Tribunal File Number: 16-002740/AABS
Case Name: 16-002740 v Allstate Insurance Company of Canada
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:
M. Y.
Applicant
and
Allstate Insurance Company of Canada
Respondent
DECISION ON A PRELIMINARY ISSUE
ADJUDICATOR: Rebecca Hines
APPEARANCES:
For the Applicant: Catherine Raver, Paralegal
For the Respondent: Julie Singh, Counsel
Written Hearing: January 23, 2017
OVERVIEW:
1The applicant was injured in a motor vehicle accident on July 22, 2014. She applied for accident benefits to Allstate Insurance Company of Canada (“Allstate”) under the Statutory Accident Benefit Schedule – Effective September 1, 2010 (the “Schedule”). Allstate denied her claim. The applicant appealed to the Licence Appeal Tribunal – Automobile Accident Benefit Services.
2This decision is on two preliminary issues, either of which may act as a complete bar to the applicant succeeding in a claim for benefits.
PRELIMINARY ISSUES:
3Is the applicant precluded from proceeding with a claim for non-earner benefits pursuant to s.281 of the Insurance Act and the limitation period set out in s.56 of the Schedule?
4Is the applicant precluded from advancing a claim for non-earner benefits pursuant to s.12 of the Schedule as she is qualified for and received an income replacement benefit?
RESULT:
5For the reasons that follow, the applicant is precluded from proceeding with her claim for non-earner benefits as she did not file her dispute within the two-year limitation period. The applicant’s claim for non-earner benefits is dismissed as she qualified for (and received) an income replacement benefit.
FACTS:
6On July 30, 2014, the applicant submitted an Application for Accident Benefits (OCF-1) to Allstate, indicating that she sustained injuries as a result of the accident and was unable to return to work due to her injuries.
7On August 8, 2014, Allstate received a disability certificate (OCF-3) supporting entitlement to both an income replacement and a non-earner benefit. The duration of the disability was marked at 9-12 weeks.
8On August 26, 2014, Allstate sent an Explanation of Benefits (OCF-9) to the applicant and her representative advising that she qualified for an income replacement benefit. In response to the applicant’s entitlement to a non-earner benefit, the Explanation of Benefits stated: “Non-Earner Benefit: You are not eligible for this benefit as you were employed and working at the time of the accident.”
9The applicant was paid an income replacement benefit from August 5, 2014 to August 21, 2014. She returned to work on August 22, 2014.
10On September 19, 2016, an Application was filed with the Licence Appeal Tribunal disputing the applicant’s entitlement to a non-earner benefit.
THE LAW AND ANALYSIS:
Is the applicant precluded from proceeding with a claim for non-earner benefits pursuant s.56 of the Schedule?
11Section 56 of the Schedule requires that a mediation proceeding, evaluation, court proceeding or arbitration shall be commenced within 2 years after the insurer’s refusal to pay a benefit or amount claimed.
12Allstate argues that more than 2 years has passed since the denial of the benefit as the limitation period was triggered by the Explanation of Benefits dated August 26, 2014, and the applicant did not file an Application to dispute the benefit until September 19, 2016. Allstate contends that the Explanation of Benefits was a clear denial of the applicant’s entitlement to the non-earner benefit, and it satisfied the requirement of outlining the steps for the applicant to dispute the denial and the time limits for doing so.
13The applicant maintains that the limitation period was not triggered by the Explanation of Benefits dated August 26, 2014 because the reason given was legally incorrect. Secondly, the applicant suggests that there is no evidence that the applicant received it or all of the pages. Finally, it was not a denial because the disability certificate was not an official application. Since there was never an application for the non-earner benefit it could not have been denied, therefore the limitation period does not apply.
Did the limitation period start to run based on the Explanation of Benefits dated August 26, 2014?
Language Used in the Explanation of Benefits
14Both parties agree that the reason for the denial outlined in the Explanation of Benefits dated August 26, 2014, was legally incorrect. It should have stated that the applicant was not eligible for the non-earner benefit because she qualified for an income replacement benefit.
15Allstate argues that it is irrelevant that the reason for the denial of the benefit was legally incorrect. Allstate relies on the following as authority: Sietzema v. Economical Mutual Insurance Company [2014] CanLII 68792; Bustamente v. The Guarantee Company of North America [2015] ONCA 530; and Steele v. Intact Insurance Company [2014] ONSC 6999.
16I agree with Allstate that Sietzema deals with very similar facts to the present case. In Sietzema, the Court of Appeal found that despite the fact that the reasons in the Explanation of Benefits were legally incorrect, it was still a clear denial of benefits and was sufficient to start the limitation period. The Courts have followed suit in Bustamente and Steele.
17The applicant argues that Allstate failed in its duty to provide complete, clear and unequivocal information to the applicant as the reason for their denial in the OCF-9 was legally incorrect. The applicant cites Smith v. Cooperators General Insurance Co, 2001 SCC 30 [2002] 2 S.C.R. 129 as an authority.
18I do not agree that Smith supports the applicant’s position that because the reason in the OCF-9 was legally incorrect it was not a proper denial of the benefit. In Smith, the court held that the insurer’s notice of denial was insufficient because it advised the insured of the right to mediate the dispute, but failed to provide notice of how to dispute the denial and the existence of the two-year statutory limitation period.
19The applicant states that there is no evidence to support that she received the Explanation of Benefits, or when she received it she understood she was being denied the non-earner benefit. At no point has the applicant said that she did not receive the Explanation of Benefits. Therefore, I find it more likely than not that she did.
Denial Prior to Application for the Benefit
20The applicant argues that the Explanation of Benefits dated August 26, 2014, was not a denial of the non-earner benefit because the disability certificate was not an official application and there is a 6-month waiting period before she would have become eligible. Further, the limitation period did not start because there was no denial of the benefit beyond October 16, 2014, when the initial disability certificate expired. The applicant claims that the insurer had an obligation under section 32 of the Schedule to advise the applicant that she qualified for the non-earner benefit after the date of her return to work. Further, the applicant states that she was not provided with an Election of Benefits Form.
21Section 32(5) of the Schedule provides that an applicant will submit a completed and signed application for benefits to the insurer within 30 days after receiving the Application forms. Section 36(2) of the Schedule provides that an application is made for a specified benefit by submitting a completed disability certificate with his or her Application for Accident Benefits.
22In the present case, I find that the applicant made an application for both an income replacement and a non-earner benefit by submitting her initial application for benefits on July 30, 2014, and by submitting the disability certificate. The applicant applied for the benefit as per the procedures outlined in the Schedule. In response, Allstate denied the benefit. Consequently, I disagree with her position that, since the benefit was not applied for, there was no denial.
23Section 37(1)(a) of the Schedule provides that where an insurer wishes to determine if an insured person is still entitled to a specified benefit, the insurer may, but not more often than is reasonably necessary request that the insured person submit a new disability certificate.
24The applicant went back to work on August 22, 2014. The applicant has not clearly demonstrated why the insurer had an obligation to request an updated disability certificate when the applicant had returned to work. The duty to do so is not mandatory in the Schedule and in the current situation I do not see where Allstate failed in its responsibilities.
25The applicant cites M.R. v. Aviva Insurance Company of Canada 2016 CanLii 78332 (ON LAT) as an authority that an insurer cannot deny a benefit the person never applied for. This case is distinguishable as it dealt with an application for attendant care benefits, which has its own unique application process. The Adjudicator found that the Insurer gave a blanket denial for all benefits before they were even applied for because the claimant’s injuries were considered minor. I do not find that this case applies to the facts in the present case.
26Allstate relies on Sietzema to support the position that there is no requirement in the Schedule that an insurer further notify an insured that he or she may be able to renew a claim which had been previously denied. The applicant has failed to provide relevant case law to counter this position.
27After reviewing the written submissions of the parties, the documentation and supporting case law it is my finding that the Explanation of Benefits issued on August 24, 2014 was a clear denial of the non-earner benefit. Therefore the applicant is precluded from advancing a claim for non-earner benefits as she missed the two year limitation for doing so.
Is the applicant precluded from advancing a claim for non-earner benefits pursuant to s.12 of the SABS as she is qualified for an income replacement benefit?
28While the application has been dismissed for the above reasons, I will also address the arguments made with respect to the second issue for clarity.
THE LAW AND ANALYSIS:
29Section 12(1)(1) of the Schedule provides as follows:
(1) The insurer shall pay a non-earner benefit to an insured person who sustains an impairment as a result of an accident if the insured person satisfies any of the following conditions:
The insured person suffers a complete inability to carry on a normal life as a result of and within 104 weeks after the accident and does not qualify for an income replacement benefit. [emphasis added]
30Section 5(1)(1) (i) of the Schedule provides as follows:
(1) The insurer shall pay an income replacement benefit to an insured person who sustains an impairment as a result of an accident if the insured person satisfies one or both of the following conditions:
The insured person.
(i) was employed at the time of the accident and, as a result of and within 104 weeks after the accident, suffers a substantial inability to perform the essential tasks of that employment.
31The applicant claims that she should not be precluded from advancing a claim for non-earner benefits because the Explanation of Benefits dated August 22, 2014, provided legally incorrect reasons. I have already addressed this issue in the above analysis with respect to the limitation period. In the applicant’s Reply submissions, she acknowledges she would not be eligible for a non-earner benefit because she qualified for an income replacement benefit and the Schedule does not permit her to receive both benefits. The applicant references Galdamez v. Allstate Insurance Company of Canada, 2012 ONCA 508. 111 O.R. (3d) 21 as an authority but does not comment or analyze how this case is relevant to hers.
32In Galdamez, the court found that the insured did not meet the two-prong test to qualify for an income replacement benefit, and consequently was not precluded from pursuing a claim for a non-earner benefit. A claimant can only qualify for a non-earner benefit if she does not qualify for an income replacement benefit. The applicant did not provide further argument or evidence on this point.
33Allstate provided a more complete analysis of the case law. For example, the applicant in the current case met the two-prong test to qualify for an income replacement benefit. She was employed at the time of the accident and met the test for disability and was paid an income replacement benefit until she returned to work.
34Due to the lack of evidence submitted by the applicant I find she did not prove her case on a balance of probabilities. I find in favour of Allstate on this issue. The applicant qualified for an income replacement benefit. Therefore she is precluded from advancing a claim for non-earner benefits.
Order
35Having heard the submissions of the parties and reviewing the evidence, I find that the applicant is barred from advancing a claim for a non-earner benefit.
Released: March 10, 2017
___________________________
Rebecca Hines
Adjudicator