J.G. v. Co-Operators General Insurance Company, 2019 CanLII 110087

Citation: J.G. vs. Co-Operators General Insurance Company, 2019 ONLAT 18-012430/AABS

Tribunal File Number: 18-012430/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:

J.G.

Applicant

and

Co-Operators General Insurance Company

Respondent

PRELIMINARY ISSUE DECISION

Adjudicator: Jesse A. Boyce

APPEARANCES

Counsel for the Applicant: Anna Szczurko

Counsel for the Respondent: Bruce Keay

Written Hearing on: September 26, 2019

OVERVIEW

1The applicant, J.G., was injured in a motor vehicle accident on June 19, 2016. She sought benefits from the respondent, Co-Operators General Insurance Company, pursuant to the Statutory Accident Benefits Schedule – Effective September 1, 2010¹ (the "Schedule").

2Co-Operators denied J.G.'s claim for a non-earner benefit ("NEB"), claiming it denied entitlement because she was self-employed at the time of the accident and was entitled to income replacement benefits ("IRB") and not entitled to a NEB. J.G. disagreed and applied to the Licence Appeal Tribunal – Automobile Accident Benefits Service (the "Tribunal") for dispute resolution. A case conference was held, but the parties could not resolve the issues in dispute, prompting this written hearing on a limitation period issue.

PRELIMINARY ISSUE

3The following preliminary issue was raised by Co-Operators:

i. Pursuant to section 56 of the of the Schedule, is the applicant barred from disputing a denial of a non-earner benefit in the amount of $185.00 per week for the period July 17, 2016, to date and ongoing, denied by the insurer on May 31, 2017, on the ground that the applicant is statute-barred pursuant to the applicable limitation period?

RESULT

4I find that J.G. is statute-barred from proceeding with her application for a NEB as Co-Operators issued a valid denial that triggered the limitation period and that J.G. did not appeal in time. Further, I decline to extend the limitation period.

BACKGROUND

5Following the accident, on July 23, 2016, J.G. applied for benefits from Co-Operators for certain accident benefits.

6At the time of the accident, J.G. was attempting to start a horse farm on her property. In her OCF-1 dated June 23, 2016, she indicated she was self-employed. In addition, she submitted an OCF-3 dated June 21, 2016, signed by her family physician. The OCF-3 stated that J.G. suffered from a complete inability to carry on a normal life as a result of the accident, which is the test for entitlement to a NEB under the Schedule.

7On September 15, 2016, Co-Operators wrote to J.G., acknowledging receipt of her application. The Explanation of Benefits notified J.G. that she was eligible for an income replacement benefit ("IRB") but entitled to zero dollars. The letter also advised J.G. that she was not eligible for a NEB because she was self-employed. Instructions outlining J.G.'s options to dispute Co-Operators decision were attached.

8On May 23, 2017, J.G. submitted an OCF-10 Election of Benefits form to Co-Operators for a NEB, as she met the test and was not earning income. On May 31, 2017, Co-Operators issued a letter denying J.G. a NEB until it was able to gather more information on her eligibility.

9On February 2, 2018, Co-Operators wrote to J.G. to clarify its position on her eligibility for weekly disability benefits. The letter referred to Co-Operators' September 15, 2016 determination that J.G. was eligible for IRBs and not a NEB due to her self-employment.

10J.G. then submitted her application to the Tribunal on December 11, 2018.

ANALYSIS

The preliminary issue

11The parties' positions are relatively straightforward: Co-Operators argues that it issued a clear, unequivocal denial of NEBs in its explanation of benefits from 2016, triggering the limitation period and that J.G. did not appeal the denial within two-years. Further, it argues that its continued investigation of the claim does not cloud the original denial. Finally, Co-Operators argues that section 7 of the Licence Appeal Tribunal Act² should not be applied to extend the limitation.

12In response, J.G. argues that Co-Operators did not provide a clear, unequivocal denial in 2016, that J.G. never submitted an election form claiming either of IRB or a NEB and that Co-Operator's alleged denial did not trigger the limitation period because of its conduct and lack of clarity since her application was filed. Further, J.G. argues that this is precisely the type of case that section 7 of the LAT Act should address and that the limitation period should be extended if it is determined that the denial was valid.

13For the reasons that follow, I agree with Co-Operators and find that it issued a valid denial of the NEB that triggered the limitation period.

Smith v. Co-operators

14It is first important to determine whether Co-Operators' denial was proper in accordance with the principles outlined in Smith v. Co-Operators General Insurance Company.³ Notices of refusal to pay benefits must contain straightforward and clear language, must be directed towards an unsophisticated person, must outline the dispute resolution process and the relevant time limits that govern the process and must provide valid medical or other reasons for the denial. If an insurer's notice to an insured does not meet these basic requirements within certain timelines prescribed by the Schedule, the denial may be deemed invalid, and the two-year limitation period is not triggered.

15Co-Operators submits it issued a clear and unequivocal denial of the NEB on September 15, 2016 which triggered the limitation period. It points to its letter from that date which conveys the following information: that J.G. was self-employed on the date of loss and was therefore not entitled to a NEB; that she was instead eligible for an IRB but that her entitlement to same was zero; it provided J.G. with notice of her right to dispute the decision; included instructions on how to appeal the denial and the limitation period is highlighted.

16In response, J.G. argues that the "alleged denial" was not clear and unequivocal because she had yet to make an election at the time and the language used by Co-Operators was "not comprehensible by an average person" because it stated that J.G. might be eligible for more than one weekly benefit and based on her self-reporting, she was not eligible for a NEB.

17I disagree with J.G.'s argument. On the evidence, I find Co-Operator's notice letter satisfied the basic requirements of Smith because it stated the reasons for the denial (J.G. reported that she is self-employed despite meeting the NEB test in her OCF-3); it clearly indicates she is not eligible for a NEB on this basis; and it provides, in straightforward language, the dispute process available to J.G. if she disagreed. I find nothing to substantiate J.G.'s argument that the denial was in any way uncertain or ambiguous.

The denial by Co-Operators

18There is a considerable body of case law that deals with claims that are denied pre-emptively by an insurer. I find that a benefit can be denied by an insurer pre-emptively and that the use of the term "not eligible" has been found to be acceptable under the Schedule. While the facts are slightly different from those before the Tribunal, in Bonaccorso v. Optimum Insurance Company Inc.⁴, the Court of Appeal held that an insurer's premature denial of a benefit may still be considered proper and trigger the two-year limitation period even when an applicant had not yet applied for a specific benefit, or where entitlement to a benefit had not crystalized. I find this provides appropriate guidance on the facts before the Tribunal. Despite J.G.'s contention that she was not applying for a NEB at the time due to her belief that she had not made an election, Co-Operators did nothing out of the ordinary when it denied the NEB, as it had an application in hand and information before it that because J.G. was self-employed on the date of loss, that she did not qualify for a NEB even if she elected otherwise.

19Further, I find the facts of this matter are very similar to those in Sietzema v. Economical Mutual Insurance Company,⁵ where the applicant argued that the limitation period had not been triggered by a denial when the insurer advised the applicant they were "not eligible" for a non-earner benefit. The Court of Appeal found the "not eligible" language used by the insurer to be a clear denial, triggering the limitation period. Put another way: the requirement to provide notice of refusal to pay certain benefits is not dependent on specific wording such as "denial" or, as J.G. argues in this case, language indicating that she may be entitled to other weekly benefits. The Tribunal has held that a refusal can take many forms, for example: a "refusal" to pay benefits or a "termination" of benefits or it may take the form of an explanation that reaffirms the language of the Schedule. Other terms that have been deemed acceptable by the Tribunal include "reduction," "stoppage," and "suspension" of benefits. Here, I find the use of "not eligible" by Co-Operators to be in line with jurisprudence and to be a clear indication of a denial and, ultimately, a refusal to pay benefits based on J.G.'s report that she was self-employed at the time of the accident. I follow the direction provided by Sietzema and other jurisprudence and find that the use of the phrase "not eligible" constitutes a denial, triggering the limitation period.

Co-Operators post-denial conduct

20J.G. also argues that the conduct of Co-Operators in the period between its denial and her application to the Tribunal was inconsistent with its position and misleading to her. She argues that because she did not include a completed OCF-10 with her initial OCF-1 and application for benefits, that it was not a complete application, and therefore any denial was improper. J.G. argues she was not properly educated by Co-Operators on her ability to elect between a NEB and IRB, despite her OCF-3 indicating that she qualified for both.

21I disagree. An OCF-10 is not required to complete an application. An application for benefits is complete when an OCF-1 and OCF-3 are submitted and the relevant boxes are checked. As noted, Bonnacorso allows an insurer to decide on a benefit prematurely. On receipt of the OCF-1 and OCF-3, completed by J.G. and her physician, I find Co-Operators was within its rights to decide on eligibility for NEB or IRB based on the information it had available at the time, chiefly, that J.G. was self-employed on the date of loss and had been for some time. On receipt of this determination, J.G. would have been free to dispute but did not.

22Further, while I am alive to J.G.'s contention that the process may have been confusing to her, I note that she did not submit the OCF-10 electing NEB until May 23, 2017, which is 11 months following the completion of her OCF-1 and OCF-3. In this post-denial period, Co-Operators arranged for J.G. to attend an examination under oath, exchanged correspondence on production, discussed her removal from the Minor Injury Guideline and approved her for extended medical benefits and attendant care. In my view, Co-Operators was continuously investigating J.G.'s claim and adjusting her file, as it is required to do. J.G. argues that Co-Operators was obligated to provide her with the OCF-10 when it was notified of her change in employment status but did not do so during this time.

23While I agree that an insurer should provide the election form in certain circumstances, I reiterate that Co-Operators was relying on information provided by J.G. that she was self-employed on the date of loss and since January 2016 and J.G. was not eligible for a NEB as a result. I disagree that it was improper for Co-Operator's to rely on J.G.'s self-reporting in this regard, because the test for entitlement under section 12(1) of the Schedule is clear: a NEB is payable if the insured suffers a complete inability to carry on a normal life as a result of and within 104 weeks of the accident and does not qualify for an IRB. Since J.G. was self-employed and indicated she was self-employed, she qualified for an IRB, which, by the language of the Schedule, meant that she was not eligible for a NEB. Therefore, I find Co-Operators denial of the NEB on September 15, 2016 was valid.

24For these reasons, I find Co-Operator's denial of the NEB was valid. The limitation period for J.G. to appeal began on September 15, 2016. As her application to the Tribunal was not filed until December 11, 2018, I find she is out of time and is statute-barred from proceeding.

Section 7 of the Licence Appeal Tribunal Act

25Section 7 of the LAT Act affords the Tribunal statutory discretion to extend the time for commencing a proceeding in certain circumstances if it is satisfied that there are reasonable grounds for applying for the extension and for granting relief. There are four factors the Tribunal weighs in determining whether the justice of the case requires an 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.⁶ These factors are not strict elements that must each be met in order to grant an extension of time. Rather, they are a guide to assist in determining the justice of the case. Whether to grant an extension of time depends on the specific facts of each case.⁷

26Having determined that Co-Operator's denial was valid, justice still requires that the Tribunal consider whether an extension of the limitation period should be granted. I find J.G. has not provided compelling evidence that the limitation period should be extended under section 7.

27First, although Co-Operators issued a proper denial, I find the fact that J.G. submitted an OCF-10 electing a NEB one year following the completion of her OCF-1 and OCF-3 to be an indication that she believed that applying for a NEB was still an option for her. While I reject her argument that her application was incomplete in the absence of the OCF-10, I do find her conduct to be evidence of an intention to at least apply for a NEB. However, the factor outlined in Manuel states that it must be a bona fide intention to appeal, which J.G. did, but after the deadline. Unfortunately, I find that J.G. has not provided compelling evidence of a bona fide intention to appeal. For instance, on February 2, 2018, Co-Operators wrote to J.G. to clarify its position on her eligibility for weekly disability benefits—indicating that it was reiterating its denial from September 2016—which she allegedly disagreed with. If that was indeed the case, I am left without an explanation as to why J.G. did not then appeal immediately, as it would have been well within the limitation period to do so. Instead, she waited until two months after the limitation period elapsed to appeal to the Tribunal and over nine months after Co-Operators clarified her alleged confusion. In my view, this factor skews in favour of Co-Operators because J.G. not only had the first denial, a denial in May 2017 and a third reminder of the denial in February 2018, seven months prior to the limitation period, and still failed to act.

28Second, I find the length of the delay in appealing the NEB denial—just shy of three months after the expiration of the limitation period—to be within the window of time that has been deemed permissible by the Tribunal. In my view, J.G. has not provided a compelling explanation for the delay, considering her arguments on the way Co-Operators handled her claim and her insistence that she maintained communication throughout the process. Still, while not ideal, I find the delay is not so long that it favours one party over the other.

29Third, the potential for prejudice to an applicant is always present. Here, the prejudice to J.G. is that she will be barred from proceeding with an application for a benefit she may very well need. However, I find there is also prejudice to Co-Operators in this matter, as it issued a valid denial and did nothing wrong procedurally that would invite a second opportunity for J.G. to claim a NEB. An extension of time would undermine the certainty of the limitation period insurers rely on and Co-Operators would be faced with the burden of defending against an additional claim after several years without medical assessments to address it.

30Fourth, I accept that there may be merit to J.G.'s claim for a NEB based on her physician's belief that she suffered a complete inability to carry on a normal life in her OCF-3. However, as noted above, I find the fact that she identified as self-employed on the date of loss and in the months prior—a fact she indicated on her OCF-1 that was submitted to and relied upon by Co-Operators—undermines the merits of her claim for a NEB. Indeed, even if the limitation period were to be extended, she would have difficulty proving her eligibility and entitlement to the NEB based on the language of the test, because a NEB is only payable if the insured suffers a complete inability to carry on a normal life as a result of and within 104 weeks of the accident and does not qualify for an IRB. While J.G.'s impairments may meet the test for a NEB and she has an OCF-3 confirming same, I find that the merit of her claim is limited because of her ineligibility for a NEB based on her self-employment on the date of loss.

31Accordingly, for these reasons, I find on a balance of probabilities, that J.G. has not provided compelling evidence for the Tribunal to exercise its discretion under section 7 of the LAT Act to extend the limitation period.

CONCLUSION

32I find Co-Operators provided J.G. with a valid denial. The denial was clear and unequivocal and provided J.G. with the requisite information to determine whether to dispute the denial while also triggering the limitation period.

33I find J.G. is statute-barred from proceeding with her application for NEB at the Tribunal and decline to extend the limitation period under section 7 of the LAT Act.

Released: October 2, 2019

______________________

Jesse A. Boyce

Adjudicator

Footnotes

1. 1O. Reg. 34/10.
2. 21999 S.O. 1999, Ch. 12, Sch. G, at s. 7 ["LAT Act"].
3. 32002 SCC 30, at para 14.
4. 42016 ONCA 34.
5. 52014 ONCA 111.
6. 6Manuel v. Registrar, Motor Vehicle Dealers Act, 2002, 2012 ONSC 1492.
7. 7A.F. v. North Blenheim Mutual Insurance Company and N.L. v. North Blenheim Mutual Insurance Company, 2017 CanLII 87546, at paras. 28-30.