[CM] v. Intact Insurance Company, 2021 CanLII 30776

Citation: [CM] v. Intact Insurance Company, 2021 ONLAT 20-001049/AABS

Release date: 04/06/2021

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:

[CM]

Applicant

and

Intact Insurance Company

Respondent

PRELIMINARY ISSUE DECISION

ADJUDICATOR:

Cezary Paluch

APPEARANCES:

For the Applicant:

[CM], Applicant, self-represented

For the Respondent:

Ramona Russel, Representative

Tara Lemke, Counsel

HEARD via Teleconference:

December 15, 2020, with written submissions

OVERVIEW

1The applicant, CM, was injured in an accident on August 3, 2013, when she fell from her motorcycle and fractured her pelvis and underwent several surgeries. She sought and received medical/rehabilitation benefits, periodic attendant care and non-earner benefits from the respondent, Intact, under the Statutory Accident Benefits Schedule – Effective September 1, 2010 (the “Schedule”).

2On August 12, 2015, CM signed a Settlement Disclosure Notice¹ and Full and Final Release² settling her claim to statutory accident benefits with respect to this accident for $50,000.00. This amount represented $38,480.00 for non-earner benefits and $8,861.17 for past and future medical benefits.³ CM did not have legal representation when she entered into this agreement and dealt with Intact herself.

3Sometime in 2017, CM forwarded to Intact an Application for Determination of Catastrophic Impairment (OCF-19)⁴ form (CAT), claiming she is catastrophically impaired as a result of the accident. Intact denied her claim on the basis the previously mentioned settlement included any future claims. Subsequently, CM filed an application to the Tribunal in January 2020.

4The parties participated in a case conference on July 14, 2020 and a preliminary issue hearing was ordered by way of a combination hearing. The purpose of the teleconference portion of the hearing, which took place on December 15, 2020, was to give the parties an opportunity to make any further submissions, and for me to ask questions.

5CM was self-represented at both the case conference and teleconference hearing. Before proceeding with the hearing, I asked CM whether she was ready to proceed. She acknowledged that she was. I also asked whether she was aware that she had a right to legal representation. In response, she said she wished to proceed without a lawyer or paralegal and wanted to represent herself in this proceeding.

PRELIMINARY ISSUE

6The issue to be decided by the Tribunal as set out in the Order dated July 16, 2020 is:

a. Is the applicant barred pursuant to Ontario Regulation 664 from proceeding with her application because she entered into a valid settlement agreement with the respondent?

RESULT

7CM is statute-barred from rescinding the settlement that she reached with Intact on August 12, 2015 by signing both the Settlement Disclosure Notice and Full and Final Release. The settlement was valid, and she did not rescind the settlement within two business days, as required in s. 9.1(4) of O. Reg. 664. Moreover, CM has not established, on a balance of probabilities, that she lacked capacity or was placed under duress at the time she signed the Settlement Disclosure Notice and Full and Final Release.

ANALYSIS

Intact’s Position

8Intact submits that CM settled her accident benefits claim in its entirety in 2015 and that, by 2014, CM was aware that she could apply for a catastrophic impairment determination, which she did not do. Intact maintains that CM is bound by the provisions of the settlement disclosure notice and the full and final release which was clear and straightforward and complied with the requirements of O. Reg. 664 and cannot be set aside. Moreover, in reply submissions, Intact maintains that it could not consider whether CM suffered a catastrophic determination absent a CAT application, which she did not file until 2017, well after the settlement. Therefore, it argues, there are no grounds for finding that she is not bound by the settlement and CM is statute-barred from seeking CAT level benefits. In the alternative, Intact submits that, if this matter is not statute-barred, that the CAT dispute be suspended pending CM repaying the settlement funds.

CM’s Position

9With respect, CM’s arguments at the teleconference hearing were difficult to follow, although she was very cooperative. She was self-represented and only filed an email letter dated November 4, 2020 as part of her submissions. Unfortunately, no formal written submissions or document brief were ever provided as was required by the July 16, 2020 case conference order which was extended by the October 30, 2020 motion order. At the teleconference portion of the hearing, she did refer to some additional documents that she apparently provided to Intact, though those were not before me. CM also stated several times that she has difficulty remembering things and has head trauma and complications from her surgery and more recent additional complications from a broken femur. She explained that, if she had a lawyer at the time of the settlement, this would not have happened, yet obviously did not retain counsel for this proceeding and wanted to proceed without a lawyer.

10In her submissions at the hearing, CM was understandably focused on her injuries and pain. She stated that she was “10 out of 10 pain and mentally, emotionally and physically in grave condition.” With respect to the legal issue, she appears to argue that she he did not fully intend to settle her claims for benefits and/or did not have capacity and was under duress and pain when she signed the settlement agreement. CM submits in her email that, in correspondence with Intact from July 3, 2015 to August 12, 2015, there was never any mention that catastrophic forms available were available for her to fill out. She further wrote as follows:

The settlement was unfair because I was not mentally or physically fit to make any decision of that magnitude at that time due to my trauma and suffering that I was in. They were aware I was catastrophic and conned me into a $50,000 cheque knowing that I didn’t have [sic] lawyer either.

Analysis

Expiry of the Cooling Period

11The settlement of accident benefits claims is an integral part of the claims process. Insured persons and insurers regularly settle claims either before filing an application to the Tribunal or after. In this respect, section 9.1 of O. Reg. 664 under the Insurance Act is a detailed code governing the settlement of claims for accident benefits (the “Settlement Regulation”).⁵ A “settlement” means an agreement between an insurer and an insured person that finally disposes of a claim or dispute in respect of the insured person’s entitlement to one or more benefits under the Schedule.

12The Settlement Regulation sets out requirements for an insurer to issue certain documents, including a "disclosure notice" containing a description of the available benefits and the offer to settle made by the insurer, a statement recommending independent legal advice, and an acknowledgement by the insured that he or she read the disclosure notice and considered seeking independent legal, medical or financial advice before signing.⁶

13The Settlement Regulation’s purpose is to permit an insured to receive sufficient information from his or her insurer in order to make a meaningful comparison between a proposed settlement payment and the value of the benefits that might otherwise be available to that person under the Schedule.⁷

14Subsections 9.1(4) and (5) of the Settlement Regulation address an insured’s right to rescind a settlement:

(4)The insured person may rescind the settlement within two business days after the later of the day the insured person signs the disclosure notice and the day the insured person signs the release.

(5)The insured person may rescind the settlement after the period referred to in subsection (4) if the insurer has not complied with subsections (2) and (3).

15Subsections 9.1(7) and (8) of the Settlement Regulation confirm how an insured person may rescind a settlement and avoid restrictions on applying to the Tribunal accessing adjudication:

(7)The insured person shall rescind a settlement under subsection (4) or (5) by delivering a written notice to the office of the insurer or its representative and returning any money received by the insured person as consideration for the settlement.

(8)No person may apply to the Licence Appeal Tribunal under subsection 280 (2) of the Act with respect to benefits that were the subject of a settlement or a purported settlement unless the person has returned the money received as consideration for the settlement.

16In this case, the CM does not dispute the form or substance of the Full and Final Release and the Settlement Disclosure Notice, nor that she signed both documents on August 12, 2015. For completion, the wording of the Settlement Disclosure Notice provided to CM is clear and straightforward. It makes plain that it proposes a final settlement of CM’s claim for accident benefits, including all past and future benefits. An addendum to the Settlement Disclosure Notice also included additional information to ensure that CM had a complete understanding of her rights before completing the full and final settlement and that she had an option to continue with her claim. The Settlement Disclosure Notice also contains the requisite description of the available benefits, including that the maximum amount for medical and rehabilitation benefits for non-catastrophic claims was $50,000.00 and that, if her impairment was catastrophic, the maximum amount was $1,000,000.00. As well, on page 6 of the Settlement Disclosure Notice, CM also acknowledges as follows:

I have received and read the Settlement Disclosure Notice provided to me and insurer, and have considered whether or not to obtain independent legal, financial and medical advice.

17In my view, the notice is fully compliant with the requirements of Settlement Regulation.

18The Release is also entitled “Full and Final Release” at the top of the page highlighted in black large letters referencing settlement of all claims for benefits.

19As well, my review of the executed settlement documents is that all the pages are initialled by CM in the right-hand corner. Her signature was signed and witnessed by another person (Frances Hislop). Her correct home address is handwritten in the appropriate section of the release which corresponds to the address in the application filed with the Tribunal. These documents were all returned to Intact. As a result, the requisite cooling period then expired within two business days that she signed the documents on August 12, 2015. Given that the applicant repudiated the settlement outside of the statutory two business days period specified in section 9.1(4) of O. Reg. 664, the only question that remains is whether she lacked capacity at the time or was under duress, as alleged by CM.

Mental Incapacity

20CM has failed to establish on a balance of probabilities that she lacked the mental capacity to enter into the settlement agreement on August 12, 2015 or the immediate days thereafter.

21As a starting point, I note that CM has checked off “Yes” to the question: “Is the Claimant Mentally Incapable” on page 1 of her application received by the Tribunal. Once “yes” is indicated, another form called ‘Representing Minors and Mentally Incapable People’ must be provided. This form appoints another person the ability to file the application on behalf of the claimant/applicant who is alleging to be incapable in proceedings.⁸ However, no such form was ever completed by anyone. Moreover, at the teleconference portion of the hearing, the applicant wanted to represent herself and did not want any legal representation.

22The Substitute Decisions Act, 1992 (“SDA”) sets out the test for capacity with regard to property. Section 6 states:

A person is incapable of managing property if the person is not able to understand information that is relevant to making a decision in the management of his or her property, or is not able to appreciate the reasonably foreseeable consequences of a decision or lack of decision.⁹

23Section 2(1) of the SDA sets out a general presumption of capacity, which may be relied upon by a third party unless there are reasonable grounds to believe that the person is incapable. The burden of proving incapacity lies upon the person who alleges they were mentally incapacitated. In this matter, CM must establish on a balance of probabilities that she was mentally incapacitated.

24In my view, CM has a clear understanding of the quantum of settlement, believing it to be unfair. During her submissions, she repeatedly cited the quantum of settlement and how it was not enough to settle this matter and how quickly the funds were exhausted. In my view, this demonstrates a critical awareness of the consequences of the settlement in question, relating to her mental capacity, understanding and ability to enter into the settlement.

25I also note that none of the medical documentation speaks to the CM’s incapacity on the date the settlement documents were signed, nor during the requisite cooling period. The orthopedic IE Report of Dr. V. Avram conducted on March 27, 2014 (about 4 months before she signed the settlement) states that CM understood the nature of the assessment and provided both verbal and written consent to proceed with the assessment. It describes CM as pleasant and cooperative throughout but expressed anger towards a lot of different healthcare providers. The psychiatry IE Report of Dr. J. Patterson conducted on May 7, 2015 (about 2 months before the settlement) under the Mental Status Examination section noted some mood difficulties but this did not predominate her clinical picture.

26On January 13, 2015, her treating orthopedic surgeon, Dr. Petrisor, noted that she was doing well following removal of her hardware, x-rays were satisfactory and showed things to be stable and healed and he did discuss with her that she could go back to her high level sports.¹⁰ A further consultation note of Dr. Dessouki dated October 28, 2015 notes that she has returned to many of her past activities, including dirt biking and water skiing.¹¹

27The applicant has the burden of establishing mental incapacity on a balance of probabilities. Although it is clear that the applicant suffers from pelvic injury and other fractures, with surgical repair and plates inserted as a result of the motor vehicle accident, she has failed to demonstrate how these ailments incapacitated her on the date of settlement and, immediately thereafter. The submissions at the hearing speaks to an applicant who is keenly aware of the settlement and hearing process, not one incapacitated by mental illness. The medical evidence proffered was not persuasive and the applicant has not established she was mentally incapacitated when she entered into the settlement on August 12, 2015, or even at any time during the cooling off period which expired on August 17, 2015.

Duress

28CM has the burden of establishing on a balance of probabilities that she was under duress at the time of the settlement. She has not met that evidentiary burden.

29Black’s law dictionary defines “duress” broadly as a threat of harm made to compel a person to do something against his or her will or judgment, especially a wrongful threat made by one person to compel a manifestation of seeming assent by another person to a transaction without real volition. Duress practically destroys a person’s free agency, causing non-volitional conduct because of the wrongful external pressure.¹²

30Intact submits that they paid the settlement funds in 2015 directly to CM. In final submissions, CM initially stated that she did not receive the funds but later explained that she did receive them, elaborating further that $50,000.00 does not last very long.

31CM did not file any affidavit to support her position. At the teleconference hearing, during her submissions, she explained that she felt pressured to enter into the settlement agreement in 2015. Notably she did not state that she was not given an opportunity to consult with a lawyer or seek legal advice prior to signing the documents. She also did not state that she was forced or threatened into signing the settlement documents.¹³

32The documentary evidence establishes that Intact wrote to CM several times explaining the process and her options prior to her executing the settlement documents. For example, on July 3, 2015, Anne Baril, an accident benefits unit manager wrote a detailed letter to CM, enclosing an offer for a full and final settlement of her accident benefits claim. This letter contained detailed instructions about signing and witnessing the documentation, the two-day cooling off period and advising her of her right to rescind the settlement with instructions on how she could rescind the settlement if she desired to do so. As well, on July 24, 2015, Ms. Baril wrote another letter to CM confirming a conversation on July 22, 2015 and extending the timeline to respond to the settlement offer to August 31, 2015.¹⁴

33Therefore, CM had from July 3, 2015 until August 31, 2015, a period of about two months, to consider the settlement and contact a lawyer or Intact if she had any questions or, alternatively, to refuse to sign and let the offer expire. She chose to accept the offer after having plenty of time to think about it. She now maintains that, if she had more time to think about the settlement’s implications, she would not have signed the settlement documents as the funds were not enough.

34It is also clear that, by letter dated September 30, 2014,¹⁵ Intact provided CM with an Application for Determination of Catastrophic Impairment or OCF-19 form, suggesting that CM contact her heath practitioner if she feels her injuries may be catastrophic. The same letter also states that Intact would provide a response once they received a completed Application for Determination of Catastrophic Impairment form and, if her impairment was deemed catastrophic, the amount of benefits available would increase. Indeed, there are references to discussions with her family doctor, Dr. Smosarki, about an OCF-19 in 2014.¹⁶ There was no evidence before me why this form was never completed at that time. Intact was clearly not trying to dupe, intimidate or compel CM into a settlement against her will.

35CM has presented no evidence of duress at the time the settlement documents were signed or immediately thereafter that would potentially vitiate this agreement. While she may have felt pressure to sign the document, this pressure is common for parties entering into binding agreements, and the 48-hour cooling period is meant to cure any potential power-imbalance between parties by affording them time to change their mind. The applicant has not demonstrated on a balance of probabilities that she was subject to threats, intimidation or any other pressure that may otherwise constitute duress.

CONCLUSION/ORDER

36The applicant is statute-barred from rescinding the settlement entered into on August 12, 2015. The settlement was valid, and the applicant did not rescind the settlement within two business days as required in s. 9.1(4) of O. Reg. 664. The applicant has not established on a balance of probabilities, that she lacked capacity or was under duress at the time she signed the Release and the Settlement Disclosure Notice.

37The application is dismissed.

Footnotes

1. 1Respondent’s Documents Brief at tab 3.
2. 2Respondent’s Documents Brief at tab 4.
3. 3Respondent’s Written Submissions, para. 12. Note: This was the remaining available balance of her $50,000.00 med/rehab limits. See also Benefits Statement at tab. 6 of Respondent’s Document Brief.
4. 4Note: I did not have this form before me, but it was referred as part of the final submissions.
5. 5R.R.O. 1990, Reg. 664.
6. 6See s. 9.1(3) of the Settlement Regulation.
7. 7Navage v. Pilot Insurance Co., 2004 CanLII 15034 (ON SC), [2004] O.J. No. 1098, para. 12.
8. 8i.e., the Public Guardian and Trustee or a Court appointed guardian or attorney under a valid continuing power of attorney that gives the attorney authority over all of the claimant’s/applicant’s property.
9. 9S.O. 1992, Chapter 30.
10. 10Respondents’ Supplementary Document Brief, tab 2.
11. 11Respondents’ Supplementary Document Brief, tab 3.
12. 12Black’s Law Dictionary, Tenth Ed. pg. 614.
13. 13Respondent’s Document Brief, tab 1.
14. 14Respondent’s Document Brief, tab 2.
15. 15Respondent’s Document Brief, tab 10.
16. 16Respondent’s Document Brief, tabs 7, 8 and 9.