and September 2015. As she could not complete the hearing, the Director assigned it to Arbitrator Matheson to render a decision based on the hearing transcripts.

In his main decision dated May 3, 2018, Arbitrator Matheson found that A.B. was catastrophically impaired and was entitled to post-104 week IRBs. In the special award decision dated May 31, 2018, he found a special award was warranted for unreasonably withholding the IRBs, so he granted a special award of 35% of the IRBs plus interest. In the expense decision dated June 22, 2018, he found A.B. was entitled to her reasonable arbitration expenses of $45,306.50.

State Farm appeals Arbitrator Matheson’s main decision on the merits, and his special award decision. It does not dispute the expense award, other than submitting the expenses awarded to A.B. should be reduced if the appeal is allowed in whole or in part.

II. BACKGROUND

Preliminary Issue – 2010

After State Farm terminated A.B.’s IRBs in 2008, she claimed the termination was improper, entitling her to ongoing IRB payments until State Farm issued a proper termination. This led to a preliminary issue hearing. In a decision dated October 27, 2010,² Arbitrator Lee dismissed the preliminary issue and ordered the matter proceed to a hearing on the merits. He found that while State Farm failed to comply with the provisions in the SABS for terminating IRBs, this did not automatically entitle A.B. to ongoing IRBs pending a proper termination notice.

I rejected the appeal of that decision, upheld on judicial review: 2011 ONSC 6316.³ However, the Divisional Court stated at para. 5: “The applicant will have a full opportunity to claim relief for the failure of the insurer to abide by the provisions of the Statutory Accident Benefits Schedule at the hearing on the merits.”

Review of Evidence in Main Decision

I will now review the two disputed decisions. My review is extensive because the Arbitrator provided brief reasons but the evidence and submissions he set out support those reasons.

A.B.’s testimony

A.B. was injured in an accident on July 18, 2005. Pre-existing factors included:

• two accidents in 1988 and 1989 that led to back surgery and ultimately chronic pain

• a hysterectomy in 2003 that contributed to pelvic pain

• a history of abuse A.B. had suffered from her stepfather when she was a child

A.B. testified that she first raised the abuse issue in 1987 when she refused to move in with her family because of it, then again in 2003, and once more in 2006, when she thought her niece was also threatened by abuse.

A.B. testified that before the accident she was taking medication for depression and chronic pain. Nonetheless, she testified that she was able to:

• shop, houseclean, cook and take her mother to temple or to visit family and friends

• socialize by attending her place of worship, seeing movies and going to bars with friends, and visiting her younger brother Sunil in Boston

• work 20 to 40 hours per week at Enbridge Gas

• run a side business of renting out two condominiums she owned

A.B. testified that at the hospital after the accident she had swollen hands, a bruised chest and a painful back. She stopped working at Enbridge because she was unable to concentrate and her hands hurt too much to use a computer. She received short-term and then long-term benefits, thus reducing the IRB claim. She sold the condos as they were too much for the family to handle. She socialized less, as she had problems following conversations. She took more medication, slept less, and feared being in a car. Her sister helped her with her personal hygiene, banking and paying the bills. Her parents provided food and did the laundry.

A.B. testified that after the accident she was institutionalized several times. She was an inpatient at Homewood Health in November 2011. She was admitted in March 2012 to the Credit Valley Hospital after a suicide attempt. In 2013, she spent seven weeks at CAMH, the Centre for Addiction and Mental Health,⁴ where she was subjected to electroconvulsive therapy that was painful and created a memory loss. A.B. overdosed on pills again after leaving CAMH.

A.B. testified that she continued to see a therapist privately, but did not discuss the abuse.

Testimony of Diana, A.B.’s sister

A large part of State Farm’s submissions turn on its view that A.B’s family failed to deal with the abuse allegations, causing A.B.’s decline post-accident, reflected in Dr. Rosenblat’s findings that A.B. was not catastrophic in 2008 but was in 2014.

The Applicant’s sister, Diana, testified that the abuse allegations arose from events that occurred when A.B. was 8 years old but were first brought up in the years prior to the accident. She agreed that A.B. struggled with the family’s decision to move on with their lives.

Testimony of Sunil, A.B.’s Younger Brother

Sunil testified that he left the family home in 1997 and returned to Ontario in 2006. He did know of the pre-MVA issues arising from the 1988 and 1989 accidents. At the time of the accident he lived in Boston. He testified that A.B. had lost her mobility after the accident, started using a cane, and relied on family to drive her around. By 2014, he noticed her limited socializing and irregular sleep patterns.

Sunil testified that he was too young to have any recollection of the actual events regarding the abuse, but knew of the allegations his entire life. He denied under cross-examination that he told A.B. to simply forget about the assault and move on with her life, as was stated in the Women’s College Hospital clinical notes and records.

Testimony of Dr. Henry Rosenblat, Psychiatrist

Dr. Rosenblat first authored a rebuttal report on October 3, 2008.

His report was in reaction to a report by Dr. Luczak, psychiatrist, who found that A.B. showed a number of impairments resulting from a combination of factors including the pre-disposing factors and the precipitating factor of the MVA. He found a Class III (moderate) impairment.

Dr. Rosenblat agreed with that conclusion. In particular, he found Class 3 impairments in Activities of Daily Living and Concentration, Persistence and Pace and Class 3-4 impairments in Social Functioning and Work Adaptation.

Both doctors found A.B. was not competitively employable in 2008.

Dr. Rosenblat prepared a second report dated March 31, 2014. He noted an exacerbation of A.B.’s earlier problems: a now complete dependency on others for arranging appointments, no social friends, and several suicide attempts. He found Class 3-4 impairment in Social Functioning and Class 4 impairments in the other domains.

Dr. Rosenblat testified that he had additional collateral information from the sister (Diana) as well as from Dr. Diane de Camps Meschino, A.B’s treating psychiatrist. Dr. Meschino found that A.B. went from a fair prognosis before the accident to very poor after. Dr. Rosenblat diagnosed posttraumatic stress disorder, major depressive disorder and somatic disorder. He concluded in 2014 that A.B. suffered a marked impairment in at least three of the four domains, including work adaptation, and so from a purely psychiatric perspective she was catastrophically impaired.

In both his reports, Dr. Rosenblat found the accident worsened A.B.’s pre-existing depression and played a material role in her current psychiatric condition. Despite a number of hypotheticals put to the doctor in a lengthy cross-examination regarding the family’s repression of the history of assault, Dr. Rosenblat opined that the post-traumatic stress disorder from which A.B. suffered was due to the accident and not the repression.

Finally, in anticipation of the evidence of Dr. K. Zakzanis, discussed next, Dr. Rosenblat was asked what it means if a person cannot be rated. He explained that if the assessor cannot rate at that time, the assessor simply could not rate the insured. That is, the assessor should say he or she was unable to come to a conclusion either way.

Testimony of Dr. Konstantine K. Zakzanis, Psychologist

Dr. Zakzanis provided two insurer assessments and corresponding addendum reports. The first assessment report dated February 3, 2011, dealt with a proposed treatment plan at Homewood. He diagnosed a major depressive disorder, posttraumatic stress disorder, and a pain disorder. In his addendum report dated April 26, 2011, he found the treatment plan reasonable and necessary.

His second assessment report dated July 7, 2011 dealt with catastrophic impairment. He stated at various points that he was unable to conclude that A.B. was as psychologically impaired as she would have us believe, so he could not substantiate the breadth and severity of A.B.’s subjective psychological complaints for the purpose of that catastrophic examination. He noted that A.B.’s responses on two of the three psychometric test measures employed were indicative of negative impression management and atypical responding. He concluded that she did not meet the threshold for catastrophic impairment under criterion “g” from a psychological perspective.

However, he agreed that, based on his first report, the 2005 accident materially and substantially contributed to the reported psychological symptoms because the accident preceded that constellation of symptoms. He also agreed that A.B. could have declined since he first saw her. As to the second assessment, he agreed that he had actually been unable to provide a rating within the four spheres, so he could not provide A.B. with a catastrophic impairment rating. His only conclusion was that she was not catastrophic. He also noted that he was not given the opportunity to re-examine A.B., nor was he provided collateral information like the records of the various treatment providers or information from the family members.

IRB Entitlement to $81.63 weekly commencing November 13, 2008 and ongoing

The test under s. 5(2)(b) of the SABS for IRB entitlement more than 104 weeks after the onset of disability is whether the insured person, as a result of the accident, is suffering a complete inability to engage in any employment for which he or she is reasonably suited by education, training or experience.

The Arbitrator set out the following medical opinions stating that A.B.

• developed a pain disorder and was unable to work as her mental state formed a work barrier: Dr. Z. Waisman, psychiatrist, IE 20 March 2006

• could not work in any capacity and would deteriorate mentally if she returned to work: Dr. William Gnam, psychiatrist, LTD insurer’s report 26 September 2007

• was too fragile for employment: Dr. Ruth Smith, physiatrist, IE 2 November 2007

• could not function in any job: Dr. Meschino, CPP assessment report 5 January 2008

• was unable to work due to both pre-disposing and precipitating factors: Dr. Alex Luczak, psychiatrist, IE CAT report 24 April 2008

• could not work at her pre-accident job or at any other suitable job as a result of the 2005 MVA: Dr. Brian Alpert, orthopedic surgeon, IE 16 November 2009

• was competitively unemployable: Dr. Neville Doxey, psychologist, psycho-vocational report 21 March 2010

• had a marked impairment for work adaptation: Dr. Rosenblat’s report 31 March 2014

By way of contrast, Dr. Muhammad A. Rashid, psychologist, initially conducted an in-person insurer’s assessment of A.B. on September 18, 2007. He stated that because he found her responses exaggerated, he was unable to determine whether A.B. was able to work at any suitable employment because he could not establish an accurate diagnosis. On November 12, 2008, he issued a slightly revised version of the same report as a paper review. This time, however, while Dr. Rashid still could not establish a valid diagnosis, he stated there was “no suggestion that [A.B.] suffers from a complete inability to engage in any employment for which she is reasonably suited by education, training or experience.” The Arbitrator found this was just a subjective opinion, since the inability to establish a diagnosis had not changed.

State Farm relied upon this report to terminate IRBs as of November 13, 2008, despite Dr. Luczak’s conclusion in his report of April 24, 2008 that A.B. was unable to work at any suitable job due to both pre-disposing and precipitating factors – that is, due to the accident.

The Arbitrator set out State Farm’s submission that A.B.’s sexual abuse and fears for her niece suffering the same meant that her impairments would be what they are today even if the July 18, 2005 accident had not occurred. Therefore, she failed the “but for” test. In reply, A.B. submitted that there was no evidence she was declining before the accident or supported the view that her condition was expected to deteriorate. Therefore, she passed the “but for” test because but for the accident, she would have continued working and functioning in her activities of daily living.

Finally, in a few paragraphs, the Arbitrator set out his decision that A.B. was entitled to her IRBs. I will cite the first three paragraphs at the bottom of p.25 of his decision:

On the preponderance of all the evidence, and on the balance of probabilities, the Applicant’s arguments are the most persuasive.

In my view, the Applicant is correct that there has not been any evidence that the Applicant was on a downward trajectory in regards to her physical or mental and behaviour health or functioning. As a result I find that but for the accident the Applicant would not be in the position she is in today.

The Insurer is relying in part, on Dr. Rashid’s paper review where some 13 months after seeing the Applicant, came to the conclusion that the Applicant did not have a complete inability to engage in any employment. This revelation was made only after the doctor over laid his subjective opinions on top of his test results. This made his results inconclusive. The error in my view, was the doctor then gave a negative inference to those inconclusive findings.

The Arbitrator also gave no weight to the report because it was flawed, as Dr. Rashid did not have any of the clinical notes and records of A.B.’s therapist, treating family doctor or treating psychologist. Accordingly, he awarded A.B. post-104 week IRBs.

Catastrophic Impairment

The Arbitrator first cited the definition of catastrophic impairment under s. 2(1.2)(g) of the SABS, namely an impairment that, in accordance with the American Medical Association’s Guides to the Evaluation of Permanent Impairment, 4th edition, 1993, results in a class 4 impairment (marked impairment) or class 5 impairment (extreme impairment) due to mental or behavioural disorder.

He noted that A.B. relied on Dr. Rosenblat’s second catastrophic impairment report of March 31, 2014, where he found A.B. marked in three of the four spheres. A.B. submitted that the report of Dr. Zakzanis was at best inconclusive and he should have asked for more information or another opportunity to test A.B. In those circumstances, she submitted, no conclusion in either the affirmative or negative could be made.

As for State Farm’s submissions, the Arbitrator wrote:

The Insurer argues that the Applicant suffered a series of physical and psychological issues in regards to her ability to work, cope at work with her supervisor, cope with her family in response to her sexual abuse allegations, and the threat of same to her niece, all of which are not related to this accident. Through a lengthy set of hypothetical scenarios the Insurer argues that Dr. Rosenblat agreed that one or all of the pre-existing psychiatric or psychological issues in themselves could have caused the decline of the Applicant, therefore the pre-existing issues must have been the cause of the catastrophic determination, if there is such a determination.

The Arbitrator then repeated the submissions by the parties on causation regarding the IRBs –basically that A.B. was on an inevitable downward trajectory versus no evidence of such a thing. The Arbitrator then set out his decision, the opening paragraphs being:

On the preponderance of all the evidence, and on the balance of probabilities, the Applicant’s arguments are the most persuasive.

In my view, the Applicant is correct that there has not been any evidence that the Applicant was on a downward trajectory in regards to her physical or mental and behaviour health or functioning. The inescapable and undisputed facts are that she was functioning as a productive member of society, prior to the accident, on all levels, including her family, work, socially and within her faith. As a result I find that but for the accident, the Applicant would not be in the position she is in today.

The Arbitrator went on to note that Dr. Rosenblat did not change his conclusions despite the hypothetical questions put to him. He also inferred that, because neither Dr. Zakzanis nor Dr. Rosenblat apportioned A.B.’s pre-accident condition from her current one, then they did not believe these impairments were ratable, although they were significant enough to be diagnosable.

With respect to Dr. Zakzanis, the Arbitrator noted that he did not have the clinical notes or records or other collateral information. The Arbitrator was also not persuaded that a non-credible test result was anything more than inconclusive in nature:

In my view, non-credible test results or un-ratable test results render the whole assessment inconclusive, which is a neutral finding. This is fatal to the Insurer’s position. For these reasons, I am unable to give a lot of weight to this doctor’s report or his opinions thereof, as he was not afforded the opportunity to re-test the Applicant to come to a comprehensive conclusion.

Therefore, the Arbitrator concluded that A.B. had suffered a catastrophic impairment because she had a marked impairment in one or more spheres.

Special Award Decision

The Arbitrator then determined A.B.’s entitlement to a special award under s. 282(10) of the Insurance Act.

The Arbitrator found he could not make a special award regarding the catastrophic impairment. While A.B. had a claim for attendant care benefits that could be payable based on the catastrophic determination, the Arbitrator could not base a special award on that, as any amounts payable had yet to be determined.

The Arbitrator set out the parties’ submissions regarding the IRBs. A.B. submitted that State Farm simply ignored the totality of the medical information, demonstrating State Farm’s stubborn, excessive, imprudent, and inflexible behaviour toward A.B.

State Farm submitted that the issue of causation was a legitimate concern, that the preliminary issue findings were not relevant, and that the 2 percent compounded monthly interest was appropriate compensation. The Arbitrator set out once again State Farm’s theory of causation, namely that repression by family members of a sexual assault could by itself lead to the kind of symptoms A.B. had. State Farm also raised the “me too” movement as legitimizing its position.

In the Decision portion of his decision, the Arbitrator stated he remained unconvinced that causation was that close a call, or that the preliminary issue findings were irrelevant:

In my view of the whole case including the preliminary issue findings, had the Insurer acted to obtain valid, concrete test results and conclusive interpretations by their respective medical examiners within their subsequent reports and testimony, the Insurer would have been in a better position to argue that it would be unfair to the Insurer and an error in principle for a causation determination in favour of the Applicant to ultimately attract a special award.

The Arbitrator noted that Dr. Luczak in his April 2008 IE report identified A.B. as a “thin skulled” Applicant, in that the combination of pre-disposing and precipitating factors resulted in Class III (moderate) impairment. The Arbitrator defined a “thin skulled” Applicant as someone with pre-disposing factors serious enough to be diagnosable but not enough to impede daily functioning:

There was no evidence that the Applicant was on a downward spiral at the time of the accident. All the evidence suggests that the Applicant would have continued living a productive self-supporting life style, but for the accident. Dr. Luczak points out that “precipitating factors” (the subject MVA) has resulted in a Class III (moderate) impairment. It is not surprising that over time, without the correct supports, the Applicant would continue to deteriorate.

In my view, the Insurer relied on incomplete and inconclusive report findings for both the IRB and catastrophic impairment determination. It continued to rely on these incomplete outlier reports despite an abundance of newer contemporaneous and conclusive medical reports all reporting conclusions in favour of the Applicant. This clearly demonstrates the Insurer’s stubborn, excessive, imprudent, inflexible, unyielding and immoderate behaviour. In my view, this pattern of behaviour is not remedied by the normal 2% interest penalty for delay or denial of an accident benefit. The Insurer unreasonably withheld payments, hence a special award is justified.

The Arbitrator awarded a special award of 35 percent of the owing IRBs and interest thereon of 2 percent compounded.

Finally, in the expense decision dated June 22, 2018, Arbitrator Matheson found A.B. was entitled to her reasonable expenses of $45,306.50, inclusive of H.S.T., disbursements and the costs of the expense hearing.

While State Farm asked for a stay of these various orders, I did not grant it. Accordingly, the outstanding IRBs and special award and expenses have been paid.

III. ANALYSIS

State Farm submits that the Arbitrator reversed the onus of proof, only paid lip service to the “but for” test for causation, failed to either review or fully appreciate the transcripts of the cross-examinations of Dr. Rosenblat and A.B.’s brother Sunil, and awarded a special award where causation was a live issue. It further submits that the decision-making process was so suspect that a new hearing should be ordered, as happened in Shuttleworth v. Licence Appeal Tribunal, 2018 ONSC 3790 (Div. Ct.).

Process Issues and Use and Availability of Transcripts

State Farm objects to how the arbitration hearing was ultimately conducted. The hearing was incomplete because Arbitrator Sone recused herself. Pursuant to Rule 71 of the Dispute Resolution Practice Code, the Director notified the parties of his intention to provide a copy of the transcript to the new adjudicator appointed by him, with a copy to the parties, at the Dispute Resolution Group’s expense, because he considered it appropriate.

State Farm submits that the Director should have ordered a new hearing and, further, that in any event the Arbitrator failed to read or at least fairly consider the transcript evidence, such as the cross-examination of Dr. Henry Rosenblat on October 1, 2014. However, while State Farm objected, the discretion lay with the Director. It is inappropriate for me to go behind the discretion conferred upon him by Rule 71. Beyond that, the parties had already been prejudiced by the delay in the proceedings, and there was extensive cross-examination of the witnesses, in particular of Dr. Rosenblat and of Sunil. Even after that cross-examination, Dr. Rosenblat affirmed that A.B.’s impairments arose from the accident, and Sunil continued to deny State Farm’s causation theory. Even if I could go behind the Director’s exercise of discretion, I would not do so, as I fail to see how bringing back these witnesses would make any difference. I find no analogy to the situation in Shuttleworth.

State Farm submits that the Arbitrator’s failure to list the transcripts of October 1, 2014, on the cover page of the main decision suggests that he did not have the transcripts or failed to review them. However, I have in front of me a printed copy date-stamped received by FSCO on November 24, 2014 of the cross-examination of Dr. Rosenblat on October 1, 2014. It also has some marked pages. Further, our records show the transcript of the cross-examination of A.B.’s brother was also delivered to FSCO electronically for the Arbitrator’s review. I set out below more details from the decision to show that the Arbitrator did review the transcripts.

State Farm submits that the process was suspect because in the first version of the main decision sent to the parties the Arbitrator listed as insurer’s counsel Mr. D. Murray, who was in fact counsel for Allstate in Harb and Allstate Insurance Company of Canada (FSCO A16‑004323, April 4, 2018), another decision on catastrophic impairment by Arbitrator Matheson. While it is regrettable that the wrong counsel was initially named in this case, I find that was a mere typographical error.

Review of the Transcripts

The assumption is that the Arbitrator actually reviewed the transcripts and any lack of discussion on a particular point does not mean the evidence was not considered and weighed.⁵ The Arbitrator was not required to footnote every sentence based on evidence from the transcript. Indeed, if he did so, the decision would be three times as long with about 7 lines of text and 21 footnotes per page. Any fair reading of the Arbitrator’s reasons in comparison with the transcript shows that he did review and reflect it in his reasons.

For instance, State Farm submits the Arbitrator did not refer to the cross-examination of Dr. Rosenblat set out in the transcript of October 1, 2014. However, the Arbitrator specifically refers to the cross-examination near the bottom of p. 15 of his decision: “However, the doctor agreed that sexual assault can invoke a diagnosis of major depressive disorder or PTSD, which could lead to suicidal ideations. Dr. Rosenblat confirmed that PTSD could be caused by either a sexual assault or a car accident…” Later in the conclusion portion of his decision, the Arbitrator refers to how Dr. Rosenblat was questioned extensively on hypothetical circumstances, and in his special award decision the Arbitrator cites State Farm’s submissions on those hypothetical circumstances.

These comments come straight from the transcript. At the top of p. 268 of the October 1, 2014 arbitration transcript, Dr. Rosenblat stated it was correct that PTSD could be a proper diagnosis for A.B. solely because of the historic sexual abuse perpetrated by her stepfather. On p. 270, around line 20, he added that he could certainly see how the threat to the niece could contribute to a worsening of A.B.’s PTSD. And on pages 274-276 he agreed that the recipe of the family’s denial and the threat to the niece could lead on its own to a worsening from moderate to marked.

However, the Arbitrator noted on p.16 of his decision that on re-examination, Dr. Rosenblat testified that the PTSD from which A.B. suffered was due to the accident, not the sexual assault.

There are other passages the Arbitrator discussed that reflect the transcript. For instance, on p. 16 of the main decision he wrote: “Dr. Rosenblat did not agree with Dr. Zakzanis in that malingering should be investigated due to invalid or non-credible psychometric test results.” A review of the transcript shows that at the top of p. 281, Mr. McCarthy asked Dr. Rosenblat to confirm that he had not used the phrase “malingering” to describe A.B. in his assessments of her, and the questions to Dr. Rosenblat about malingering carry on for several pages after that.

The next sentence reads: “Further Dr. Rosenblat opined that truthfulness to specific questions are not effected by alcohol or opioids.” A discussion about abuse of opiates or alcohol starts on p. 284 of that transcript. This leads to Mr. McCarthy’s question starting at the middle of p. 291 of the transcript about whether Dr. Rosenblat had concerns about the validity of psychological testing if someone abused alcohol or opiates, to which he answered: “It shouldn’t actually – if, if a person answering questions truthfully it shouldn’t really affect the testing.” That answer is marked in the transcript. The discussion carries on for several more pages, as counsel and witness eventually agree they have different understandings of what “validity” means. Dr. Rosenblat gave an explanation at the top of p. 293, which again is marked. The witness explained that while there might be more cognitive impairment, it would be of a valid nature, not a made up nature, as in not about “I’m going to try and score really badly on test xyz.” So the Arbitrator accurately summarized that point.

With respect to the transcript of Sunil, the brother, it is true we only have an electronic copy that was forwarded from Durham Reporting after the Director exercised his discretion. State Farm submits that the Arbitrator ignored important confessions by Sunil. However, my review of the transcript shows that it consists mostly of argument among counsel and the witness during his cross-examination by Mr. McCarthy. The Arbitrator summarized the cross-examination in one sentence at the bottom of p. 10: “In cross-examination the witness continued to deny that he told the Applicant to simply forget about the assault and move on with her life, as was stated within the Women’s College Hospital clinical notes and records.”

The transcript supports that summary:

• Q. Did you fill [the doctor] in on her history of sexual abuse at the hands of your stepfather, and your telling her not to talk about it anymore and forget about it? Did you fill him in on that history? … A. I do not recall Dr. Ginsberg asking me any questions about that. [P. 24-25]
• [Mr. McCarthy] I suggested to the witness that he deliberately did not volunteer the sexual abuse himself, and, and, if [the Applicant] had tried to talk about, that is a hypothetical, he would have told her to forget about it… [P. 32-33]
• [Mr. McCarthy] It’s a fact, it’s a fact that he told her to forget about it. [P. 34]
• Q. And yet you would agree with me that that’s contrary to what is recorded here, where you are being accused of telling her to forget about it, and get over it? A. No, it’s not contrary. [P.41]
• Q. And I suggest, sir, that you contributed to her mental illness in a significant way because of your directing her not to talk about it, and forget about it… A. I completely disagree, sir. [P. 46-47]
• Q. And I suggest the records speak for themselves at what you told her to do: forget about it. Get over it. Correct? A. No, sir. And I’ve said no. And if you can’t understand, I guess you can just keep repeating the question over and over again. [P. 50]

I find that State Farm received a fair review of the transcript and I find no merit in its submission that the Arbitrator failed to consider the transcripts. Beyond that, it is not my role to weigh the evidence in the transcript.

Onus of Proof and Income Replacement Benefits

State Farm’s whole theory of post-2008 decline due to the family issues is irrelevant to the causation question regarding the IRBs and the resultant special award based on the IRBs because the IRBs were terminated in 2008. The question was whether A.B. met the post-104 week test then, not at the time of the arbitration hearing. Any decline thereafter was irrelevant.

State Farm submits that the Arbitrator erred in both the Bisnath and Harb cases by betraying a fundamental misunderstanding of the onus of proof. In the Harb case, Arbitrator Matheson had noted that the insurer had not called witnesses that might have contradicted Mr. Harb due to “irregular statements,” or provided sufficient evidence that an earlier accident was the cause of the symptoms. State Farm then points to a passage in Harb at p. 40 where Arbitrator Matheson found causality was not in question, as he found the symptoms were a direct result of the accident in issue, and he had no evidence to the contrary.

Harb was appealed: Allstate Insurance Company of Canada and Harb (FSCO P18-00028, February 13, 2019). As Delegate Lee noted in the appeal decision, the insurer in that case similarly submitted the Arbitrator erred in law by reversing the onus of proof and requiring the Appellant to disprove that the Respondent had suffered a catastrophic impairment. Delegate Lee concluded:

Nothing in the Arbitrator’s assessment suggests he somehow reversed the onus of proof. He assessed and weighed various sources of evidence. It was within his jurisdiction to make these factual assessments, and I find no error of law in his determinations.

Furthermore, as was stated in H.K. and Canadian Surety Company (FSCO P98-00041, February 29, 2000), the appropriate approach to the onus of proof is a flexible, fact-based one, in which, while the legal onus always remains on the insured, the sufficiency of the proof depends on what is reasonable in the circumstances. This involves consideration of the evidence presented by both parties including the nature of the individual’s condition and extent of the disability.⁶ If the evidence from A.B. showed and the Arbitrator accepted that she was functioning before the accident, then the sufficiency of proof to show otherwise would shift to the insurer.

State Farm takes exception to the Arbitrator using the same language regarding the IRBs and catastrophic impairment, already cited above, that there was no evidence A.B. was in a downward trajectory before the accident. State Farm submits that this cannot be the basis for a decision establishing a causal connection at the time of the arbitration hearing, nor was State Farm required to show a downward spiral before the accident. However, I find the Arbitrator looked at the evidence, expert and otherwise, as a whole. A.B.’s issues about suppression had been ongoing for years before the accident, and yet, as the Arbitrator noted, she was able to continue working up to the accident. The Arbitrator thus applied the “but for” test, in that he found she was not on a downward trajectory before the accident and but for the accident she would not be in her current position.

State Farm submits that the Arbitrator found an issue of fact was inconclusive, as reflected in his treatment of Dr. Rashid’s second report regarding the post-104 week IRBs. As already discussed above, Dr. Rashid issued two nearly identical reports. In his initial report, Dr. Rashid could not establish a diagnosis so he could not answer whether A.B. could work at any suitable job. In his second report, he still could not provide an accurate diagnosis, yet now purported to answer the post-104 week IRB issue. Both reports had inconclusive findings. The Arbitrator accepted Dr. Rosenblat’s position that if you have inconclusive findings, you should not reach positive or negative conclusions, unlike what Dr. Rashid did in the second report. The Arbitrator found Dr. Rashid’s report inconclusive, not that the issue of fact was inconclusive.

While it would have been preferable if the Arbitrator had stated outright that he gave greater weight to the various reports A.B. relied on, I find that is implicit in his statement that he found A.B.’s arguments the most persuasive. State Farm takes issue with that phrasing, suggesting that this meant he was attempting to place the onus upon the Insurer to “argue” other causes that could have persuaded this Arbitrator. I do not read the Arbitrator’s reasons that way. He is simply using “argument” as an alternative for “submissions,” and indeed the term can include both oral and written arguments.⁷ I find that was just his way of saying he gave no weight to Dr. Rashid’s report but preferred the reports of the other doctors – including State Farm’s own assessors – who said that A.B. could not work at all as of 2008.

In conclusion, the Arbitrator had before him evidence that A.B. could not work at any job as of 2008, and he provided reasons why he gave no weight to Dr. Rashid’s second report. I find no error in the Arbitrator’s conclusion that A.B. met the post-104 week test in 2008. I will now turn to the special award, as it was based on the IRBs.

Special Award

State Farm does not take issue with the test the Arbitrator applied, namely that a special award may be granted if the record demonstrates an unyielding, stubborn attitude or approach to the adjustment of an accident benefit claim.

State Farm submits that where the major issue was causation and the condition of A.B. deteriorated over time, it cannot be said that it was unreasonable, stubborn or unyielding to take a different view from A.B. on the question of causation. It also submits that Dr. Rosenblat conceded A.B.’s condition worsened between his initial assessment in 2008 and his ultimate assessment in 2014. However, these submissions focus on the period after 2008, which as I just discussed was not the relevant period for the IRB claim and the special award that was based on the IRBs.

State Farm submits that the CAMH records from 2013 were barely mentioned by the Arbitrator, yet they showed the family wished A.B. to move on from the abuse, which could cause her disability on its own. However, the transcript of Dr. Rosenblat’s cross-examination shows it was barely discussed with him either. An arbitrator can only be expected to review in detail what was reviewed at the hearing and not root through the evidence to come up with theories or findings on his own. State Farm took me through those CAMH records in some detail, but it is not my role to weigh the evidence, even if I believed the findings to be palpably and overridingly wrong: Belair Direct Insurance Company v Green, 2018 ONSC 2782. And to be clear, I do not believe there was any such error.

State Farm submits that the Arbitrator unfairly relied on the 2008 catastrophic impairment reports of Dr. Luczak and Dr. Rosenblat to grant the special award, yet they had not found A.B. catastrophically impaired at the time. However, both Dr. Luczak and Dr. Rosenblat found in 2008 that A.B. could not work at any suitable employment. The evidence of Dr. Luczak as of April 2008 supported the Arbitrator’s finding that A.B. was a thin-skulled accident victim who became unable to work due to both pre-disposing and precipitating factors. He had evidence to show that while A.B. had pre-accident symptoms that were serious enough to be diagnosable, they did not impede her daily functioning, nor were they ratable. By way of contrast, as a result of the accident, A.B. had ratable symptoms that Dr. Luczak in 2008 determined were Class III (moderate), or one step below catastrophic.

Of course, an accident does not have to be the sole cause of impairment, or even the major cause: Athey v. Leonati, 1996 CanLII 183 (SCC), [1996] 3 S.C.R. 458. Ms. Athey, who suffered from pre-existing back problems, suffered a herniated disc after two motor vehicle accidents that contributed 25 percent to the herniation, which was sufficient to pass the “but for” test. In this case, the Arbitrator had plentiful evidence to support his finding that A.B. would have continued living a productive self-supporting life style but for the accident.

State Farm submits that the fact it had incorrectly terminated the IRBs as determined by Arbitrator Lee in the preliminary issue hearing was irrelevant to a special award. However, as the Divisional Court pointed out in its judicial review, this was A.B.’s opportunity to claim relief for the failure of the insurer to abide by the provisions of the SABS. In that regard, the Arbitrator’s comment was germane when, after pointing out that the accident rendered A.B.’s impairment ratable at Class III, he stated: “It is not surprising that over time, without the correct supports, the Applicant would continue to deteriorate.” With respect to the lack of support, aside from not receiving the IRBs, A.B. had to fund her own rebuttal report by Dr. Meschino dated December 10, 2008,⁸ a report that State Farm also ignored.

As for the special award test, the Arbitrator had evidence to support his conclusion that State Farm relied on an incomplete and inconclusive report from Dr. Rashid to terminate benefits, when it had evidence from both its own IE assessors and A.B.’s assessors that she could not work. He also had evidence to support his finding that State Farm continued to rely on the outlier Rashid report in the face of later reports that continued to show A.B. could not work. These were described in detail on p.6 of his special award decision where he set out A.B.’s submissions on the additional medical evidence after Dr. Rashid’s report that supported her claims. I find no error in the Arbitrator having granted a special award in these circumstances.

Catastrophic Impairment

This case is somewhat unusual in that both parties agree that A.B. suffers from mental and behavioural disorders. The question is rather one of degree and causation.

The Arbitrator dealt with the causation issue briefly. He found that there was no evidence of a downward trajectory before the accident, whereas there was evidence that A.B. had been a functioning member of society up to then. He therefore found that but for the accident she would not have suffered ratable impairments. As for State Farm’s theory of a downward spiral from 2008 to 2014, he noted that Dr. Rosenblat did not change his diagnosis or his conclusions after being questioned extensively on hypothetical circumstances and how those circumstances could have affected a case such as this. Therefore, he did not find State Farm’s causation theory persuasive.

A number of factors support the Arbitrator’s finding. It should be noted that causation was not a reason given by State Farm when the IRBs were terminated or the CAT application was denied. Dr. Luczak did not raise any causation issue in 2008, and he and Dr. Rosenblat both agreed that A.B. had Class III or moderate impairments as a result of the accident. Indeed, there was no expert opinion or report that related A.B.’s current disability to the abuse. With respect to State Farm’s “spiral” argument, A.B. went from Class 3 and 3-4 impairments in 2008 to Class 3‑4 and 4 impairments in 2014. That is, her condition was pretty bad in 2008 and simply got worse, but that could not be described as a downward spiral. Furthermore, the issues with the family’s suppression of the abuse existed long before the accident, yet as the Arbitrator noted A.B. had been able to carry on her social life and work. If State Farm really felt this was a significant issue, it should have put it to an insurer’s examination instead of raising it for the first time at the hearing and trying unsuccessfully to argue it then. Therefore, I find no error in the Arbitrator giving short shrift to State Farm’s causation theory.

As for the greater weight he gave to Dr. Rosenblat’s 2014 report over that of Dr. Zakzanis, the Arbitrator set out his reasons. Dr. Zakzanis had less medical and collateral information than Dr. Rosenblat, and he put an improper interpretation on some test results. The Arbitrator therefore had a basis for finding the whole assessment inconclusive. Against that, Dr. Rosenblat’s report was based on more information and was conclusive. Therefore, I find no error in the Arbitrator giving greater weight to Dr. Rosenblat’s evidence and report.

The appeal is therefore dismissed and the Arbitrator’s decisions are affirmed.

The parties have agreed to $2,500 all in for the expenses of the appeal. Since A.B. was successful, she is entitled to $2,500 payable by State Farm for the legal expenses of this appeal.

June 14, 2019

David Evans Director’s Delegate

Date

Footnotes

1. 1The Statutory Accident Benefits Schedule — Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended.
2. 2(FSCO A08-00007)
3. 3Leave to appeal refused: (M40677), March 13, 2012.
4. 4On appeal, State Farm submits the Arbitrator did not review the CAMH records, but in footnote 6 he specifically refers to them.
5. 5State Farm v. Movahedi, [2001] O.J. No. 5099 (Div. Ct.).
6. 6This approach was approved in the appeal decisions El-Saikali and Co-Operators General Insurance Company (FSCO P01-00059, March 13, 2003) and TTC Insurance Company Limited and Wootton (FSCO P04‑00004, November 2, 2004).
7. 7See for instance the headnote in Leader Media Productions Ltd. v. Sentinel Hill Alliance Atlantis Equicap Limited Partnership, 2008 ONCA 463, where it states: “On the close of evidence at trial, it was agreed among counsel and the trial judge that the parties would file written argument and thereafter would attend before the trial judge for oral argument. The parties filed written submissions, but the trial judge released his judgment before they had an opportunity to make oral submissions.”
8. 8Special award decision, p. 6.