Date: 2017-12-17

Tribunal File Number: 17-000018/AABS

Case Name: 17-000018 v State Farm Insurance

In the matter of an Application for Dispute Resolution pursuant to subsection 280(2) of the Insurance Act, RSO 1990, c I.8., in relation to statutory accident benefits.

Between:

Applicant

Applicant

and

State Farm Insurance

Respondent

REASONS FOR DECISION AND ORDER

ADJUDICATOR: Cezary Paluch, Member

APPEARANCES:

Counsel for the Applicant: Michael A. Yermus

Counsel for the Respondent: Stacey N. Karellas

HEARD IN WRITING: May 25, 2017

Overview

1The applicant, NR, was injured in a motor vehicle accident on June 11, 2014. She applied for and received benefits under the Statutory Accident Benefits Schedule – Effective after September 1, 2010 (the “Schedule”), including an Income Replacement Benefit (IRB).

2The respondent, State Farm Mutual Automobile Insurance Company (“State Farm”) initially paid the applicant the amount of $125.68 per week from January 1, 2015 to January 28, 2015. However, as of January 28, 2015, State Farm suspended the IRB for Section 33 non-compliance as additional information was requested but not provided by the applicant. In addition to the s. 33 suspension, after completing an Insurer’s Examinations, State Farm terminated the IRB pursuant to s. 37 of the Schedule, effective March 16, 2015, as it determined that the applicant no longer met the test for entitlement.

3The applicant submits that she suffers a substantial inability to perform the essential tasks of employment as a result of the accident and claims entitlement to IRB in the amount of $168.26 per week for 2015 and $130.97 per week for 2016.

4In response, State Farm, argues that even if the applicant is found to have met the test for entitlement, the entitlement should be $125.68 per week in 2015 (save and except January 1, 2015 to January 28, 2015 for which payment has been made), and $92.00 per week for 2016 with payments stopping at the 104 week mark on June 11, 2016.

5All submissions and evidence were filed with the Tribunal. A review of those documents forms the basis of this decision.

Issue:

6Is the applicant entitled to receive a weekly income replacement benefit in the amount of $168.26 per week for the period January 1, 2015 – December 31, 2015 and $130.97 per week for the period January 1, 2016 – December 31, 2016?

Result:

7I find on all the evidence that the applicant is not entitled to receive IRB for either of the periods sought. The Applicant did non-comply with s.33 of the Schedule and has not provided a reasonable explanation for the delay in providing the documentation for the claimed period. In addition, the applicant has failed to prove her entitlement to IRB in accordance with s. 5 of the Schedule.

Law and Discussion:

Suspension of Benefits and Reasonable Explanation:

8On January 13, 2015, the respondent sent to the applicant a written request pursuant to s. 33 of the Schedule for documentation to calculate the quantum of the applicant’s IRB entitlement¹. This documentation related to the applicant’s personal and corporate earnings of the Thai restaurant she owns and manages. This information was reasonably required to assist the insurer in determining the applicant’s claim for IRBs². State Farm requested that these documents be produced by January 28, 2015. I find that the 9 requested items that included what percentage of the restaurant the respondent owned, copy of income tax returns for the last fiscal year, financial statements for the restaurant were all legitimate and appropriate documentation that LBC³ required to prepare a report for State Farm to calculate the applicant’s entitlement to IRB.

9Under s. 33 of the Schedule, the applicant must provide within 10 business days upon request information reasonably required to assist State Farm in determining the entitlement to an income replacement benefit. It appears from the documentary evidence that the respondent, or the accounting firm retained by the respondent, LBC International Investigative Accounting Inc. (LBC), made a total of at least 14 requests for the applicant’s income documentation. The applicant failed to provide any income documentation until February 21, 2017 when some of the requested documentation was provided. Notably, this was after the Application to the Tribunal was already filed on or about January 3, 2017.

10As part of the information that was provided on February 21, 2017, the applicant included 2014 Financial Statements for another corporation named Project Management With Project Solutions Inc. (“Project Management”) which disclosed another source of income. This was the first time that the respondent became aware of the applicant’s source of income from Project Management. Indeed, in her Application (OCF-1), signed on July 25, 2014, under Part 8, the applicant only listed one source of income being from the Thai Restaurant. As well, the Disability Certificate (OCF-3) completed on July 9, 2014, and signed by the applicant, indicated that the applicant runs her own restaurant. Again, there was no mention of her employment with Project Management. The applicant’s explanation in her Affidavit for this omission was that her job at Project Management was not her primary and she only worked there a few hours each night.

11Subsequently, on April 4, 2017, nearly 3 years post-accident, the applicant provided all of the requested documentation which included the 2014 and 2015 Corporate Tax Returns for the Thai Restaurant and 2013 and 2014 T4 slips from Project Management.

12In these circumstances, the respondent alleges that the applicant breached s. 33(1) of the Schedule because she did not provide requested financial documents. As a result of this breach, the respondent seeks an order that it is not liable to pay the income replacement benefit during the period of non-compliance (past January 28, 2015).

13Timelines are critically important under the statutory accident benefits regime for the purpose that claims must dealt with expeditiously. The legislature clearly recognized this guiding principle by making it mandatory that a claimant must provide to the insurer the requested information within 10 business days after receiving a request. In other words, in a timely fashion.

14It is clear that the applicant in this case breached section 33(1). However, section 34 of the Schedule states that the breach does not disentitle the person to a benefit if the person has provided a “reasonable explanation”. Therefore, I must consider whether the applicant has a reasonable explanation for not complying with the request.

15In this case, the onus is on the applicant to provide a “reasonable explanation”. The plain meaning of the common word “reasonable” is that it be sensible, sound, practical, or realistic. A reasonable explanation must substantiate that the applicant acted with all due diligence. If the applicant exercised such diligence and was still unable to obtain the information, then perhaps she should not be disentitled to the benefit. I find that there was a lack of evidence from the applicant to substantiate her explanation that she was having difficulty in obtaining the requested information from her accountant and what efforts she made to obtain the requested documents.

16As support for her explanation, the applicant included a letter from her lawyer to her accountant dated November 14, 2016, sent via regular mail, requesting complete accounting file for the Thai Restaurant and Project Management. I noted that there were no other letters or correspondence attached as Exhibits to the applicant’s affidavit to substantiate her explanation that she was having difficulty in obtaining the accounting records and what other additional steps she was taking.

17The applicant’s reason for the delay that she had difficulty obtaining the complete accounting records in a timely manner from her former accountant who apparently was “uncooperative” is vague, lacking in substance, and is not, in my view, a reasonable or realistic explanation for the extensive 2-3 year delay in providing the documentation to the insurer so that her claim could be expeditiously resolved. Here, there was an affidavit with only one single letter from her lawyer to the accountant requesting the documents. No follow up or other such correspondence as to steps taken was produced.

18I am not satisfied that the applicant has provided a reasonable explanation why the information was provided so late. Section 33(6) of the Schedule states that the respondent is not liable to pay a benefit in respect of any period during which the insured person fails to comply with providing the required information. I find that the period of non-compliance was from January 28, 2015 to April 4, 2017.

19In any event, I also find that the applicant is not entitled to IRB’s because she does not meet the statutory test.

Eligibility Criteria for Income Replacement Benefits

20The test for entitlement to payment of an IRB within 104 weeks after the accident is found in s. 5(1) of the Schedule. S. 5(1) provides that an injured party must prove she was employed at the time of the accident and, as a result of the accident, “suffers a substantial inability to perform the essential tasks of [her pre-accident employment].”

21For analytical purposes, the inquiry can be divided into two parts:

i. Causation; and

ii. Substantial inability to perform the essential tasks of employment.

i. Causation

22It is uncontested that the applicant was a self-employed restaurant owner/operator at the time of the accident. The applicant deposes that she worked 80 hours a week running the restaurant. She also apparently earned employment income from Project Management assisting with various administrative tasks. She worked there a few hours each night and in 2014 earned $36,900⁴.The information is detailed in her affidavit. The Functional Abilities Evaluation (FAE) prepared by Mr. Haratsis on February 27, 2015, on behalf of State Farm, to determine the applicant’s eligibility to IRB, only address the applicant’s work as an owner/operator of the Thai restaurant but not her employment with Project Management. This is not surprising for two reasons. One, because State Farm only found out about the applicant’s employment with Project Management on February 2017 (after the FAE was completed). Second, because it appears that the applicant only mentioned to Mr. Haratsis that she worked at the Thai restaurant and did not mention any other form of employment.

23State Farm submits that the applicant’s injuries are not a result of the June 11, 2014 accident but due to ongoing impairments that pre-date the accident. With respect to the applicant’s alleged loss of income from Project Management, the respondent says that this is not related to the accident but to the closure of Project Management. As a result, State Farm submits that the applicant cannot show that the subject motor vehicle accident caused her impairments.

24I agree with the applicant on this point. I accept that the intervening act of the motor vehicle accident is responsible for the alleged impairments.

25The applicant submits in her Affidavit that after the accident she missed several weeks at the restaurant on the advice of Dr. Sinha and since the accident has been required to hire additional staff to run the restaurant. She further explains that her son and daughter have had to assist her at the restaurant as she does not have the strength to shop for food, carry and unload it. With respect to her job at Project Management, the applicant states that because of her persistent pain she had to stop her role entirely with that company. I note that the applicant did not earn any income with Project Management in 2015 or 2016.

26In support of her claim, the applicant also relied on the Disability Certificate OCF-3 dated July 9, 2014 submitted by Karen Peronilla, physiotherapist, Centennial Physiotherapy & Rehab that concluded that that the applicant is substantially unable to perform the essential tasks of her employment as a result of the accident. The purpose of the Disability Certificate is to provide a starting point for the respondent to investigate whether the applicant is entitled to the claimed benefit.

27I also note that the respondent admitted that the applicant suffered impairments in that they paid her IRBs from January 1, 2015 to January 28, 2015. Secondly, the respondent’s own assessor, Dr. J. Jeffries concluded in his Psychiatry Assessment that the accident did contribute to her current mood disorder.⁵ Also, Dr. W. Franks, in his Physiatry Insurer’s Examination dated February 27, 2015, answered “yes” to the question whether the applicant’s condition was caused by the accident.⁶

28Therefore, I am satisfied that on a balance of probabilities whatever injury or impairment the applicant has sustained or endured was caused by the motor vehicle accident.

29I now turn to the issue of whether the headaches, back, neck, shoulder, knee pain, dizziness, chronic pain, stress and anxiety, difficulty sleeping cause the applicant a substantial inability to perform the essential tasks of her employment.

ii. Substantial inability to perform the essential tasks of that employment

30Having reviewed the evidence I find that the applicant has not established that she is entitled to the IRB.

31The essence of the test for an IRB is whether the applicant suffers from a substantial inability to perform the essential tasks of her or his employment. To answer this question in the applicant’s case, two determinations are required. First, what are the essential tasks of the applicant’s employment? Second, is the applicant substantially unable to perform the essential tasks of her employment?

32Based on the applicant’s affidavit, I find as fact that the essential tasks of her employment as the owner and operator of a restaurant were:

(a) cooking;

(b) preparing food;

(c) mopping;

(d) sweeping;

(e) taking orders;

(f) talking to customers;

(g) cleaning dishes;

(h) carrying supplies;

(i) stocking shelves;

(j) handle paperwork and operating the business;

(k) carry cases of water; and

(l) grocery shopping.

33Based on the applicant’s affidavit, I find as fact that the essential tasks of her employment at Project Management were:

(a) carrying boxes of office supplies; and

(b) administrative tasks/organizing and filing documents.

34The applicant’s essential tasks of her employment as deposed in her supporting Affidavit and described in the other information as part of this written hearing were not contested.

35The key component of the test for IRB is whether the applicant is substantially unable to perform the essential tasks of her employment.

36Prior to addressing this question, I must review the applicant’s medical evidence.

Assessment of applicant’s medical evidence

Disability Certificate

37In support of her claim that she is substantially unable to perform the tasks of her employment, the applicant presented the following medical evidence:

i. OCF-3 Disability Certificate, dated July 9, 2014;

ii. MRI Report dated November 21, 2015;

iii. Dr. Sinha’s notes and records;

iv. OHIP Summary from June 11, 2011 to May 26, 2016;

v. Centennial Physiotherapy & Rehab records;

vi. Dr. Marie Clements-Baker’s consult note dated October 5, 2015; and

vii. Dr. Dinar’s Consultation Report dated July 15, 2014.

38The applicant’s OCF-3 Disability Certificate completed on July 9, 2014 (almost a month after the accident), concluded that that the applicant is substantially unable to perform the essential tasks of her employment at the time of the accident. The anticipated duration of the disability is stated as 9-12 weeks. Accordingly, the anticipated duration of disability was projected to end on or about September - October 2014.

39The Disability Certificate diagnosed the applicant with the following injuries as a direct result of the accident:

• Whiplash (WAD2);

• Sprain and strain of thoracic spine;

• Sprain and strain of lumbar spine;

• Sprain and strain of shoulder joint;

• Headache;

• Contusion of knee;

• Disorders of initiating and maintain sleep (insomnias).

MRI Report

40The applicant deposes in her affidavit that the MRI report dated November 21, 2015 noted” “MVA 2 years ago gradual onset of pain.” Although, the MRI Report does identify disc space height loss, protrusion and canal narrowing it is unclear if the existence of this impairment was caused by the accident. The lack of impairment related to the accident is reinforced when I consider that the mild degenerative disc disease appears to date back to at least January 27, 2009 when a diagnostic imaging report from CML Healthcare Inc. printed on January 29, 2009 shows that the applicant had some form of mild degenerative disc disease already at that time (2 and ½ years prior to the accident).

Medical Notes and Records

41The evidence presented in Dr. Sinha’s notes and records does not substantiate the applicant’s claim that she is substantially unable to perform the tasks of her employment as a result of the accident. The records do not list or examine the applicant’s essential job tasks and duties and say that she is in any way unable to perform those tasks. Although the note of November 4, 2014 does state “chronic myofascial pain from MVA” and another note from January 22, 2015 says “chronic recurrent headaches and neck pain”, the challenge with such notes is that they do not provide any context as to how the applicant’s injuries prevented her from performing the essential tasks of her job. Nothing in these notes state the applicant’s pain is permanent or prevents her from substantially working at her restaurant (or at Project Management).

42The consultation note dated October 5, 2015, from Dr. Marie-Clements-Baker that confirms residual stiffness from the MVA. This medical evidence is based on the applicant’s self-reports.

43Dr. Dinar’s Consultation Report dated July 15, 2014 also does not assist the applicant in forming the necessary connection between the impairment and the accident. To the contrary, Dr. Dinar’s noted that the applicant “has symptoms in both upper limbs for about a year.” This report was completed only one month after the accident but makes reference to symptoms well prior to the accident.

Assessment of State Farm’s medical evidence

44State Farm provided three reports as part of a multi-disciplinary assessment to address IRB: (i) Physiatry Report prepared by Dr. William Franks dated February 27, 2015; (ii) Functional Abilities Evaluation (FAE) conducted by Mr. John Haratsis on February 10, 2015; and (iii) a Psychiatry Assessment completed by Dr. Joseph Jeffries dated December 11, 2015. Unlike the applicant’s evidence, these assessors were hired to comment specifically on this issue and determination.

45The three assessments all support the conclusion that the applicant does not suffer from a substantial inability to perform the essential tasks of her employment as a restaurant owner and operator. Both Dr. Franks and Mr. Haratsis noted that the applicant did in fact return to work 2 to 3 hours per day after the accident. Dr. Jeffries also noted that she already returned to work and told him that the restaurant is doing well and she is currently training three new staff.

46Moreover, Dr. Franks in his Physiatry Report opined that the applicant is capable of performing light to medium level work which is consistent with her pre-loss occupational duties, and that she was capable of returning to pre-loss activity levels and that no restriction are required as a result of the accident related impairments. Dr. Franks also noted that the applicant’s examination included various inconsistencies between formal testing and informal observation and no pain behaviour. For example, the applicant stated to Dr. Franks that she was having back pain at 7/10 but someone with level 7/10 pain, according to the doctor, would be tearful and need to lie down and have difficulty carrying on the interview.

47Dr. Jefferies, diagnosed the applicant with adjustment disorder with depressed and anxious mood but opined that her psychological issues did not interfere with her ability to return to her employment as a restaurant owner/operator. He explained that she has not returned to her pre-loss levels because of her physical injuries and not her psychiatric problems (though they may have played a small role). Dr. Jefferies noted that the applicant has stress from other sources (i.e. breakup of her marriage, deportation of her daughter) which have contributed to her current mood disorder. She told him that she is sad because she is alone, saying “Sometimes I feel like I have nobody.” I accept Dr. Jefferies findings because he did a detailed assessment including a review of all of the relevant medical documentation and review of the applicant’s psychiatric history. I noted, however, that Dr. Jefferies was psychiatrist assessor and I did not put a lot of weight on his comment that the applicant did not return to her pre- loss levels because of her physical injuries.

Conclusions

48I accept the reports of Dr. Franks, Dr. Jefferies and Mr. Haratsis which further convince me that the claim for IRB should be dismissed. In arriving at this conclusion, the important issue for me was the applicant’s ability to demonstrate a workday tolerance of 8 hours per day of which this included 3 to 4 hours standing and 4 to 5 hours walking as demonstrated in the Functional Abilities Evaluation. The FAE evaluated the applicant’s safe functional abilities and concluded that she was found to be able to currently function at a light to medium physical demands level. This level of physical ability is a strong indication to me that the applicant is able to perform the essential tasks of her employment as the owner and operator of a restaurant or her administrative duties.

49Conversely, irrespective of these reports, given the absence of compelling evidence from the applicant, I arrive at the same conclusion because the applicant has failed to discharge her onus to prove on a balance of probabilities that she suffers from a substantial inability to perform the essential tasks of her employment as a result of the accident. Without evidence that makes the connection between the alleged impairment and the accident including what essential tasks or job duties she is unable to do and to what degree, I am unable to conclude that she is unable to perform essential tasks of her employment like cooking, preparing food and operating the restaurant or working at Project Management.

50Even if I take her most physically demanding tasks of carrying boxes or carrying cases of water I do not have any evidence how big or heavy these boxes, or cases were, or exactly how often and when she would have carry them or what percentage of her entire job comprised of carrying these boxes. It may be that this was only a very small percentage of her total activities. Being unable to engage in activities post- accident (i.e. carrying boxes) that one was engaged pre-accident is not determinative to an income replacement benefit. The applicant must prove that she is unable to perform substantially all of her pre-accident activities. The headaches, sprains and strains and other impairments the applicant complained of do not, in my view, render the applicant substantially unable to perform the essential tasks of her employment.

51In addition, there was no supporting documented proof that the applicant was forced to give up her job with Project Management due to persistent pain (aside from the applicant’s generic statement in paragraph 47 of her Affidavit) that resulted in her apparently not being able to carry boxes, organize and file documents. This evidence was even more crucial when I consider that Dr. Franks in his report noted several inconsistencies between the applicant’s reported pain and her observed behaviour. Also, that Mr. Haratsis as part of his Functional Abilities Evaluation was only able to address the applicant’s work as an owner/operator of the thai restaurant but not her employment with Project Management (which it appears the applicant never told him about). I was left in the dark, how prior to the accident, the applicant was apparently able work 80 hours at the restaurant and at the same time work a few hours each night with Project Management.

52In relation to the onus issue, I can tie in applicant’s referral in her Factum to the 16-000179 v Old Republic Insurance Company⁷ as a possible parallel case where the claimant there was found to have been substantially unable to perform the essential tasks of her employment as a school bus driver (mainly because she was unable to drive for an extended period of time even though she could drive for one hour at a time). In my view, that case can be distinguished from the facts here for two main reasons.

53First, the applicant in that case, commissioned two expert reports, one from a physiatrist and the other from a psychologist to substantiate her claim that she was unable to perform the tasks as a bus driver (which the adjudicator assessed). No expert medical report was provided in this case to support the applicant’s position, or to challenge the respondent’s expert’s opinion in the Functional Abilities Evaluation that the applicant was able to demonstrate a workday tolerance of 8 hours per day, or Dr. Frank’s opinion that the applicant was capable of performing light to medium level work which was consistent with her pre-accident duties.

54Second, driving was the essential and only task that the applicant in the Old Republic case was engaged for the entire work day. In this case, the applicant is a restaurant owner and operator responsible for numerous different tasks, as outlined previously (not one singular task) that she can complete at her own pace, or perhaps delegate and supervise, without being limited to one continuous and uninterrupted task for the entire day.

55The other two cases cited by the applicant and included in her Brief of Authorities which I have reviewed are not persuasive.

56For these reasons I find, on a balance of probabilities, that the applicant has not proven that she suffers a substantial inability to perform the essential tasks of her pre- employment during the first 104 weeks after the subject motor vehicle accident. The applicant’s claim for an IRB is dismissed. Given my conclusion, I do not need to address quantum.

Costs:

57The applicant has requested costs. Tribunal Rule 19.1 allows for parties to request costs, if they believe that the other party in a proceeding has acted unreasonably, frivolously, vexatiously, or in bad faith. Rule 19.4 further sets out the requirements for that request, which must include the reasons for the request and the particulars of the alleged conduct.

58The applicant provided no particulars or details of alleged unreasonable, frivolous or vexatious or bad faith conduct other than to say that the respondent failed to agree to pay the applicant’s IRB and consider the overwhelming medical evidence. I did not find any merit that the respondent unreasonably withheld benefits or that it acted in bad faith. The claim for costs is denied.

Conclusion:

59For the reasons outlined above, I find that that the applicant is not entitled to IRBs. The applicant is also not entitled to any interest or cost of the proceeding.

Released: December 21, 2017

Cezary Paluch, Adjudicator

Footnotes

1. 1This was the third request of the items originally requested in letter from LBC dated December 4, 2014.
2. 2The respondent sent to the applicant an Explanation of Benefits (OCF-9) from in which it also included a letter from LBC International Investigative Accounting Inc. (LBC) dated December 4, 2014, previously sent to the applicant, which listed the nine (9) requested items that it needed to calculate the applicant’s IRBs.
3. 3LBC is the accounting firm retained by the respondent to calculate the quantum of the IRB entitlement.
4. 4See also Lipton Polisuk Inc. Report dated March 28, 2017, Schedule 2 based on the Applicant’s T4.
5. 5Psychiatry Assessment dated December 11, 2-15, page 9
6. 6Physiatry Insurer Examination – Part of Multi-Disciplinary Assessment dated February 27, 2015, page 9.
7. 72016 CanLII 73692 (ON LAT)