Licence Appeal Tribunal
Tribunal File Number: 16-000920/AABS
Case Name: 16-000920 v Unica Insurance Inc.
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:
N.T.
Applicant
and
Unica Insurance Inc.
Respondent
DECISION ON A PRELIMINARY ISSUE
Order made by: Anita John, Adjudicator
Applicant: Satwant Merwar, counsel
Respondent: Angela Comella, counsel
Hearing: In writing, October 28, 2016
I. Overview
The applicant was involved in an automobile accident on December 20, 2012, and sought benefits pursuant to the Statutory Accident Benefits Schedule - Effective September 1, 2010 (the “Schedule”).
The applicant initially made a claim for Attendant Care Benefits by submitting a Form 1 in the amount of $1,046.41. This Form 1 is dated May 17, 2013 – almost 5 months after the accident.
The respondent requested an insurer examination assessment of attendant care needs. The insurer examination was scheduled to proceed on August 7, 2013. According to the applicant, the insurer examination did not proceed and was rescheduled twice. The applicant attended the insurer’s examination on October 3, 2013. In his report, dated October 23, 2013, Jeff Ford, occupational therapist, found that the applicant had the functional ability to perform all of her personal care tasks. He assessed the monthly attendant care needs as $0.00 per month.
On October 23, 2013, the applicant was notified by letter setting out that her Attendant Care Benefits had been determined to be zero, and an OCF-9 (Explanation of Benefits form), which included a step-by-step guide to the resolution process that clearly warned of the two year time limit in bold capitalized letters.
The respondent has not paid any monies with respect to attendant care benefits to the applicant.
The applicant filed three separate applications for mediation with the Financial Services Commission in the period of time prior to the expiry of the two year limitation period following the denial of the Attendant Care Benefits. However, not one of the Applications included a dispute with respect to the October 23, 2013 denial of the monthly Attendant Care Benefits.
Almost three years from the time the applicant submitted her initial Form 1, the applicant submitted two subsequent Form 1 assessments, with an amended application, both of which were prepared by Meeta Gugnani, occupational therapist. Both forms are dated March 30, 2016. The first Form 1 assessed the total amount of the attendant care benefit as $7861.36 (for the period from December 20, 2012 to March 31, 2013). The second Form 1 assessed the total amount of the attendant care benefit as $7668.52 (for the period from April 1, 2013 to March 30, 2016).
The applicant submitted an application to the Licence Appeal Tribunal – Automobile Accident Benefits Service (the “Tribunal”) on June 22, 2016.
II. Preliminary Issue
- The preliminary issue question has three parts:
a. Did the applicant make an application for Attendant Care Benefits?
b. Did the respondent make an unequivocal refusal to pay Attendant Care Benefits?
c. Is the applicant precluded from making a claim for Attendant Care Benefits by reason of a lapsed limitation period and change of circumstances?
III. Decision
- For the reasons that follow and after reviewing the evidence and submissions of the parties, I find that the applicant applied for Attendant Care Benefits. The benefit was properly denied on October 23, 2013 and with this denial, I find that the two year limitation period began to run.
The applicant is therefore precluded from proceeding with her application for Attendant Care Benefits, by reason of a lapsed limitation period.
IV. Analysis:
Did the applicant make an application for Attendant Care Benefits?
The applicant initially submitted a Form 1, dated May 17, 2013, in the amount of $1046.41 per month which included an assessment completed by occupational therapist, Aimen Hasham.
The applicant submits that this Form 1 does not constitute a claim for a benefit.
The applicant asserts that in terms of procedures, she did not apply for the Attendant Care Benefits, because she did not send in an OCF-6 (Application for Expenses) which the applicant asserts is proof of incurred expenses. The applicant submits that it is the OCF-6 that should be considered the application for ACB.
Subsection 42(1) (a) of the Schedule states that an application for attendant care benefits must be in the form of and contain the information required to be provided in the version of the document entitled “Assessment of Attendant Care Needs” that is approved by the Superintendent for use in connection with the claim.
Pursuant to s. 42 of the Schedule, once a respondent receives a Form 1, it has an obligation to begin paying the expenses or make a request for an IE assessment under s. 44.
To the case at hand, the respondent responded to the applicant’s Form 1 and requested respondent’s Examination Assessment in a letter dated July 9, 2013. The letter indicated that the respondent refused to pay the amounts set out in the May 17, 2013 Form 1 and requested its own assessment.
The respondent had an insurer’s examination scheduled on October 3, 2013 which determined that the Attendant Care Benefits amount was $0.00.
The applicant in the case of Taylor v. State Farm Mutual Insurance Company,1 made a similar argument to the applicant in this case. In Taylor, the initial Form 1 was submitted on November 8, 2011, the insurer denied entitlement to ACB on May 9, 2012. The insured lated submitted his expenses for the attendant care benefits on May 7, 2013. These expenses were denied on May 9, 2013. The insured argued that the submission of expenses for attendant care benefits on May 9, 2013 is when the limitation clock began to run. In Taylor, the Tribunal rejected the argument that one can re-start a limitation from the date of the submission of expenses separate and apart from the initial application of attendant benefits. Although not binding on me, I find this case persuasive.
I find that the submission of the May 17, 2013 Form 1 from the applicant triggered a positive obligation to pay the benefit or assess entitlement on the part of the respondent. As such, I find it to be an application for attendant care benefits.
Did the respondent make clear and unequivocal statements with respect to the refusal to pay Attendant Care Benefits?
Section 56 of the Schedule (as it then was) states that a mediation proceeding or evaluation under s. 280 or 280.1 of the Act or a court proceeding or arbitration under clause 281(1) (a) or (b) of the Act in respect of a benefit shall be commenced within two years after the respondent’s refusal to pay the amount claimed.
In order for a limitation period to commence, the denial of benefits must be valid. The applicant asserts that the letter dated October 23, 2013 does not constitute a clear and unequivocal denial which triggered the limitation clock to run.
In determining the sufficiency of a denial, guidance must be taken from the Supreme Court of Canada’s decision in Smith v. Cooperators General Insurance Company.2 Writing for the majority, Gonthier J. opined that the insurer is required under s. 71 to inform the person of the dispute resolution process contained in ss. 279 to 283 of the Insurance Act 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 dispute resolution 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.
The respondent’s words in the July 9, 2013 letter state that there was a refusal to pay pending the outcome of an IE assessment: This is to advise you that, in accordance with Section 44(3) of the Schedule, we are refusing to pay the attendant care sum requested on the Form 1 dated May 17, 2013….we require you to be assessed.
The respondent subsequently assessed the applicant on October 3, 2013. After the assessment had been completed and received, the next letter on October 23, 2013, stated as follows:
Based on the above and as per the Form 1 dated October 3, 2013, attendant care is now determined to be zero. No further attendant care is payable effective immediately. A copy of the Insurer’s Examination report has been previously provided and a copy of the report has been forwarded to the health professional who prepared the form.
In addition,enclosed within the October 23, 2013 letter was an OCF-9 Explanation of Benefits form which included a step-by-step guide to the dispute resolution process and clearly warns of the two year limit in bold capitalized letters.
I find that the legal test held in the Supreme Court of Canada decision, Smith v. Cooperators was met by the respondent’s denial. I find these statements are clear and unequivocal statements on the respondent’s position with respect to the payment of the Attendant Care Benefits.
Section 281.1(1) of the Insurance Act (at the time)3 stated that a mediation proceeding or evaluation under s. 280 or 280.1 or a court proceeding or arbitration under section 281 shall be commenced within two years after the insurer’s refusal to pay the benefit claimed.
Section 281.1(2) of the Insurance Act provided for an exception that despite subsection (1), if mediation fails, an arbitration may be commenced "within 90 days after the mediator reports to the parties under subsection 280(8)”.
The applicant filed three separate Applications for Mediation with the Financial Services Commission in the time period, two of which were prior to the two year limitation period for the attendant care benefit claim which expired on October 23, 2015 The dates of the mediator’s reports are January 8, 2014, August 21, 2014 and March 7, 2016.
The mediator’s report, dated January 8, 2014 dealt with income replacement benefits. The mediator’s report, dated August 21, 2014 dealt with medical benefits such as chiropractic services, cost of examinations and interest. The mediator’s report dated March 7, 2016 dealt with cost of orthopaedic assessment, multi-disciplinary treatment and interest. However, not one of these Applications for Mediation raised an issue concerning the October 23, 2013 denial of the monthly attendant care benefits.
The mediator’s reports had mediated the disputed benefits on an individual basis and not a global one. I find that the mediation of certain benefits listed in the three mediator’s reports does not provide an automatic extension for the attendant care benefit. I find that the mediation of other benefits does not bootstrap the attendant care benefit into the extended limitation period pursuant to ss. 281.1(2) of the Insurance Act.4
The applicant relies on the Financial Services Commission of Ontario Appeal decision, Reichert v. Gore Mutual Insurance5 which I find is not applicable to this case. The Reichert decision is distinguishable because the insurer did not cease paying the ACB as a result of an IE Assessment. At no time did the insurer specifically advise Mr. Reichert that his entitlement to ACB was $0.00 per month and that future benefits were payable beyond a certain date. The case turns on a different issue as Mr. Reichert was seeking retroactive benefits on top of what the insurer had already paid to him. On these facts, the insurer’s refusal to pay a higher level of benefits was not sufficient to trigger the limitation.
Is the applicant precluded from making a claim for Attendant Care Benefits by reason of a lapsed limitation period and change of cirumstances?
The applicant submitted two subsequent Form 1s which are dated March 30, 2016.
On September 1, 2015, the applicant submitted a determination of catastrophic impairment. The applicant asserts that the insurer’s examinations for catastrophic assessments were completed on January 25, 2016. It was determined the insured was in fact catastrophically impaired.
In Haldenby v. Dominion of Canada General Insurance Co.,6 the Court of Appeal for Ontario held that there was no provision in the Act or the Schedule which allows a claimant to reapply for further benefits after an insured person’s benefits have been terminated by the respondent. The only remedy for the insured person is to appeal the termination of benefits within the two year period.
Citing Haldenby, the Court of Appeal for Ontario in Blake v. Dominion of Canada General Insurance Co.,7 held that the submission of new applications for benefits by the claimant following a clear refusal by the respondent to pay benefits does not re-start the limitation clock. In Blake, the insured was initially denied caregiver benefits in January 2014. Despite the denial, she continued to submit expenses for caregiving benefits after the two year limitation expired in January 2016. The Court of Appeal for Ontario went on further to state that 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.
In Somerville v. State Farm, the Financial Services Commission of Ontario considered whether a change of circumstance, such as a finding of catastrophic determination, precluded the applicant from making applications to claim benefits beyond the two years of the insurer’s refusal to pay. The insured was injured in a motor vehicle accident on June 8, 2005. He applied for and received statutory accident benefits from State Farm Mutual Automobile Company. State Farm refused to pay Mr. Somerville housekeeping and home maintenance benefits on or around November 23, 2005. The benefits in dispute in the arbitration include attendant care benefits and housekeeping and home maintenance benefits. Around five years after the accident, it was determined that Mr. Somerville sustained a catastrophic impairment as a result of the accident.
The Tribunal in Somerville relied on the Supreme Court of Canada decision Smith v. Co-operators General Insurance Co., where it was it was established that in order to trigger the limitation period, a denial must be clear and unequivocal and must inform the insured person of the dispute resolution process in clear and straightforward languge. The Tribunal, goes on further to state, that the findings in Smith were based in part on interpretation mandated by consumer protection objective of the Schedule. Mr. Somerville argues that the consumer objective of the Schedule is served by finding that State Farm cannot rely on a denial that failed to inform him that his failure to dispute would affect future rights, should deterioration occur and/or the insured become catastrophically impared.
The Tribunal further held that the consumer protection objective dictates that, where ambiguity exists, a broad and liberal interpretation of the Schedule in favour of the insured person is required. The Tribunal found that the consumer protection objective does not create rights not found in the Schedule. The Tribunal found that Mr. Somerville identified no provision in the Schedule potentially imposing the obligation for which he argues. Although not binding on me, I find this case persuasive.
I find that in the case of a change in the applicant’s circumstance, such as a finding of catastrophic impairment, does not vitiate the insurer’s clear and unequivocal denial.
I find that the submissions of new applications for benefits by the applicant following a clear refusal by the respondent to pay benefits do not restart the limitation clock. Instead, when the respondent has denied attendant care benefits, the applicant’s remedy was then to seek recourse within the limitation period and not to submit further application for benefits in 2016.
I find that the applicant’s subsequent applications for Attendant Care Benefits in 2016 did not re-start the limitation clock in the absence of a change in circumstances. The benefit was properly denied on October 23, 2013 and with this denial, I find that the two year limitation period began to run.
V. CONCLUSION
- The applicant is precluded from proceeding with their application to the Licence Appeal Tribunal.
Released: May 5, 2017
___________________________
Anita John, Adjudicator
Insurance Act R.S.O. c. 18 – Historical Version – August 16, 2013-May 31, 2014
Insurance Act, R.S.O. c. 18 – Historical Version – August 16, 2013-May 31, 2014
Footnotes
- Taylor v. State Farm Mutual Automobile Insurance Company, FSCO A14-006660.
- Smith v. Cooperators General Insurance Company, 2002 SCC 30.
- Statutory Accident Benefits Schedule - Effective September 1, 2010 O.Reg. 34/10 – Historical Version - June 1, 2014 – December 16, 2013
- Statutory Accident Benefits Schedule – Effective September 1, 2010 O.Reg. 34/10 – Historical Version June 1, 2014 - December 16, 2013
- 2016 O.F.S.C.D No. 5
- 2001 CanLII 16603 (ON CA), 2001 O.J. No. 3317
- 2015 ONCA 165