BH v. Certas Home and Auto Insurance Company, 2018 CanLII 95551

BH v. Certas Home and Auto Insurance Company

Date: 2018-06-27

Tribunal File Number: 17-006692/AABS

Case Name: 17-006692 v Certas Home and Auto Insurance 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:

BH

Applicant

and

Certas Home and Auto Insurance Company

Respondent

DECISION

ADJUDICATOR: Christopher A. Ferguson

APPEARANCES:

Counsel for the Applicant: Gus Triantafillopoulos

Counsel for the Respondent: Michael McChesney

Heard in Writing: April 3, 2018

OVERVIEW

1BH was injured in an automobile accident (“the accident”) on March 19, 2017, and sought benefits from the respondent pursuant to the Statutory Accident Benefits Schedule - Effective September 1, 2010 (“the Schedule”).

2BH submitted an application to the Licence Appeal Tribunal - Automobile Accident Benefits Service (“the Tribunal”) when her claim for benefits was denied by Certas Insurance.

3The parties agree that BH is entitled to be paid income replacement benefits (IRBs). They disputed the weekly amount payable, but that dispute was resolved on February 27, 2018, and in fact Certas is now paying an amount higher than originally claimed by BH.

4Certas refuses to pay the cost of preparing an IRB Report claimed by BH.

DISPUTED BENEFITS

5The issues before me are:

1. Is the applicant entitled to receive a benefit in the amount of $1,695.00, for completion of an IRB report by Jennifer Lynch, dated September 6, 2017, submitted September 12, 2017, and denied by the respondent on September 18, 2017?
2. Is the applicant entitled to interest on any overdue payment of benefits?
3. Is the respondent liable to pay an award under Regulation 664, Automobile Insurance¹ (“Regulation 664”) because it unreasonably withheld or delayed payments to the applicant?

FINDINGS

6BH is not entitled to payment for the IRB report that she claims. Her appeal on this is dismissed. The issue of interest on payment for the IRB report is moot.

7Certas is liable to pay interest to BH on the overdue payments for her IRBs, which arose from miscalculations by both parties.

8Certas is not liable to pay an award.

REASONS

9Section 4(2)1 of the Schedule permits the insured person to designate as his or her gross employment income the amount he or she earned for the 52 weeks before the accident. For BH, the relevant employment period was March 19, 2016 to March 18, 2017, with an important note that this includes only nine days of paid employment in 2017.

10Section 7 of the Schedule prescribes how to calculate the amount of weekly IRB. In effect, an eligible person is paid 70% of his/her gross pre-accident income, minus 70% of any gross employment income earned after the accident.

11Section 7(4) of the Schedule requires the insurer to pay for the preparation of a report for the purposes of calculating the insured person’s pre-accident income. The expense must be reasonable and necessary for the purposes of determining entitlement to an IRB. This is referred to by the parties as an “IRB report”. The amount payable for an IRB report is capped at $2,500.00.

BH’s IRB Report

12BH retained Jennifer Lynch, chartered accountant, after Certas calculated her IRB entitlement to be $107.69 per week in an Explanation of Benefits (OCF-9) dated July 7, 2017.

13Ms. Lynch prepared an IRB report dated September 6, 2017, which calculated BH’s IRB entitlement at $152.04 per week. Her calculation was based on the OCF-2s provided by BH’s employers.²

14Certas then recalculated BH’s IRB at $121.16, based on the gross amount reported in her 2016 income tax return and the amount of the last paycheque from one of her employers in 2017. It notified her of this in an OCF-9 dated October 6, 2017.

15On February 27, 2018, Certas advised BH that it had recalculated her IRB to be $165.50 based on her 2016 Revenue Canada Notice of Reassessment (Income Tax), which BH submitted on February 5, 2018.

Is the claimed IRB Report reasonable and necessary?

16BH argues that the IRB report was made necessary as soon as Certas miscalculated her IRB entitlement. She contends that multiple recalculations prove that the IRB issue was complicated enough to warrant professional assistance.

17Certas asserts that the IRB report was not necessary as the calculation of IRBs in this case is “extremely simple”.

18Certas also argues that its miscalculations of BH’s entitlement arose because BH failed to provide accurate information at the outset and then failed to clarify specific discrepancies in employment earnings information set out on her OCF-2 documentation and income tax returns and Service Canada Record of Employment (dated March 7, 2017) when asked by Certas to do so.³

19Certas also argues that because the IRB report miscalculated BH’s gross employment income, by relying solely on OCF-2 information without reference to tax returns or paystubs, it is not reasonable to pay for it.

20I find that the IRB Report was not reasonable and necessary because:

i. BH’s submissions do not dispute Certas’s account of the discrepancies in the information she provided it, and do not explain her delays in providing it. They deny Certa’s assertion that it adjusted its IRB information whenever it got new information, but my reading of Certa’s EOBs and related correspondence indicates that this is exactly what happened. I find that this gap in her submissions undermines BH’s case that Certas was fumbling her claim, making the retention of an accountant necessary to resolve the IRB calculation issue.

ii. I agree with Certas that the calculation of IRBs in this case, which involves a salaried employee who filed tax returns, is very simple and did not require the services of a chartered accountant. The dispute here arose from BH’s unexplained failure to provide complete and accurate income information, not from any dispute over complex income issues. I reject BH’s contention that she is not responsible for addressing questions raised about inconsistent income amounts in her documentation.

Interest

21Section 51 of the Schedule sets out the criteria for assessing and awarding interest on overdue payments.

22Certas has acknowledged that BH is entitled to IRBs of $165.50 per week. Until February 2018, Certas was paying BH significantly lower weekly rates: $104.69 from July 1 to October 7, 2017, and then $121.16 from October 7, 2017 to February 27, 2018.

23It is clear from the OCF-9s that Certas has paid BH the difference between these amounts retroactively, as it is required to do. These amounts are, or were (if they have in fact already been paid) overdue payments. Interest is applicable.

24Certas argues that because the delay in getting her IRB calculation right was caused by BH, no interest is payable on these amounts. I reject this argument because I can find nothing in the Schedule that places any condition or restriction on the payment of interest on overdue payments. I read s.51 as a “no-fault” provision.

25Certas is liable to pay interest on the amounts that were owed by Certas to BH as the result of miscalculations, at the prescribed rate.

Award

26Section 10 of Regulation 664 permits the Tribunal to award a lump sum of up to 50% of the amount to which the insured person (i.e. the applicant) was entitled at the time of the award together with interest on all amounts then owing (including unpaid interest) if it finds that that an insurer (i.e. the respondent) has “unreasonably” withheld or delayed payments.

27There is no basis for an award in this case:

i. Certas did not withhold or delay payment of BH’s IRBs. It did not insist on getting answers to its requests for information before paying them. It reiterated its openness to recalculating IRBs as soon as better information was provided to it.

ii. I find that the miscalculations by Certas and the resulting under-payment of the IRBs was largely caused by BH’s unexplained failure to provide Certas with accurate information when requested to do so.

iii. I do not find Certas’s initial use of BH’s 2016 tax returns as opposed to OCF-2 information to be unreasonable in this case.

iv. Certas re-calculated an accurate IRB and began paying it as soon as it had accurate, reliable information, demonstrating a reasonable approach to this file.

CONCLUSIONS

28BH’s appeal with respect to the IRB report is dismissed.

29BH’s appeal with respect to interest owing on overdue IRB payments is allowed.

30BH’s award claim is dismissed.

Released: June 27, 2018

___________________________

Christopher A. Ferguson

Adjudicator

Footnotes

1. 1R.R.O. 1990, Reg. 664
2. 2An “OCF 2” is the Employer’s Confirmation Form which includes information on income. BH’s OCF 2s were dated May 4 and May 12, 2017: BH had jobs with two employers during the relevant period.
3. 3The requests were made in Explanations of Benefits (OCF-9s) dated July 1, 2017 and October 6, 2017, and accompanying letters.