M.K. v. TD General Insurance Company, 2020 CanLII 34500

Citation: MK v. TD General Insurance Company, 2020 ONLAT 19-003616/AABS

Released Date: 04/06/2020 File Number: 19-003616/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:

M. K.

Applicant

and

TD General Insurance Company

Respondent

DECISION

ADJUDICATOR:

Derek Grant

APPEARANCES:

For the Applicant:

Michael Rotondo, Counsel

For the Respondent:

Patricia Hill, Counsel

HEARD:

By way of written submissions

OVERVIEW

1The applicant, M.K., was injured in a motor vehicle accident on January 2, 2015. She sought benefits from the respondent, TD General Insurance Company, pursuant to the Statutory Accident Benefits Schedule – Effective September 1, 2010¹ (the “Schedule”).

2TD denied M.K.’s claim for a non-earner benefit (“NEB”), denying entitlement because she was employed at the time of the accident and was entitled to income replacement benefits (“IRB”) and not entitled to a NEB. M.K. 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 TD:

(i) Pursuant to section 56 of the of the Schedule, is M.K. barred from disputing a denial of a non-earner benefit in the amount of $185.00 per week for the period of March 24, 2017, to date and ongoing, on the ground that M.K. is statute-barred pursuant to the applicable limitation period?

RESULT

4Based on a review of the evidence, I find that M.K. is statute-barred from proceeding with her application for a NEB as TD issued a valid denial that triggered the limitation period and M.K. did not appeal in time.

BACKGROUND

5Following the accident, on January 2, 2015, M.K. applied for benefits from TD for certain accident benefits.

6At the time of the accident, M.K. was employed full-time as an Office Administrator with [a legal firm]. In her Application for Accident Benefits Form (“OCF-1”) dated January 13, 2015, she indicated she was employed and working at the time of the accident. In addition, she submitted a Disability Certificate (“OCF-3”) dated January 15, 2015, signed by her family physician. The OCF-3 stated that M.K. 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. M.K. submitted a second OCF-3 dated January 21, 2015, signed by Chiropractor, Dr. Andrea Nalli. The second OCF-3 also indicated that M.K. suffered from a complete inability to carry on a normal life as a result of an accident.

7On January 27, 2015, TD wrote to M.K., acknowledging receipt of her application. The Explanation of Benefits notified M.K. that she may be eligible for an income replacement benefit (“IRB”) upon receipt of an Employer’s Confirmation of Income Form. The letter also advised M.K. that she was not eligible for a NEB because she was employed and working at the time of the accident. Instructions outlining M.K.’s options to dispute TD’s decision were attached.

8M.K. indicated in her Statutory Declaration dated March 9, 2015 that she was employed full time.² M.K. did not direct me to any evidence that she appealed the decision within two years following TD’s denial.

9In a letter dated May 25, 2017, Mr. Rotondo wrote to TD advising he was new counsel for M.K. TD contends that at the time Mr. Rotondo took over as Counsel, the limitation period to dispute M.K.'s eligibility for NEB had already expired.³

10In a letter dated November 14, 2018, Mr. Rotondo provided TD with his assessment of M.K.'s accident benefits claim and suggested a payout for NEB despite the expiry of the limitation period and despite the fact that M.K. simply does not qualify for NEB under the Schedule given: (1) she was employed and working at the time of the subject loss; and, (2) she had resumed employment.⁴

11As a response to Mr. Rotondo's letter, TD sent three letters to Mr. Rotondo and M.K. on December 19, 2018, requesting that M.K. undergo an examination under oath and submit a new OCF-3.⁵

12In a letter dated January 22, 2019, Mr. Rotondo referenced TD's letters of December 19, 2018 and January 16, 2019 wherein TD, as a result of an oversight, notified M.K. that both NEB and IRB are suspended due to failure to submit OCF-3.⁶

13In a letter dated February 13, 2019, TD advised M.K. and Mr. Rotondo that the January 16, 2019 letter was sent in error.⁷

14M.K. then submitted her application to the Tribunal on April 2, 2019.

ANALYSIS

Did TD’s denial trigger the limitation period?

15The parties’ positions are apparent: TD argues that it issued a clear, unequivocal denial of NEBs in its explanation of benefits from January 27, 2015, triggering the limitation period and that M.K. did not appeal the denial within two-years.

16In response, M.K. argues that TD did not provide a clear, unequivocal denial in January 2015, that M.K. never submitted an election form claiming either IRB or a NEB and that TD’s alleged denial did not trigger the limitation period because of its conduct and lack of clarity since her application was filed.

17For the reasons that follow, I agree with TD and find that it issued a valid denial of the NEB that triggered the limitation period.

The Principles of a Proper Denial

18It is important to determine whether TD’s denial was proper in accordance with the principles outlined in Smith v. TD General Insurance Company.⁸ 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.

19TD submits it issued a clear and unequivocal denial of the NEB on January 27, 2015, which triggered the limitation period. It points to its letter from that date which provides the following information: that M.K. was employed and working on the date of the accident and was therefore not entitled to a NEB; that she was instead eligible for an IRB; it provided M.K. with notice of her right to dispute the decision; included instructions on how to appeal the denial and the limitation period is highlighted.

20In response, M.K. argues that the denial was not clear and unequivocal because she had yet to make an election at the time, nor did TD provide M.K. with any opportunity to elect for a particular specified benefit in accordance with s. 35 of the Schedule. In addition, there is no indication by reference to M.K.’s accident benefits file that TD provided any information about the election process as required by s. 32(2)(2)(d) of the Schedule, or that M.K. was notified by TD that her application for statutory accident benefits was incomplete as contemplated by s. 32(6) of the Schedule.

21I disagree with M.K.’s argument. I find that TD’s notice letter satisfied the basic requirements of Smith because it stated the reasons for the denial (M.K. reported that she was employed and working despite meeting the NEB test in her OCF-3’s); it clearly indicates she is not eligible for a NEB on this basis; and it provides, in straightforward language, the dispute process available to M.K. if she disagreed. I find nothing to substantiate M.K.’s argument that the denial was in any way uncertain or ambiguous.

Was TD’s denial proper?

22There 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.⁹, 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.

23I find Bonaccorso provides applicable guidance on the facts before the Tribunal. Despite M.K.’s contention that she was not applying for a NEB at the time due to her belief that she had not made an election, TD did nothing out of the ordinary when it denied the NEB, as it had an application and information before it that because M.K. was employed on the date of loss, she did not qualify for a NEB even if she elected otherwise.

24Further, I find the facts of this matter are very similar to those in Sietzema v. Economical Mutual Insurance Company,¹⁰ 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. I find the use of “not eligible” by TD to be in line with jurisprudence and to be a clear indication of a denial and, ultimately, a refusal to pay benefits based on M.K.’s report that she was employed and working at the time of the accident. Following the direction provided by Sietzema and other jurisprudence, I find that the use of the phrase “not eligible” constitutes a denial, triggering the limitation period.

Was an Election of Benefits Form necessary?

25M.K. argues that because she did not include a completed Election of Benefits Form (“OCF-10”) with her initial OCF-1 and application for benefits, that it was not a complete application, and therefore any denial was improper. M.K. argues she was not properly informed by TD on her ability to elect between a NEB and IRB, despite her OCF-3s indicating that she qualified for both.

26I 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 above, Bonnacorso allows an insurer to decide on a benefit prematurely. On receipt of the OCF-1 and OCF-3s completed by M.K. and her physicians, I find TD was within its rights to decide on eligibility for NEB or IRB based on the information it had available at the time, specifically that M.K. was employed on the date of loss and had been for some time. On receipt of this determination, M.K. would have been free to dispute but did not.

27In the post-denial period, TD arranged for M.K. to attend an examination under oath, exchanged correspondence on production and approved her for medical benefits up to the minor injury guideline limit. In my view, TD was continuously investigating M.K.’s claim and adjusting her file, as it is required to do. M.K. argues that TD 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.

28I agree that an insurer should provide the election form in certain circumstances. However, as previously stated, TD was relying on information provided by M.K. that she was employed and working on the date of loss and was not eligible for a NEB as a result. I disagree that it was improper for TD to rely on M.K.’s self-reporting in this regard, because the test for entitlement under s. 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 M.K. indicated she was employed and working, she qualified for an IRB, which, by the language of the Schedule, meant that she was not eligible for a NEB.

29For these reasons, I find TD’s denial of the NEB was valid. The limitation period for M.K. to appeal began on January 27, 2015. As her application to the Tribunal was not filed until April 2, 2019, I find the limitation period has expired and M.K. is statute-barred from proceeding.

CONCLUSION

30I find TD provided M.K. with a valid denial. The denial was clear and unequivocal and provided M.K. with the required information to determine whether to dispute the denial while also triggering the limitation period.

31I find M.K. is statute-barred from proceeding with her application for NEB at the Tribunal.

Footnotes

1. 1O. Reg. 34/10
2. 2TD's Book of Documents at Tab 5
3. 3Ibid at Tab 6.
4. 4Ibid at Tab 7.
5. 5Ibid at Tab 8.
6. 6Ibid at Tab 9.
7. 7Ibid at Tab 10.
8. 8Smith v. Co-operators General Insurance Co., 2002 SCC 30, [2002] 2 SCR 129 at para. 14.
9. 9Bonaccorso v. Optimum Insurance Company Inc., 2016 ONCA 34
10. 10Sietzema v. Economical Mutual Insurance Company, 2014 ONCA 111