Tribunal File Number: 16-002779/AABS
Case Name: 16-002779 v BelairDirect Insurance
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:
B.H.
Applicant
and
BelairDirect Insurance
Respondent
AMENDED DECISION
Adjudicators: Nicole Treksler and Rebecca Hines
Appearances:
Applicant: B.H.
Counsel for the Applicant: Ernest H. Toomath
Counsel for the Respondent: Tracy Brooks and Sloane Bernard
In-person hearing: April 4, 5 & 6, 2017
Overview
1The applicant, B.H., was injured in an automobile accident on May 6, 2016, and sought benefits pursuant to the Statutory Accident Benefits Schedule - Effective September 1, 2010 (the ''Schedule'').
2At the time of the accident, the applicant was the owner, operator and sole proprietor of an assisted living residence, where she also resides. Her clients live in the residence with her and she provides services based on her clients’ needs such as meal preparation, cleaning, laundering, and personal attending.
3After the accident, the applicant was unable to continue to run her business and on May 7, 2016, the applicant hired R.H. to work as a personal support worker (“PSW”) for the clients of her business.
4On June 1, 2016, the applicant then hired R.H. to provide attendant care services to her.
5As a result of the accident, the applicant sought a catastrophic (CAT) designation and payment of income replacement benefits, a medical benefit and attendant care benefits.
6Initially, the respondent denied these benefits and the CAT designation. However, on April 3, 2017, at around 5:00 p.m., the day before the hearing, the respondent accepted the applicant’s catastrophic designation and agreed to pay for income replacement benefits (IRBs), including interest, and a medical benefit, specifically, a mattress.
7The parties, however, were not able to come to a settlement regarding the payment of attendant care benefits because the respondent’s position is that R.H. was not working as a PSW at the time of the accident, as such, the Schedule requires that she prove economic loss. The respondent submits that the applicant has failed to do so.
8The applicant claims that R.H. does not need to establish economic loss because she was working as a PSW prior to the accident.
9She is also seeking an award because the respondent unreasonably withheld or delayed payments of benefits under section 280(10) of the Insurance Act (Ontario Regulation 664, R.R.O. 1990).
10The parties agreed that the monthly amount of the attendant care benefit is
i. $2,342.51 as calculated by Christina Phillips, Occupational Therapist, from June 1, 2016 to February 1, 2017. The parties dispute the amount of the attendant care benefits after February 1, 2017, but agreed to deal with that issue following the conclusion of this hearing.
11The onus is on the applicant to show on a balance of probabilities that she is entitled to the payment of attendant care benefits and the award.
12We find that the applicant has met her onus and is entitled to receive payment of the attendant care benefits for services provided by R.H.
13We also find that the respondent unreasonably withheld payment of IRBs and award 30% of the amount to which the applicant was entitled. However, we do not find that the respondent unreasonably withheld payment of ACBs, a medical benefit and a catastrophic designation.
I. Issues
14The parties settled several of the issues in dispute prior to the hearing. Thus, the parties agree that the following issues remain in dispute at the hearing on April 4, 2017:
a. Were the attendant care benefits incurred? Specifically,
Was R.H. providing attendant care services to the applicant in the course of her employment, occupation or profession in which she would ordinarily have been engaged but for the accident, in accordance with Section 3(7)(e)(iii)(A) of the Schedule, or
Did R.H. sustain an economic loss within the meaning of Section 3(7)(e)(iii)(B) of the Schedule?
b. Is the applicant entitled to an award because the respondent had unreasonably withheld or delayed payments of benefits1 under section 280(10) of the Insurance Act (Ontario Regulation 664, R.R.O. 1990)?
II. Result
15We find that:
a. The attendant care services were incurred for the period of July 2016 to February 2017. Specifically, R.H. was providing attendant care services in the course of her profession in which she would have ordinarily have been engaged but for the accident. As such, we do not address whether she sustained an economic loss.
b. The applicant is not entitled to an award for the delay in payment of attendant care and medical benefits or the finding of a CAT designation. However, the applicant is entitled to an award for IRBs because the respondent unreasonably withheld payment of these benefits. We will award 30% of the amount that the applicant was entitled.
III. Analysis:
a) Were the attendant care benefits incurred?
16Under subsection 3(7)(e) of the Schedule, in order for the applicant to receive payment for attendant care benefits, there must be evidence that the expense was “incurred.”
17An incurred expense requires that the following conditions be met:
i) The applicant received the service to which the expense relates;
ii) The applicant paid the expense or promised to pay the expense or is legally obligated to pay the expense; and
iii) The person who provided the service did so:
A. in the course of her employment, occupation or profession in which he or she would ordinarily have been engaged, but for the accident, or
B. sustained an economic loss as a result of providing the goods or services to the insured person.
18In this matter, there is no dispute that the applicant received the services; the applicant promised R.H. to pay for the services; and R.H. is a PSW.
19The dispute is whether R.H. did so in the “course of her employment, occupation or profession in which he or she would ordinarily have been engaged, but for the accident.”
20The respondent raised a concern that R.H. was the applicant’s mother. We are satisfied that R.H. is not the applicant’s mother. Even if she were, it would not impact our analysis in this decision.
b) Did R.H. work as a PSW but for the accident
21Both parties interpreted the test for whether R.H. was working in the course of her profession “but for the accident” to mean whether R.H. was working “at the time of or prior to the accident.”
22The parties spent a lot of time addressing whether R.H. was providing personal care to the applicant’s former mother-in-law prior to the accident from December 2015 to May 2016. The applicant failed to persuade us that
a. R.H. had been working prior to the accident because there were inconsistencies in both the applicant’s and R.H.’s testimonies.
23Despite these inconsistencies, it has not impacted our factual finding in this matter because we find that both parties interpreted this section incorrectly.
24In our view, section 3(7)(e)(iii) (A) requires that the service provider was working or was looking for work at the time s/he performed the attendant care services. In contrast, the parties’ interpretation requires that the service provider was working or looking for work prior to the date of the accident.
25If we accept the parties’ interpretation of section 3(7)(iii)(A), it would create an absurd result. For example, if an insured person was in an accident on February 1, 2014 and required attendant care services on April 1, 2017, the service provider would have had to have been working in the course of her profession prior to the accident--- February 1, 2014. There would be several scenarios in which a service provider would not have been working as a PSW at the time of the accident. For example, the service provider was in the process of becoming qualified as a PSW or was not even thinking of becoming a PSW prior to February 1, 2014.
26In this hypothetical scenario, the service provider had only become certified as a PSW on April 1, 2016 and from that time worked regularly as a PSW. According to the parties’ interpretation, the service provider would not have been eligible to provide services to the insured person because he or she was not working or looking for work as a PSW at the time of the accident— February 1, 2014.
27We are of the view that the wording “but for the accident” relates not to the date of the accident but rather to the date of the provision of services. In our view, the question posed by the section is not whether, “Was R.H. working as a service provider on the date of the accident?” but rather, “If R.H. was not providing services to the applicant, would she be performing PSW work elsewhere?” This interpretation is consistent with the plain wording of the section and its focus is on the service provider’s profession, employment or occupation.
28As stated above, we are of the view that if we take the parties’ interpretation of “but for the accident,” it leads to illogical results. We believe that the legislature did not intend to exclude individuals who had been working in the course of their employment after the accident, as was the case for R.H., to be excluded from being compensated. As such, it makes more sense that “but for the accident” does not relate to the date of the accident, but rather to the date of the provision of the services.
29The legislature’s intention was to ensure that service providers were working in the course of their profession, occupation and employment when the services were rendered and not necessarily at the time of the accident. The purpose of this section 3(7)(e) was to minimize situations where family members would have benefitted from a windfall for care that they would have provided to family members in any event. The respondent’s interpretation of the legislation as it relates to the facts in this matter would create a loophole for the respondent to avoid paying benefits.
30In Shawnoo v. Certas Direct Insurance2 the court rejected the applicant’s claim for attendant care benefits because the applicant’s mother, a qualified PSW, had not been working as a PSW for at least two years prior to the accident. Further, she was receiving Ontario Works, there was no evidence that she was seeking employment or that she would receive an offer for such employment. In the circumstances of Shawnoo, the court found that she was not providing services in the course of her employment, occupation or profession.
31What distinguishes Shawnoo from this matter is that R.H. did not come out of retirement to provide attendant care services to the applicant. She had been working full-time as a PSW prior to providing such services.
32There was an intervening step prior to R.H. rendering attendant care services to the applicant. R.H. was working as a PSW for three weeks prior to providing services to the applicant.
33Given our finding that R.H. was employed from May 7, 2016 to May 31, 2016, prior to preforming services for the applicant, and our reading of the Schedule, we find that the applicant is entitled to the payment of attendant care benefits from June 1, 2016 to February 1, 2017.
d) Is the applicant entitled to an award because the respondent unreasonably withheld or delayed payments?
34Ontario Regulation 664, R.R.O. 1990 (O. Reg. 664) states that if the Tribunal finds that an insurer had unreasonably withheld or delayed payments, the Tribunal, in addition to awarding the benefits and interest to which an insured person is entitled, may award a lump sum of up to 50 percent of the amount to which the person was entitled at the time of the award with interest.
35The applicant submitted that the respondent unreasonably withheld or delayed payment regarding the CAT designation, income replacement benefits, attendant care benefits and a medical benefit, a mattress. We agree that the income replacement benefit was unreasonably withheld, but not the other benefits, for the reasons that follow.
CAT Designation
36A day before the hearing, the respondent accepted that the applicant was catastrophically impaired. Regarding the CAT designation, we are of the view that a CAT designation is not a monetary award for benefits, but rather eligibility to access benefits up to a maximum of $1,000,000.
37At the time of the hearing, the respondent had paid $18,299.42 in medical and rehabilitation benefits. Therefore, the applicant has not exhausted the $50,000 limit she was entitled to without a CAT designation. As such, the respondent’s alleged delay in determining that the applicant has sustained a catastrophic impairment as a result of the accident has not prejudiced the applicant in terms of receipt of benefits, as she still had over $30,000 in medical/rehabilitation benefits that she could have incurred.
38We find that it is not necessary to determine whether the respondent had unreasonably delayed the applicant’s CAT designation as the designation is not an award for payment of benefits, but rather the ability to access those benefits. Therefore, even if we had found that the respondent had delayed the applicant’s CAT designation, we would not be able to grant an award because the respondent had not unreasonably withheld or delayed payments.
Attendant Care Benefits
39Although we agree that the applicant is entitled to attendant care benefits as described above, nevertheless, we do not find that the respondent “unreasonably withheld or delayed payments” regarding those attendant care benefits, for the reasons that follow.
40On November 14, 2016, the respondent received the applicant’s expenses for attendant care benefits by email. On November 15, 2016, the respondent replied to the applicant requiring clarification about the expenses that had been incurred.
41The applicant submitted that there were errors in the respondent’s November 15, 2016 letter. The first error was that the respondent indicated that “the person providing the goods and services is not in the course of the employment, occupation or profession in which he/she ordinarily engages and has not sustained an economic loss by providing such services”. The applicant correctly points out that under the Schedule, the respondent’s notice should have said “or” rather than “and”.
42In addition to this error, the respondent also required that R.H. provide proof of business registration and liability insurance. The applicant submitted that such a requirement is not in the Schedule.
43We note that these errors may have caused some confusion and some distress for the applicant, but it did not create an unreasonable delay in the payment of benefits.
44Further, it was reasonable for the respondent to question whether R.H. was eligible to provide attendant care services under section 3(7)(e)(iii)(A). For example, there was evidence that R.H. had been retired at the time of the accident and did not provide any evidence that she had sustained an economic loss.
45In a letter dated November 23, 2016, the respondent’s position was that R.H. had been in retirement and there was no proof of economic loss. As such, the benefits were not payable. The respondent promptly made a determination of its position.
46Even though we have decided in the applicant’s favor regarding entitlement to attendant care benefits, we are of the view that the respondent’s position was not unreasonable. As such, we find that the respondent did not unreasonably withhold or delay payment of these benefits.
Medical Benefit-Automatic Adjustable Bed
47On November 3, 2016, the applicant submitted a treatment plan, prepared by Christina Phillips, Occupational Therapist, for an automatic adjustable bed in the amount of $7,230.85. We do not find this benefit was unreasonably withheld or delayed.
48On November 16, 2016, the respondent denied the treatment plan and requested an in-home assessment to determine whether the request for the automatic adjustable bed was reasonable and necessary.
49Terry Landry, Occupational Therapist, preformed that assessment on January 2, 2017. By letter dated February 22, 2017, the respondent advised the applicant that based on Mr. Landry’s assessment the adjustable bed was not reasonable and necessary. Mr. Landry recommended a new mattress instead of the automatic adjustable bed.
50On April 3, 2017, the parties agreed that the respondent would pay for the cost of the mattress.
51We find that the insurer responded in a reasonable time regarding the denial of the claim and arranging an assessment. There is no evidence before us that the respondent had unreasonably withheld or delayed payments. As such, we will not grant an award for this medical benefit.
Income Replacement Benefits
52We find that the respondent unreasonably withheld and delayed full payment of IRBs.
53The applicant operates her own company and the calculation of IRBs is complex. The respondent hired an accounting firm, H&A, to calculate the weekly quantum of the applicant’s benefits.
54In a letter dated December 1, 2016, the respondent agreed to pay the following for IRBs: $0 for IRBs between May 14, 2016 and June 3, 2016;
a. $400 between June 4, 2016 and June 30, 2016; and $151 instead of $185 between July 1, 2016 and September 27, 2016, which the respondent alleged caused an overpayment of $850.00. Further, the respondent reduced payment by $30.20 of the $151.00 until the overpayment of
b. $850.00 had been repaid.
55Prior to the hearing, the respondent indicated it had paid IRBs in the amount of $8,342.80.
56The respondent’s position is that the applicant failed to produce sufficient documentation to calculate benefits. Specifically, the respondent submits that according to section 4(4)(b) of the Schedule, it requires a salary expense to be paid to a replacement worker before a deduction or consideration can be given for the purpose of calculating the amount of IRBs. The applicant submits that she could not afford to pay the replacement worker, R.H., at the time, but had promised to pay.
57Further, the applicant submits that she has provided sufficient documentation for the respondent to calculate benefits and the request for documents has been excessive. In addition, she has sustained significant injuries as a result of the accident which prevented her from doing her bookkeeping and she could not afford to hire an accountant. The applicant asserts that she should be paid the full weekly amount of $400 for IRBs.
58The applicant hired Collins Barrow to calculate her IRBs and it calculated her benefits at $400 weekly and opined that “information requests [from the respondent] appear to be excessive and go well beyond that which is reasonable or necessary for the calculation of the income replacement benefits.” Collins Barrow indicated that H&A requested exhaustive shopping lists of information which was well beyond what was reasonably necessary for its purpose. Collins Barrow opined that H&A’s review of the applicant’s financial information appeared more like an audit rather than a calculation of the amount of her IRBs.
59In determining whether the respondent should pay for an award regarding the payment of IRBs, we need to determine whether the respondent unreasonably withheld or delayed payment of benefits.
60Based on Collin’s Barrow’s analysis, we agree that the respondent’s request for documents was excessive and not reasonably required in order to calculate the weekly amount of IRBs. As such, we find that the respondent unreasonably delayed full payments of benefits from July 1, 2016 to April 3, 2017, approximately 10 months.
61The delay of payment of IRBs has had an emotional and financial impact on the applicant. The applicant testified that she has accrued a debt of over twenty thousand dollars since the accident.
62We note that the respondent did agree to pay the weekly amount of IRBs, including interest on the eve of the hearing, April 3, 2017 as per the applicant’s initial claim.
63We accept Collins Barrow’s analysis that the respondent was not justified in asking for extensive documentary disclosure, which resulted in an unreasonable delay in payment of the full amount of IRBs. For example, the respondent requested a general ledger of the applicant’s business for the period of July 1, 2016 and ongoing. The applicant’s injuries prevented her from providing such information and she could not afford to hire an accountant. The applicant had sufficient information, in absence of this ledger, to calculate the applicant’s weekly entitlement to IRBs.
64The respondent’s behavior had a serious effect on the applicant, causing her to go into debt. We find an award under O. Reg 664. is warranted. We now turn to calculating the amount of the award.
Calculating the amount of the award
65We note that the respondent paid some IRBs and it settled this matter prior to the hearing. We find that these are mitigating factors in favour of the respondent.
66According to Collins Barrow, the amount of income replacement benefits that the respondent owed the applicant at the time of the hearing was $11,730 and default interest at 1% per month compounded monthly to April 30, 2017 is $582. Therefore, the value of past income replacement benefits entitlement to April 30, 2017, including interest, is $12,312.
67According to O. Reg. 664, the adjudicator has discretion to award up to 50% of the disputed amount, including interest, for amounts unreasonably withheld or delayed. Taking into account the mitigating factors, we will award 30% of the above amount. Accordingly, we find that the applicant is entitled to an award of $3,693.60.
IV. Order:
We order the following:
The applicant is entitled to payment of attendant care benefits from July 1, 2016 to February 1, 2017 as we found that R.H. was providing attendant care services to the applicant in the course of her employment, occupation or profession, but for the accident in accordance with the Schedule.
The applicant is entitled to an award under section 10 of O. Reg. 664 in the amount of $3,693.60 because the respondent unreasonably withheld or delayed payments of IRBs.
The applicant is not entitled to an award for ACBs, CAT designation and a medical benefit, specifically a mattress.
Released: August 4, 2017
Nicole Treksler, Adjudicator
Rebecca Hines, Adjudicator
Footnotes
- According to the applicant, the benefits are the IRBs, a medical benefit, specifically a mattress, ACBs and a catastrophic designation. The Tribunal notes that a catastrophic designation is not a monetary award for benefits, but rather eligibility to access benefit up to a maximum of 1 million dollars.
- Shawnoo v. Certas Direct Insurance, 2014 ONSC (para 6, 8-9).```