[The Applicant] v. Western Assurance, 2018 CanLII 76418

Date: 2018-03-19

Tribunal File Number: 17-005066/AABS

Case Name: 17-005066 v Western Assurance

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:

[The Applicant]

Applicant

and

Western Assurance

Respondent

DECISION

ADJUDICATOR: Christopher A. Ferguson

APPEARANCES

For the Applicant: G. Joseph Falconeri, Counsel

For the Respondent: Arthur R. Camporese, Counsel

HEARD in Writing on: March 5, 2017

OVERVIEW

1[The applicant] was involved in an automobile accident on October 17, 2015, and sought benefits pursuant to the Statutory Accident Benefits Schedule – Effective September 1, 2010¹ (the ''Schedule'').

2The applicant applied for benefits from the respondent, and applied to the Licence Appeal Tribunal (the “Tribunal”) when the disputed benefits were denied.

3A hearing is scheduled for June 18-21, 2018 to determine issues in dispute, including whether or not the applicant is catastrophically impaired.

4The respondent has raised two preliminary issues that could prevent the Tribunal from hearing portions of this appeal relating to specific, substantive benefits.

i First, the respondent asserts that the applicant is prevented from appealing its refusal to pay a number of her claims, because she failed to commence her appeal within two years of the date that her claims for benefits was denied as required by s. 56 of the Schedule.

ii Second, the respondent claims that the applicant from appealing two specific claims because she failed to submit those claims to it within the time limits prescribed by the Schedule.

5In her response submission, the applicant conceded that some of the claims she appealed are statute-barred. She withdrew an additional issue. Accordingly, I will determine only those issues that remain in dispute. I will enumerate the conceded and withdrawn issues in an appendix to clarify that they are withdrawn.

PRELIMINARY ISSUES

6The issues before me are:

1. Is the applicant prevented from proceeding with the following claims, because she failed to file her application with the Tribunal within 2 years after the respondent refused to pay the amounts claimed?

a. attendant care benefits (“ACBs”) in the varying amounts per month from December 1, 2011 to date and ongoing recommended by Ms. Spencer in an attendant care needs Form 1 dated October 25, 2016.

b. a medical benefit of $8,112.20 for physiotherapy, recommended by Patty Cianfanga of Foundations for Movement in a treatment plan dated June 22, 2011, denied by the respondent on July 8, 2011.

c. a medical benefit in the amount of $7,273.50 for occupational therapy services recommended by Penny Doncaster, occupational therapist, in a treatment plan dated August 29, 2011, denied by the respondent on August 31, 2011;

d. a medical benefit in the amount of $4,247.20 for massage therapy services recommended by Christine Callaghan of Network Niagara in a treatment plan dated August 24, 2011, denied by the respondent on August 31, 2011;

e. a benefit for cost of examinations (“CoE”) in the amount of $19,700.00 for a mental health catastrophic (“CAT”) assessment, recommended by Dr. Kaplan in a treatment plan dated September 10, 2012, denied by the respondent on October 15, 2012.

2. Is the applicant prevented from proceeding with the following claims, because she failed to file an application with the respondent within the time limit prescribed by the regulation?

a. a medical benefit of $7,550.89 for taxi and Red Cross transportation services submitted by the applicant on December 1, 2016, denied by the respondent on December 19, 2016;

b. a medical benefit of $3,481.30 for taxi and Red Cross transportation services submitted by the applicant on December 1, 2016, denied by the respondent on December 19, 2016.

FINDINGS

7The applicant is not prevented from appealing the denials of benefits set out in issue 1(a)-(d). These disputes may proceed to the hearing.

8The applicant is prevented from appealing the denials of benefits set out in issue 1(e). These disputes may not proceed to the hearing.

9The applicant is prevented from appealing the denials of benefits set out in issue 2. These disputes may not proceed to the hearing.

REASONS

Issue 1 Is the applicant’s appeal beyond the limitation period?

10Under s.56 of the Schedule, an appeal of an insurer’s denial of a benefit must be commenced within two years after the insurer’s refusal to pay the amount claimed. The two years is called the “limitation period”.

11If an appeal is not filed within the two-year limitation period prescribed by s. 56, then the Tribunal cannot hear it. The appeal is said to be “statute barred.”

12There is no disagreement that the applicant’s appeal was filed more than two years after the dates that the respondent notified her of its refusal to pay the disputed benefits.

13The parties agree that my determination of this issue turns on whether or not the respondent gave the applicant a clear and unequivocal notice that it denied her claims and why. I must make this determination of each of the claims enumerated under Issue 1 above.

Clear & Unequivocal Denial

14The Schedule requires insurers to notify claimants of their refusal to pay a claim, and provide the reasons for refusal.

15For an insurer to be able to rely on the limitation period, it must provide the applicant a valid explanation of benefits (“EOB”) that states a clear and unequivocal denial, it must give reasons for the denial, and it must provide a description of the dispute resolution process.²

16“Unequivocal” means “clear, plain; capable of being understood in only one way, or as clearly demonstrated; free from uncertainty, or without doubt ”³ A denial notice must be “in straightforward and clear language, directed towards an unsophisticated person.”⁴

17The onus is on the insurer to establish that the applicant has received the proper notice of denial⁵ and that the denial was clear and unequivocal.⁶

Issue 1(a) Attendant Care Benefits

18There were five EOBs for ACBs included in the submissions. The applicant treats them collectively and so will I overview them all.

19In the EOB dated January 25, 2012 the respondent:

i. Advised the applicant that she had reached the policy limit on benefits set by the Schedule for non-CAT persons for ACBs, and indicated that her claim was “as such, not payable”.

ii. Enclosed an application for determination of CAT impairment with encouragement to complete it.

iii. Included a standard-form disclosure of the applicant’s right of appeal, including the two-year limitation period.

20In the four other EOBs issued from January to April 2012, the respondent:

i. Advised the applicant that she had reached the policy limit or maximum on benefits set by the Schedule for non-CAT persons for ACBs, and indicate that her claim was “as such, not payable.

ii. The January 18, 2012 EOB told her that an amount of $1,136.00 claimed within the limit would be sent to her.

iii. Enclosed an application for determination of CAT impairment with encouragement to complete it.

iv. Included standard-form disclosure of the applicant’s right of appeal, including the two-year limitation period.

21The applicant argues that the respondent did not issue a clear and unequivocal denial because:

i. The EOBs stated simply that benefits were not payable because she had reached the $36,000 limits on ACBs available to non-CAT impaired claimant. They did not state that she was ineligible for the ACBs.

ii. They failed to tell the applicant that her policy limits could be increased if she applied successfully for a determination of CAT impairment. The CAT impairment application enclosed with the January 25 EOB was unexplained: it did not provide any information as to why it would be helpful or that it could result in an increase in the limits for ACBs.

iii. The standard-form notice of appeal rights and deadlines was of no value to the applicant because there was nothing to dispute with respect to policy limits.

22The applicant goes on to contrast the ACB denials with the language used by the respondent to deny the applicant’s housekeeping/home maintenance benefits, which she argues was clear, unequivocal and explicit on the issue of CAT impairment:

“In accordance with Section 23 (housekeeping/home maintenance) of the Statutory Accident Benefits Schedule [sic] you must have sustained a catastrophic impairment in order to be eligible to receive this benefit. Based upon medical documentation received to date, you have not sustained a catastrophic impairment. Therefore, you are not eligible to receive this benefit.”

23The applicant argues that this explanation provides “that there is a path to get the benefits in question” and in conjunction with the ‘right to dispute’ information provided, would give sufficient guidance to the ‘unsophisticated person’ referred to in Smith v. Cooperators to know that they had to take steps to access this benefit.”

24In contrast, the applicant asserts, the language used in the ACB denials does not provide any guidance to the same "unsophisticated person" on the fact that further steps are available. An "unsophisticated person" receiving the EOBs would not have any information upon which to suggest that dispute resolution or litigation would bear any result, because policy limits had been exhausted. The language used was misleading, in that it made it seem there was no way to dispute or access these benefits as the limits had been exhausted.

25The respondent makes the following case that its ACB denials were clear and unequivocal:

i. A “legally wrong” reason for refusing a benefit does not invalidate the denial for the purposes of triggering a limitation period. The purpose of the requirement is to permit the insured to decide whether or not to challenge the cancellation.⁷ [emphasis in the respondent’s submission].

ii. Its EOB of January 25 contained all of the elements required for a denial: it stated that benefits were “not payable”, it gave the reason – policy limits were reached, and it provided right to dispute and notice of limitation information.

iii. The applicant is not absolved of her obligation to appeal the denial within two years because a CAT designation would entitle her to “a higher tier of benefits”.

iv. The Schedule does not require written notice as to why a CAT designation might be helpful or that it could result in an increase in the policy limits for ACBs. The respondent submits that such a requirement goes beyond the purpose of the notice requirements set out by the court in Turner v. State Farm (noted above).

26I find that the respondent’s EOB for ACBs did not constitute a clear and unequivocal denial for the following reasons:

i. I find that the wording of the EOB, which stated a policy limit and stated that the claim was “as such, not payable” did not meet the purpose test set out in Turner v. State Farm (noted above). I agree with the applicant that these EOBs would not trigger the reasonable, unsophisticated reader to consider her rights of appeal, because they provide no plausible grounds for or pathway to such a step.

ii. In considering my decision, I was mindful of principle articulated in Zeppieri v. Royal Insurance that an insurer cannot raise the limitation period as a bar to an appeal of its denial if its own conduct led the insured person to delay his or her appeal beyond the limitation period⁸, a point uncontested by the respondent.

iii. Inclusion of the information and application form for CAT impairment determination in the same package as the January 25, 2012 EOB would in my view create confusion in the mind of any unsophisticated recipient as to whether a limitation was running on her ACB claim(s) or she could refile her ACB claim as part of an application for CAT determination. I find that this meets the test of Zeppieri and bars the respondent from raising the limitation period to prevent an appeal of its decision.

iv. The respondent’s point that a denial need not be “legally correct” or meet a standard of perfection to be valid is fair but inapplicable in this case. I do not read the case law provided to me as providing licence to issue denials that are unclear and confusing to the reader. I find that the purpose test set out in Turner must be met before any allowances are made for imperfections or mistakes in an EOB.

v. The fact that the Schedule does not spell out the exact wording for EOBs or require the details suggested by the applicant has no bearing, in my view, on whether or not the instant EOBs met the test of “clear and unequivocal”.

vi. I am persuaded that the ambiguity I see in the denial notice should be interpreted in favor of the insured, applying the rule that laws purporting to be consumer protection should be interpreted generously in favour of consumers, a widely understood principle in consumer and insurance contract law, confirmed by the Supreme Court in numerous cases, including Smith.⁹

27As the result of my findings, the applicant’s claims for ACBs should proceed to a hearing to determine their merits.

Issue 1(b-d) Medical Benefits

28The EOBs for the disputed medical benefits all based denial on having reached policy limits – maximum payable amounts – for non-CAT impairments. No other reason was given or suggested.

29The arguments of the parties are the same as they have submitted for ACBs above.

30I find for the applicant: these denials were not clear and unequivocal. My reasons are the same as I have set out for the ACBs above.

Issue 1(e) Costs of Examination

31The respondent’s claims representative sent a letter dated October 15, 2012 notifying the applicant that this claim was denied.

32On April 22, 2013, an EOB form was sent to the applicant by the same claims representative, which stated: “As previously advised that $0 remains from your medical […] of $50,000.00 as such no medical/rehabilitation is not [sic] payable. Should you feel that you have sustained a Catastrophic Impairment […] please submit the attached Application for Determination of Catastrophic Impairment (OCF-19).

33The applicant argues that these documents do not constitute a clear and unequivocal denial. She states that:

i. The letter of October 15 does not provide any reason for the denial.

ii. The EOB of April 22 was unclear and did not link the denial information included therein to the disputed benefit.

34I find that the letter of October 15, 2012 sets out a clear and unequivocal denial of the benefit claimed, adequate to meet the tests described above:

i. It provides a valid, clear reason for the denial.

ii. I find it readily understandable from the letter that the respondent refused to pay the benefit based on its review of the medical and other documentation, with reference to specific testing criteria, providing the applicant with a basis for appeal.

iii. It provided contact information and an invitation to the applicant to raise any questions or concerns – which she could have done if she felt that the reasons for denial were unclear.

iv. It included notice of the applicant’s right to dispute resolution and appeal, and a warning respecting the two-year limitation period.

v. Taken together, the above four points would trigger a reasonable, unsophisticated person to consider challenging the insurer’s decision.

35I find the EOB of April 22, 2013 to be irrelevant to determining this issue. It constitutes a reminder that policy limits have been reached and provides the applicant with information she needed to change those limits. The applicant herself indicates that the EOB cannot be linked to the disputed benefit.

36As a result of my reading of the letter dated October 15, 2012, I find that the applicant is statute-barred from proceeding with an appeal on issue 1(e).

Issue 2 Are the applicant’s claims set out in issue 2 above barred from appeal because she submitted her claims to the respondent beyond the time limit for claims?

37Part VIII of the Schedule prescribes the procedures for claiming benefits.

38Section 32 of the Schedule prescribes requirements and timelines for persons claiming accident benefits.

39Section 55(1)1. of the Schedule prohibits an insured person from appealing to the Tribunal if she has not complied with the timelines for making claims set out in s.32.

40Section 34 of the Schedule prescribes that a person’s failure to comply with a time limit set out in Part VIII does not disentitle a person to a benefit if the person has a reasonable explanation.

41The parties agree that the applicant’s claim submissions were filed beyond the time limits prescribed by the Schedule, and the respondent’s EOB, dated December 19, 2016 explains as much.

42The parties agree that my decision on this issue turns on whether or not the applicant offered a reasonable explanation for not complying with the prescribed deadline for filing her claims.

43I find the applicant’s explanation, that she was never advised that she could claim transportation benefits, to be insufficient, because I don’t find it credible:

i. The affidavit from Ms. Storring, a clerk with the applicant’s legal representative’s office, dated Feb 22/18 simply reiterates the affiant’s belief – with no reasons given – that the applicant was unaware that she could claim transportation and I find it to be unpersuasive evidence of the applicant’s knowledge or lack thereof.

ii. The respondent’s evidence includes a letter it sent to the applicant, dated October 21, 2010 in which it set out, among other things, the applicant’s right to claim transportation expenses. The letter told her to get back to the respondent with any claims she had at that time by Nov 21/10 or it would close her file.

44My findings lead me to conclude that the applicant is prevented from proceeding with her appeal with respect to the claims for transportation expenses described in Issue 2 under s.55 of the Schedule. This is because she failed to comply with the prescribed timeline for notifying the respondent of her claim and has no reasonable explanation for doing so.

Procedural Note

45The applicant’s counsel faxed a note dated March 5, 2018 at 2:23 p.m. and addressed to the case conference adjudicator. It said:

“Given the importance of these issues, we request the opportunity to make brief oral submission with respect to preliminary issues.

We are of the view that these could be conducted via telephone conference.”

46The respondent’s counsel promptly sent a note dated March 6, 2018 to the Tribunal opposing the applicant’s “Motion”.

47I denied the applicant’s request because:

i. Applicant’s counsel provided me with a vague and insufficient reason to extend the proceeding in this matter to allow for oral submissions.

ii. My review of the submissions indicates that they are comprehensive and complete, and sufficient for me to make a fair determination of the issues.

iii. I have been given no reason to think that the submissions contain any material errors or omissions of fact, evidence or law that need to be addressed.

iv. The Tribunal’s Order specifying a written hearing for the preliminary issues in this case should not be varied without substantial justification.

v. The applicant’s counsel waited three months after the case conference and resulting Order to act on his belief that oral submissions are advisable in this matter; this undermines his credibility in suggesting that his request is necessary.

CONCLUSIONS

48The applicant is not prevented from appealing the denials of benefits set out in issue 1(a)-(d), because the respondent’s denial of benefits was not clear and unequivocal. These disputes may proceed to the hearing.

49The applicant is prevented from appealing the denial of benefits set out in issue 1(e) because she failed to appeal the respondent’s refusal to pay the benefit within the prescribed two-year limitation period. These disputes may not proceed to the hearing.

50The applicant is prevented from appealing the denials of benefits set out in issue 2 because she missed the deadline for filing her claims with the respondent without a reasonable explanation. These disputes may not proceed to the hearing.

Released: March 19, 2018

___________________________

Christopher A. Ferguson, Adjudicator

Appendix: P.D. v. Aviva [Preliminary Issues]

1In her response submission dated February 22, 2018, the applicant removed a number of issues from contention in this matter.

2The following claims were conceded to be statute-barred by the applicant and will not proceed to the hearing:

a. Housekeeping and Home Maintenance Benefits in the amount of $100.00 per week from February 1, 2011 to date;

b. Visitor transportation expenses dated October 30, 2010 in the amount of $100.00;

c. Visitor transportation expenses dated November 9 and 15, 2010 in the amount of $32.00;

d. Other expenses for long-distance telephone calls in the amount of $89.70.

3The following claim was withdrawn by the applicant and will not proceed to hearing:

1. Attendant care services provided by a registered nurse from November 16, 2012 to September 23, 2016 in the amount of $2,565.00.

Footnotes

1. 1O.Reg. 34/10
2. 2Smith v. Co-operators, 2002 SCC 30, 2002 … CarswellOnt. 914 at para. 14 submitted by the applicant
3. 3Black’s Law Dictionary definition relied on by the Superior Court in Kitchenham v. Axa Insurance Canada, 1998 CarswellOnt 6071, submitted by the applicant
4. 4Smith v. Co-operators
5. 5Zeppieri and Royal Insurance Company of Canada, 1994 CarswellOnt 7389, submitted by the applicant.
6. 6Smith v. Co-operators
7. 7Turner v. State Farm Mutual Automobile Insurance Co., 2005 CanLII 2551 (ON CA), [2005] O.J. No. 351 (C.A.) at para 8.
8. 8Zeppieri and Royal Insurance Company of Canada, 1994 CarswellOnt 7389, submitted by the applicant.
9. 9Smith v. Co-operators, see above at footnote 2.```