Citation: A.M. v. Aviva General Insurance Company, 2020 ONLAT 19-004182/AABS

Released Date: 08/13/2020

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:

A. M.

Applicant

and

Aviva General Insurance Company

Respondent

DECISION

ADJUDICATOR:

Derek Grant

APPEARANCES:

For the Applicant:

Rizwan Wancho, Paralegal

For the Respondent:

Candace Mak, Counsel

HEARD:

By way of written submissions

1The applicant, A.M., was injured in a motor vehicle accident on November 10, 2016. She sought benefits from the respondent, Aviva General Insurance Company (“Aviva”), pursuant to the Statutory Accident Benefits Schedule – Effective September 1, 2010¹ (the “Schedule”).

2Aviva denied A.M.’s claim for income replacement benefits (“IRBs”). A.M. disagreed and applied to the Licence Appeal Tribunal – Automobile Accident Benefits Service (the “Tribunal”) for dispute resolution.

PRELIMINARY ISSUE

3The following preliminary issue was raised by Aviva:

(i) Pursuant to section 56 of the of the Schedule, is A.M. barred from disputing a denial of an income replacement benefit in the amount of $400.00 per week for the period of February 15, 2017, to date and ongoing?

RESULT

4Based on a review of the evidence, I find that A.M. is statute-barred from proceeding with her application for an IRB as Aviva issued a valid denial that triggered the limitation period and A.M. did not appeal in time. Further, I decline to extend the limitation period.

BACKGROUND

5At the time of the accident, A.M. was employed full-time as an Office Manager with [Office Products]. In her Application for Accident Benefits Form (“OCF-1”) dated November 30, 2016, she indicated she was employed and working at the time of the accident. In addition, she submitted a Disability Certificate (“OCF-3”) dated November 29, 2016, signed by her family physician. The OCF-3 stated that A.M. was substantially unable to perform the essential tasks of her employment, which is the test for entitlement to an IRB benefit under the Schedule.

6On January 11, 2017, Aviva wrote to A.M., requesting an Election of Benefit Form (“OCF-10”). The OCF-10 was provided to Aviva on January 12, 2017. On January 16, 2017, Aviva sent A.M. an Explanation of Benefits (“EOB”), which notified A.M. that she was not eligible for an IRB because the total days missed does not equal the waiting period for the IRB. Instructions outlining A.M.’s options to dispute Aviva’s decision were attached.

7A.M. submits that at the date of the EOB, she was attempting to continue with her job on modified duties and hours, therefore no OCF-2 was submitted. A.M. did not direct me to any evidence that she appealed the decision within two years following Aviva’s denial.

8It is not until August 14, 2019, that A.M. submits an OCF-2 indicating that she is seeking IRBs. A.M. then submitted her application to the Tribunal on April 30, 2019. At the October 22, 2019 case conference, A.M. requested to add IRB entitlement as an issue in dispute.

ANALYSIS

Did Aviva’s denial trigger the limitation period?

9The parties’ positions are clear: Aviva argues that it issued a clear, unequivocal denial of IRBs in its explanation of benefits from January 16, 2017, triggering the limitation period and that A.M. did not appeal the denial within two-years.

10In response, A.M. argues that Aviva did not provide a clear, unequivocal denial in January 2017, that A.M. never submitted an election form claiming IRB and that Aviva’s alleged denial did not trigger the limitation period because of its conduct and lack of clarity since her application was filed.

11For the reasons that follow, I agree with Aviva and find that it issued a valid denial of the IRB that triggered the limitation period.

The Principles of a Proper Denial

12It is important to determine whether Aviva’s denial was proper in accordance with the principles outlined in Smith v. Co-operators General Insurance Company.² 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.

13Aviva submits it issued a clear and unequivocal denial of the IRB on January 16, 2017, which triggered the limitation period. It points to its letter from that date which provides the following information: that A.M. was not off for the required time period and was therefore not entitled to an IRB; it provided A.M. with notice of her right to dispute the decision; included instructions on how to appeal the denial and the limitation period is highlighted.

14In response, A.M. argues that the denial was not clear and unequivocal because she had yet to make an election at the time, and that she was informing Aviva that she has returned to work. A.M. further submits that she informed Aviva that she is not entitled to an IRB; that she was not requesting an IRB. A.M. contends that Aviva cannot deny, reduce or stop a benefit that does not exist or is not claimed.

15I disagree with A.M.’s argument. I find that Aviva’s notice letter satisfied the basic requirements of Smith because it stated the reasons for the denial (A.M. was not off from work for the required time period); it clearly indicates she is not eligible for an IRB on this basis; and it provides, in straightforward language, the dispute process available to A.M. if she disagreed.

16Additionally, as indicated above, A.M. submitted an OCF-10 in January 2017, which clearly indicates at Part 2, “I choose to receive the following benefit”, with IRB indicated. It stands to reason that Aviva would conclude that A.M.’s intention was to claim entitlement to IRB. This notice would thereby trigger a response from the insurer as to whether it agrees or not to pay the benefit indicated on the OCF-10. Aviva advised A.M. in the negative. I find nothing to substantiate A.M.’s argument that the denial was in any way uncertain or ambiguous.

17For these reasons, I find Aviva’s denial of the IRB was valid. The limitation period for A.M. to appeal began on January 16, 2017. As her application to the Tribunal was not filed until April 30, 2019, I find the limitation period has expired and A.M. is statute-barred from proceeding.

Section 7 of the Licence Appeal Tribunal Act

18Section 7 of the LAT Act affords the Tribunal statutory discretion to extend the time for commencing a proceeding in certain circumstances if it is satisfied that there are reasonable grounds for applying for the extension and for granting relief. There are four factors the Tribunal weighs in determining whether the justice of the case requires an extension be granted: i) the existence of a bona fide intention to appeal within the appeal period; ii) the length of the delay; iii) prejudice to the other party; and iv) the merits of the appeal.³ These factors are not strict elements that must each be met in order to grant an extension of time. Rather, they are a guide to assist in determining the justice of the case. Whether to grant an extension of time depends on the specific facts of each case.⁴

19Having determined that Aviva’s denial was valid, procedural fairness still requires that the Tribunal consider whether an extension of the limitation period should be granted. I find A.M. has not provided compelling evidence that the limitation period should be extended under section 7.

20First, although Aviva issued a proper denial, I find the fact that A.M. submitted an OCF-10 electing an IRB approximately two months following the completion of her OCF-1 and OCF-3 to be an indication that she believed that applying for an IRB was an option for her. I find this action to be evidence of an intention to apply for an IRB. However, the criteria outlined in Manuel states that it must be a bona fide intention to appeal, which A.M. did, but after the deadline.

21I find that A.M. has not provided compelling evidence of a bona fide intention to appeal. For example, on January 16, 2017, Aviva wrote to A.M. to inform her of its position on her eligibility for weekly IRB benefits. A.M.’s explanation of a lack of intent to claim IRBs is contradicted by the OCF-10. It is evident that she intended to claim IRBs when she submitted the OCF-10, which notifies the insurer for which specified benefit she claims entitlement to. A.M. waited until three months after the limitation period elapsed to appeal to the Tribunal and over two years after Aviva’s denial letter. In my view, this weakens A.M.’s argument, because she filed the requisite OCF-10, received a denial based on the submission of the OCF-10, and still failed to take action before the limitation period expired.

22Second, I find the length of the delay in appealing the IRB denial—approximately three months after the expiration of the limitation period—to be an unreasonable period of time. In my view, A.M. has not provided a compelling explanation for the delay, considering her arguments on the way Aviva handled her claim and her insistence that she maintained communication throughout the process. I find the delay does not prejudice one party over another.

23Third, the potential for prejudice to an applicant must always be considered. Here, the prejudice to A.M. is that she will be barred from proceeding with an application for a benefit she may very well need. However, I find there is also prejudice to Aviva in this matter, as it issued a valid denial and did nothing wrong procedurally that would invite a second opportunity for A.M. to claim an IRB. An extension of time would undermine the certainty of the limitation period insurers rely on and Aviva would be faced with the burden of defending against an additional claim after several years without medical assessments to address it.

24Consequently, for these reasons, I find on a balance of probabilities, that A.M. has not provided compelling evidence for the Tribunal to exercise its discretion under section 7 of the LAT Act to extend the limitation period.

AWARD

25Section 10 of Regulation 664 permits the Tribunal to award a lump sum of up to 50% of the amount to which the insured person (i.e. A.M.) was entitled at the time of the award together with interest on all amounts then owing (including unpaid interest) if it finds that that an insurer (i.e. Aviva) has “unreasonably” withheld or delayed payments.

26I have found that A.M. is statute-barred from pursuing her appeal for entitlement to IRBs. As such, Aviva cannot be found to have unreasonably withheld payment of the specified benefit. Accordingly, A.M. is not entitled to a special award.

CONCLUSION

27I find Aviva provided A.M. with a valid denial. The denial was clear and unequivocal and provided A.M. with the required information to determine whether to dispute the denial while also triggering the limitation period.

28I find A.M. is statute-barred from proceeding with her application for IRB at the Tribunal.

Released: August 13, 2020