B.M. v. Travelers Insurance Company of Canada, 2019 CanLII 101813

Citation: B.M. vs. Travelers Insurance Company of Canada, 2019 ONLAT 18-009669/AABS

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.M.

Applicant

and

Travelers Insurance Company of Canada

Respondent

DECISION ON A PRELIMINARY ISSUE

ADJUDICATOR: Lindsay Lake

Appearances:

For the Applicant: Peter Cozzi, Counsel

For the Respondent: Erin Morgan, Counsel

Heard IN WRITING: May 27, 2019

OVERVIEW

1The applicant, B.M., was injured as a pedestrian in an automobile accident on May 6, 2013 (the “accident”) and sought benefits pursuant to the Statutory Accident Benefits Schedule – Effective September 1, 2010 (the “Schedule”) from Travelers Insurance Company of Canada (“Travelers”), the respondent.

2On October 11, 2018, B.M. submitted an application to the Licence Appeal Tribunal – Automobile Accident Benefits Service (the “Tribunal”) to determine his entitlement to weekly income replacement benefits (“IRBs”) and a treatment plan for chiropractic treatment.

3At the case conference held on February 21, 2019, Travelers raised a preliminary issue regarding B.M.’s claim for IRBs. It submits that pursuant to s. 56 of the Schedule, B.M. is statue barred from proceeding with his claim for IRBs at the Tribunal because he failed to apply within the limitation period of two years after Travelers’ refusal to pay IRBs. As a result, a written preliminary issue hearing was schedule.

PRELIMINARY ISSUE

4The following preliminary issue is to be decided:

(i) Is B.M. statue barred from pursuing his claim for IRBs to the Tribunal due to the limitation period in s. 56 of the Schedule?

RESULT OF PRELIMINARY ISSUE

5I find that B.M. is statute barred from pursing his claim for IRBs as he applied to the Tribunal outside of the two-year limitation period set out in the Schedule. I am also not prepared to extend the limitation period in this matter pursuant to my discretion set out in s. 7 of the Licence Appeal Tribunal Act, 1999 (the “LAT Act”).

FACTS

6Following the accident, B.M. submitted an application for benefits (OCF-1) dated July 3, 2013 to Travelers. The OCF-1 noted that at the time of the accident, B.M. was employed and working and had been so employed since May 14, 2012. The OCF-1 noted that an Employer’s Confirmation Form (OFC-2) was to follow, that B.M.’s injuries prevented him from working since May 6, 2013 and that B.M. had not been able to return to work at any time since the accident.

7On July 5, 2013, Travelers wrote to B.M. acknowledging receipt of the OCF-1. In its correspondence, Travelers noted that it had not received a Disability Certificate (OCF-3) and that an OCF-2 was required to enable it to initiate B.M.’s IRBs.

8On July 19, 2013, Travelers sent a second letter to B.M. that specifically requested an OCF-3, and OCF-2 and also a permission to disclose health information form (OCF-5) to assess B.M.’s eligibility to IRBs. This letter stated, “If you do not comply with this request, your entitlement to this benefit will be suspended effective August 2, 2013, until we receive the requested information.”

9On November 14, 2013, Travelers sent correspondence to B.M., which enclosed a copy of its July 19, 2013 letter, that advised it suspended B.M.’s entitlement to IRBs “as of August 2, 2013 until you comply with our request and the information is received in our office” in accordance with s. 33(6) of the Schedule.

10Travelers sent reply correspondence dated February 5, 2014 to B.M. which again asked for an OCF-3, OCF-2 and OCF-5. This correspondence noted that B.M.’s entitlement to IRBs continued to be suspended and advised that if it did not receive a response from B.M. by March 5, 2015, “we will be closing down the Income Replacement Benefits portion of your claim.”

11On May 22, 2014, an OCF-3 dated May 13, 2014 was submitted to Travelers that was completed by Matt Wright, physiotherapist, with York County Physiotherapy and Sports Injury Clinic. This OCF-3 noted that B.M. was currently working and Mr. Wright answered “no” to whether or not B.M. was substantially unable to perform the essential tasks of his employment at the time of the accident as a result of and within 104 weeks of the accident. Mr. Wright also indicated that B.M. was able to return to work on modified hours and/or duties.

12On May 23, 2014, Travelers sent an Explanation of Benefits (“EOB”) to B.M. which did not select a “check boxes” for either “A. Eligible” or “B. Not Eligible/Stoppage of Benefit,” but stated, “please see page 4 for further information” under “details of how we calculated your income replacement benefit” portion. Under the heading “Income Replacement Benefits” in the “Additional Comments” portion of the EOB, it stated, “your disability certificate indicates that you are not substantially unable to perform the essential tasks of your employment and that you are able to return to work. Therefore, you are not eligible for this benefit.” The EOB contained part 6 entitled, “Applicant’s Rights to Dispute” which outlined B.M.’s right to dispute Traveler’s determination of his IRB entitlement and included notice of the two-year limitation period.

13On August 29, 2014, B.M. applied for mediation with the Financial Services Commission of Ontario (“FSCO”) following Travelers’ denial of two treatment plans for medical benefits. B.M. did not apply to FSCO to dispute his entitlement to IRBs or any other weekly benefits.

14B.M. submitted a second OCF-3 dated January 12, 2015, which was partially completed by Dr. Veronica Kekosz, physician. In the Disability Tests and Information section, Dr. Kekosz noted that his most recent examination of B.M., which was also his first examination, was on August 14, 2014. Dr. Kekosz answered “yes” to whether or not B.M. was substantially unable to perform the essential tasks of his employment at the time of the accident as a result of and within 104 weeks of the accident. Dr. Kekosz also answered “yes” to whether or not B.M. could return to work on modified hours and/or duties and states, “patient returned to work 3 months post accident to regular duties as elevator mechanic repairman – modified duties not available.” Dr. Kekosz noted that the anticipated duration of B.M.’s disability was 9-12 weeks and explained, “patient working with significant back pain found to have L5-5, disc protrusion on CT Scan August [illegible], 2014.”

15On January 28, 2015, Travelers sent an EOB to B.M. which again did not select a “check boxes” for either “A. Eligible” or “B. Not Eligible/Stoppage of Benefit,” and again stated, “please see page 4 for further information” under “details of how we calculated your income replacement benefit” portion. Under the “Additional Comments” section, Travelers acknowledged the receipt of the second OCF-3, referenced its July 19, 2013 and February 24, 2014 correspondence, and noted that B.M. still had not complied with its request for certain information. Travelers included information on the dispute process in place at the time of the correspondence and further stated that B.M.’s entitlement to IRBs “will remain suspended as of August 2, 2013,” that B.M.’s IRB portion of his claim was “closed” in March 5, 2014 and that B.M. is “not eligible for income replacement benefits.”

16B.M. made a further application for arbitration to FSCO on February 6, 2015. This application was for medical benefits and not for IRBs, or any other weekly benefits.

17Through his counsel, B.M. advised Travelers on February 25, 2015 that he returned to work on July 10, 2013 and confirmed that he was not intending on making an IRB claim at this time. B.M.’s counsel stated, “if my client makes an Income Replacement Benefit claim in the future he will again request that his employer complete an OCF-2 and submit to you.”

18B.M. had surgery in May 2015 and has been off work since May 26, 2015. As of the date of his submissions, B.M. was in receipt of long-term disability benefits from his private insurer and submits, “even from 2015 to the present, the Applicant has no entitlement to a payment of income replacement benefits from Travelers because he is being paid those income benefits by his primary disability insurer.”¹

19On October 11, 2018, B.M. applied to the Tribunal for a determination of his entitlement to a treatment plan for chiropractic services and also for a determination of his entitlement to IRBs.

ANALYSIS

20Prior to April 1, 2016, under the FSCO regime, an applicant was required to mediate and either commence an arbitration or action within two years of after an insurer’s refusal to pay the amount claim in respect of a benefit. Under this regime, an applicant had an extra 90 days after the Report of Mediator in which to file for a proceeding at FSCO or to commence a court action. The 90-day grace period was removed by the changes to the Schedule and the Insurance Act² on April 1, 2016, when the Tribunal assumed jurisdiction over automobile accident benefits claims. The limitation period of two years, however, did not change after April 1, 2016.

21Travelers argues that the limitation period of two years for B.M. to dispute his entitlement to IRBs began to run on May 23, 2014 when it issued an EOB which, it argues, was a clear and unequivocal refusal to pay B.M. IRBs. In the alternative, Travelers argues that if I do not agree that B.M.’s limitation period began to run on May 23, 2014, then it began to run following its January 28, 2015 EOB, which was also a clear and unequivocal denial of B.M.’s entitlement to IRBs. Travellers’ position is that B.M. did not dispute his entitlement to IRBs within the two-year limitation period and, therefore, his current application to the Tribunal for IRBs is statute barred pursuant to s. 56 of the Schedule.

22B.M.’s position is that he was off of work following the accident for approximately 10 weeks in 2013, during which time he received full short-term disability income from his private insurer, and that he missed no work in 2014. B.M. agrees with the May 13, 2014 OCF-3 that he was not eligible for IRBs and that there was no income loss to replace at that time. B.M. argues that the May 23, 2014 EOB from Travelers was not a proper denial of IRBs because he had not submitted a claim for IRBs to Travelers and that Travelers should not be permitted to rely upon a blanket denial issued prior to or before a specific request for payment of a benefit has been claimed. B.M. also argues that this EOB was not a clear and unequivocal denial of IRBs.

23B.M.’s position is that he only became eligible for IRBs following the submissions of Dr. Kekosz’ January 12, 2015 OCF-3. B.M. argues that despite the fact that he was working and earning his regular salary, Dr. Kekosz opined that he had a substantial inability to perform the essential tasks of his employment on her OCF-3. B.M. argues that Travelers January 28, 2015 EOB in response to this OCF-3 was not a clear and unequivocal denial of his entitlement to IRBs and, therefore, he is not statute barred from pursuing his claim for IRBs to the Tribunal.

When did B.M. apply for IRBs?

24I find that B.M. submitted an application for IRBs on May 22, 2014 as his OCF-1 and May 22, 2014 OCF-3 together constituted a completed application for IRBs.

25Section 36 of the Schedule, as it read at the relevant time to this application, sets out what an applicant must submit to an insurer to claim IRBs. It states:

36. (1) In this section and section 37, “specified benefit” means an income replacement benefit…

(2) An applicant for a specified benefit shall submit a completed disability certificate with his or her application under section 32.

(3) An applicant who fails to submit a completed disability certificate is not entitled to a specified benefit for any period before the completed disability certificate is submitted [my emphasis added].

26While the term “completed” is not defined in the Schedule, s. 67 is of assistance as it states when a form is “completed:”

67. (1) Any document that is required by section 66³ to be in a form approved by the Superintendent and to which subsection 64(7) applies and any other document specified in a Guideline applicable for the purposes of this section is duly completed and includes all information required by this Regulation to be included in it if,

a) every field not identified on the form as an optional field is completed in accordance with subsection (2); and

b) if any field on the form that is identified as an optional field is completed, it is completed in accordance with subsection (2).

(2) If the form specifies the manner or the format in which a field is to be completed, completion of the field shall be in that manner and in that format.

27I disagree with B.M.’s argument that without an OCF-3 indicating that he had a substantial inability to work, there was no eligibility for IRBs to begin with, and there was no need for such a statement from Travelers to be disputed by B.M. as this position is contrary to previous Tribunal decisions.⁴ Therefore, I find that a completed OCF-3 need not confirm an applicant’s entitlement to IRBs to be “complete” for the purposes of s. 67 of the Schedule. Furthermore, an OCF-2 is not required to complete B.M.’s application for IRBs as an OCF-2 only assists in calculating the quantum of benefits.

28A review of both the OCF-1 and the May 22, 2014 OCF-3 indicate that the forms used were those approved by the Superintendent, all of the required fields on the forms were completed and both forms were signed by B.M. The OCF-3 was signed by Mr. Wright, a health practitioner, as required. Therefore, even though the May 22, 2014 OCF-3 did not confirm B.M.’s entitlement to IRBs, I find that this OCF-3 and B.M.’s OCF-1 together constituted a complete application for the purposes of the Schedule for IRBs.

Did Travelers provide a clear and unequivocal denial to pay IRBs to B.M.?

29After receipt of the May 22, 2014 OCF-3, Travelers issued an EOB dated May 23, 2014. I find that the May 23, 2014 EOB was a clear and unequivocal denial of payment of IRBs to B.M.

30Both parties relied upon the Supreme Court of Canada decision of Smith v. Co-operators General Insurance Co.⁵ which held that in order for a denial to be clear and unequivocal, the denial must be in writing and in straightforward and clear language directed to an unsophisticated person. It must also provide information on the dispute resolution process including the time limits that govern the entire process.

31B.M. first argued that the May 23, 2014 EOB was not a clear an unequivocal denial because Travelers failed to check one of two boxes, indicating “eligible” or “not eligible,” and instead directed B.M. to page 4 of the EOB for further information.

32The requirement to provide notice of refusal to pay benefits is not dependent on including specific wording such as “refusal” or “denial.” A refusal can take various forms. It may be a “refusal” to pay benefits or a “termination” of benefits. It may also be in the form of an explanation that reaffirm the Schedule. It may also refer to a “reduction,” a “stoppage,” or a “suspension” of benefits.⁶ Furthermore, the substance of a denial is important and the failure to check off boxes has been held not to affect the clarity of a denial.⁷

33I agree with B.M. that Travelers did not select one of two check boxes on page 1 of the May 23, 2014 EOB; however, this failure to mark a check box does not deter from the overall substance of the clarity of the denial. I am satisfied that Travelers provided a clear and unequivocal denial of payment of IRBs to B.M. via this EOB. Page 4 of the EOB clearly states, “you are not eligible for this benefit” under the heading “Income Replacement Benefits.” This wording has been held by the Tribunal in other matters to be clear and unequivocal⁸ and I agree. Furthermore, the EOB included information on disputing Traveler’s determination of B.M.’s claim for benefits as well as a warning of the two-year limitation period. I also do not agree with B.M.’s interpretation of the Ontario Court of Appeal Decision in Machaj v. RBC General Insurance Co.⁹ because the wording of the denial at issue in that decision was not “that an insured is not eligible for a certain benefit,” as submitted by B.M. In fact, the wording at issue in that decision was, “and therefore you do not qualify for the increased benefits.”¹⁰ Machaj is also distinguishable as it was addressing an application for catastrophic determination which is not before the Tribunal in this matter.

34I also give no weight to B.M.’s argument that Travelers’ May 23, 2014 EOB was not a valid denial because he was not entitlement to IRBs. As I discussed above, B.M. applied for IRBs and, while I am making no determination on the substantive issues in dispute in this matter, it is possible that B.M. was entitled to IRBs as he was off of work in 2013 for 10 days. B.M. is confusing his potential entitlement to IRBs with the potential quantum of IRBs that he may entitled to as his income was fully paid through his private insurer.

Did B.M. apply to the Tribunal outside of the two-year limitation period?

35As I have found that B.M. submitted a complete application for IRBs to Travelers on May 22, 2014 and that Travelers’ EOB dated May 23, 2014 was a clear and unequivocal denial of payment of IRBs to B.M., I find that B.M.’s limitation period to apply to dispute Travelers’ decision expired on May 22, 2016.

36B.M. submitted no evidence that he applied to FSCO or to the Tribunal to dispute Travelers’ denial of IRBs prior to the current application. As there is no dispute that B.M.’s application was filed with the Tribunal on October 11, 2018, I find that B.M. filed his application outside of the two-year limitation period set out in s. 56 of the Schedule.

What is the effect of B.M.’s January 12, 2015 OCF-3 and Travelers’ January 28, 2015 EOB?

37B.M. argues that there are two denial notices at issue in this matter with the second being the EOB from Travelers dated January 28, 2015. This EOB followed B.M.’s submissions of a second OCF-3 dated January 12, 2015.

38I find that B.M.’s January 12, 2015 OCF-3 was not complete pursuant to the requirements set out in the Schedule and, therefore, the January 28, 2015 EOB is moot. However, even if I am wrong in this finding, B.M.’s OCF-3 did not trigger a new limitation period and the expiry of the two-year limitation period on May 22, 2016 still stands.

39B.M.’s January 12, 2015 OCF-3 was partially completed by Dr. Kekosz and confirmed that B.M. was substantially unable to perform the essential tasks of his employment at the time of the accident as a result of and within 104 weeks of the accident.

40I find that the January 12, 2015 OCF-3 was not “complete” for the purposes of the Schedule because the majority of the information in Part 1 “Applicant Information,” is left blank as is Part 2 and Part 3. Further, B.M. did not sign the OCF-3 in Part 4. There is no indication that the information contained in these parts, although most of which is redundant, was optional. Therefore, Parts 1, 2, 3 and 4 of the January 12, 2015 OCF-3 were required to be completed, most important of which was the signature of B.M.

41As I have determined that the January 12, 2015 OCF-3 was not complete, I also find that it was not properly submitted to Travelers for consideration as fresh medical evidence and, as a result, Travelers EOB dated January 28, 2015 is moot. Even if I am wrong in this finding, the Court of Appeal is clear in Wadhwani v. State Farm Mutual Automobile Insurance Company¹¹ that B.M. cannot reapply for IRBs following a denial to start a fresh limitation period.¹²

Section 7 of the LAT Act

42As I have found that B.M. has applied to dispute Travelers’ denial of payment of IRBs to him outside the 2-year limitation period, I must consider whether or not I should extend the limitation period pursuant to s. 7 of the LAT Act. For the reasons that follow, I find that this is not a matter in which I am prepared to extend the two-year limitation period and, therefore, B.M. is statute barred from pursuing his application for IRBs to the Tribunal.

43Section 7 of LAT Act gives the Tribunal power to extend the time, despite any limitation of time fixed by or under any Act, if the Tribunal is satisfied that there are reasonable grounds for applying for the extension and for granting relief. Neither party, however, referred to this provision in their submissions. Nevertheless, I am obliged to consider s. 7 of the LAT Act pursuant to the reconsideration decision of A.F. v. North Blenheim Mutual Insurance Company, N.L. v. North Blenheim Mutual Insurance Company.¹³

44In determining whether to grant an extension of time under s. 7 of the LAT Act, the Tribunal generally weighs the following four factors in order to determine whether the justice of the case requires that the extension be granted:

(i) the existence of a bona fide intention to appeal within the appeal period;

(ii) the length of the delay;

(iii) prejudice to the other party; and,

(iv) the merits of the appeal.¹⁴

45I find that this is not a case in which I am prepared to exercise my discretion to extend the limitation period for B.M. to dispute Travelers’ denial of IRB. As the limitation period began to run on May 23, 2014, I cannot conclude that B.M. had a bona fide intention to appeal within the appeal period. In fact, the evidence submitted indicates otherwise, as B.M. commenced two proceedings at FSCO to dispute denied medical benefits within the two-year limitation period of the denial of his IRBs. Further, there is no satisfactory explanation for his delay in applying to the Tribunal and the resulting prejudice to Travelers is significant, as B.M. did not apply to the Tribunal until over 2 years and 4 months after the expiry of the limitation period. Therefore, I find that B.M. is statute barred from proceeding with his claim for IRBs as I am not prepared to use my discretion and extend the limitation period in this matter.

CONCLUSION

46Based on my reasons set out above, I find that:

(i) B.M. applied for IRBs on May 22, 2014 following the submissions of the OCF-3 to Travelers;

(ii) Travelers provided a clear and unequivocal denial of IRBs to B.M. via its EOB dated May 23, 2014 which triggered the two-year limitation period for B.M. to dispute Travelers’ denial;

(iii) B.M.’s January 12, 2015 OCF-3 was not complete and, therefore, not properly submitted to Travelers. As a result, Travelers’ subsequent EOB dated January 28, 2015 is moot;

(iv) B.M.’s limitation period to dispute Travelers’ denial of IRBs expired on May 22, 2016 and, therefore, B.M.’s application to the Tribunal was filed outside of the limitation period on October 11, 2018; and

(v) B.M. is statute barred from pursuing his claim for IRBs to the Tribunal as I am not prepared to extend the limitation period pursuant to my discretion set out in s. 7 of the LAT Act.

OTHER PROCEDURAL ISSUES

47Pursuant to the next steps following the decision on the preliminary hearing set out in the Tribunal’s February 21, 2019 Order, I order that within 30 days of the release of this preliminary hearing decision, the parties shall contact the Tribunal to arrange for a resumption of the case conference to schedule a hearing in this matter to determine the remaining issues in dispute.

Released: August 12, 2019

___________________________

Lindsay Lake

Adjudicator

Footnotes

1. 1Preliminary Issue Brief of the Claimant, para. 21.
2. 2R.S.O. 1990, c. I.8.
3. 3This includes a disability certificate under ss. 21, 36 or 37.
4. 4See 17-000388 v The Co-operators, 2017 CanLII 148390 (ON LAT) at para. 32. A reconsideration of this decision was denied in D.W. v. The Co-operators, 2018 CanLII 8092 (ON LAT). Although the Executive Chair found that the Tribunal erred at first instance, these errors did not involve the preliminary issue and were ultimately found to be inconsequential.
5. 52002 SCC 30 at para. 14.
6. 6G.R. and Aviva Insurance Company, 2017 CanLII 77379 (ON LAT) at paras. 27 and 28.
7. 716-003034 v Economical Mutual Insurance Company, 2017 CanLII 59507 (ON LAT) at para. 30.
8. 817-006863 v Aviva General Insurance Company, 2018 CanLII 132574 (ON LAT).
9. 92016 ONCA 257, [2016] O.J. No. 1815 (COA) (“Machaj”).
10. 10Ibid. at para. 4.
11. 112013 ONCA 662.
12. 12Ibid. at paras. 14-15.
13. 132017 CanLII 87546 (ON LAT).
14. 14Ibid. at para. 28. A second reconsideration was held in this matter which confirmed the four factors to consider in determining whether the justice of the case requires that an extension be granted. See 16-002336 v. North Blenheim Mutual Insurance Company, 2019 CanLII 58193 (ON LAT) at para. 13.