Seepersaud v. Allstate Insurance
Released Date: 02/09/2021
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:
Nicholas Seepersaud Applicant
and
Allstate Insurance Respondent
DECISION
ADJUDICATOR: Jesse A. Boyce, Vice-Chair
APPEARANCES:
For the Applicant: Giovanna Barrasso
For the Respondent: Laura Meschino
HEARD: By way of written submissions
OVERVIEW
1The applicant was injured in an accident on May 10, 2019, and sought various benefits, including an income replacement benefit (“IRB”), from the respondent, Allstate, pursuant to the Statutory Accident Benefits Schedule - Effective September 1, 20101 (''Schedule''). The applicant submits that Allstate failed to pay his IRB in a timely manner, as it did not remit the first payment until May 22, 2020, over one year after he first submitted his application. Further, the balance of his IRB and interest on same was not completely paid until June 24, 2020.
2The applicant asserts that all of the information necessary to calculate his IRB was provided to Allstate by June 2019. In addition, the applicant asserts that he provided all of the additional information that Allstate requested pursuant to s. 33 of the Schedule by August 2019. The applicant also provided his accounting report to Allstate in November 2019. The applicant submits that Allstate consistently and unreasonably delayed the payment of his IRB and failed to adjust his claim in good faith, justifying an award under s. 10 of O. Reg. 664.
3The applicant submitted an application to the Tribunal for dispute resolution. At the case conference, the parties settled the issues in dispute, leaving only the issue of whether a s. 10 award is payable for this written hearing.
ISSUE IN DISPUTE
4The following is the sole issue in dispute:
i. Is the respondent liable to pay an award under s. 10 of O. Reg. 664 because it unreasonably withheld or delayed payments to the applicant?
RESULT
5I find an award in the amount of $4,025.00, representing 25% of the total benefits payable, is appropriate due to Allstate’s unreasonable withholding and delay of the payment of the applicants IRB. Interest applies at the rate of 2% per month, compounded monthly.
ANALYSIS
Section 10 Award
6Under s. 10, the Tribunal may award up to 50% of the total benefits payable if it determines that the insurer unreasonably withheld or delayed the payment of benefits. The Tribunal has determined that an award is justified where the delay or withholding of benefits by the insurer is unreasonable conduct, meaning “behaviour which is excessive, imprudent, stubborn, inflexible, unyielding or immoderate.”2 The onus is on the applicant to prove, on a balance of probabilities, that Allstate’s conduct meets this criteria.
7I find the evidence clearly demonstrates that Allstate unreasonably withheld and delayed the payment of the applicant’s IRB claim for over one year of his eligibility. I find Allstate’s conduct—or more specifically, its lack of conduct or engagement with the claim for extended periods of time—in adjusting the applicant’s claim can certainly be described as imprudent, immoderate and unyielding, justifying an award under s.10.
8Indeed, on the evidence, I agree with the applicant that all of the documentation reasonably required for Allstate to initiate and calculate his IRB claim was provided in a timely manner. I find that an OCF-1 accompanied by a completed OCF-2 and income documentation was provided to Allstate on May 29, 2019. An OCF-3 confirming that the applicant was substantially unable to perform the essential tasks of his employment and was unable to return to work on modified duties followed and was received by Allstate on or before June 7, 2019. The adjuster’s log notes from this day confirm that the applicant was not entitled to a Non-Earner Benefit. Despite this fact, the parties agree that Allstate then requested an Election of Benefits (“OCF-10”) form from the applicant anyways and made several s. 33 requests for the applicant’s family doctor records, OHIP records and income records.
9The correspondence shows that the applicant satisfied Allstate’s s. 33 requests in a timely manner, as he submitted the family doctor records via email on July 2, 2019, his OHIP records via email on July 25, 2019, the OCF-10 via fax on July 25, 2019 and additional income documentation via fax on August 7, 2019. These submissions were all in addition to the OCF-2 and income records submitted with the OCF-1 in May 2019. Allstate does not dispute this.
10Then, nothing happened. The applicant asserts that he made numerous attempts to contact Allstate over the following months. On November 11, 2019, the applicant sent an email to Allstate advising that it had failed to respond to the applicant’s claim since July 2019. The email states that due to the lack of correspondence from Allstate, that he was going to have his own IRB calculation completed by a forensic accountant. On November 22, 2019, an S&T Accounting Report was provided to Allstate. The log notes indicate the report was received, but Allstate again took no action.
11Finally, on December 23, 2019, the issue was seemingly escalated to Allstate’s department manager via phone call, who was advised of the lack of communication and overall delay in the payment of the applicant’s IRB. Allstate confirmed receipt of the documentation and the log notes indicate that an accountant would be assigned to calculate the IRB “right away.”
12And yet, Allstate did not produce its Davis Martindale accounting report until May 8, 2020, almost one year to the day of the accident. Allstate then requested more financial information from the applicant to determine IRB quantum, which the applicant promptly provided directly to the accountant. In any event, by this time, the applicant had already applied to the Tribunal.
13Allstate then issued three lump sum payments to the applicant: a May 22, 2020 explanation of benefits (“EOB”) confirms a $6,558.37 payment of IRB to the applicant for the period May 18, 2019 to October 19, 2019, with interest; a June 5, 2020 EOB confirms a $9,175.24 payment of IRB to the applicant for the period October 19, 2019 to June 12, 2020; and a June 24, 2020 EOB confirms a $366.44 payment of IRB interest to the applicant for the period October 19, 2020 to June 5, 2020. In total, Allstate has remitted overdue IRB payments, with interest, in the amount of $16,100.05. It continues to pay IRB to date.
14However, instead of conceding that it mishandled this claim by failing to communicate with its insured for months at a time and by waiting over one year to calculate an IRB despite having all of the requested documentation, Allstate submits that an award is not appropriate. It argues that the log notes alone cannot give adequate insight into the adjusting; that it is notable that the applicant has chosen not to adduce any oral evidence from its adjuster; that the Tribunal has confirmed that an insurer will not face an award just because an insurer “got it wrong”; and that the applicant failed to provide a completed OCF-13 declaring what, if any, post-accident income he received. To this end, Allstate submits that the applicant does not come before the Tribunal with “clean hands.” In the alternative, Allstate submits that if the Tribunal finds the applicant is entitled to an award, the award should be reduced due to the above and in line with the Tribunal’s reasoning in 17-005825 v. Aviva Canada Inc., 2018 CanLII 98285 (ON LAT) where a 25% award was ordered on similar facts.
15I am not persuaded by Allstate’s submissions. It is unclear how the log notes do not give adequate insight into Allstate’s failure to assess the applicant’s IRB claim for, at minimum, 10 months, despite the applicant fulfilling all of its requests and the log notes documenting same. Further, it is unclear why it is “notable” that the applicant did not call the adjuster to speak to Allstate’s mishandling of the claim—or why the applicant would even rely on Allstate’s adjuster to prove his case—where Allstate has not disputed the applicant’s timeline of events. Also, I fail to see how the applicant’s failure to provide an OCF-13 is evidence of unclean hands where that form is rarely used (if not discontinued) and where it is not required to calculate IRB. Finally, I reject Allstate’s submission that this is a situation where the insurer simply “got it wrong”. Rather, on the evidence, I find this is a situation where Allstate simply dropped the ball.
16Even affording Allstate the benefit of the doubt, I find that it still failed to communicate with its insured for several months after its s. 33 requests were satisfied on August 7, 2019. Allstate did not acknowledge receipt of his documentation. It did not calculate or pay his IRB. It did not respond when the applicant indicated that he would be commissioning his own accounting report. It did not respond when it received the S&T Accounting Report. Indeed, the applicant had to escalate the issue to the department manager on his own in December 2019 and, despite indicating that an accountant would be retained, Allstate still did not act, forcing the applicant to apply to the Tribunal. Following the applicant’s application to the Tribunal in January 2020, it still took Allstate nearly five months to commission the Davis Martindale IRB report. Payment for the overdue IRB payments and interest was then not completed until June 24, 2020, over one year after the accident.
17Accordingly, I agree that the delay and unreasonable withholding of the IRB payment caused unnecessary stress and hardship, as the applicant was not working and was without income assistance for over one year. I find this delay can be attributed directly to Allstate’s unreasonable mishandling. In my view, this is clear evidence of imprudent, immoderate and unyielding file handling, as it led to significant delay. While I agree that it is not the type of egregious or bad faith conduct that would attract the maximum 50% award, I rely on the Tribunal case 17-005825/AABS, provided by Allstate, and find a 25% award is appropriate in order to deter Allstate from neglecting the claims of its insureds moving forward.
ORDER
18An award in the amount of $4,025.00 is appropriate, representing 25% of the total IRB payable. Interest at 2% per month, compounded monthly, applies.
Date of Issue: February 9, 2021
Jesse A. Boyce Vice Chair
Footnotes
- O. Reg. 34/10, as amended.
- See, for e.g., 17-006757 v. Aviva Insurance Canada, 2018 CanLII 81949 (ON LAT); S.M. v. Unica Insurance Inc., 2020 CanLII 61460 (ON LAT Reconsideration).