K.G. v. Certas Direct Insurance Company, 2018 CanLII 39499

Licence Appeal Tribunal

Date: 2018-03-12

Tribunal File Number: 16-003633/AABS

Case Name: 16-003633 v Certas Direct Insurance Company

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

Between:

K. G. Applicant

and

Certas Direct Insurance Company Respondent

DECISION

ADJUDICATOR: Robert Watt

APPEARANCES:

Counsel for the Applicant: Ashu Ismail Counsel for the Respondent: Joe Bowcock

HEARD: December 14, 2017

OVERVIEW

1The applicant, K.G., was injured in an automobile accident on June 1, 2013, and sought benefits pursuant to the Statutory Accident Benefits Schedule - Effective September 1, 2010 (the ''Schedule'').

2The parties participated in settlement discussions at the case conference held on January 18, 2017, but were unable to resolve all of the issues in dispute.

3A further case conference was held on June 29, 2017, to deal with preliminary issues.

4Further preliminary issues were raised at the teleconference hearing held on September 15, 2017.

5An in-person and written hearing on a preliminary issue was ordered to be heard on December 14, 2017.

ISSUES IN DISPUTE

6The parties agreed to address the following preliminary issue:

(i) Is the applicant prevented from bringing her application forward on the basis that the proceeding was not commenced within two years of the refusal to pay, subject to section 56 of the Schedule?

(ii) More specifically, does the July 25, 2013 explanation of benefits letter (EOB) constitute a denial in compliance with the Schedule which would then preclude the applicant from proceeding with her IRB claim?

(iii) Does s. 7 of the Licence Appeal Tribunal Act¹ apply to Statutory Accident Benefit matters?

RESULTS

7The July 25, 2013 EOB does not constitute a denial in compliance with the Schedule.

8The applicant can proceed with her IRB claim.

ANALYSIS

Background

9The applicant was a passenger in a vehicle that was rear ended on June 1, 2013.

10Following the accident, the applicant saw her family doctor, Dr. Macdonald, who referred her to CBI Physiotherapy and Rehabilitation Centre (CBI). On July 2, 2013, the CBI assisted the applicant to complete an application for benefits (OCF 1). That form indicated that the applicant was on Employment Insurance Benefits and had been working as caregiver at the time of the accident. The applicant’s OCF 1 was faxed to the respondent by CBI on July 22, 2013.²

11The respondent apparently replied to the applicant on July 25, 2013, with an EOB letter. The applicant claims to have never received this EOB. The explanation by the respondent indicated that the applicant did not qualify for income replacement benefits “as she was not employed or deemed employed at the time of the accident”.³ There was no further evidence of any letter from the respondent clarifying the contents of the July 25, 2013 letter.

12The applicant’s previous lawyer apparently had possession of the July 25, 2013 EOB. When he obtained the EOB or how he obtained it is unknown, but according to the applicant, it would have been in the latter part of 2014, when the applicant finally retained counsel.

13Sabrina Vurro, a quality assurance advisor with the respondent, gave evidence that she had no recollection of the July 25, 2013 EOB letter being returned to the respondent as undelivered and therefore, she expected the applicant had received it. Her notes of June 13, 2013, indicate that the applicant had not received the AB package at that time and that the applicant was to call her when she received the package to go over it. No other calls between the applicant and Sabrina Vurro were recorded on Sabrina Vurro’s notepad.⁴

14The applicant’s counsel asked for a copy of the AB file. There were no letters or documents contained in the file from the respondent showing an explanation of available benefits or letters indicating that the applicant was ineligible for or denied any benefit by the respondent.⁵

15On November 11, 2015, the applicant provided the respondent with an election of benefits, indicating that she was electing for the first time to receive the income replacement benefit (IRB).

16On October 25, 2016, the applicant filed an application by an injured person for Auto Insurance Dispute Resolution under the Insurance Act⁶ for the IRB.

Insurer’s obligation to provide benefits information

17When an insured person applies for benefits under the Schedule, the insurer is required to provide the applicant with the appropriate forms, a written explanation of the benefits available, information to assist the person applying for benefits and information on the election relating to income replacement, non-earner and care giver benefits, if applicable. The applicant then has 30 days to submit a completed and signed application after receiving the forms.⁷

18I find there is no evidence that the respondent sent out the required information package, as required by the Schedule. I prefer the evidence of the applicant that she did not receive any benefits package or information from the respondent explaining her elections on benefits. Sabrina Vurro’s notes indicate that there was no further conversation between her and the applicant, which was to take place once the applicant received the information package. The applicant’s lawyer also did not receive any correspondence concerning the AB file to show that a package had been sent.

19I find that the respondent breached its obligations and duty of good faith under the Schedule to properly educate the applicant as to benefits that she was entitled to, and what benefits to make elections on.

20What the respondent sent out was an EOB denying an IRB. This response was the wrong response, since it was not the required information package. There was no election by the applicant at this time for any benefit, because the applicant had not received proper notice of the process from the respondent.

21Not only was the applicant not properly advised as to what benefits she could elect,⁸ the basis for the respondent’s denial in the EOB letter, that “she was not employed or deemed employed at the time of the accident”, was also wrong. The original application set out that the applicant was on employment insurance benefits at the time of the accident. Under the Schedule, this would qualify her for IRBs.⁹

22The Schedule requires an application to the Tribunal be made within two years after the insurer’s refusal to pay the amount claimed.¹⁰

23I find that the July 23, 2013 EOB letter does not constitute a proper denial in accordance with the Schedule for the following reasons:

(a) There was no election by the applicant at the time of the EOB letter, for any specific benefit, including an IRB. The applicant had submitted a general application (OCF 1) setting out personal information about herself, her employment, her medical conditions, and family information, etc. There cannot be a denial on a benefit before it is claimed. The applicant made her first claim for an IRB on November 11, 2015, once she was properly advised, that she could make the claim.

(b) The respondent did not comply with the Schedule to properly inform the applicant what benefits she could elect. The July 23, 2013 EOB letter was incorrect on the applicant’s rights to elect an IRB. These factors make the response not clear and unequivocal to an unsophisticated person. The Supreme Court requires all denials to be clear and unequivocal.¹¹ Further, an insurer’s obligation of good faith and fair dealing carries a positive obligation to inform an insured of the nature of the benefits available under a policy.¹²

(c) The use of the wording in the EOB letter stating that the applicant “did not qualify” is not the same wording as refusing to pay a benefit that has been claimed and is therefore insufficient.

24I therefore find that the applicant is not barred from bringing her claim to the Tribunal, as she has not exceeded the two year limitation period set out in the Insurance Act and the Schedule, because there was no clear and unequivocal denial by the respondent which would trigger the limitation period.

25As I have made the finding that the applicant can proceed with her application to the Tribunal, I do not need to consider s. 7 of the Licence Appeal Tribunal Act and its application to Statutory Accident Benefit matters.

ORDER

26I order that this application proceed to another case conference hearing, with the date to be set by the Tribunal.

Footnotes

1. 1S.O. 1999, c. 12, Sched. G.
2. 2Affidavit of the applicant, sworn July 28, 2017, at para 5.
3. 3Ibid., paras 8-9.
4. 4Affidavit of Sabrina Vurro, sworn July 12, 2017, at para 15, tab B.
5. 5Ibid., at para 14.
6. 6RSO 1990, c I.8.
7. 7Schedule, s. 32(1)(5).
8. 8Schedule, s. 32(2).
9. 9Schedule, s. 5(1)(ii).
10. 10Schedule, s. 56.
11. 11Smith v Co-operators General Insurance Co., 2002 SCC 30, [2002] 2 S.C.R. 129, para 14.
12. 12Usanovic v. Penncorp Life Insurance company (La Capital Financial Security Insurance Company), 2017 ONCA 395, para 30.