C.W. v. Jevco Insurance Company, 2020 CanLII 103671

RECONSIDERATION DECISION

Citation: C.W. vs. Jevco Insurance Company, 2020 ONLAT 18-000790/AABS

Before: Jeffrey Shapiro, Vice-Chair

Date: December 21, 2020

File: 18-000790/AABS

Case Name: C.W. vs. Jevco Insurance Company

Written Submissions by:

For the Applicant: Christopher A. Obagi, Counsel

For the Respondent: Brian Smith and Sean T. Miller, Counsel

OVERVIEW

1Jevco seeks reconsideration of the Tribunal’s February 1, 2019 Decision¹ (“Decision”), in which I found C.W. is entitled to a “retroactive” Attendant Care Benefit (“ACB”) from November 9, 2007 to December 25, 2015, with interest accruing from November 9, 2007 at the rates under the Schedule. The Decision’s other orders, made on the parties’ agreement, are not in dispute – i.e. that the ACB is ongoing after December 25, 2015 and that C.W. is entitled to certain Income Replacement and Housekeeping Benefits.

2Jevco asserts errors of law, fact and mixed law and fact in the Decision. It requests that the Decision (1) be varied to order that C.W.'s entitlement to the ACB began on December 16, 2015, and interest began to accrue on May 18, 2017, or (2) the Decision be set aside and a new hearing ordered. C.W. opposes the request and asks the decision to be upheld.

RESULT

3Jevco’s request for reconsideration is denied and the Decision stands.

ANALYSIS

4The grounds for a reconsideration request are in Rule 18.2 of the Tribunal’s Rules.² The relevant criterion Jevco argues is Rule 18.2 (b): “The Tribunal made an error of law or fact such that the Tribunal would likely have reached a different result had the error not been made.”

5Jevco asserts the Decision contains five errors that individually or collectively are fatal to the Decision. C.W. believes the decision was correct and that Jevco’s submissions mischaracterize the Decision’s findings and turn on conclusions that it disagrees with, such that the Request is an improper attempt to reargue the hearing. In particular, C.W. believes Jevco fails to address “an essential fact” – Jevco asserted a general non-coverage position in the related tort proceeding.

6I generally agree with C.W. and its submission.³ The Decision turned on a confluence of several very unique and rare circumstances – a key one of which was in fact Jevco’s non-coverage position articulated in the tort proceeding. While the Decision and C.W.’s submissions set out the history more fully, a brief review of the facts will help to understand Jevco’s arguments in context.

7In short, on November 1, 2007, C.W. was a pedestrian when struck by a vehicle. She did not have insurance of her own. The driver did not advise Jevco of the accident or C.W. of Jevco until C.W. started a tort claim two years later. Thus, Jevco now agrees that for the first two years following the accident it was impossible for C.W. to apply for accident benefits from Jevco or any party.

8From that point, however, Jevco denied coverage in the tort matter, claiming it did not insure the vehicle. For instance, Jevco’s January 24, 2014 Factum in the tort matter opposing it being added as a defendant states, “7. [Driver] was driving a motor vehicle that was not insured by Jevco when he was involved in an accident with the plaintiff on November 1, 2007.”⁴ Jevco maintained that non-coverage position over the next five years, i.e. seven years post-accident, until it finally reversed its position. C.W. then applied to Jevco for accident benefits on March 3, 2015, and in December 2015 for an ACB and retroactive ACBs.

9Jevco argued that at least after the two year period, C.W. still could have applied to Jevco, and Jevco would be bound to pay the claim under Ontario’s pay-first provisions that generally require the first insurer to receive an accident benefits claim to pay the claim while seeking reimbursement from the correct insurer.

10However, I found that Jevco’s non-coverage position, coupled with another unique factor, meant that Ontario’s pay-first provisions do not apply. Specifically, because C.W. was a Quebec resident, the parties agree – although Jevco initially disputed it during the hearing – that C.W. was ineligible for the benefits under Ontario’s Motor Vehicle Accident Claims Fund (“MVACF”). Thus, while in a typical case, MVACF would act as the insurer of last resort, and thus an insured could have applied to either MVACF or Jevco at any point and either would have had to pay the claim while they figure out which insurer was ultimately responsible, that was not the case here. As discussed in the Decision, with C.W. not having her own insurance and being ineligible for the MVACF, Jevco was the only possible insurer, and thus, the “pay-first” provisions would not apply as there was no dispute between insurers.

11Thus, until Jevco admitted coverage, it did not appear – or at least was unclear – that C.W. was eligible for accident benefits from any source.

12The parties do not dispute – even with a “retroactive” application – that C.W. was catastrophically impaired immediately as a result of the accident, and in need of catastrophic level ACB. They dispute if it was “impossible” or “impractical” for C.W. to have applied for an ACB earlier and, if not, whether she had a reasonable excuse for not doing so, and then, if so, whether she is entitled to interest.

13Thus, the crux of Jevco’s Request is driven in large part by whether the pay-first provisions applied and what was the essence of Jevco’s non-coverage position in the tort claim, and, in turn and more generally, was C.W.’s delay reasonable. Jevco, however, interprets my findings on its position differently.

14Put another way, Jevco maintains that it did not dispute accident benefits coverage, and C.W. should have filed her accident benefits claim with Jevco regardless of Jevco’s position in the tort claim that it did not insure the vehicle that struck her.

15In a broad sense, Jevco’s arguments in its Request are premised on how Ontario’s motor vehicle insurance system is designed to work – i.e. an applicant can at least apply to the MVACF or the insurer with some nexus. The flaw in its Request is that unique circumstances of this matter – including its own position – meant it did work as designed. There was no relief to the MVACF and the insurer with some nexus was claiming it in fact had no nexus. Thus, as explained in the Decision, C.W.’s actions were at least reasonable and in response to Jevco’s actions.

i. Did the Decision err in awarding interest during a period in which Jevco did not know that an accident had occurred, let alone have sufficient evidence upon which to determine whether benefits were payable to C.W.?

16A threshold point, this allegation of an error in the Decision is flawed as Jevco did know that an accident involving C.W., a pedestrian, occurred. Jevco was actively defending tort liability and insisting that it did not insure the vehicle.

17To some extent, nevertheless, Jevco seems to acknowledge that the Tribunal could have found that C.W. had a reasonable excuse for the delay in requesting the ACB, but that the real error is that the Decision granted interest retroactively – particularly during a period when Jevco was allegedly unaware of the claim. Jevco acknowledges that I had discretion to find interest not payable; thus, the argument is disagreeing with my use of that discretion.

18A second error in that position is that interest – even at the seemingly high rates under the 1996 Schedule – has consistently been held to be compensatory, not punitive.

19A third error in Jevco’s position is that the compensatory interest is generally mandatory. In fact, even Jevco submits, quoting C.(J.) v. Progressive,⁵ the general rule is “interest is mandatory, compensatory, and flows from the late payment of overdue benefits. There is no need for a finding of insurer misconduct.” Indeed, C.(J.) also states that it is a “fundamental principle” that absent express language that a payment is not overdue, interest applies.

20Jevco, however, believes that C.W.’s actions involve the exception to that rule also quoted by C.(J.), i.e. that "unusual circumstances brought on by the complexity of the action and/or the applicant's own behaviour may relieve the insurer from bearing the consequences of its decision not to pay benefits later found to be owing. Indeed, previous decisions support the view that the insured person's conduct, including delay, can affect his or her right to interest” and thus an adjudicator has discretion to relieve the insurer from paying interest due to an applicant’s own behavior.⁶

21However, both C.(J.) and Allstate v. Cole⁷, which C.(J.) quotes, involve factually distinguishable situations. For instance, Mr. Cole received an IRB termination after a return to work, and then sought benefits two years later. He was ultimately paid the IRB retroactively, but not entitled to retroactive interest as the circumstances meant that Allstate had good reason to believe Mr. Cole accepted the termination and little reason to inquire into the matter, making “the situation…out of [the insurer’s] hands”.

22Likewise, C.(J.) found that although four years of essentially retroactive IRBs were due, interest was not as the applicant had waited four years after a formal termination to dispute it, also making the situation out of the insurer’s hands. Yet, in this case, the delay flowed from Jevco’s non-coverage position, Jevco was aware that C.W. existed, and C.W. was actively trying to establish coverage.

23After submissions in this Request for Reconsideration, C.W. moved to submit a recent Superior Court decision, Roy v. Primmum.⁸ Roy noted that “that the overall goal of the SABS is to reduce the economic dislocation and hardship of victims of motor vehicle accidents” and reiterated the presumption that interest is payable to “compensate insureds for the loss of the time value of money”, even though the value of the interest may “far exceed” the value of the benefits themselves.

24Roy granted retroactive ACBs to the 2004 accident, plus interest, despite the insurer’s argument that it should not be required to pay interest based on retroactive payments because, prior to the 2010 CAT application or the 2015 application seeking retroactive ACBs, it could not reasonably have been aware that Mr. Roy was catastrophically impaired.

25I do not see that the C.(J.), Cole, or Roy decisions, or any of the cited cases, directly deal with this matter where an applicant’s delay is in response to the insurer’s actions. In the unique circumstances of this matter, however, Jevco offers no reason why C.W. is not entitled to mandatory, compensatory interest at least during the first two years when she did not have any recourse against any party – and at the fault of Jevco’s own insured driver. I fail to see how C.W. should bear the risk of compensatory interest during that period where there is no allegation she did any wrong. After that period, Jevco knew she existed – and it was denying that the policy was in effect for that vehicle or accident. Thus, while Jevco casts this matter as C.W.’s actions caused the delay, it fails to recognize the Decisions finding that C.W.’s actions were in response to its own decisions as more fully explained in the decision.

ii. Did the Tribunal impose a fiduciary duty upon insurers contrary to the Schedule and established jurisprudence, to send an Application for before an applicant has stated an intention to claim benefits?

26Jevco asserts the Ontario Court of Appeal in Plaza Fiberglass,⁹ stated that because an insurance contract is one of the utmost good faith, that “does not mean that it gives rise to a general fiduciary relationship” and that the Superior Court in Layland¹⁰ recently expressed that same statement applies to accident benefits claims. I agree with that basic statement, but do not read the Decision as imparting a new general fiduciary relationship or imposing a general obligation to send Applications before an applicant states an intention to claim benefits. The Decision made its comments in the unique circumstances of this case.

27However, Plaza Fiberglass also noted that specific circumstances could call for the imposition of fiduciary obligations, and Layland only deals with a simple mistaken statement of benefits, which is far different from the situation here.

28More importantly, the thrust of the Decision remains unaffected. Jevco was aware that its insured driver had withheld his existence for two years. After that point Jevco was aware that C.W. existed and maintained to her for seven years post-accident that it did not insure the vehicle. Thus, it can not claim that it was unaware of a potential claim or had a reason to believe no claim would be brought like in the C.(J.) or Cole cases. Rather, while taking a non-coverage position, it could have reduced its risk by sending the application at anytime, and it seems to me, following a seven year denial of coverage, once it reversed its position, it was obligated to do so in this circumstance.

iii. Did the Tribunal conclude that Jevco denied all coverage including AB coverage under the policy without any legal or evidentiary basis?

iv. Did the Decision make findings of fact about C.W.’s decision-making process in the absence of any evidence?

29Within these overlapping alleged points of error, Jevco raises several points, which again, I find are restating the same arguments in the hearing, and adding incorrect nuances to the underlying Decision, in particular paragraphs 40 and 41.

30Jevco submits – as it argued in the hearing – that by adding itself to the tort claim as a Statutory Third Party pursuant to s. 258(14) of the Insurance Act, it was admitting that a valid motor vehicle policy exists, and thus acknowledged that coverage was available for accident benefits. However, C.W. did not dispute that a policy exists. While Jevco insured the driver for other vehicles, Jevco’s defense was that it does not insure this vehicle or the driver on this vehicle. For the purposes of s. 258(14), Jevco was protecting its interest against a claim that it “might be” required to indemnify the driver, but not admitting it must. By protecting its interest, it was then obligated up to the statutory minimum $200,000 in liability limits – but not the entire policy – which it continued to dispute. Thus, as the Decision explains, by joining itself, the $200,000 provided liability on behalf of the driver, but not that the vehicle or accident was covered.

31While Jevco did not actually send a letter to C.W. saying it denies accident benefits coverage – nor does the Decision make that finding – C.W.’s position is that Jevco was denying that this policy covers the vehicle in question and thus accident benefits are not available. It is difficult to fathom that Jevco was asserting that coverage denial in the tort case but prepared to concede that the same denial is irrelevant to an accident benefits claim arising out the same motor vehicle accident. As C.W. submits, either the policy covers that vehicle or does not. As the Decision explained, given the non-coverage position in the tort claim, it was impractical for C.W. to seek accident benefits until Jevco admitted the basic coverage of the vehicle and accident or, if not, C.W. had a reasonable excuse.

32Finally, Jevco now disputes that the Decision is in error as there was no evidence of what C.W. “believed, knew, understood or thought,” or would have been required to expend “more legal fees”. I disagree with that submission on several points. First, that submission was not made in the hearing, and is contrary to how the hearing was presented.

33The parties presented this matter based on their general agreement to the background, and the dispute was as to the legal effect. The matter was heard on written submissions, with no affidavits, followed by oral arguments on the phone. Both parties assumed relatively non-controversial points, and C.W.’s counsel was very clear that the C.W.’s basic overall position was that it was not practical or reasonable for C.W. to file for an accident benefits claim given Jevco’s non-coverage position in the tort claim. For instance, C.W.’s Supplemental Reply Submission, in paragraphs 4 and 7, during the hearing, and before the oral argument, states:

4. There are fundamental errors in the Respondent’s Reply Submissions that…turn on…whether the Applicant is obligated to litigate against Jevco on two fronts at the same time, exposing her to two sets of costs and untold emotional duress for a person who has sustained a catastrophic impairment; and

5. It is entirely unreasonable for Jevco to suggest that the Applicant ought to expose herself to two separate legal proceedings, with both the emotional and financial costs associated therewith, in order to protect her right to claim accident benefits…

34While Jevco certainly argued that C.W. should have nevertheless filed her accidents benefits claim, at no point did Jevco argue that those underlying points were not established by the record.

35As well, under the SPPA,¹¹ the Tribunal has wide latitude to accept evidence in different forms than in court, and while statements of counsel are rarely evidence, these were not controversial points and in context accepted. Certainly, it is a basic inference that litigation is expensive. As C.W. submits, the Court of Appeal in Van Galder – a key decision addressed by the parties in the hearing – held, “it defies common sense that a catastrophically impaired insured person delay making an application that would open the door to desperately needed enhanced catastrophic benefits”…unless the insurer leads the applicant to believe there are no benefits.¹²

36Nevertheless, C.W. also provided documents evidencing her efforts to locate the insurer, and provided portions of the tort file, such as some of the parties’ submissions as well as citation, on consent, to the Court’s motion decision which added declaratory relief against Jevco.¹³ In that decision, the Court considered C.W.’s request to have access to the policy which Jevco claimed did not insure the vehicle. The Court discussed access to justice issues and the high expense of litigation in general and as pertains to C.W. It concluded that it was not just to force C.W. to engage in further and expensive litigation without being able to determine if the litigation would be worth it, and thus granted C.W. access to the tort policy prior to a finding on liability. Finally, I note, too, ironically, Jevco supports its submissions with references to what C.W.’s lawyer reasonably ought to know.

37I find that this assignment of error was waived during the hearing, and not in accordance with how the parties presented this case.

v. Did the Tribunal fail to appreciate that the Supreme Court of Canada's decision in Zurich Ins. v. Chubb required Jevco to pay accident benefits to C.W. despite its tort coverage position had she submitted an Application?

38In short, Jevco submits that Section 2.1(6) of O.Reg. 283/95 - Disputes Between Insurers (the "Dispute Regulation") requires that the first insurer to receive a completed application for benefits from the applicant shall commence paying the benefits, and the Tribunal erred in appreciating that the Zurich¹⁴ decision makes clear that the overriding public policy of the regulation is to provide timely delivery of benefits to all persons injured in car accidents in Ontario, despite the inconvenience to insurance companies who must provide benefits immediately and seek reimbursement from the correct insurance company later, so long as the nexus test is met. Thus, Jevco submits C.W. lacked a reasonable excuse for a delay in submitting her accident benefits claim to Jevco, because Jevco would have had to pay it.

39This, however, is the same argument rejected in the Decision. As explained in the Decision, O.Reg. 283/95 deals with disputes between insurers, which is not the case here, and Zurich itself mentions there may be extreme cases where an insurer may refuse to pay. In this case, given the unique facts of the case – such as C.W. not having insurance of her own and being a Quebec resident so that she was ineligible for coverage from the MVACF – there was only one possible insurer and that insurer was maintaining its claim that it did not insure the vehicle. To read Zurich as Jevco submits would mean that, even had Jevco successfully established it did not insure the vehicle, it would nevertheless have to pay the accident benefits claim, with no hopes of being reimbursed, simply because it insured the driver on other vehicles. Moreover, even if C.W. is wrong about the interpretation – and I do not think she is – it provides a reasonable excuse for any delay in pursuing this action.

CONCLUSION AND ORDER

40In the very unique circumstances of this matter, C.W. actively investigated coverage issues and then filed her accident benefits claim as soon as the only possible insurer reversed positions and acknowledged it actually insured the vehicle. Even if she could have filed earlier, her decision in the context of this matter appears reasonable. She is also entitled to interest, which under the case law is deemed compensatory.

41Jevco’s request for reconsideration is denied. The decision stands.

Footnotes

1. 118-000790 v Jevco Insurance Company, 2019 CanLII 22200 (ON LAT)
2. 2The Licence Appeal Tribunal, Animal Care Review Board, and Fire Safety Commission Common Rules of Practice and Procedure, October 2, 2017, as amended (“the Rules”).
3. 3One exception is C.W. submissions at paragraph 34, starting with the sentence “Furthermore,…” as those points were not raised during the hearing.
4. 4I added the underlining. See Factum of the Third Party Jevco Insurance Company, at paragraph 7, submitted by C.W. as Exhibit 19 in the hearing.
5. 5Jevco’s Request for Reconsideration, at para. 19, citing C.(J.) v Progressive Cas. Ins. Co. of Can., 2005 CarswellOnt 2853 (FSCO Appeal), which quotes Allstate Ins. Co. v. Cole, 2003 CarswellOnt 6515, [2003]
6. 6Jevco’s Request for Reconsideration, also at para. 19, quoting C.(J.), which quotes the Court of Appeal in Attavar v. Allstate Ins. Co. of Can., 2003 CanLII 7430 (ON CA). Jevco supplied the emphasis.
7. 7Allstate Ins. Co. of Ca. v. Cole, 2003 CarswellOnt 6515, [2003]
8. 8Roy v. Primmum Ins., 2020 ONSC 3886, para. 8, 117, 355-57, citing in part, Tomec v. Economical Mut. Ins. Co., 2019 ONCA 992.
9. 9Plaza Fiberglass Manufacturing Ltd. v. Cardinal Insurance Co., 1994 CanLII 653 (ON CA)
10. 10Layland v. State Farm Mut. Auto. Ins. Co., 2018 ONSC 6477
11. 11Statutory Powers Procedure Act, RSO 1990, c S.22, at section 15.
12. 12Applicant’s Responding Submissions to the Request for Reconsideration, at para. 20.
13. 13W. v. P., 2014 ONSC 1606
14. 14See Justice Juriansz’s decent in Zurich Ins. v. Chubb Ins., 2014 ONCA 400, at para. 40, which was adopted by the Supreme Court in Zurich Ins. v. Chubb Ins., [2015] 2 SCR 134, 2015 SCC 19