AA v. Unifund Assurance Company, 2019 CanLII 51323

Citation: AA vs. Unifund Assurance Company, 2019 ONLAT 18-008999/AABS

Date: May 7, 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:

AA

Applicant

and

Unifund Assurance Company

Respondent

DECISION

ADJUDICATOR: Christopher A. Ferguson

Counsel For The Applicant: Frank E. McNally

Counsel For The Respondent: Arthur R. Camporese

HEARD in Writing: May 13, 2019

REASONS FOR DECISION

Overview

1The applicant, AA, was involved in an automobile accident on November 1, 2012 and sought benefits pursuant to the Statutory Accident Benefits Schedule – Effective September 1, 2010¹ (the ''Schedule''). She applied for dispute resolution services to the Licence Appeal Tribunal – Automobile Accident Benefits Service ("the Tribunal") when the respondent, Unifund, denied her claims.

2Unifund has raised a preliminary issue that could prevent the Tribunal from hearing AA's appeal of its decision to deny her claim for attendant care benefits (ACBs). It asserts that the applicant is statute-barred from appealing its refusal to pay ACBs because AA failed to commence her appeal within two years of the date that her ACB claim was denied, as required by s. 56 of the Schedule.

3A hearing of AA's ACB claim, and other disputed claims for medical benefits, has been scheduled for July 15-17, 2019 inclusive, in Ottawa, Ontario.

Issues

4The issue to be decided by the Tribunal is:

i. Is AA barred from proceeding with her claim for ACBs because she failed to commence her application within two years after Unifund's refusal to pay the amount claimed?

RESULT

5AA's IRB appeal may proceed. It is not statute-barred.

REASONS

6Under 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 year anniversary is called the "limitation period."

7If an appeal is not filed within the two-year limitation period prescribed by s. 56, then the Tribunal cannot hear it: the appeal is effectively dismissed without a hearing. The appeal is said to be "statute-barred."

8It is uncontested by the parties that the limitation period for an appeal does not begin to run until and unless a proper notice of denial is issued by the insurer.

9Under 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).

10For an insurer to be able to rely on the limitation period in s. 56, it must provide the applicant a valid EOB that provides a clear and unequivocal denial, gives reasons for the denial, and outlines the dispute resolution process.²

11"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."³

Chronology of Events

12The evolution of this ACB appeal is undisputed. The dispute is about how to interpret the law as it applies to the facts.

13AA sent an Application for Benefits ("OCF-1") dated November 1, 2012 to Unifund. ACBs were not claimed in the OCF-1.

14On November 30, 2012, Unifund wrote to AA, acknowledged receipt of her OCF-1, and told her she was not entitled to ACBs because her injuries were, in Unifund's view, "minor" and thus covered by the Minor Injury Guideline (MIG).⁴ Unifund included information on how to dispute its decision and warned AA of the two-year limitation period in her appeal. I will refer to this as "the 2012 denial".

15On January 31, 2014, AA filed an Application for Mediation with the Financial Service Commission of Ontario (FSCO), seeking entitlement to two medical benefits, the cost of an examination, and a determination that her injuries fell outside of the MIG. She did not assert her entitlement to an ACB at that time.

16Unifund sent AA a letter dated March 13, 2014, confirming that AA had been removed from the MIG and that, as a result, she "was now eligible to receive" ACBs.I will refer to this as "the 2014 letter".

17On May 15, 2014, the FSCO Mediator confirmed that the issues in dispute listed in AA's Application for Mediation had been resolved. AA was removed from the MIG at this time.

18On April 24, 2018, AA submitted an Assessment of Attendant Care Needs ("Form 1"), dated March 22, 2018, to Unifund, recommending $1,088.31 in monthly ACBs for AA.

19Unifund denied AA's claim of entitlement to this benefit on July 4, 2018, following its completion of a section 44 insurer's examination (IE), which it relied on to conclude that AA did not require attendant care services. I will refer to this as "the 2018 denial".

20AA commenced her appeal to the Tribunal on October 10, 2018, asserting her entitlement to an ACB from March 22, 2018 to date and ongoing.

Unifund's Position

21Unifund submits:

i. It issued a clear and unequivocal denial of AA's claim for ACBs in the 2012 denial. It submits that the limitation period began on that date and ended on November 1, 2014.

ii. "Even if its denial was not legally correct […] it still triggers the two-year time clock."

iii. A benefit can be denied by the insurer pre-emptively. An insurer's premature denial of a benefit may still be considered proper and trigger the two-year limitation period, even where it was found that the applicant had not yet applied for said benefit, or where entitlement to same had not yet crystalized.⁵

iv. The Court of Appeal, in Sietzema⁶, held that an insurer's denial of a benefit, even if it is legally incorrect, will trigger the two-year time limitation. "If the applicant believes that the denial was improper, they had a right to dispute whether it was proper or not within two years."

v. In Haldenby,⁷ the Court of Appeal held that there was no provision in the Insurance Act⁸ or the Schedule which allows a claimant to reapply for a benefit after [her] benefits have been terminated by the Respondent. The only remedy for the insured person is to appeal the termination of benefits within two years.

vi. "A change in circumstance of the Applicant, does not vitiate the insurer's clear and unequivocal denial."⁹ Unifund characterizes AA's removal from the MIG, and the eventual decision to deem her catastrophically impaired as changes in her circumstance.

vii. During the running of the two-year limitation period, AA disputed other determinations made by Unifund, including whether or not she should be confined to the Minor Injury Guideline (a finding initially made in the 2012 denial). There is no reason why she could not have also disputed her entitlement to an ACB during this same period of time.

viii. "It has been over five years since the date of the subject denial. There is no reasonable explanation to justify [AA's] delay in commencing the within dispute."

ix. Unifund in effect urges me to apply a plain reading of s. 56. AA was late in commencing her appeal, with no excuses.

AA's Position

22AA submits:

i. Unifund's 2012 denial was not a clear and unequivocal denial of ACBs. It indicated that AA was ineligible for ACBs because Unifund believed her to be in the MIG. In AA's view, this was not a denial because "it does not make it clear that a final decision had been reached about her entitlement."

ii. AA asserts that, even if the 2012 denial was valid, Unifund's "letter dated March 13, 2014 rescinded it by confirming that [AA] had been removed from the MIG" and that as a result she "was now eligible to receive" ACBs. As a result of this rescission, AA contends that she is NOT [emphasis AA's] statute-barred from proceeding with her appeal to the Tribunal for ACBs. Furthermore, this communication led AA to reasonably believe that her ACB claim was still under consideration.

iii. AA contends that Unifund recognized this rescission when, in response to a Form 1 for ACBs dated April 24, 2018, it scheduled insurer's examinations (IEs) to determine AA's entitlement. This led AA to reasonably believe that her ACB claim was still under consideration.

iv. The true date of denial, according to AA is July 4, 2018, the date of the 2018 denial, when Unifund issued a clear denial of AA's ACB claim.

v. AA submits that the Tribunal is estopped from asserting a statute-bar against AA because its 2014 letter induced her to delay her appeal to the Tribunal.

Findings

Is the Respondent estopped from denying that the incident was an accident?

23I noted in the paragraph above that AA asserts that Unifund is "estopped" (i.e. blocked, barred or precluded) from relying on its 2012 denial in light of the March 13, 2014 letter and its subsequent conduct. AA relied on the 2014 letter in deciding to apply for ACBs rather than appeal to the Tribunal.

24I find that the Tribunal cannot impose estoppel on Unifund, because estoppel is an equitable remedy that the Tribunal simply has no authority to grant.¹⁰

Is AA's appeal statute-barred?

25After reviewing the parties' submissions, I find that AA's appeal was not filed beyond the limitation period. This is because:

i. I find that Unifund's 2012 denial did not constitute a clear and unequivocal denial of AA's entitlement to ACBs. I find that Unifund's decision to tell AA that she was ineligible for ACBs due to its initial position that she was in the MIG made this denial equivocal in the sense that a reasonable person could interpret it to mean that if the MIG status changed, the ACB eligibility would also change (as indeed it did) and, with it, AA's right to claim ACBs and have her entitlement determined with her right of appeal intact.

ii. Unifund's argument that its 2012 denial is proven to be clear by AA's decision to submit it to FSCO for dispute resolution is weak: the 2012 did trigger AA to act on the MIG issue, but it was, in my view, insufficient to trigger an appeal of ACBs because ACBs were not sought at that time and ACBs weren't specifically denied. Unifund fails to explain how AA was supposed to appeal for a benefit before she had actually applied for it.

iii. I find that Unifund's 2014 letter operated to reset the limitation period because, as I read it, AA's eligibility for ACB's was clearly reinstated by virtue of her removal from the MIG. The letter tells AA that Unifund had not yet received a Form 1 from her, which in my view further reinforces a reasonable belief that the issue was still open. Lastly, the 2014 letter makes no reference at all to earlier correspondence on the ACB issue: again, this says to me that no final denial of AA's entitlement to ACBs had been reached at that time.

iv. I find that Unifund's scheduling of IEs and its eventual 2018 denial provided the clear and unequivocal – and final -- denial that started the limitation period. The 2018 denial contained no reference to any earlier denial of ACB eligibility or entitlement. In my view, if Unifund believed that AA was barred from appealing its decision on ACBs when it drafted this notice, it should have told her so. The language in the 2018 denial materials – perhaps more precisely the lack of language – supports AA's contention that the limitation period began on that day.

v. I believe that Unifund's letters from 2012 forward and its adjustment of the ACB claim undermine the contention that Unifund's 2012 denial was final, and would induce, in my view, a reasonable person to believe that the 2012 denial could be and (eventually) was contingent on MIG determination and being reconsidered after AA was removed from the MIG. I find that, taken together, the series of letters from Unifund to AA worked to offset any original denial of ACBs, even if one existed, and to undermine its purpose, namely to trigger a decision by AA whether or not to appeal the insurer's decision.

vi. The precedents cited by Unifund for finding its 2012 denial final were unpersuasive to me in deciding this case. Unifund noted that FSCO decisions are not binding on me, and I would note that the Tribunal decisions it cites aren't either. I do not agree with what I perceive to be the thrust of Unifund's core argument, that a minimal level of disclosure which may be technically compliant serves to override a lack of clarity created by its own words and actions even if the effect is to expose a catastrophically impaired accident victim to the extreme prejudice of a stature-bar.

26I find that the limitation period AA's appeal began on July 4, 2018. Her appeal on ACBs is not statute-barred and it may proceed.

EXTENDING THE TIME TO APPLY TO THE TRIBUNAL

27Under s.7 of the Licence Appeal Tribunal Act¹¹ (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.

28AA 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 AA would meet them.

29There 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.¹²

30My reasons for finding that the criteria for extension are met:

i. I find no basis to believe that AA lacked a bona fide intention to file her appeal for ACBs within the limitation period. I find this because the evidence is that AA appealed Unifund's July 4, 2018 decision about three months after it was made, in what I find is the reasonable belief that this was Unifund's clear, unequivocal and final decision on ACBs.

ii. The delay in this case is relatively long, if you accept Unifund's arguments. However, I do not consider this egregious given AA's confusion around the meaning of Unifund's letters in relation to her ACB eligibility. This delay does nothing to prejudice The Cooperators' ability to defend AA's claim.

iii. The merits of AA's case for ACBs are not clear from the submissions. However, Unifund's decision to schedule IEs to assess her entitlement to ACBs, and the remarkable shift in its assessment of her status from "in the MIG" to "deemed catastrophically impaired" is enough for me to conclude that AA's ACB claim has sufficient merit to warrant adjudication.

iv. The prejudice to AA, a catastrophically-impaired accident victim, of imposing the statute bar is manifest. The prejudice to Unifund of proceeding is proportionally much less financially and is non-existent in terms of its ability to defend AA's claim. It has IE reports in hand, from examinations conducted in mid-2018 that it can rely on in presenting its case at the hearing. It is noteworthy to me that Unifund's submissions did not argue any hardship or prejudice to it arising from AA's appeal – likely because there is none. The "balance of prejudice" in this case favors allowing the appeal to proceed.

CONCLUSION

31Unifund's request to bar AA's appeal from proceeding is denied. AA's appeal may proceed.

Footnotes

1. 1O.Reg. 34/10.
2. 2Smith v. Co-operators, 2002 SCC 30, cited by both parties.
3. 3Ponnampalam and State Farm (FSCO Appeal P12-00031C, December 11, 2013) cited in JQ v. The Cooperators General Insurance Company, 2019 ONLAT 18-003910/AABS, which was submitted by AA.
4. 4"Minor injury" is defined by s.3(1) of the Schedule, and further definition is provided by the Minor Injury Guideline, Superintendent's Guideline 01/14, issued pursuant to s. 268.3 (1.1) of the Insurance Act. Section 14.2 of the Schedule restricts the payment of ACBs to persons whose injuries are not minor.
5. 5Bonaccorso v. Optimum Insurance Company Inc., 2016 ONCA 34, led by Unifund.
6. 6Sietzema v. Economical Mutual Insurance Company, 2014 ONCA 111), led by Unifund.
7. 7Haldenby v. Dominion of Canada General Insurance Co., 2001 CanLII 16603 (ON CA), led by Unifund.
8. 8RSO 1990, c.I.8
9. 916-000920 v Unica Insurance Inc., 2017 CanLII 69295 (ON LAT), led by Unifund.
10. 10J. T. and Aviva Canada Inc., 2018 Can LII 8097 (ON LAT), which was upheld on reconsideration, and upheld again on appeal in Taylor v. Aviva Canada Inc., 2018 ONSC 4472, all led by Unifund.
11. 11S.O. 1990, c.12
12. 12A.F. and North Blenheim Mutual Insurance Co. & N.L. and North Blenheim Mutual Insurance Co., 2017 CanLII 87446 (ON LAT).