Tribunal File Number: 16-002364/AABS

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

Between:

I.T.

Applicant

and

The Personal Insurance Company

Respondent

DECISION

ADJUDICATOR: Jeffrey Shapiro

APPEARANCES:

For the Applicant: Jennifer Baic, Licensed Paralegal

For the Respondent: Katie Stanger, Counsel

Heard in Writing: January 26, 2017

REASONS FOR DECISION AND ORDER

Overview

1The applicant (“Ms. T”) was injured in a motor vehicle accident on January 22, 2015 (“the accident”) while she was in the course of her employment as a Registered Practical Nurse. Because she was employed at the time, she was eligible for, applied for and received Workers Safety Insurance Benefits (“WSIB”).

2Ms. T subsequently de-elected to receive WSIB benefits and instead elected to pursue (a) a lawsuit (“tort action”) against the unidentified driver of the other vehicle for pain, suffering, and other damages, and (b) statutory accident benefits (“accident benefits”) under a motor vehicle insurance policy issued by the respondent (“the Insurer”) governed by the Statutory Accident Benefits Schedule – Effective after September 1, 2010 (the “Schedule”).

3The Insurer, however, based on s. 61 of the Schedule concluded that Ms. T is not entitled to make such a re-election in this case and therefore denied her accident benefits claim. In brief, s. 61 provides that an automobile insurer is not required to pay accident benefits for a claimant who is entitled to receive WSIB benefits unless the applicant elects to opt out of the WSIB benefits to pursue a tort action and accident benefits, provided that this election is “not primarily for the purpose of receiving accident benefits.”

4In this application to the Licence Appeal Tribunal (“Tribunal”), Ms. T is seeking a ruling that her re-election was not primarily for the purpose of claiming accident benefits, and thus, that she is entitled to proceed with her claim for accident benefits.

5The parties are in general agreement to the facts and applicable law in this matter. The dispute is the interpretation of those facts. Evidence was presented in writing, consisting of various records and affidavits.

6While I acknowledge that the facts could be reasonably interpreted as each party suggests, I find that Ms. T established her re-election was not primarily for the purpose of receiving accident benefits, and thus, her claims for accident benefits may proceed.

Issues

7This Tribunal’s case conference order identifies the preliminary issue as follows:¹

(i) Is the applicant precluded, pursuant to s. 61 of the Schedule, from proceeding to a hearing because she brought her action primarily for the purpose of claiming statutory accident benefits?

Result

8Ms. T is not precluded, pursuant to s. 61 of the Schedule, from proceeding with her claims for accident benefits. Within one week of this decision, the parties shall submit to this Tribunal three proposed dates, agreed between them, for a case conference occurring within 30 days, during which the parties may undertake settlement discussions and, if needed, schedule a hearing on the accident benefits in dispute.

Positions of the Parties

9Ms. T contends that the timeline of her WSIB and accident benefit claims shows the primary purpose of her re-election was to pursue a tort action, not to claim accident benefits. She argues, supported by affidavits, that she gave great consideration to her ability to recover damages in a tort action for pain and suffering and compensation for her children’s loss of her care, guidance and companionship. She submits that when re-electing, her WSIB claim was viable with a very reasonable chance of succeeding in the WSIB appeal process and obtaining further WSIB benefits. She was aware that the Schedule’s income replacement benefit rate and medical benefits are less than the equivalent WSIB benefits and she would be unable to claim IRB benefits prior to her January 2016 re-election. Nevertheless, she believes the differences, including loss of income and future medical case, could be recovered in the tort action. Thus, Ms. T argues, her real motivation was seeking a tort claim.

10The Insurer contends that the timeline – and the re-election occurring after WSIB’s denial – supports the opposite conclusion. It also argues that her re-election was to secure accident benefits, because the tort action is not viable for a number of reasons such as a subsequent incident creating a causation issue and then other potential statutory bars such as failing to meet various statutory thresholds, condition precedents and requirements.

Background

11An overview of the facts will be useful in analysing the election. On January 22, 2015, Ms. T was in the course of her employment as a Registered Practical Nurse when she was struck by another vehicle that was making a U-turn (“the accident”). She spoke with the driver but the driver left the scene and remains unidentified. She did not secure any identifying information of the other vehicle; she also never made a police report. The Insurer points out that during a psychological examination in the WSIB process, Ms. T expressed her frustration at failing to secure that information. Neither party commented on a WSIB accident reporting form that lists a co-worker as a witness and phone number for the other driver.²

12While Ms. T reported the accident to her employer that day and completed WSIB forms over the next few weeks, Ms. T was unrepresented and received no independent legal advice. It is important to note that, on February 16, 2015, she completed an WSIB Election Form (Schedule 1 – Motor Vehicle Accident) in which she confirmed that she had not started or settled a lawsuit and that she had not applied for any benefits from an automobile insurance company. That single page WSIB Election Form contains language about giving up the right to start a “lawsuit” against “anyone concerning this collision”, but is silent about waving accident benefits.³

13After returning to work six days after the accident on January 28, 2015, Ms. T heard a crack in her back when lifting a patient. She has not returned to work since that time.

14Within a month of the accident, the WSIB began rendering a series of decisions concerning her claim for benefits, which basically granted her various benefits but only until May 27, 2015. A March 12, 2015 decision allowed Health Care and Loss of Earnings benefits. A March 26, 2015 decision granted Loss of Earnings Benefits for the period from February 19 to March 13, 2015, but determined that suitable work was available for her after that time. A June 29, 2015 decision concluded she reached maximum medical recovery as of May 27, 2015 and noted her current symptoms presented as “non-organic”.

15On July 6, 2016 - approximately one week after the last decision - Ms. T retained Zare Paralegal Services (“Zare”) for her WSIB claim, and a month later, on August 6, 2015, Zare submitted an Intent to Object form regarding the June 29, 2015 WSIB decision. (While the Insurer suggests based on Zare’s letter to the WSIB dated June 8, 2015 that representation began in June, I accept Ms. T’s explanation of the date being a typographical error. In fact, a June 29, 2015 WSIB letter does not indicate Ms. T is represented, while later WSIB letters do.)

16On July 14, 2015, Ms. T requested WSIB benefits for psycho–traumatic disability and/or chronic pain disability, and in response, the WSIB requested further medical records from the applicant’s family physician.

17On August 7, 2016, the WSIB upheld the June 29, 2015 decision.⁴ That same day, Ms. T met with Zare and began the process of re-electing benefits. They discussed a claim for damages for pain and suffering and the accident’s effects on her children; she was advised to seek legal advice from a lawyer regarding a tort claim. She promptly did so on August 20, 2015, when she spoke with Mr. Kinch, and as a result, she advised Zare to look into de-electing WSIB benefits. On October 1, 2015, Zare contacted WSIB in that regard. On October 6, 2015, the WSIB faxed a letter about the procedure for withdrawing her WSIB claim to pursue a lawsuit.

18At the same time that Zare and WSIB were corresponding about withdrawing the WSIB claim, an October 2, 2015 WSIB decision ruled that her post-traumatic stress disorder did not meet WSIB’s eligibility criteria. Zare objected, but on November 24, 2015, the WSIB upheld the decision. While the WSIB denied the claim, a WSIB examination report opines that Ms. T is unable to work in any capacity.

19On November 24, 2015, Ms. T formally requested the WSIB to allow her to withdraw her WSIB claim. On January 15, 2016, WSIB formally allowed it. By January 22, 2016, Ms. T formally retained Mr. Kinch and they both executed the WSIB’s Re-Election Agreement.

20On February 19, 2016, Ms. T retained Zare for an accident benefit claim and signed an Application for Accident Benefits. On March 3, 2016, Ms. T provided a statement to the Insurer, and advised she retained a lawyer to pursue a tort action.

21On March 16, 2016, the Insurer denied the claim pursuant to s. 61 of the Schedule. On August 16, 2016, Ms. T appealed that decision to this Tribunal. A case conference took place on November 29, 2016. Ms. T confirmed that she was seeking an Income Replacement Benefit (IRB) from January 29, 2015, which the Insurer contends is contrary to s. 61(3) of the Schedule, besides other treatment plans and benefits. On August 18, 2016, the Insurer advised Ms. T that her claim was denied in its entirety.

22On December 13, 2016, Mr. Kinch formally issued a Statement of Claim for the tort action and, several days later, provided a letter to the Insurer about the matter and his opinion regarding the viability of the tort claim stating that he thought she had a viable claim “even in light of the threshold and statutory deductible”. Ms. T’s daughters are plaintiffs in that matter pursuant to the Family Law Act.

Is Ms. T’s re-election permitted under s. 61 of the Schedule?

Law

23The general rule reflected under s. 61 of the Schedule is that automobile insurers are not required to pay benefits if the insured person is entitled to WSIB benefits. However, if the claimant is also entitled to commence an action against a person with respect to the injury, and the insured person makes an election under the WSIB legislation to sue in court instead of claiming WSIB benefits, the automobile insurer must pay benefits provided that the election “was not made primarily for the purpose of claiming accident benefits.”⁵ The relevant text of s. 61 is as follows:

61. (1) The insurer is not required to pay benefits described in this Regulation in respect of any insured person who, as result of an accident, is entitled to receive benefits under the Workplace Safety and Insurance Act, 1997 or any other Worker’s Compensation law or plan.

(2) Subsection (1) does not apply in respect of an insured person who elects to bring an action referred to in section 30 of the Workplace Safety and Insurance Act, 1997 if the election is not made primarily for the purpose of claiming benefits under this Regulation. (Emphasis added).

24While s. 61 does not provide much guidance on analyzing whether the “the election is not made primarily for the purpose of claiming benefits under this Regulation,” decisions analysing this phrase do provide guidance.

25First, it is Ms. T’s obligation to prove that her election for tort and accident benefits falls within the exception of s. 61 of the Schedule. I disagree with the Insurer’s articulation that Ms. T must “prove that the election was made for the primary purpose of commencing an action.” S. 61 is stated in the negative - the election is valid if she proves an equal intention to pursue tort and accident benefits.

26Second, the relevant point of time when determining the claimant’s primary purpose is at the time of the election.⁶

27Third, determining the “primary purpose” involves determining the claimant’s mindset at the time of the election, and thus, the test is inherently a subjective test to consider if the choice was made in good faith.

28Fourth, although the test is subjective, adjudicators must consider "objective" factors in evaluating the person's motives. These include the strength of the court action, the steps taken to pursue the claim, and any advantages that might have led the insured person to choose accident benefits over WSIB benefits. Action or inaction since election and the strength of the action can shed light on the true mindset.⁷ Challenges to successfully establishing liability in tort are also a factor to consider.⁸

29Additionally, the Insurer submits that the election must be a “real choice,” not forum shopping on the question of disabilities. Thus, a person who re-elects to sue after being unable to convince the [WSIB] of their disability is not making a valid election.⁹ I note that the case the Insurer relies upon involved a prior version of the Schedule, i.e. Bill 164, SABS-1994, and it is unclear if that version is materially similar to the current version. However, I will consider the principle as a factor, and note that the case notes that there may be circumstances where a bona fide re- election can be made after a final refusal by the [WSIB].

30It is important to consider that there is nothing “sinister” in an applicant determining under which system they will maximize benefits. The analysis, however, must root out an election made primarily for accident benefits rather than WSIB.¹⁰

31The decisions cited by the parties are fact-driven. In Pearson,¹¹ the arbitrator found the two-year delay in filing the tort action to be “in the normal course” when considering the chronology given. Though a subsequently discovered witness cast doubt on whether tort liability could be established, the election when made was not primarily for the purpose of accident benefit.¹² In Mahjourian,¹³ however, the arbitrator found that waiting to elect until two years after the accident, and the statement of claim only being issued after a s. 61 [then s. 59] defence was raised, coupled with non-credible reasons for bringing the tort claim, presents a chronology that the election was not compliant with s. 61. Similarly, in Mahadeo, filing a tort claim after the applicable limitation period expired and two days before a prehearing conference for an accident benefit claim which would determine whether the election was valid, ‘spoke volumes’ that the election was not valid.¹⁴

What was the applicant’s mindset at the time of the election?

32The Insurer argues the election was clearly in part for accident benefits as well as tort. I agree. The Schedule, however, requires the election to be not primarily for accident benefits. Thus, while her election clearly was in part for accident benefits, I must still decide if the evidence establishes the election was not primarily for accident benefits. I conclude that that applicant’s election was equally made to pursue a tort claim and accident benefits, and thus, not primarily for claiming accident benefits.

33As noted, each party looks to the chronology, and the applicant at claims only available in tort, and the respondent at bars to the tort action. The Insurer points to the fact Ms. T took two months to retain a lawyer for the tort claim after her de- election. In her statement to the Insurer, she provided a “very uninterested and uninvolved statement with respect to her tort action.”¹⁵ While those facts may be true, I view them differently, because retaining a lawyer takes time and “the tort action is for my lawyer to deal with” is an appropriate statement for a non-lawyer to make.

34Like in Pearson, where a two-year delay in filing the tort action was found to be “in the normal course” when considering the chronology, Ms. T’s “delays” in the tort action are not unusual. I accept the applicant’s explanations of how she proceeded from step to step. I note that she did not have the aid of legal counsel from the very beginning, and, it’s not uncommon that when a person receives a denial of benefits they seek legal advice at which point they may learn they had options they did not realize – a reason people seek legal counsel. From that point forward, Ms. T’s actions appear in line with pursuing a tort claim and accident benefits. I accept Ms. T’s affidavit about her ability to pursue pain and suffering in a tort action to be a significant factor. I also note that Ms. T has filed a timely statement of claim (a lawsuit). Filing a lawsuit is not a light matter; I find it hard to accept, as the Insurer would infer, the lawsuit was filed a charade to cover up the seeking of accident benefits.

35I also find no glaring in-action as in Mahadeo and Mahjourian. Mahadeo involved a legal representative who waited until the limitation period to file a tort action ended, despite actively pursuing the accident benefit claim over a long period of time. Likewise, in Mahjourian, the claimant applied for accident benefits in the weeks following the accident but only commenced a tort action one day after the limitation period expired, the timing of which made her tort claim appear to be a direct response to the Insurer raising a s. 61 [then s. 59] defence. Here, Ms. T’s actions are active in both matters.

36The Insurer submits that Ms. T’s assertion that the tort action was pursued as compensation for children is not borne out by the time frame as Ms. T’s children did not sign Mr. Kinch’s retainer agreement in January 2016 when Ms. T did, but rather only signed it in December 12, 2016, after the Pearson decision was issued in September 2016. As the analysis should focus on the time the election was made, I give some weight to the Insurer’s argument on this point.

Viability of the Tort Claim

37The Insurer asserts that Ms. T has a number of potential bars to a successful tort action, including her alleged inability to establish that her ongoing injuries (a) are caused by this accident (rather than the incident six days after the accident), or (b) are severe enough to meet the “threshold” under Ontario law. Other potential bars include that Ms. T failed to comply with various legislative and contractual provisions to assert an Unidentified Motorist Claim, such as an inability to establish that this is truly an unidentified driver situation as she met the other driver but failed to secure the other’s drivers information, filed to file a police report, and cannot provide material evidence of an unidentified action.

38Under Gebru, these are not dispositive factors, but the strength of the claim is a relevant factor when determining Ms. T’s mindset when she made her election. I note that Ms. T’s counsel for the tort action provided an affidavit that the tort action remains viable. Ultimately, while I agree these challenges exist, I am not convinced that they will ultimately bar Ms. T’s tort action, for several reasons, including that the WSIB psychological assessor appears to find her psychological injuries significant, and Ms. T has a strong basis to establish relief from forfeiture, and a court could reasonably determine that given the circumstances of the driver suddenly leaving the scene and the shock of the accident, it wasn’t reasonable for her to secure the identity of the vehicle. In any event, these potential bars do not change my finding that Ms. T’s election was primarily for tort – or at least equally between tort and accident benefits.

ORDER

39Pursuant to the authority vested in this Tribunal under the provisions of the Insurance Act, I find that Ms. T is not precluded, pursuant to s. 61 of the Schedule, from proceeding with her claims for accident benefits. Within one week of this decision, the parties shall submit to this Tribunal three proposed dates, agreed between them, for a case conference occurring within 30 days, during which the parties may undertake settlement discussions and, if needed, schedule a hearing on the accident benefits in dispute.

Jeffrey Shapiro

Adjudicator

Footnotes

1. 1I note the December 8, 2016 order also makes provisions for the insurer to bring forward a motion for costs by January 16, 2017. I do not see that such a motion was brought forward, and therefore, find it was waived.
2. 2See Written Submissions of the Applicant on a Preliminary Issue at Tab 1 (the "Ms. T, Tab 1") - WSIB Employer’s Report of Injury/Disease (F 7), section C, box 7 and 8.
3. 3Applicant, Tab C, at para. 7. I note the Affidavit of the Applicant, Tab 4, para. 4, appears to be missing a “not” as it states "… I had [not] started a law suit [sic] or applied for any benefits from an automobile [ins. co.].”
4. 4Although Ms. T had two decisions upheld, the Applicant submits that neither constituted a final decision, as a formal appeal process was available to her within the WSIB and then to the Workplace Safety Insurance Appeals Tribunal. I accept this reasoning.
5. 5Conseco Insurance Co. and Gebru (FSCO Appeal P01-00043, January 7, 2002)(“Gebru – Appeal”)
6. 6Gebru – Appeal. The applicant in Gebru was also a homecare worker that was injured in a motor vehicle accident while travelling between clients. The respondent argued that subsequent evidence – i.e. a witness – showed that the applicant could not succeed in a tort action because she could not establish liability in court and thus, her election to bring a court action was “made primarily” for the purpose of claiming benefits under the Schedule. The arbitrator found that the relevant time to examine the election was when made, not when subsequent evidence was discovered.
7. 7Gebru-Appeal. See also, Mahadeo and Aviva (FSCO Appeal Order P06-000158, March 22, 2007).
8. 8Gebru – Appeal. I note that after the parties’ submissions in this matter, this Tribunal issued the reconsideration decision of G. P. v. Northbridge Personal Insurance Corporation, 16-001066/AABS, in which Executive Chair Lamoureux found that it was error to read as. 61. (1) of the Schedule without reference to s. 30 of the WSIA, as that section is cited in as 61. Rather 61 (2) of the Schedule must be read in a manner to complement, not frustrate, the WSIA. S. 30 of the WSIA uses the phrase "entitled to commence an action against a person…", which makes clear that s. 30 contemplates only those actions that an insured worker has a legal right to commence. Thus, because WSIAT had determined that the applicant did not have a right to commence an action – it was a statute barred – the Executive Chair concluded the tort action should never have been commenced, so that the Applicant had no election to make – thereby invaliding it. In Ms. T’s matter, there has been no such determination in this case – only potential bars have been alleged after the choice was made.
9. 9Respondent at paragraph 23, citing Davis v. Pafco Insurance, [1997] O.I.C. D. No. 168, para. 46.
10. 10Sumal and America (FSCO A03-000693, September 5, 2007)
11. 11Pearson and Ace Ina (FSCO A14-002487, September 26, 2016)
12. 12Pearson and Ace Ina (FSCO A14-002487, September 26, 2016)
13. 13Mahjourian and TD Home and Auto Insurance Co. (FSCO A08-001115)
14. 14Mahadeo and Aviva (FSCO Appeal Order P06-000158, March 22, 2007).
15. 15Respondent, paragraph 37