M.O. v. Jevco Insurance Company, 2020 CanLII 63561

Licence Appeal Tribunal

Citation: M.O. vs. Jevco Insurance Company, 2020 ONLAT 19-003520/AABS

Released Date: 08/17/2020

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:

M.O.

Applicant

and

Jevco Insurance Company

Respondent

PRELIMINARY ISSUE DECISION

ADJUDICATOR: Jesse A. Boyce

APPEARANCES:

For the Applicant: A. Fabio Longo

For the Respondent: Melinda J. Baxter

HEARD: Via written submissions

OVERVIEW

1On June 16, 2002, the applicant, M.O., was riding his tricycle along the sidewalk when a vehicle reversed into him and dragged him beneath it. He was only six years old at the time of the accident. As a result, M.O. sustained physical, cognitive and psychological impairments that he alleges slowed his developmental progress and continue to affect his day to day life as an adult.

2It is uncontested that M.O. never sought benefits following the accident and did not notify the respondent, Jevco, of same until over a decade later. M.O. was not covered under a standard Ontario automobile insurance policy, and neither were his parents, both of whom were recent immigrants. Upon reaching the age of majority, M.O. retained counsel to commence a tort action against the driver of the vehicle and provided notice of same to Jevco, via a tort action letter, dated July 14, 2014. On the evidence, it does not appear that Jevco responded to the tort action letter or remitted an accident benefits package to M.O despite the letter being stamped as received on July 21, 2014. In 2016, M.O.’s counsel retired, and he was forced to secure new counsel.

3In 2016, M.O. retained his current counsel who informed him of his right to claim accident benefits as a result of the 2002 accident. M.O. then submitted an application for accident benefits to Jevco on December 5, 2016. On March 16, 2017—100 days following the submission of the application—Jevco responded to M.O.’s application, requesting further information and an explanation for the delay. M.O. provided written reasons for the delay, chiefly that he was six-years-old at the time of the collision and that no one from Jevco wrote to him or his parents explaining the accident benefits process. M.O. also participated in an in-person statement explaining the circumstances of the accident.

4On June 1, 2017, Jevco denied M.O.’s application, citing a delay in both notifying it of his intention to claim accident benefits and in submitting his application for accident benefits. M.O. disagreed, arguing that the tort action letter received by Jevco on July 21, 2014 constituted proper notice of the 2002 accident and that Jevco breached its obligation to inform him of his rights to accident benefits and to provide him with the proper forms to do so under s. 32 of the Statutory Accident Benefits Schedule – Effective September 1, 2010 (the “Schedule”). Further, M.O. submits that he has a reasonable excuse for the delay in applying for accident benefits under s. 34 and that any limitation period imposed should be extended under s. 7 of the Licence Appeal Tribunal Act and that his appeal should be determined on the merits because the Schedule is consumer-protection legislation.

5M.O. applied to the Tribunal for resolution of the dispute. At the case conference, Jevco raised the preliminary issue giving rise to this written hearing. It submits that M.O. is statute-barred from proceeding with his application at the Tribunal pursuant to s. 55 of the Schedule because he did not comply with the time limits to notify Jevco of the accident or apply for accident benefits prescribed in s. 32 and further that he has not provided a reasonable explanation for the delay.

ISSUES IN DISPUTE

6Three issues were identified as being in dispute in the Case Conference Order. However, for the purposes of this preliminary issue hearing, the parties agree that only issue (i) as listed in the Order will be addressed, as there are no substantive benefits yet in dispute. Accordingly, the following issue is the sole matter in dispute, as identified in the Case Conference Order:

i. Is the applicant entitled to benefits pursuant to the Schedule for claims submitted to the respondent December 5, 2016 and denied on June 1, 2017 for a motor vehicle accident that occurred June 18, 2002?

RESULT

7I find M.O. is entitled to proceed with his application for accident benefits.

ANALYSIS

The limitation period, M.O.’s status as a minor and the tort action letter

8The parties agree that, despite the accident occurring in 2002 when M.O. was only six years old, any two-year limitation period would not begin to run until he reached the age of majority. M.O. turned 18 on October 20, 2013, which means that the two-year limitation period would elapse on October 20, 2015, being his 20th birthday. As noted above, and it is not disputed, M.O. did not submit his application for accident benefits to Jevco until December 5, 2016. If only this date is considered, then M.O.’s “notice” and application were clearly late under s. 32, as his notice was served well-past any of the applicable timelines in the Schedule. It is Jevco’s position that M.O. did not provide notice of his intention to apply for accident benefits until the submission of an OCF-1, dated December 5, 2016, which was submitted 14.5 years after the accident and more than three years after M.O.’s 18th birthday, which it argues “goes well beyond every benefit of doubt provided at law for a minor to advance a claim by over a year.”

9However, M.O. asserts that he provided sufficient notice of the accident to Jevco via the tort action letter dated July 14, 2014 that was received by Jevco (formerly Kingsway Insurance) on July 21, 2014. Jevco disputes M.O.’s argument that the tort action letter constitutes sufficient notice under the Schedule because it is a “standard form letter provided to a tort insurer” and the letter did not actually indicate that M.O. was making a claim for accident benefits. Jevco submits that it is implicit in the notice provision that an insured must notify an insurer of their wish to apply for accident benefits from that insurer. It relies on the FSCO decision Carruthers and Royal & Sunalliance¹ to support its position that, in situations where the policy in question is not one where the insured is a customer of the insurer, and other policies may apply and/or have priority, it is not a reasonable presumption to consider that an applicant will be claiming accident benefits simply from the provision of a “tort notice letter”.

10I disagree. While I am alive to the findings in Carruthers, it is not binding on me and, in any event, I find it distinguishable from the facts in this matter and prefer the reasoning in the Tribunal cases provided by M.O.² Unlike the facts of Carruthers, M.O. did not retain his previous counsel for the purposes of an accident benefits claim. Further, M.O.’s tort action letter providing notice of the 2002 accident was addressed directly to Jevco, which is unlike Carruthers where it was only addressed to the third-party driver. Additionally, as a six-year old with uninsured parents, there is no evidence that M.O. was covered under another policy or that Jevco even made this argument, as the claimant in Carruthers did. Critically, it does not appear that Jevco took any steps to confirm whether M.O. was seeking accident benefits as would be appropriate when information about an accident involving a minor child is received. Rather, Jevco was seemingly content to leave M.O.’s stone unturned and has not provided any log notes. In contrast, the Tribunal cases submitted by M.O. determined that a tort letter is sufficient to satisfy an insurer’s obligations under s. 32 of the Schedule because the end goal is the same, namely, to obtain information necessary to notify the insurer of an intention to make a claim. On receipt of this information, I agree that an insurer should reach out to the injured party to advise them of the potential claim and consider its own obligations to adjust same.

11On review of the tort action letter that is in evidence here, I find it is not a “standard form letter” as posited by Jevco. In my view, it is somewhat disingenuous to argue that a letter that states that an infant sustained injuries in a car accident is somehow “standard” or would be filed away without consideration. Log notes would have been helpful to assess Jevco’s adjuster’s handling on receipt of this information. More concerning to me is the fact that Jevco seemingly took no action whatsoever upon receipt of this letter (and accompanying tort statement of claim) stating that one of its insureds was being held liable for running over a child, apparently because the letter did not specifically indicate that accident benefits were being pursued by that child. Jevco did not remit an accident benefits package to M.O. On the evidence, it is unclear whether Jevco contacted M.O. at all.

12Putting this aside, I also find it absurd that Jevco would not have been aware of the 2002 accident and M.O.’s potential accident benefits claim until it received the OCF-1 in December 2016 as there is a police report in evidence and an ambulance attended at the scene where a child was run over by one of its insureds. I agree with M.O. that it is difficult to conceive that Jevco’s insured would not have notified it after colliding with a child riding a tricycle. If Jevco is given the benefit of the doubt and was somehow not aware of the collision in 2002, I find it was made aware, at the latest, by July 21, 2014 when it received the tort action letter and statement of claim. As M.O. submits, and I agree, this notice was provided within one year of M.O.’s 18th birthday and Jevco took no action to investigate. I agree that Jevco failed to remedy its failure under s. 32 to advise M.O. on potential entitlement to benefits and to provide him with an application. It did not reach out or provide an explanation to M.O.’s guardians at any point while he was a minor. It did not write directly to M.O. after he reached the age of majority and on receipt of the tort action letter. Considering the Schedule is consumer-protection legislation, Jevco’s actions are alarming.

Section 32 and a “reasonable explanation” under s. 34

13Under the applicable sections of the Schedule (at the time of the accident under ss. 31/32 and in the current version under ss. 32/34) M.O. is required to notify Jevco of his intention to apply for benefits no later than the 30th day after the circumstances arose that gave rise to his entitlement to the benefit, or “as soon as practicable thereafter.” Jevco would then be required under s. 32 to provide M.O. with the proper forms in order to complete his application. After receipt, M.O. would then have 30 days to submit the forms back to Jevco under s. 32(5) for a determination on entitlement. However, s. 34 provides that M.O.’s failure to comply with the time limit does not automatically disentitle him to benefits so long as he has a “reasonable explanation” for the delay.

14As we know, M.O. did not notify Jevco within 30 days of the accident in 2002. However, having determined above that Jevco had sufficient notice by July 21, 2014, at the latest, that an uninsured minor who was injured in a 2002 accident by one of its insureds had now reached the age of majority, I agree that Jevco should then have taken steps to inform M.O. of his potential entitlement to benefits. It did not. Instead, Jevco asserts that s. 32 has no specific consequences for non-compliance and further submits that it was M.O.’s onus to provide notice of being involved in an accident first and/or a reasonable explanation for the delay in applying before any other procedural requirements of s. 32 are triggered on its end. It relies on my decision in J.V. v. Unifund Assurance Co.³ to support its argument that “this is especially the case when the applicable policy was not held by the applicant on the date of loss and the ‘notice’ was an OCF-1.” Jevco further submits that M.O. has not provided a reasonable explanation based on the criteria established in the case law.⁴

15Again, I disagree. Even though I find that Jevco did not satisfy its obligations under s. 32 when notice of the 2002 accident was provided, I still find that M.O. easily meets the test for a “reasonable explanation” for delay under s. 34. Generally, for an explanation to be “reasonable”, there are five factors that the insured must establish: the explanation must be determined to be credible or worthy of belief; ignorance of the law alone is not a reasonable explanation; a reasonable explanation is both a subjective and objective test that should take into account both the personal characteristics and a reasonable person standard; the lack of prejudice to the insurer does not make an explanation automatically reasonable; and, finally, an assessment of reasonableness includes a balancing of prejudice to the insurer, hardship to the claimant and whether it is equitable to relieve against the consequences of the failure to comply with the time limit.

16Frankly, the first line of the tort action letter— “We act on behalf of [M.O.] who was an infant at the time of the accident with regard to injuries he sustained”—is, in my view, an eminently reasonable explanation for delay that should have triggered action on Jevco’s behalf. There is a police report, volumes of contemporaneous medical documentation evidencing M.O.’s struggles post-accident and to date and M.O.’s age in 2002 is not disputed. The explanation is clearly credible and worthy of belief as M.O. could not have been expected to act as a minor. As recent immigrants, M.O.’s parents spoke and continue to speak limited English, they did not own a vehicle, did not have their own car insurance and, as such, they could not have applied to their own insurance company because they did not own a vehicle. While ignorance of the law alone is not reasonable, I find it clear that M.O. sought legal advice in the months after reaching the age of majority. When his previous counsel retired, he sought new counsel and promptly submitted his application. Prior to reaching the age of 18, M.O. was reliant entirely on his mother.

17With regards to the remaining cases cited by Jevco, I agree with M.O. that they are all distinguishable. In my decision in J.V. v. Unifund, the first “notice” received by the insurer was an OCF-1 five years post-accident and the insured was not a minor. I accepted that it was reasonable for the insurer to request an explanation for the delay and ultimately found the explanation not reasonable. Here, M.O. was a minor, the tort notice letter was received within a year of M.O.’s 18th birthday and the letter indicated he was a minor at the time of the accident, which I find is a reasonable explanation. K.H. and Northbridge General Insurance Company⁵ is distinguishable because the insured in that case was an adult with capacity at all times, she was not reliant on her immigrant parents, she knew who her insurance company was and relied to her detriment on counsel. I prefer the cases submitted by M.O., especially the FSCO case Novakovic v. Coseco Insurance Company⁶, where a minor of immigrant parents’ explanation for a 16-month delay after turning 18 was considered to be reasonable. The facts are nearly identical to the facts before the Tribunal here.

18Finally, Jevco argues that the significant delay is presumptively prejudicial to it because it prevents Jevco from requesting contemporaneous, medical examinations and records. It submits that this lack of information deprives “both parties of accurate information about what effects, if any, an accident has had on an insured person and makes it impossible to delineate the accident’s effects and those arising from subsequent events, and there is no remedy for this loss of opportunity.” With respect to any arguments surrounding hardship to M.O., Jevco submits that “he has other avenues to pursue to overcome any potential hardship if not permitted to pursue an accident benefit claim,” being relief through his tort action, as well as a potential action against his previous solicitor in negligence. It asserts that both of these options have been held as alternative avenues to overcome any potential hardship to an applicant.

19I disagree and find limited prejudice to Jevco. I find that the totality of the circumstances, together with the hardship caused by denying M.O. access to potential claims under the Schedule, balanced with the limited, if any, prejudice to Jevco (considering its inaction), easily meets the test for reasonableness. Again, M.O. was six years old when he was run over. His parents were recent immigrants without insurance policies. He was diagnosed with PTSD at seven years old, a diagnosis that was confirmed as an adult. He was held back in school and continues to have learning disabilities. He received and continues to receive psychological counselling. He has pain, he struggles to work. He continues to wet the bed at night. There are volumes of contemporaneous medical records to quell Jevco’s concerns about accurate information and the effects of the accident on M.O. over time. I agree with Jevco that M.O. may have other avenues to address his hardship, but it does not follow that he should be barred from pursuing accident benefits or is somehow limited to one avenue.

20While I make no specific finding on M.O.’s entitlement, I find that he provided notice of the 2002 accident to Jevco by July 21, 2014 at the latest in the form of the tort notice letter and should be permitted to proceed with his substantive claim. The tort notice letter indicated that he was a minor at the time of the accident and identified Jevco’s insured as liable for the injuries he sustained. Jevco took no action. While I find that Jevco’s failure to reach out to M.O. or to provide him with application forms for his potential accident benefit claims was a failure under s. 32 that prevents it from relying on the limitation period, I find, in any event, that M.O. provided a reasonable explanation for delay under s. 34. Accordingly, I find he may proceed with his claim at the Tribunal.

Remaining arguments

21As noted, M.O. offered several alternative arguments—that Jevco did not comply with the 10-day rule under s. 32(6) when it responded 100 days after his OCF-1 was submitted, that relief from forfeiture is an appropriate remedy, that M.O. meets the criteria for an extension under s. 7 of the Licence Appeal Tribunal Act—to support his position that he should not be barred from proceeding with his application. While I am alive to these submissions, given my findings above, it is not necessary to address them, as I find M.O. is permitted to proceed with his appeal.

CONCLUSION

22M.O. may proceed with his appeal at the Tribunal. The parties are directed to contact the Tribunal on receipt of this decision in order to schedule a case conference to determine how to proceed.

Footnotes

1. 1Carruthers and Royal & Sunalliance Insurance Company of Canada, FSCO A99-000923.
2. 217-000317 v. Aviva (ON LAT) and 18-000790 v. Jevco Insurance Co (ON LAT).
3. 32019 CanLII 130359 (ON LAT).
4. 4See, for e.g., K.H. and Northbridge General Insurance Company, 2019 CanLII 101613; Horvath and Allstate Insurance Company of Canada, FSCO A02-000482; S.R. and State Farm Mutual Automobile Insurance Company, FSCO A09-002171.
5. 52019 CanLII 101613 (ON LAT).
6. 62003 CarswellOnt 2831 (FSCO).