Citation: AGS vs. Echelon General Insurance Company, 2020 ONLAT 18-001994/AABS

Released Date: 08/26/2020

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:

AGS

(a minor represented by her litigation guardian MG)

Applicant

and

Echelon General Insurance Company

Respondent

DECISION

ADJUDICATOR:

Derek Grant

APPEARANCES:

For the Applicant:

MG on behalf of AGS, Applicant

Arthur Camporese, Counsel

For the Respondent:

Dallas Hunt, Adjuster

Jamie Pollack, Counsel

HEARD:

January 22, 2020

OVERVIEW

1The applicant, AGS was involved in a motor vehicle accident ‘en ventre sa mere’ (as a fetus in utero) on December 11, 2015. Four days after the accident, AGS was born prematurely on December 15, 2015 at 26 weeks gestation. She has been diagnosed with cerebral palsy as a result of her premature birth.

2AGS has filed several appeals with respect to the denial of an attendant care and other benefits pursuant to the provisions of the Statutory Accident Benefits Schedule – Effective September 1, 2010 O. Reg 34/10 (the “Schedule”). They are to be heard back to back. Notwithstanding that it initially paid benefits based on a medical opinion, Echelon now questions whether the accident caused AGS’s condition and wants to rely on a medical report prepared by Dr. Oppenheimer. Dr. Oppenheimer reviewed further medical documentation received by Echelon and concluded the accident did not cause AGS’s impairments.

3Rather than simply assert causation as a defence, Echelon commenced its own application for a determination of the causation issue. That application has been consolidated into this file, 18-001994/AABS, and is proceeding as part of this preliminary issue hearing to determine if Echelon may raise causation as a defence.

PRELIMINARY ISSUES

4Pursuant to the Order of Adjudicator Lester dated October 8, 2019, the issues to be determined in the preliminary issue hearing are as follows:

a. Is the respondent, Echelon Insurance Company (“Echelon”) precluded from arguing causation at the hearing because it has been more than 2 years since the approval of the benefit?

b. Is Echelon entitled to rely on the report of Dr. Oppenheimer?

c. Does Echelon’s application (19-007602/AABS) lack a foundational basis?

FINDING

5Based on the evidence, I find the following:

a. Echelon is not precluded from arguing causation at the substantial issue hearing. Its assertion of causation as a defence is not caught by the two-year limitation period set out in s. 56 of the Schedule.

b. Echelon is entitled to rely on the report of Dr. Oppenheimer

c. Echelon’s application (19-007602/AABS) is moot as the issue raised in the application is a defence argument and is not a stand-alone issue.

DISCUSSION

Supplementary Submissions - Pucci¹

6At the time of this proceeding, the Court of Appeal had not yet released its decision in the Pucci matter. In Pucci, the issue of waiver, estoppel and causation were discussed as a part of the issues to be addressed in that matter.

7In the present matter, the issue of waiver and causation were discussed by the parties. In the interest of procedural fairness, I allowed the parties an opportunity to present supplementary submissions to address the issues of causation and waiver as discussed in the Pucci matter.

8After a review of the parties’ submissions, I find that Pucci clearly establishes that the insurer’s actions in the subject proceeding do not amount to a waiver of insurer rights. Further, I find that the issue of causation can be raised at any time in an accident benefits proceeding.

ANALYSIS

Issue #1 - Is Echelon precluded from arguing causation?

9For the reasons that follow, I find that Echelon is not precluded from arguing causation.

10Following the accident, Echelon arranged a neonatal perinatal paper review assessment with Dr. Dany Weisz in order to determine AGS’s entitlement to a treatment plan (‘OCF-18’) dated April 8, 2016 which sought funding for completion of a Form 1 Assessment of Attendant Care Needs.

11Echelon asked Dr Weisz to provide an opinion on causation. Dr Weisz prepared a report dated November 16, 2016 with respect to the said OCF-18. Dr Weisz opined that AGS’s injuries may be fully related to her prematurity alone. He noted that observational studies have associated an accident with prematurity and opined that the temporal association between the onset of preterm labour and preterm premature rupture of membranes and the accident is compelling in AGS’ case.²

12Based on the report of Dr Weisz, Echelon approved the OCF-18 dated April 8, 2016 for an attendant care assessment. Echelon wrote to AGS advising of the approval by letter dated December 19, 2016.³

13Echelon sought another opinion from Dr. Oppenheimer, obstetrician, to determine if there was a more definitive finding that could be made regarding causation.

14In this proceeding, AGS submits that because Echelon approved and provided funding for the attendant care benefit, it can no longer raise a causation defence argument.

15I disagree. There is no evidence of waiver. For waiver to succeed, Echelon would have had to have had full knowledge of the facts and choose not to assert their right to deny the benefits. The evidence discloses and I find that Echelon always questioned causation. There was some delay finding an expert to review the medical file and give an opinion. This procedure falls clearly within the policy considerations outlined in Pucci. As the Court of Appeal pointed out in paragraph [54], to foreclose an insurance company from reconsidering its position on causation in the future would delay payments of benefits to injured insureds in the short term while the insurers prudently protected their long-term interests.

16The following are the significant paragraphs from Pucci, regarding causation:

53I begin with s. 45. I do not read the section as requiring the insurer, at the catastrophic injury phase of the process, to accept the impairment in issue was caused by the accident. I read the opening language of the section, which requires the insured to have sustained “an impairment as a result of an accident”, as setting down a precondition to the bringing of an application for the determination that the insured has suffered a catastrophic impairment. Under the generally applicable principles of proof, it falls to the insured, as the party seeking the determination of catastrophic impairment, to demonstrate the existence of the pre-condition.

54Apart from the language of s. 45, there could be significant harm to the fair and efficient operation of the SABS benefit scheme if payments of benefits post-accident by the insurer were to be taken as foreclosing any causation-based argument at some later point in the process. Were that interpretation of s. 45 to prevail, I would think it would strongly disincentivize the timely payment of benefits in the immediate aftermath of accidents. Prudent insurers, before making any payments for expenses referable to benefits claimed, would first fully explore any potential causation-related issues. Resolving those issues can require significant input from experts. That exercise takes time.

17I find that Pucci has clearly established that causation can be raised in a proceeding, regardless of when it is raised. As in Pucci, there is no evidence that Echelon’s actions were an admission or a waiver of its right to raise the issue of causation.

18Regarding waiver, the following from Pucci is significant in response,

56Waiver has no application. There is no evidence that Wawanesa knew, or had reason to believe, that Ms. Pucci’s condition was not the result of her accident but chose to waive any reliance on the absence of a causal connection and make payments according to the policy.

19Similarly, there is no evidence that Echelon knew, or had reason to believe that AGS’s condition was not the result of the accident and chose to waive any reliance on a lack of a causal connection and make payments of any benefits.

20While I am live to the concern on behalf of AGS, regarding Echelon’s claim of repayment of the attendant care benefit, I leave that determination to be made by the substantive issue hearing adjudicator. Even the issue of waiver may be best addressed at the substantive hearing, as I was asked to address the issue of causation and Dr. Oppenheimer’s report. However, since the parties discussed the issue of waiver and causation, I felt it prudent to respond accordingly.

21Echelon has a duty to continue to adjust the file, as additional medical evidence or other information is made available. Echelon’s approval of the attendant care benefit does not waive its right to revisit causation and conduct future examinations of the insured, in accordance with s. 44 of the Schedule.

22The approval of a benefit and the two-year limitation are of no consequence to Echelon in raising a causation argument. AGS argues that the 2-year limitation period applies to Echelon’s right to consider new information as it becomes available and adjust the file accordingly. I disagree. Section 56 applies to claims brought against insurers for denials of benefits. It says nothing about defences insurers may raise against those claims. It is inapplicable. Consequently, I find that Echelon is not precluded from raising a causation argument.

Issue #2 – Is Echelon entitled to rely on the report of Dr. Oppenheimer?

23The following is a summary of Dr Oppenheimer’s engagement on behalf of Echelon as evidenced from the productions and from the cross-examination of adjuster Dallas Hunt. Based on the evidence, I find that Echelon is entitled to rely on Dr. Oppenheimer’s report.

24Mrs. Hunt testified on behalf of Echelon that, following receipt of the Section 44 assessment of Dr. Dany Weisz relating to the causation issue, she received an email from Echelon’s claims examiner Sandra Coletta stating that the causal relationship between the motor vehicle accident and pre-term delivery was not definitive. Ms. Coletta suggested that counsel for Echelon, Jamie Pollack, be contacted in order to determine whether he has any recommendations on how to deal with causation and whether he can recommend an assessor who is qualified to review medical documentation and provide an opinion.⁴

25Dr. Oppenheimer was first contacted by counsel for Echelon, who sought an Expert Medical Report, on January 5, 2017. The correspondence between Dr. Oppenheimer and counsel for Echelon did not indicate that Echelon was seeking to retain Dr. Oppenheimer for the purposes of determining AGS’s entitlement to a benefit but rather to provide an expert medical opinion on causation.

26In his January 5, 2017 correspondence to Dr. Oppenheimer, Jason Goodman, counsel for Echelon, summarized the accident details, AGS’s injuries and the proposed assignment to Dr. Oppenheimer as follows:

In summary on December 11, 2015, the mother was the sole occupant of her vehicle when she was rear ended by a third-party motorist. Mother was 26.5 weeks pregnant at the time of the accident. Her baby was born 4 days after the accident. There is an allegation that the premature birth may have been accident-related. We are looking to retain you to review the medical documents and provide us with a written report as to whether the premature birth was accident-related.

27Dr Oppenheimer responded the following day to advise that he could assist. On April 3, 2017, Mr. Goodman wrote to Dr. Oppenheimer and requested a telephone call to discuss the matter.⁵

28An entry in the Adjuster’s Log Note shows that on September 8, 2017, claims examiner Ms. Coletta, stated causation is a key issue with this case “because our plan as far back as January was to gather medical documentation prior to setting up a s. 44 IE paper review with Dr. Oppenheimer so that he can address a rejected benefit and causation at the same time. Since this doctor’s not familiar with the Schedule and it will be important to spell out for him what he does pursuant to the redacted sections”.⁶

29Mr. Goodman again wrote to Dr. Oppenheimer by email dated January 17, 2018. Amongst other things, a request was made for Dr. Oppenheimer to author a letter stating something to the effect that in order to provide an expert medical opinion with respect to causation the records of AGS’s mother were required.⁷

30Mr. Goodman followed up by email on August 24, 2018 to advise that Echelon would be in a position to forward the remaining medical documentation toward the end of September. On November 14, 2018, Echelon sent a Notice of Examination to AGS advising that it “was in the process of obtaining a s. 44 paper review to determine if the motor vehicle accident was a material contributor to your daughter’s premature birth and the subsequent injuries, she may have sustained due to the subject motor vehicle accident”. AGS submits that the correspondence did not refer to any particular benefit. Dr. Oppenheimer prepared a report dated January 14, 2019. The report was addressed to Mr. Goodman at Laxton Glass LLP and not to Echelon.

31AGS submits that Echelon is not entitled to rely on the report of Dr. Oppenheimer given the circumstances surrounding the procurement of Dr. Oppenheimer’s report along with the insurers’ “complete disregard for the requirements of the Schedule”. It is the position of AGS that Dr. Oppenheimer’s report ought to be excluded from the Hearing. Dr. Oppenheimer’s report is a medical legal report that was not obtained pursuant to s. 44, the only provision authorizing an insurer to examine an insured person.

32AGS submits that the evidence is clear that the review of medical documentation and subsequent report was arranged by Echelon’s counsel. Contrary to s. 44, the examination was not arranged with a person chosen by the insurer but rather at the behest of the insurer’s legal counsel. Additionally, Dr. Oppenheimer’s January 14, 2019 report is addressed to Mr. Jason Goodman of Laxton Glass rather than to Echelon or to an adjuster employed by Echelon. AGS submits that while the Schedule contemplates the participation of third-party service providers in the assessment coordination process it does not contemplate the participation of a lawyer for medical legal purposes.

33Section 44 (1) of the Schedule provides that: “For the purposes of assisting an insurer to determine if an insured person is or continues to be entitled to a benefit for which an application is made, but no more often than is reasonably necessary, an insurer may require an insured person to be examined by one or more persons chosen by the insurer who are regulated health professionals or who have expertise in vocational rehabilitation.”

34Section 44 (9)3 provides that if the examination relates to an application for attendant care benefits, the report of the examination must include an assessment of attendant care needs prepared in accordance with s. 42.

35The requirement for the notice of examination are set out in s. 44 (5) of the Schedule:

a. the medical and any other reasons for the examination;

b. whether the attendance of the insured person is required at the examination;

c. the name of the person or persons who will conduct the examination, any regulated health profession to which they belong and their titles and designations indicating their specialization, if any, in their professions; and

d. if the attendance of the insured person is required at the examination, the day, time and location of the examination and, if the examination will require more than one day, the same information for the subsequent days.

36As previously stated, s. 44(1) of the Schedule allows for an insurer to conduct examinations for the purposes of determining entitlement to benefits. In this proceeding, the insurer has previously conducted examinations, and has determined, based on new available medical evidence provided by AGS, that further investigation is both reasonable and necessary. In addition, there is no evidence or argument put forth by AGS that the number of assessments were “more often than reasonably necessary”.

37Section 44(5) sets out additional requirements for insurer’s requesting examinations. In this proceeding, Echelon stated the medical reason as noted above in paragraph 30. The November 14, 2018 Notice of Examination advised AGS that a s. 44 paper review would be conducted pursuant to s. 44(5).

38I disagree with AGS’s claim that Mr. Goodman or Mr. Pollack did not act on behalf of Echelon in obtaining the Dr. Oppenheimer report. During this entire proceeding, both Mr. Goodman and Mr. Pollack were agents of Echelon, working on its behalf and taking instructions from it.

39For the reasons stated above, I find that Echelon, Mr. Goodman and Mr. Pollack’s actions (on behalf of Echelon) complied with s. 44.

Issue #3 – Can Echelon’s application (19-007602/AABS) proceed?

40Under s.56 of the Schedule, an application to the Tribunal is required to be commenced within two years after the insurer’s (emphasis added) refusal to pay the amount claimed. When an insurer refuses to pay a benefit, it is required to give the insured person written notice under s.54 of the Schedule of the right to dispute the refusal.

41AGS argues that since Echelon began paying the attendant care benefit, it thereby waived its right to raise the issue of causation after the two-year limitation period has passed. Approval and payment of a benefit does not trigger s. 56. It is triggered by a denial or a dispute over quantum. Section 56 plainly states “after an insurer’s refusal to pay a benefit”. Further, in this proceeding, the insurer approved the benefit and commenced payment of said benefit.

42AGS submits that Echelon’s application lacks a foundational basis, as it does not relate to a specific benefit in dispute, pursuant to the Schedule and s. 280 of the Insurance Act.

43Echelon submits that its cause of action is the issue of causation. That being, the material facts on which Echelon bases its application involve the association between AGS’s pre-accident medical records and her post-accident premature birth.

44With respect to both counsels, I think they have overly complicated this proceeding by bringing multiple applications, particularly one seeking to permit Echelon to advance a defence. Causation is simply a defence and not a standalone issue to be brought before the Tribunal. It may be raised at any point during the proceeding. Where new evidence becomes available, necessitating an insurer to re-evaluate an insured’s entitlement to benefits; or what contributing factors may need to be considered as to the cause or source of injuries or impairments, this may lead to the defence argument of causation to be raised.

45I find that causation can be argued at the substantive issues hearing in this proceeding. Echelon is not prohibited by any limitation period from raising this defence argument. Echelon should not have filed its own application to address the issue of causation, but, given that 19-007602/AABS has been consolidated into Tribunal file 18-001994/AABS, the application is not necessary, and the issue is moot.

CONCLUSION

46For the above reasons, I find the following:

a. Echelon is not precluded from arguing causation;

b. Echelon can rely on the report of Dr. Oppenheimer; and

c. Echelon’s application, 19-007602/AABS is dismissed as moot and without prejudice to Echelon’s ability to raise causation in the formal hearing of 18-001994/AABS.

Released: August 26, 2020

__________________________

Derek Grant

Adjudicator

Footnotes

1. 1Pucci v. The Wawanesa Mutual Insurance Company, 2020 ONCA 265
2. 2Applicant Document Brief - Tab 1 Neonatal-Perinatal Paper Review Report of Dr. Dany Weisz dated November 16, 2016 at pg. 5.
3. 3Ibid - Tab 2 Correspondence by Respondent to Applicant dated December 1, 2016 approving OCF-18 dated April 8, 2016.
4. 4Exhibit 1 Log Notes redacted at page 102 entry dated January 3, 2017
5. 5Tab 11 Email thread between Jason Goodman and Dr Oppenheimer variously dated between January 5, 2017 and April 3, 2017
6. 6Exhibit 1 - Log Notes redacted at page 173 entry dated September 8, 2017
7. 7Applicant Document Brief - Tab 1Z Email thread between Jason Goodman and Dr Oppenheimer variously dated between March 13, 2018 and January 17, 2018