J.V. vs. Unifund Assurance Company, 2019 ONLAT 18-009402/AABS
Tribunal File Number: 18-009402/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.V.
Applicant
and
Unifund Assurance Company
Respondent
PRELIMINARY ISSUE DECISION
PANEL:
Jesse A. Boyce, Adjudicator
APPEARANCES:
For the Applicant:
Sophia L. Dales, Counsel
For the Respondent:
Pamela Brownleee, Counsel
Ken Yip, Counsel
HEARD:
In Writing on: December 4, 2019
OVERVIEW
1On January 1, 2012, J.V. got on an uninsured snowmobile driven by her former husband. The couple had both been drinking alcohol at a New Year’s party in Val-Des-Monts, Quebec. Shortly after midnight, the snowmobile was in a single-vehicle accident and J.V. was ejected. There were no witnesses, no police reports, no photographs of the damage and J.V.’s recollection of the accident is limited. Over time and as a result of the accident, J.V. alleges she has suffered a traumatic brain injury with ongoing post-concussion symptoms, severe psychological impairments including suicidal ideation and attempts, and functional impairments rendering her dependent on others for assistance with daily living.
2J.V. did not submit her application for accident benefits to the respondent, Unifund, until September 18, 2017, which is 5 years and 8 months post-accident. Unifund initially denied the claim because no policy was in place on the date of loss, as the snowmobile was owned by someone else and neither J.V. nor her ex-husband were insured with the respondent. Unifund ultimately denied J.V.’s claim in October 2018 based on the timing of J.V.’s application and its view that she does not have a reasonable explanation for the delay.
3There is no dispute between the parties that J.V. submitted her OCF-1 well outside of the prescribed seven-and 30-day timelines in s. 32 of the Schedule. Instead, the preliminary issue before the Tribunal is whether she has a reasonable explanation for that delay that would permit her to proceed with her application for benefits.
ISSUES TO BE DECIDED
4The issues to be decided, as per the Case Conference Order of March 12, 2019:
(i) Is the applicant disentitled to accident benefits because she does not have a reasonable explanation for failing to apply for benefits within the time limit imposed by section 32(1) of the Schedule?
(ii) Is the applicant barred by section 55(1)1. from commencing her application to the Tribunal because she has not notified the respondent of the circumstances giving rise to a claim for a benefit or she has not submitted an application for the benefit within the times prescribed in the Schedule?
RESULT
5I find J.V. has not provided a reasonable explanation for the significant delay in notifying Unifund of the accident and submitting her application for accident benefits and is therefore statute-barred from proceeding with her claim before the Tribunal.
ANALYSIS
Sections 32, 34 and Horvath
6Section 32(1) of the Schedule requires an insured person to inform an insurer of an accident within seven days, at which point the insurer will provide the insured with the application forms for accident benefits. Section 32(5) then requires an insured person to complete and deliver these forms back to the insurer within 30 days. As noted, the parties agree that neither of these timelines were met by J.V. Accordingly, J.V. raises the exception in s. 34, which allows an insured person to proceed with a late application for benefits if the person has a “reasonable explanation” for the delay.
7While not binding on this Tribunal, the parties agree that the Financial Services Commission of Ontario case Horvath and Allstate Insurance Company of Canada, (FSCO A02-000482) is instructive in this matter, as it identified the following principles concerning the interpretation of a “reasonable explanation”:
i. An explanation must be determined to be credible or worthy of belief before its reasonableness can be assessed.
ii. The onus is on the insured person to establish a “reasonable explanation.”
iii. Ignorance of the law alone is not a “reasonable explanation.”
iv. The test for a “reasonable explanation” is both a subjective and objective test that should take account of both personal characteristics and a “reasonable person” standard.
v. The lack of prejudice to the insurer does not make an explanation automatically reasonable.
vi. An assessment of reasonableness includes a balancing of prejudice to the insurer, hardship to the claimant and whether it is equitable to relieve against the consequences of the failure to comply with the time limit.
The positions of the parties
8J.V. provided several purported reasonable explanations: first, J.V. submits that she did not report the accident because she was trying to protect her ex-husband who had been drinking at the time of the accident; second, she submits that her ex-husband was abusive towards her; third, that she and her ex-husband had an alcohol dependency; fourth, financial stress; fifth, she believed that her symptoms would improve with time and more treatment and that it was not until June 21, 2016 that she realized her symptoms may be permanent; sixth, she had little to no support of her own and only retained counsel through Reach Canada; and lastly, that she had no knowledge of the availability of benefits coverage for such an unusual accident.
9In sum, J.V. argues that based on the consistent medical evidence supporting that she was in an abusive marriage and was protecting her ex-husband—and herself—from perceived repercussions if she reported the accident, the nature of the accident (drinking while driving a snowmobile which caused J.V. to suffer a brain injury), and J.V.’s vulnerability as a woman suffering from a significant loss of function, suicidal ideation and, at times, alcohol dependence—combined with the unusual accident circumstances involving an uninsured snowmobile in Quebec—her reasons for the delay are credible and reasonable in all the circumstances.
10In response, Unifund submits that J.V.’s explanations are not reasonable and do not even meet the threshold test of being worthy of belief on the following grounds: J.V. was employed as a sales associate and trainer at Bel Air Direct Insurance for its home and auto insurance products at the time of the accident and was promoted shortly after the accident; that her excuse that she was trying to protect her ex-husband cannot be supported because she attended the hospital the next day and subsequently reported the accident to her employer, family doctor and treating physicians; that there is no evidence her ex-husband threatened, impeded or otherwise prevented her from informing Unifund and, in any event, she applied and appealed for short term disability and applied for long-term disability benefits on her own; that she separated from her ex-husband in February 2015 and did not apply to Unifund until two and half years later; and, that it is unclear how her alcohol dependency and financial stress affected her ability to apply for accident benefits. Further, Unifund argues that evolving conditions and permanency of symptoms are precisely why s. 32 exists and that she was told in June 2016 that her symptoms may be permanent, and she still did not act. Finally, Unifund submits that there is nothing unusual about the accident and that J.V.’s alleged ignorance of the law is not reasonable for an insurance underwriter.
11Respectfully, I agree with Unifund.
12The Tribunal recognizes that J.V. has been through many trying moments in the years since the alleged snowmobile accident and that her impairments are considerable. However, while I find J.V.’s explanations for delay to be credible—in the sense that I believe these stressors occurred—I find it difficult on the evidence to reconcile the truly significant delay and find that none of the reasons provided by J.V.—while true—lasted continuously throughout her nearly six-year period of inaction. I find, with certain exceptions, that the fault in these delays can be placed largely at her feet. On this basis, I agree with Unifund that there were many periods of time in the five years and eight months between the accident and her application where J.V. was not affected by, or was very much able to work around, the myriad issues that purportedly prevented her from notifying Unifund of the accident or applying for accident benefits.
J.V.’s ex-husband, 2015 separation and employment
13J.V. focuses the majority of her submissions on her relationship with her ex-husband, who was driving the snowmobile while intoxicated when the accident occurred. J.V. submits that she did not report the accident—to police or to Unifund—or attend immediately at a hospital because she was trying to protect her ex-husband from perceived criminal liability and that her former in-laws perpetuated this fear. J.V. states that her ex-husband was verbally and emotionally abusive towards her, and this fear further fueled her inaction. While I have no reason to doubt J.V.’s contention about her relationship, I find she did attend the hospital the next day and subsequently reported the accident to all of her employer (on her return to work), her family doctor (in September 2012) and in the months and years that followed, her treating physicians. The Tribunal has great empathy for anyone who is in a position where they feel that they cannot speak out and finds that this aspect of delay is not J.V.’s fault.
14Indeed, I find it is difficult—if not impossible—for the Tribunal to discern or, in this case, bifurcate, between the potential periods when the abuse—or even J.V.’s fear of abuse or repercussion—occurred. I disagree with Unifund that there is no evidence before the Tribunal to substantiate J.V.’s claim that her ex-husband threatened, impeded or otherwise prevented her from informing Unifund about the accident while they were together. While an affidavit or viva voce evidence is preferred, if it is established that J.V.’s ex-husband had been abusive, she alone would have known whether her safety was at risk simply based on her past experience. After years of abuse an actual threat would not have been needed and J.V. would have been able to gauge her safety based on much more subtle cues and past ways that may have been used to control her. In my view, it would be unfair to require tangible evidence of this and J.V. gained nothing from sharing these facts. Accordingly, while this period of delay certainly occurred, I find any inaction on J.V.’s part to be entirely reasonable.
Post-separation
15Moving forward in time, it is uncontested that J.V. separated from her ex-husband in February 2015. With this fact in mind, I still accept that, post-separation, it is likely that there was still the fear of potential abuse. On the facts, by this time, J.V. had undergone successful treatment for alcohol abuse and was no longer struggling. I find she was also receiving treatment and had various professional supports during this period. Against these facts, and accounting for the fear of abuse and her impairments, I find she still did not notify Unifund until two and a half years after her separation. In my view, even though I consider the post-accident delay up to the date of her separation and slightly beyond to be reasonable, I find the two and half years of inaction that followed constitutes an extreme and unreasonable period of delay. Problematically, J.V. does not offer much of an explanation for why this post-separation period of inaction was reasonable, other than her arguments that she had little to no support of her own and that she had no knowledge of benefits coverage for the accident.
16Horvath provides that ignorance of the law alone is not a reasonable excuse. While I would be prepared to accept this alleged lack of knowledge of coverage as one factor amongst many in an objective person scenario, I find that it is somewhat undermined by the fact that J.V. was employed by an auto insurance company as a trainer/underwriter at the date of loss and for several months thereafter. I reject J.V.’s argument that a reasonable person—let alone a person like J.V. who worked in auto insurance and therefore held specialized knowledge of the processes involved—would interpret the “unusual accident circumstances involving an uninsured snowmobile in Quebec” as a novel scenario that did not entitle her to benefits coverage and was not worthy of reporting or pursuit for nearly six years.
17Additionally, I find Unifund’s argument that J.V. was still able to pursue and appeal short and long-term disability benefits from Manulife during and after this period—and that she began a new relationship with stronger support in May 2016—to be a compelling rebuttal that she was not unable to or somehow prevented from even notifying Unifund about the accident. While I accept J.V.’s submission that the process of seeking disability benefits would not implicate her ex-husband like reporting the accident may have, I still find it difficult to justify her excuse for inaction in the two and half years after February 2015, and especially so given her former occupation.
Alcohol dependency and financial stress
18J.V. also cites her and her ex-husband’s alcohol dependency and financial stresses in the years following the accident. Specifically, while J.V. and her ex-husband always drank, they were both abusing alcohol, with Dr. Eaton, psychiatrist, noting J.V. was using alcohol to cope with her impairments. J.V. was also dependent on her ex-husband financially and emotionally post-accident due to the severity of her impairments. Her ex-husband was managing their finances and was allegedly frustrated she was not earning income, which allegedly led to financial stress, more drinking and further abuse. I accept the potential fear of abuse and J.V. being cut off financially. However, with respect, I agree with Unifund that it remains unclear why J.V. and her ex-husband’s alcohol dependency, which she was treated for in 2014, prevented J.V. from notifying Unifund about the accident until September 2017. In a similar vein, it is unclear why the couple’s financial stresses when they were together prevented J.V. from notifying Unifund about the accident after they separated, especially since doing so may have helped to alleviate her financial stress post-separation.
Onset of impairments
19J.V. believed that her symptoms would improve with time and more treatment and she submits that it was not until June 21, 2016, when Dr. Quon from the Ottawa Hospital Post-Concussion Clinic told her that her symptoms may be permanent, that she realized that extent of her impairments and that she may not improve or work again. Again, I agree with Unifund that J.V.’s argument is precisely why the s. 32 framework exists: because evolving conditions and the need for contemporaneous assessments are the reason why insureds should notify their insurers of an accident and any intention to apply for benefits as soon as practicable. On the evidence, I do not find that an application after five years and eight months is “as soon as practicable.”
20Indeed, the majority of claimants applying for accident benefits believe that their condition will improve, however, as was noted in Syed and Allstate (FSCO A02-000461), “the hope that purportedly serious injuries would subside on their own, might in some circumstances very well be reasonable explanations for failing to seek treatment, but it does not follow that these are reasonable explanations for failing to notify an insurer of injuries arising from a motor vehicle accident.” I find this rationale to be very applicable in this matter, as J.V. continuously failed to notify Unifund of both the accident and her impairments over five years and eight months, even as her impairments got worse and her condition deteriorated. Even though I accept most of J.V.’s explanations for delay, I cannot look beyond the fact that upon receiving the news from Dr. Quon that her injuries may be permanent, J.V. still waited another 15 months before notifying Unifund about the accident. In my view, this constitutes yet another period of time of unreasonable inaction.
Balancing of prejudice to the insurer, hardship to the claimant and whether it is equitable to relieve against the consequences of the failure to comply with the time limit
21J.V.’s explanations are worthy of belief. However, even though I find these explanations overcome the threshold of credibility, I still do not find that these explanations provide adequate coverage, cumulatively, to fill in the myriad gaps and periods of time outlined above where J.V. could have notified Unifund about the accident. While I accept that life events and impairments may derail or temporarily take people off of a certain path, for the reasons outlined here, I do not accept J.V.’s argument that her specific life events and impairments continuously and reasonably prevented her from reaching out to Unifund every single day over the course of five years and eight months.
22The hardship to J.V. here is obvious, as she has undergone extensive treatment and is barred from proceeding with her application for benefits that she may very well need. However, while it is well-settled that the Schedule is consumer-protection legislation, I find it would not be equitable to relieve against the consequences of J.V.’s continued failure to comply with the time limits because there were numerous periods of unreasonable inaction where J.V. could have simply notified Unifund about the accident and avoided the overall delay of five years and eight months entirely, which, in my view, is quite extreme and unreasonable on the majority of the facts. I find this length of delay, contrary to J.V.’s submission, is prejudicial to Unifund and would severely undermine any certainty that time limits are intended to provide.
Section 32 Notice
23As a secondary argument, J.V. contends that her explanation for delay should automatically be deemed reasonable due to Unifund’s failure to comply with O. Reg. 283/95 Disputes Between Insurers because it “deflected” her claim for a period of eight months after J.V. provided Unifund with her OCF-1 in September 2017.
24Unifund’s response to J.V.’s application was that it was “unable to extend coverage” because the “date of loss was prior to the effective date of the policy”. J.V. wrote to Unifund explaining its obligations under O. Reg. 283/95 and after she did not receive a response, she contacted the Unifund Ombudsman. Shortly after, Unifund assigned an adjuster to the file, hired counsel and scheduled an Examination Under Oath to “review the circumstances surrounding the accident, investigate priority and to assist in determining [J.V.’s] entitlement/eligibility to various accident benefits.” On October 16, 2018, following the Examination Under Oath, Unifund denied J.V.’s application on the basis that she did not have a reasonable explanation for the delay.
25J.V. alleges that Unifund did not initially deny her application on the basis of timing, but rather because there was no policy in place and it never requested further information or a reasonable explanation from her. J.V. also submits that Unifund never provided her with the appropriate forms and information to assist her in applying for accident benefits. J.V. argues that Unifund did not comply with s. 2(1) of O. Reg. 283/95, which states that the first insurer to receive a completed application is responsible for paying benefits to an insured pending resolution of any priority dispute. She alleges that Unifund attempted to “prevent or stop” her application.
26In response, Unifund argues that it was not the insurer of record for the snowmobile at the time of the accident and that J.V. was a stranger to it at the time. It concedes it is now the insurer of record based on J.V.’s application and that it accepts priority. Unifund argues that it took no action to suggest to J.V. that it would not rely on the time limit and that, aside of s. 32, it remains J.V.’s onus to prove that her explanation for delay was reasonable and not Unifund’s obligation to request an explanation.
27I agree with Unifund. On receipt of J.V.’s application, this was the first indication Unifund received of the snowmobile accident that occurred in January 2012 for which it was not even the insurer of record at the time. On review of J.V.’s application, there is no explanation for the five year and eight-month delay between the accident and her submission of the OCF-1. On this basis, I find it was reasonable for Unifund to initially deny the claim based on the date of loss being prior to the effective date of the policy, in the absence of more information. While the time that elapsed between J.V.’s application and Unifund’s ultimate denial on the basis of delay was not ideal, I find it was mitigated by the overall delay in J.V. bringing her application, the fact that J.V.’s claim came without notice of the accident and Unifund’s eventual acceptance of priority after gathering details of the accident.
28Further, I agree with Unifund that there are no specific consequences outlined in the Schedule for its failure to strictly comply with s. 32 vis-à-vis O. Reg. 283/95 given J.V.’s lack of notice of the accident or reasonable explanation for delay in submitting her application. Indeed, I agree with Unifund that this matter constitutes a s. 32(1) delay, as it was J.V.’s onus to provide notice of the accident first and a reasonable explanation for the five year and eight-month delay in applying before any of the procedural requirements in s. 32 are triggered. I find this is especially so considering that, on intake, there was no policy on the date of loss and the “notice” was an OCF-1. Finally, I agree with Unifund that the Tribunal case 17-004690 v. Unifund Assurance Company, 2018 CanLII 81916 on which J.V. relies, is distinguishable, as that case did not consider either of “reasonable explanations” for delay or O. Reg. 283/95.
Section 55
29For completion, s. 55 of the Schedule states that an insured person shall not apply to the Tribunal under subsection 280(2) of the Insurance Act if the insured person has not notified the insurer of the circumstances giving rise to a claim for a benefit or has not submitted an application for the benefit within the times prescribed in s. 32. For the reasons above, I find that J.V. did not notify Unifund of the accident or apply for benefits within the times prescribed by the Schedule and has not provided a reasonable excuse for the significant delay of nearly six years. Accordingly, I find that she is statute-barred from proceeding with her application before the Tribunal.
CONCLUSION
30I find J.V. is statute-barred from proceeding with her application at the Tribunal pursuant to s. 55 of the Schedule because she did not comply with the time limits to notify Unifund of the accident or apply for accident benefits prescribed in s. 32 and, further, she has not provided a reasonable excuse for the delay under s. 34.
Released: December 9, 2019
________________________
Jesse A. Boyce
Adjudicator