J.Q. v. Co-operators General Insurance Company, 2019 CanLII 43893

Citation: J.Q vs. Co-operators General Insurance Company, 2019 ONLAT 18-003910/AABS

Date: April 18, 2019

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:

JQ

Appellant

and

Co-operators General Insurance Company

Respondent

DECISION

ADJUDICATOR: Christopher A. Ferguson

Appearances:

For the Appellant: J.Q., Applicant Nadim Barsoum, Counsel

For the Respondent: Bruce Keay, Counsel

Heard: In Writing Hearing: November 26, 2019

REASONS FOR DECISION

Overview

1The appellant JQ was involved in an automobile accident on November 24, 2015 and sought benefits pursuant to the Statutory Accident Benefits Schedule – Effective September 1, 2010¹ (the ''Schedule''). He applied to the Licence Appeal Tribunal – Automobile Accident Benefits Service (“the Tribunal”) for dispute resolution when the respondent, The Co-operators, denied his claim.

2The Co-operators has raised a preliminary issue that could prevent the Tribunal from hearing JQ’s appeal of its decision to refuse his claim for a non-earner benefit (NEB). It asserts that JQ is statute-barred from appealing its refusal to pay NEBs, because JQ failed to commence his appeal to the Tribunal within two years of the date that his NEB claim was refused, as required by s. 56 of the Schedule.

3In an Order dated August 24, 2018, the Tribunal ordered that if I determine JQ’s claim can proceed, a case conference will be scheduled within 30 days of my decision to determine next steps in determining the NEB claim dispute.

Issues

4The issue to be decided by the Tribunal is:

i. Is JQ statute-barred from proceeding with his appeal of The Cooperators’ refusal to pay NEBs?

RESULT

5JQ is not barred from commencing his appeal before the Tribunal.

6The above-noted Order of August 24, 2018 is to be carried out.

REASONS

7Under 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.”

8If an appeal is determined to have been filed beyond the two-year limitation period prescribed by s. 56, then the Tribunal cannot hear it. The appeal is said to be “statute-barred.”

Background

9JQ sent an Application for Benefits (“OCF-1”) dated February 26, 2016 to The Co-operators, claiming NEBs.

10On March 8, 2016, The Co-operators wrote to JQ, acknowledged receipt of his OCF-1, and told him he was ineligible for an NEB because he had indicated on the form that he was able to return to his normal activities following the accident.²

11On June 14, 2016, The Co-operators wrote to JQ in response to a Disability Certificate (“OCF-3”) submitted by his family physician, Dr. Peter Galley and received on June 7, 2016. In the OCF-3, Dr. Galley checked a box indicating that JQ was able to return to his normal pre-accident activities. The Co-operator’s letter included an Explanation of Benefits (“OCF-9”) denying the NEB and advising JQ of his right to appeal and the process for disputing The Co-operator’s decision.

12On January 18, 2018, The Co-operators wrote to JQ again denying the NEB, enclosing two insurer’s examination reports (IEs) supporting its decision, and a “Your Right to Dispute” form.

13JQ filed his appeal on April 27, 2018.

14The dispute is about how to interpret the law as it applies to the facts and exactly when The Co-operators’ denial of JQ’s NEB claim was sufficient to start the limitation period on JQ’s claim.

15Under s. 38(8) of the Schedule, the insurer must provide the insured person a notice of what goods, services, assessments and examinations set out in the treatment plan it will approve or refuse to pay. The notice must include an explanation of the medical and all other reasons why the insurer considers any proposed goods, services, assessments and examinations—or the cost of them—not to be reasonable or necessary. The notice is commonly referred to as an Explanation of Benefits (EOB).

16For an insurer to be able to rely on the limitation period in s.56, it must provide the applicant a valid 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.³

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

Co-operator’s Position

17The Co-operators submits:

i. It issued a clear and unequivocal denial of JQ’s claim for NEBs on March 8, 2016. It submits that the limitation period was triggered on that date.

ii. JQ took no steps to appeal or dispute its denial until April 27, 2018 when he wrote to The Co-operators and to the Tribunal to commence his appeal.

iii. JQ provides no evidence of a bona fide intention to appeal within the prescribed limitation period. He waited two years and two months (per Co-operators) to commence his appeal.

iv. Co-operators urges me to apply a plain reading of s.56. JQ was late in commencing his appeal, with no excuses.

JQ’s Position

18JQ submits:

i. The Co-operators’ letter of March 8, 2016 cannot be considered a denial, because it was premature. NEBs were not payable for the first 26 weeks after the accident:⁴ JQ asserts that he could not be assessed for NEBs until May 24, 2016. The Co-operator’s letter was sent 15 weeks after the accident; therefore, JQ contends, The Co-operators could not deny the benefit until May 24, 2016 or thereafter.

ii. JQ cites Garmider⁵ a case in which an adjudicator found that a statement by the insurer to the insured person that it would like to review his entitlement to an NEB rendered an earlier, clear and unequivocal refusal invalid. The adjudicator in that case found that this representation “would lead a reasonable person to believe that the insurer was reconsidering its position and no longer relying on its [earlier] refusal. JQ argues that this reasoning applies to these facts, as he describes them:

a. The Co-operators sent a letter dated January 24, 2017 in which it expressed the need to re-address JQ’s eligibility for NEBs and told JQ that he could re-apply for NEBs and would need to submit a completed OCF-3 establishing that he met the eligibility criteria. JQ contends that this invalidates the March 8, 2016, as The Co-operators was reviewing and reconsidering its position on JQ’s NEB claim. States JQ: “Clearly, the [this] letter would induce a reasonable person to believe that it was reconsidering its position and that it was not relying on its letter of March 8, 2016.”

b. The Co-operators sent letters dated April 4 and June 7, 2017 respectively, in which it sought additional information in order to assess JQ’s eligibility for NEBs. JQ argues that this evidence shows that Co-operators had not maintained its original position on the NEB, was reconsidering it, and induced JQ to believe that this was the case.

c. The letter of September 28, 2017 in which The Co-operators advised JQ that it was scheduling IEs and two follow-up letters, warned JQ that failure to attend the scheduled IEs could result in a denial of the NEB. JQ argues that this means that The Co-operators was clearly admitting that there was still no denial of benefits.

iii. JQ argues that the limitation period began on January 18, 2018 when The Co-operators sent him the IE reports and stated its denial of the claimed NEB.

Findings

19I find that:

i. The Co-operators’ letter of March 8, 2016 constituted a clear and unequivocal denial of NEB eligibility. JQ does not, in fact, question whether its contents meet the criteria for a valid denial.

ii. Whether or not the letter of March 8, 2016 was in some sense “premature” is irrelevant. The Court of Appeal has ruled that a premature denial by an insurer may still be considered proper and trigger the two year limitation. This is clear in the its decisions in Sietzema v. Economical⁶ and Bonaccorso v. Optimum Insurance Company Inc.,⁷ where it was found that benefits which the applicant has not yet applied for, or have not yet crystalized, may be denied by the insurer pre-emptively.

20Notwithstanding my findings in paragraph 18, after reviewing the parties’ arguments and evidence, I find that the limitation period for JQ’s appeal was extended to January 18, 2020, because:

i. The Co-operators’ letter and OCF-9 of January 18, 2018 was sufficiently unclear to persuade me that JQ was misled, however inadvertently, into thinking that the two years for appeal cited therein ran from January 18, 2018. This is because the letter does not clearly reiterate or refer to the denial of March 8, 2016 or warn JQ that his appeal period ran from that date. I contrast that with language in the same package of documents that clearly warns the insured that working with the insurer to settle the dispute does not extend the limitation period.

ii. The language in The Cooperator’s letter of September 28, 2017 undermines the contention that The Co-operators’ initial denial was final, and would induce, in my view, a reasonable person to believe that the earlier denial was being reconsidered.

iii. Taken together, the series of letters from The Co-operators to JQ worked to offset the original denial and undermine its purpose, namely to trigger a decision by the applicant whether or not to appeal the insurer’s decision. I find that these letters and the EOB of January 18, 2018 made the original denial unclear and equivocal, and that in fact it was this denial notice that triggered JQ’s limitation period.

EXTENDING THE TIME TO APPLY TO THE TRIBUNAL

21Under s.7 of the Licence Appeal Tribunal Act⁸ (LATA), the Tribunal may extend the time for filing an appeal of a denial of benefits beyond the legislated limitation period if it is satisfied that there are reasonable grounds for doing so.

22JQ did not ask the Tribunal to use this discretionary authority in his submissions, and I did not find it strictly necessary to do so. However, I note that I reviewed the criteria against which s.7 extensions may be granted and found that JQ would meet them.

23There are four factors for determining whether an extension of limitation period should be granted:

1. the existence of a bona fide intention to appeal within the appeal period;

2. the length of the delay and the explanation for it;

3. any prejudice to the responding party (in this case Intact) caused or worsened by the delay;

4. the merits of the appeal.

These four factors act as a guideline – they are not elements that must be met before an extension can be granted, but they act as a guideline to determining the just decision in each case.⁹ However, the general rule is that time for an appeal is not extended unless it can be shown that these factors apply to an extension: the applicant bears the onus of establishing the necessary factual foundation.¹⁰

24My reasons for finding that the criteria for extension are met:

i. I find no basis to believe that JQ lacked a bona fide intention to file his appeal for NEBs within the limitation period. I find this because the evidence is that JQ was clearly asking The Co-operators about his NEBs: his waiting to appeal while cooperating with the ongoing adjustment of his claim, is understandable and not unreasonable.

ii. The delay in this case is relatively short: about seven weeks. I do not consider this egregious, especially given the scheduling of IEs relatively close to the end of the limitation period that The Cooperaters seeks to stand by. I find the delay reasonable given JQ’s confusion around the meaning of The Cooperators’ decision to schedule IEs in relation to its denial of his NEB claim. This delay does nothing to prejudice The Cooperators’ ability to defend JQ’s claim.

iii. The merits of JQ’s case for NEBs are not clear from the submissions. However, changes in his original claims forms were sufficient to lead The Co-operators to schedule IEs to assess his entitlement to NEBs. This is enough for me to conclude that his appeal has sufficient merit to warrant adjudication.

iv. The prejudice to JQ of imposing the statute bar is manifest. The prejudice to The Co-operators of proceeding is proportionally much less financially and is minimal in terms of its ability to defend JQ’s claim. It has IE reports in hand, from examinations conducted very shortly before the March 8, 2018 deadline it seeks to enforce on JQ, evidence that it can rely on in presenting its case at the hearing. The “balance of prejudice” in this case favors allowing the appeal to proceed.

CONCLUSION

25The Cooperators’ request to bar JQ’s appeal from proceeding is denied.

26The Tribunal’s Order dated August 24, 2018, to schedule a case conference within 30 days of my decision, in order to determine next steps in determine the NEB claim in dispute, is to be carried out.

Footnotes

1. 1O.Reg. 34/10
2. 2Section 12 of the Schedule requires an insurer to pay an NEB to an insured person who suffers a complete inability to carry on a normal life as the result of an impairment sustained in the accident. The compensable impairment must arise within 104 weeks after the accident. Section (3)(7)(a) explains that “a person suffers a complete inability to carry on a normal life […] if, as a result of the accident, the person sustains an impairment that continuously prevents the person from engaging in substantially all of the activities in which the person ordinarily engaged before the accident.”
3. 3Smith v. Co-operators, 2002 SCC 30, submitted by The Cooperators.
4. 4A period prescribed by s.12(4)(a) of the Schedule as it was on November 24, 2015 – the date of the accident.
5. 5Mikhail Garmider v. Co-operators General Insurance Company, 2013 FSCO A12-006193
6. 6Sietzema v Economical Mutual Insurance Company, 2014 ONCA 111 (Canlll), 118 OR (3d) 713, cited by The Co-operators.
7. 7Bonaccorso v. Optimum Insurance Company Inc., 2016 ONCA 34, cited by The Co-operators.
8. 8S.O. 1990, c.12
9. 9A.F. and North Blenheim Mutual Insurance Co. & N.L. and North Blenheim Mutual Insurance Co., 2017 CanLII 87446 (ON LAT).
10. 10Ibid.