Date: 2016-10-28

Tribunal File Number: 16-000212/AABS

Case Name: 16-000212 v State Farm Mutual Automobile Insurance Company

In the matter of an Application pursuant to subsection 280(2) of the Insurance Act,

RSO 1990, c 1.8., in relation to statutory accident benefits.

Between:

S. A. R.

Applicant

and

State Farm Mutual Automobile Insurance Company

Respondent

DECISION

Adjudicator: Cynthia Pay

Representatives:

For the Applicant, Yoni Silberman, counsel For the Respondent, Jocelyn Tatebe, counsel Held in writing: August 10, 2016

Overview:

1. The applicant was involved in an automobile accident on February 7, 2012 and sought benefits pursuant to the Statutory Accident Benefits Schedule - Effective September 1, 2010 (the "Schedule").

2. She submitted an Application for dispute resolution services to the Licence Appeal Tribunal - Automobile Accident Benefits Services (the “Tribunal”) regarding a number of statutory accident benefits.

3. At the case conference held on July 6, 2016, the respondent submitted that the applicant did not submit her Application with respect to non-earner benefits and two treatment plans within the two-year limitation period set out in the Schedule.

4. The parties agreed that this was an issue that should be decided by the Tribunal at a preliminary issue hearing. After hearing submissions from the parties on the format of this hearing, the Tribunal scheduled a written hearing.

5. This preliminary decision considers whether the applicant filed her Application in time with respect her claim for non-earner benefits and two treatment plans.

Issues:

a. Is the Application regarding non-earner benefits outside of the statutory limitation period?

b. Is the Application regarding medical benefits of $3,100.00 and $1,053.99 for physiotherapy by Oshawa Physiotherapy & Rehabilitation Center outside of the statutory limitation period?

Result:

a. The Application regarding non-earner benefits was filed outside of the statutory limitation period and is precluded from proceeding to a hearing.

b. The Application regarding medical benefits of $3,100.00 and $1,053.99 for physiotherapy by Oshawa Physiotherapy & Rehabilitation Center was filed within the statutory limitation period and can proceed to a hearing.

a) Is the Application Regarding Non-Earner Benefits Outside of the Statutory Limitation Period?

6. I find that the Application regarding non-earner benefits was out of time. The respondent provided a denial that met the criteria for starting the limitation period on October 11, 2012, but the Application to the Tribunal was not filed until May 7, 2016, which was past the applicable two-year limitation period. Although the applicant submitted further applications for non-earner benefits, and the respondent did provide further decisions in response to these additional applications, these additional decisions did not re-start the limitation period.

Chronology of Application for Non-Earner Benefits

7. The parties provided materials regarding the history of the applicant’s benefit claims, including an Affidavit of Thomas Elliot, Affidavit of Rachel Radomski, copies of benefit applications and Explanation of Benefit forms and other correspondence. These materials largely agree on the chronology of events regarding the applications for benefits that are in dispute. Based on these materials, and the parties’ agreement on the facts, I make the following findings regarding the chronology of the applicant’s claim for non-earner benefits:

• February 7, 2012: the applicant was involved in an automobile accident.

• February 21, 2012: the applicant submitted an OCF-1 Application for Accident Benefits and OCF-3 Disability Certificate. The Disability Certificate confirmed that the applicant met the test for non-earner benefits, i.e., that she suffered “a complete inability to carry on a normal life” as a result of the accident.

• February 23, 2012: the respondent replied with an OCF-9 Explanation of Benefits noting that the applicant was not eligible for non-earner benefits as the 26 week waiting period had not yet been met, but that they would assess her eligibility for non-earner benefits at the 26 week anniversary of the accident.

• August 7, 2012: the 26-week waiting period for non-earner benefits was reached and the respondent ordered an Insurer’s Examination (IE) by Dr. Neetan Alikhan.

• October 11, 2012: the respondent sent the applicant an OCF-9 Explanation of Benefits based on the above IE which denied the application for non-earner benefits because she did not “suffer a complete inability to carry on a normal life.” The Explanation of Benefits form also provided a standardized outline of the dispute resolution process, including a “warning” about the two-year limitation period to dispute this decision.

• October 21, 2012 and July 19, 2013: The applicant was then involved in two further motor vehicle accidents. She filed a second OCF-3 Disability Certificate in relation to the first (February 7, 2012) accident dated January 28, 2013. This document was not before the Tribunal, but Ms. Radomski advises in her affidavit that the chiropractor who filled in the form failed to check off the “yes” or “no” box regarding the applicant’s entitlement to non-earner benefits.

• March 13, 2014: in response to further medical information provided by the applicant, the respondent ordered a paper review by Dr. Alikhan. On March 13, 2014 the respondent issued another OCF-9 Explanation of Benefits dated March 13, 2014 that stated that the applicant was not eligible for non-earner benefits.

• December 30, 2015: the applicant submitted a third OCF-3 Disability Certificate dated December 30, 2015 in relation to the February 7, 2012 accident. This document supported her entitlement to non-earner benefits.

• December 30, 2015: the respondent again denied entitlement to non-earner benefits in an OCF-9 Explanation of Benefits.

8. The applicant submits that December 30, 2015, the date of the last OCF-9 Explanation of Benefits form, should be the triggering date for the two-year limitation period to file an Application to the License Appeal Tribunal.

9. The respondent disagrees and submits that the triggering date is October 11, 2012, the date of the original OCF-9 Explanation of Benefits form denying eligibility for

non-earner benefits. As a result, the respondent argues that the Application is beyond the two-year limitation period and is statute-barred.

Law and Analysis:

Limitation Period and Date that Limitation Period is Triggered

10. The parties do not disagree on the law regarding the applicable limitation period for Applications to the Tribunal; rather, the issue in dispute is the triggering date for the start of the two-year limitation period.

11. According to s.56 of the Schedule, an application in respect of a benefit under s. 280(2) of the Insurance Act “shall be commenced within two years after the insurer’s refusal to pay the amount claimed.”

12. I find that the limitation period with respect to the application for non-earner benefits started on October 11, 2012, when the respondent originally considered and denied the application for non-earner benefits, and that this portion of the Application is out of time.

13. This denial of non-earner benefits met the criteria to trigger the two-year limitation period as set out in the cases of Turner v State Farm Mutual Automobile Insurance Co., 2005 CanLII 2551 (ON CA), 195 OAC 61 2005 and Smith v Cooperators General Insurance Co. 2002 SCC 30, [2002] 2 SCR 129. In order to be a valid refusal that triggers the two-year limitation period, a decision must be clear and unequivocal, and must inform the claimant of the dispute resolution process under the Insurance Act in straightforward and clear language. This is also required under s. 54 of the Schedule, which states that

If an insurer refuses to pay a benefit or reduces the amount of a benefit that a person is receiving, the insurer shall provide the person with a written notice advising the person of his or her right to dispute the refusal or reduction.

14. On October 11, 2012, the respondent provided a clear and unequivocal denial of non-earner benefits in its OCF-9 Explanation of Benefits:

Non-earner benefits: Based on section 44 report dated 08/21/12, you do not suffer a complete inability to carry on a normal life. Therefore, you are not eligible to receive a Non-Earner Benefit pursuant to Section 36 of the Statutory Accident Benefits Schedule.

They also provided a clear explanation of the dispute resolution process and deadlines, including the following warning:

*WARNING: TWO YEAR TIME LIMIT

You have TWO YEARS from the date of your insurer’s refusal to pay, or reduction of a benefit, to arbitrate or commence a lawsuit in court [emphasis in original].

15. As a result, the applicant should have initiated the dispute resolution process within two years of October 11, 2012. Because she did not file her Application to the Tribunal until May, 2016, the Tribunal finds that this part of her application is statute- barred, as it was started well outside the two-year limitation period.

16. After initially being denied non-earner benefits, the applicant filed additional medical information and a third OCF-3 Disability Certificate in relation to the February 7, 2012 accident which supported her entitlement to non-earner benefits.

17. In response to the additional medical information, the respondent carried out a paper review and provided a further OCF-9 Explanation of Benefits form dated March 13, 2014, which stated:

As per the enclosed section 44 Report(s) dated 02/28/14, the opinions and conclusions of Dr. Neetan Alikhan as outlined in the Section 44 Report dated 08/21/12 remain unchanged. As such, please refer to the previous Explanation of Benefits (OCF-9) dated 10/11/12, wherein the benefit was denied or deemed not payable. State Farm’s position with regard to this benefit remains unchanged.

This form also included the same information regarding the dispute resolution process as included in the other OCF-9 Explanation of Benefits form dated October 11, 2012.

18. In response to the third OCF-3 Disability Certificate, the respondent provided another OCF-9 Explanation of Benefits form dated December 30, 2015, which stated:

Non-Earner Benefits: We are in receipt of your OCF-3 dated December 9, 2015. As indicated in the OCF-9 dated October 11, 2012, and March 13, 2014, as per the section 44 report dated August 21, 2012 and supplementary report dated February 23, 2014, you do not suffer a complete inability to carry on a normal life as a result of the motor vehicle accident on February 7,

2012. Therefore, you are not eligible to receive a non-earner benefit under Section 36 of the Statutory Accident Benefit Schedule.

The same standard information about the dispute resolution process and time limits was also provided.

19. Although the applicant requested non-earner benefits with respect to the February 7, 2012 accident a number of times, and the respondent considered and denied these requests, I find that the limitation period does not change as a result.

20. As held in the case of Blake v Dominion of Canada General Insurance Company

2105 ONCA 165,

the submission of new applications for benefits does not re-start the limitation clock. Where an insurer has denied statutory accident benefits, the claimant’s remedy is to seek recourse for the termination of benefits within the limitation period, not to submit further applications for benefits (at para. 30).

21. The applicant submitted that her claim was an evolving one, and that there had been a “material change” in her circumstances which would change the triggering date for the applicable limitation period. These changes included the fact that she was involved in two subsequent motor vehicle accidents; further medical information regarding her medical conditions was sent to the respondent; she was found to be eligible for Canada Pension Plan Disability benefits; and she provided a third OCF-3 Disability Certificate dated December 9, 2015 which supported her entitlement to non-earner benefits. The applicant argued that this should be the date when the limitation began to run.

22. The applicant did not provide any further explanation regarding how a material change would affect the start of the limitation period in this case. Further, even if a “material change” has the effect of re-starting the limitation clock, the applicant has not directed me to any specific evidence of a material change in her condition that was causally connected to the first accident.

23. The applicant also raised the duty of good faith and submitted that the respondent was required by this duty to further investigate and review entitlement to non-earner benefits based on her material change in circumstances.

24. The cases raised by the applicant, such as Kogan v Chubb Insurance Co. of Canada, 2011 CarswellOnt 1582, Whiten v Pilot Insurance Company, 2002 SCC 202 CSC 18 and Mamaca v Coseco Insurance Co. [2007] CarswellOnt 1828, all involved situations where an Insurer acted in bad faith, for example requiring an insured person to spend over $320,000 in legal fees to pursue a claim for approximately $340,000 (Whiten) or behaving in a manner that was “reprehensible, callous and highhanded” in prejudging a claim and assuming it to be caused by arson (Kogan, supra, at para 66).

25. This was not the case here. The respondent responded to the applicant’s communications in a timely way, and provided a clear response to her additional OCF-3 Disability Certificates. They arranged for Insurer’s Examinations in 2012 and a paper review of the applicant’s file in 2014. In fact, the applicant concedes in her written submissions that the respondent continued to investigate the applicant’s claim, and conducted additional Insurer’s Examinations with respect to her application for medical and rehabilitation benefits.

26. The applicant raised the case of Garmider v Co-operators General Insurance Co., 2013 CarswellOnt 15086 as support for the proposition that a later letter from the insurance company rendered an earlier decision date non-applicable with respect to the start of the limitation period. This case can be distinguished from the current Application. In Garmider, the insurance company initiated a review of the applicant’s entitlement to benefits, and it was found that the insurance company made a representation that would induce the claimant to believe that they were reviewing his entitlement, and not relying on their original refusal of benefits. That was not the case here. In this case, it was the applicant who initiated the review of their entitlement to non-earner benefits by submitting additional OCF-3 Disability Certificates. The respondent referred back to their original decision in 2012 in each of their responses. There was nothing in these responses that would induce the applicant to think that the respondent was reconsidering its position and not relying on the 2012 refusal as occurred in the Garmider case.

b) Is the Application regarding the two treatment plans for physiotherapy outside of the statutory limitation period?

27. I find that the Application with respect to the two treatment plans in dispute is not out of time. Although the respondent originally denied these treatment plans on May 22, 2012, and these decisions met the criteria to start the limitation period, they later provided a further decision on May 7, 2014 that was confusing and informed the applicant that she had two years from that date to apply for dispute resolution. As a result, the limitation period with respect to these treatment plans begins to run on May 7, 2014. I find that the Application was filed on May 6, 2016, and therefore it is not out of time.

Chronology of Applications for Physiotherapy Treatment

28. Based on the evidence before me, and the parties’ agreement on the facts, the following is a chronology of the applicant’s application for treatment plans:

• February 15, 2012: the applicant submitted an OCF-18 Treatment Plan dated February 15, 2012 to the respondent requesting $3,100.00 for physiotherapy

• May 22, 2012: date of OCF-9 Explanation of Benefits form denying these applications for physiotherapy based on an Insurer’s Examination by Dr. Alikhan. This is the date that the respondent claims is the triggering date for the start of the limitation period.

• March 13, 2014 and May 7, 2014: dates of further OCF-9 Explanations of Benefits forms confirming the respondent’s original decision to deny these treatment plans in response to additional medical information provided by the applicant and a paper review of this information. The applicant takes the position that May 7, 2014 is the triggering date.

Law and Analysis

29. As outlined above, in order to trigger the start of the limitation period, the decision must be clear and unequivocal, and provide straightforward and clear information about the dispute resolution process under the Insurance Act. I find that these requirements were not met with respect to the two treatment plans.

30. In its May 7, 2014 OCF-9 Explanation of Benefits form, the respondent stated

If you wish to dispute our decision regarding the denial of this medical and rehabilitation benefit, you must apply for mediation through the Financial Services Commission of Ontario within 2 years of receiving this notice or you may lose your right to dispute this decision. Please refer to part six of this form for further information.

31. This is confusing. The decision indicates that the applicant has two years from receiving the notice, which was dated May 7, 2014, to dispute the denial.

32. Even though the respondent refers in its decision to the earlier denials dated February 15, 2012 and March 12, 2012, and also provided further information about the dispute resolution process, including the warning about the two-year time limit, this does not repair the confusion caused by the misleading advice given in their decision on May 7, 2014.

33. The respondent argues that May 22, 2012, the date of its initial refusal of the treatment plans, should be the triggering date because they met the requirements of providing a clear and unequivocal decision and information about the dispute resolution process. Although the initial refusal did meet these requirements, subsequent communications from the respondent provided conflicting and confusing information to the applicant.

34. As held in Smith v Cooperators, one of the main objectives of insurance law is consumer protection. This requires insurers to provide a clear explanation of the dispute resolution process directed toward an “unsophisticated person”, which at a minimum sets out the main steps of the process. Without this information, a proper refusal has not been given, and the limitation period will not begin to run (supra, at paras 11 to 15).

35. In this case, the respondent gave conflicting information regarding the limitation period for dispute resolution with respect to the two treatment plans. They advised the applicant that she had two years from May 7, 2014 to dispute their decision, and the applicant should be permitted to rely on this advice.

36. As a result, I find that the respondent did not meet their requirements under the Schedule to clearly inform the applicant of the dispute resolution process, and that the limitation period for the two treatment plans did not begin until their later decision date of May 7, 2014. The Application was filed on May 6, 2016, which was within the two-year limitation period.

When was the Application filed with the Tribunal?

37. The respondent further asserts that even if the May 7, 2014 date is the triggering date, the applicant is out of time, as the Application was filed with the Tribunal on May 20, 2016.

38. I find that the Application was filed with the Tribunal on May 6, 2016.

39. The Application is dated May 5, 2016, but a letter from the Tribunal dated May 10, 2016 states that the Application was filed on May 10, 2016.

40. According to the affidavit of Rachel Radomski, the Application was actually filed with the Tribunal on May 6, 2016. The applicant provided a courier slip confirming a delivery to the Tribunal on May 6, 2016.

41. Based on this evidence, I find on the balance of probabilities that the Application was filed May 6, 2016. Although the Tribunal indicated in its letter that the Application was filed on May 10, 2016, it appears that this date is incorrect. The cause of this error is unknown, but may be the result of a delay in processing the Application or an administrative error.

42. As a result, the Application with respect to these issues is not out of time, and may proceed to a hearing.

Conclusion

43. For the reasons set out above, I find that:

a. The Application regarding non-earner benefits was filed outside of the statutory limitation period and is precluded from proceeding to a hearing; and

b. The Application regarding medical benefits of $3,100.00 and $1,053.99 for physiotherapy by Oshawa Physiotherapy & Rehabilitation Center was filed within the statutory limitation period and can proceed to a hearing.

Date of Issue: October 28, 2016

Cynthia Pay,

Adjudicator