Tribunal File Number: 16-001326/AABS
Case Name: 16-001326 v Unifund Assurance Company
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:
T. E.
Applicant
and
Unifund Assurance Company
Respondent
DECISION
ADJUDICATOR: Chris Sewrattan
APPEARANCES:
Counsel for the Applicant: Aliza Karoly
Counsel for the Respondent: Viktoria Anteby
HEARD: Written Hearing: December 16, 2016
Overview
1The applicant was injured in a motor vehicle accident on May 24, 2012. 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).
2Unifund Assurance Company (“Unifund”) terminated the applicant’s IRB on April 22, 2013, taking the position that she does not meet the test for entitlement. The applicant disputes that termination.
3This is a written hearing to determine a preliminary issue relating to the limitation period. There are three potential denials of the income replacement benefit, occurring in January, April, and May 2013, respectively. The applicant applied to the Licence Appeal Tribunal in July 2015, well past the two year limitation period for any of the denials. However, the applicant claims that the denials were not clear and, as a result, are invalid. In the absence of a valid denial, the limitation period has not begun to run.
4If the applicant is successful in this preliminary issue hearing, the matter will proceed to a written hearing in April 2017. If Unifund is successful in this preliminary issue hearing, the applicant will be statute barred from proceeding before the Licence Appeal Tribunal with her application for income replacement benefits.
Preliminary Issue:
5Is the applicant’s claim for an income replacement benefit statue barred due to non-compliance with the applicable limitation period?
6Is Unifund entitled to costs of this proceeding?
Result:
7The applicant is statute barred from bringing a claim before the Licence Appeal Tribunal for an income replacement benefit arising out of her May 24, 2012 motor vehicle accident.
8Unifund is not entitled to costs.
Discussion:
Facts
9A proper understanding of the timeline in this matter is essential to address the limitation issue. In all, the applicant was sent three Explanation of Benefits (OCF-9s) in relation to the relevant IRB claim. The first Explanation of Benefits said she was entitled to the IRB and requested additional medical documentation from the applicant. The second and third Explanations of Benefits said she was not entitled to the IRB. What follows is a detailed timeline of the applicant’s claim, and denial, of an IRB for the May 24 motor vehicle accident.
10The applicant was involved in a motor vehicle accident on May 24, 2012. The applicant was involved in a second accident on July 10, 2012. The second accident is important to the extent that it sheds light on the timeline. The only accident with which the Tribunal is concerned is the May 24 accident – and the claim for an IRB which resulted.
11The applicant applied for benefits for the May 24, 2012 accident on June 4, 2012. To assist in determining whether the applicant is entitled to an IRB, Unifund scheduled an Independent Examination for the applicant with Dr. Lo, a physiatrist. The examination was set for December 11, 2012 and the applicant attended. Two reports were generated. One for the applicant’s entitlement to an IRB for the May 24 accident and one for the applicant’s entitlement to an IRB for the June 4 accident.
i. The First Explanation of Benefits
12On January 15, 2013, Unifund sent a letter and Explanation of Benefits (OCF-9) to the applicant. Both documents were in relation to her entitlement to an IRB for the May 24 accident. The letter explained that Unifund was in receipt of Dr. Lo’s report in relation to the claim for income replacement benefits, which was dated December 11, 2012. Unifund requested additional medical information from the applicant to assist in determining her eligibility for an IRB. In the meantime, the applicant would receive payment for an IRB while Unifund made a more informed decision. The Explanation of Benefits stated:
You are still entitled to receive an income replacement benefit. This decision is based on the physiatry insurer’s examination report completed by Dr. Julian Lo dated December 11, 2012. The report indicates you do not suffer a substantial inability to perform your pre-accident tasks of employment. However the assessor also recommended to review the results of various diagnostic procedures you had done including any MRIs. Please refer to the attached letter dated January 15, 2013.
[Emphasis added].
Page 1 of the Explanation of Benefits described the appeal process:
This form tells which benefits are approved, the amount payable and any benefits that have not been approved or are ending. If an examination was performed, a copy of the report of examination has been enclosed or has been sent to you separately. If you disagree with this determination, you have the right to dispute it according to the procedure described in Part 6 on page 3 of this form.
[Emphasis in original].
Page 3 stated:
If you are unable to resolve your dispute by speaking to your adjuster, you may apply to mediate your dispute through the Financial Services Commission of Ontario (FSCO) within two years of your insurer’s refusal to pay, or reduction of a benefit. To begin the mediation process you must complete an application for mediation.
13The applicant submitted to Unifund most but not all of the requested medical documentation. The documentation was forwarded to Dr. Lo, who generated a revised report on April 1, 2013. Dr. Lo’s April 1 report was substantially similar to his December 11 report. His conclusions remained unchanged. Dr. Lo did note that there is outstanding documentation for his review.
ii. The Second Explanation of Benefits
14The most important date in the timeline is April 22, 2013. On that date Unifund sent the applicant Dr. Lo’s Physiatry Paper Review, dated April 1, and, for the second time, an Explanation of Benefits. The Explanation of Benefits stated:
You are no longer entitled to receive income replacement benefits effective April 29, 2013. This decision is based on the physiatry paper review insurer’s examination report completed by Dr. Julian Lo dated April 1, 2013. This report indicates that after review of the additional clinical notes and records submitted that you still do not suffer a substantial inability to perform your pre-accident tasks of employment.
We are in receipt of additional clinical notes and records from CBI Rehabilitation and Physiotherapy. We have sent these for another addendum Physiatry Paper Review Insurer’s Examination. We will advise you of the results of the insurer’s exam, and if the assessor’s opinion regarding your ability to perform pre-accident tasks of employment changes.
[Emphasis added].
The Explanation of Benefits had the same explanation of how to appeal Unifund’s decision.
15On April 30, 2013 Dr. Lo released two addenda to the Physiatry Paper Review, one for each accident. The addendum for the May 24 accident concluded that the applicant continues to not suffer from a substantial inability to perform pre-accident tasks of employment.
iii. The Third Explanation of Benefits
16On May 16, 2013, Dr. Lo’s April 30 addendum and a third Explanation of Benefits were sent by Unifund to the applicant. The Explanation of Benefits stated:
Income Replacement benefit: Based on the results of the addendum Physiatry Paper Review Insurer’s Examination to the additional clinical notes and records from CBI Rehabilitation & Physiotherapy, you are still not entitled to receive the Income Replacement benefit as of April 29, 2013. This decision is based on the addendum Physiatry Paper Review Insurer’s Examination report completed by Dr. Julian Lo dated April 30, 2013. The report indicates after review of the additional clinical notes and records submitted that you do not suffer a substantial inability to perform your pre-accident tasks of employment.
[Emphasis added].
The Explanation of Benefits had the same explanation of how to appeal Unifund’s decision as in the past.
17An additional (fourth) Explanation of Benefits also provided to the applicant on May 16, 2013. This Explanation concerned the portion of the IRB to which the applicant was entitled, the portion that predated the denial on April 22, 2013. The Explanation of Benefits advised that Unifund “did not issue payment for the period of March 16, 2013 onwards because [it] required confirmation of post-accident income, and this was never provided.”
18On August 14, 2013 the applicant sent Unifund paystubs from April 2013 to July 2013 in respect of the above request.
19On March 30, 2016, the applicant applied to the Financial Services Commission of Ontario for mediation.
20On July 7, 2016 the applicant applied to the Licence Appeal Tribunal for dispute resolution.
21The applicant received an IRB from May 31, 2012 to February 6, 2013.
The law
22Section 56(1) of the Schedule sets out a limitation period of two years after the insurer’s refusal to pay the amount claimed in which an Applicant can commence a claim before the Tribunal. The limitation period begins when the insurer notifies the applicant of its refusal to pay the benefit. However, the refusal must be in writing, clear, and unequivocal. The Supreme Court of Canada provided guidance on the minimum scope of the written refusal in Smith v. Co-operators General Insurance Co., [2002] 2 S.C.R. 129, 2002 SCC 30 at para 14 (cited to SCC):
In my opinion, the insurer is required …. to inform the person of the dispute resolution process … in straightforward and clear language, directed towards an unsophisticated person. At a minimum, this should include a description of the most important points of the process, such as the right to seek mediation, the right to arbitrate or litigate if mediation fails, that mediation must be attempted before resorting to arbitration or litigation and the relevant time limits that govern the entire process. Without this basic information, it cannot be said that a valid refusal has been given.
Application of the law
23Unifund sufficiently notified the applicant of its refusal to pay the requested IRB. The applicant failed to commence her application within two years of this refusal. The applicant’s claim for an IRB is barred by section 56(1) of the Schedule.
24The applicant commenced claims for mediation and dispute resolution on March 30, 2016 and July 7, 2016 to the Financial Services Commission of Ontario and the Licence Appeal Tribunal, respectively. This was a time of some confusion as the Licence Appeal Tribunal assumed jurisdiction over matters previously dealt with by the Financial Services Commission of Ontario. In this case, nothing turns on the delay between March 30 and July 7. Both dates are well outside of two years from the dates on which Unifund sent the applicant the respective Explanation of Benefits (OCF-9). For this reason, I will assume without deciding that the applicant properly filed an application under section 56(1) on March 30, 2016. The important question is whether Unifund provided a clear and unequivocal written denial of his IRB claim in before this date.
25Unifund provided a clear and unequivocal written denial of the applicant’s IRB claim at least by May 16, 2013, the date on which it sent a third Explanation of Benefits and Dr. Lo’s addendum dated April 30, 2013 to the applicant. The Explanation clearly and without equivocation conveys the following:
- the applicant is not entitled to receive the IRB,
- why this is so (the decision is based on Dr. Lo’s addendum dated April 30, 2013), and
- instructions on how to appeal Unifund’s decision.
The only reasonable conclusion from the May 16, 2013 correspondence is that the applicant’s claim for an IRB has been refused.
26The initial denial on January 15, 2013 (the first Explanation of Benefit) may have been equivocal, particularly in light of Unifund’s decision to not deny the claim even though Dr. Lo concluded that the applicant does not meet the test for an IRB. However, that equivocation was cleared up in my view by the second Explanation of Benefit on April 22, 2013. By May 16, 2013, the date of the third Explanation of Benefit, it was clear that Unifund was denying the applicant’s claim due to the most recent conclusion of Dr. Lo.
27The Applicant advanced six arguments in her written submissions.
28First, the applicant submits that Unifund’s Explanation of Benefits failed to include a valid “determination”, as required by s. 37 of the Schedule, because it relied on the decision of Dr. Lo instead of providing its own conclusion. This submission is belied by the January 15, 2013 Explanation of Benefits, which refused to deny the IRB claim despite Dr. Lo’s conclusion that the applicant did not qualify. In any event, the applicant’s submission conflates notice of an insurer’s refusal with the substance of the refusal. What matters is whether Unifund’s written denial of the IRB claim was clear and unequivocal to the applicant. It does not matter that the respondent may have been legally incorrect in its reason for denying the benefit. That is an issue that can be dealt with after an application is made to the Tribunal.
29Second, the applicant submits that Unifund’s three Explanation of Benefits, dated January 15, April 22, and May 16, respectively, conflict with each other. Dr. Lo’s conclusion remained the same throughout this time, yet the January 15 Explanation did not deny the benefit and the two other Explanations did. Again, this conflates notice of insurer’s refusal with the substance of the refusal. Even if Unifund’s reason for denying the benefit was wrong, it was up to the applicant to make a claim within two years to dispute it.
30Third, the applicant submits that Unifund’s Explanation of Benefits dated April 22, 2013 was equivocal. Unifund based its decision on Dr. Lo’s addendum and Dr. Lo’s addendum stated that she needed further information, namely electro diagnostic testing. Dr. Lo was missing that same information during his December 2012 examination, but Unifund continued to pay the IRB in that instance. The applicant submits that it does not make sense for Unifund to change its decision with virtually unchanged information from Dr. Lo. This submission does not detract from the clear and unequivocal denial in the May 16 Explanation of Benefits. Furthermore, Dr. Lo received new information from the applicant between his December 2012 report and April 2013 addendum. Unifund has an ongoing duty to continually adjust the file in light of the medical information at its disposal. It cannot be faulted for making a decision and asking for further documentation to allow for correction in the future.
31Fourth, the applicant submits that the Explanation of Benefits dated April 22 was unclear and equivocal because Unifund indicated that it would be reviewing the clinical notes and records of CBI physiotherapy. This submission fails for the same reasons as the third submission.
32Fifth, the applicant submits that the Explanation of Benefits dated April 22 and May 16 were unclear and equivocal because they referenced addenda from Dr. Lo, and Dr. Lo provided multiple addenda with the same date. The applicant submits that Unifund’s references to Dr. Lo’s assessments were confusing. This likely stems from the fact that there were two accidents under Dr. Lo’s consideration. I have reviewed both Explanation of Benefits and respectfully disagree with the applicant’s submission. The May 16 Explanation of Benefits in particular is clear about which motor vehicle accident it concerns.
33Sixth, the applicant notes that the two Explanation of Benefits dated May 16 were unclear and equivocal because one referenced the denial of the benefit and the other asked for confirmation of post-accident income from March 16, 2013 onwards. The applicant, through counsel, ought to have known that she was entitled to payment for the IRB up to the date on which her claim was denied. The fact that Unifund was asking for income confirmation so that it could pay her part of the IRB is a further indication that the benefit was denied. The issuance of multiple Explanation of Benefits on May 16 ought to have clarified, not confused, the issue of whether the IRB was denied.
Costs
34Unifund requests that the Tribunal order the applicant to pay for its cost in defending against the application for the IRB and this preliminary issue hearing. Under Rule 19.1 of the Licence Appeal Tribunal Rules of Practice and Procedure, an award of costs is an exceptional remedy requiring an evidentiary record. There must be evidence before the Tribunal that the opposing party has acted unreasonably, frivolously, vexatiously, or in bad faith in the Tribunal’s proceeding. I see no such conduct in this case. While the applicant’s claim for an IRB has turned out to be statute barred, the reality of this is not so clear as to make her application unreasonable or frivolous. Furthermore, there is no evidence that she has been vexatious or acted in bad faith in the proceeding. Access to justice is central to the mandate of the Licence Appeal Tribunal. The Ontario Legislature has provided a right of appeal to the Tribunal for applicants who wish to dispute their automobile accident benefits. It will be the rare instance that the Tribunal will order costs against an applicant who chooses to exercise their statutory right of appeal.
Conclusion:
35The applicant has not brought her claim within the limitation period. She is statute barred from bringing a claim before the Licence Appeal Tribunal for an income replacement benefit arising out of her May 24, 2012 motor vehicle accident. Unifund is not entitled to costs.
Released: March 24, 2017
___________________________
Chris Sewrattan,
Adjudicator