Citation: Tagoe v. The Personal Insurance Company, 2022 ONLAT 21-001365/AABS

Licence Appeal Tribunal File Number: 21-001365/AABS

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:

Samuel Tagoe

Applicant

and

The Personal Insurance Company

Respondent

DECISION

ADJUDICATOR:

Daniela Corapi

APPEARANCES:

For the Applicant:

Samuel Tagoe, Applicant

Shahen Alexanian, Counsel

For the Respondent:

Paul Barnes, Counsel

HEARD: In Writing

August 25, 2021

1The applicant (“S.T.” or “Mr. Tagoe”) was involved in an automobile accident on April 28, 2016, and sought benefits pursuant to the Statutory Accident Benefits Schedule Effective September 1, 2010 (including amendments effective June 1, 2016)¹.The applicant was denied certain benefits by the respondent and submitted an application to the Licence Appeal Tribunal - Automobile Accident Benefits Service (“Tribunal”).

2The Personal Insurance Company (“the respondent” or “TPIC”) took the position that the applicant is substantially past the 2-year limitation period to contest his IRB denial.

3S.T. disagreed and applied to the Licence Appeal Tribunal – Automobile Accident Benefits Service (the “Tribunal”) for dispute resolution. On February 3, 2021, S.T. filed an application with the LAT seeking income replacement benefits from TPIC from May 5, 2016 to date and ongoing.

4A case conference was held, but the parties could not resolve the issues in dispute, prompting this written hearing on a limitation period issue in relation to income replacement benefits.

PRELIMINARY ISSUE

5The following preliminary issue was raised by the respondent:

i. Whether the applicant is barred from proceeding with his claim for income replacement benefits (“IRBs”) as he failed to commence his application within two years after the respondent’s refusal to pay the amount claimed?

RESULT

6For the reasons that follow, I find that the applicant is statute-barred from proceeding with his application for IRBs as the limitation period has expired following a valid denial by TPIC.

BACKGROUND

7At the time of the accident, S.T. was employed as an IT Professional. Following the accident, S.T. took one day off work. S.T. continued to work full-time, albeit with certain limitations, for approximately 16 months post-accident.

i. First OCF-3

8During 2016, S.T. submitted the following forms: an OCF-1 (sent on May 9, 2016) and an OCF-3 (sent on May 17, 2016). Notably, the OCF-3 (“first OCF-3”), prepared by Brampton Civic Care Centre, indicated that the applicant was substantially unable to perform the essential tasks of his employment as an IT professional as a result of the subject accident. The OCF-3 further advised that the applicant was able to return to work on modified hours/duties, and that he had further been advised not to return to work but due to financial reasons, he decided to return to work with pain and discomfort.

9On May 20, 2016, the adjuster sent an Explanation of Benefits (“EOB”) form to the applicant confirming that he did not qualify for an income replacement benefit because he did not suffer from a substantial inability to perform the essential tasks of his employment. The EOB pointed out that the OCF-3 submitted by the applicant indicated that he continued to work. The EOB further stated that he had “no initial eligibility” for the income replacement benefit.

i. Second OCF-3

10On December 5, 2019, the applicant submitted a second OCF-3 from the Brampton Civic Care Centre (dated November 19, 2019), claiming entitlement to post-104-week IRBs. It indicated that the applicant was substantially unable to perform the essential tasks of his employment at the time of the subject MVA and that he was not able to return to work on modified hours or duties.

11On June 17, 2020, the respondent sent correspondence to S.T. confirming that the applicant was not eligible for an income replacement benefit, referring him to the original EOB dated May 19, 2016. The respondent advised that its position on IRBs remained the same the applicant was statute-barred from disputing the IRB denial.

ii. Applicant’s Position

12S.T. submits that it believed IRBs were a live issue and at no time during the two-year period did the respondent ever communicate that the applicant’s claim for IRBs was statute-barred. He further submits that the respondent’s ongoing requests for information relating to the IRB claim led him to believe that the IRB was being considered by the respondent. S.T. stated that he did not dispute the denial of the NEBs as he could have had he known that the respondent considered S.T.’s claim for IRBs as time-barred.

13The applicant also submits that there is no evidence that an election of benefit (OCF-10) form was ever submitted to the respondent on behalf of S.T.

14On or around May 17, 2016, a disability certificate was submitted to the respondent on behalf of Mr. Tagoe (the “First OCF-3”), which indicated that Mr. Tagoe had “due to financial reasons…returned [to work] with pain and discomfort.”

15On May 20, 2016, the respondent sent the purported denial letter to S.T. which contained, in Part 2, the following text regarding IRBs:

You do not qualify for an income replacement benefit because you do not suffer from a substantial inability to perform the essential tasks of your employment. As indicated within your OCF 1 – Application dated 05 04 2016, you do not suffer a disability under this benefit heading. We also note that the OCF 3 - Disability Certificate dated 05 03 2016, also indicates that you continued to work. No initial eligibility.

16In the same section of the purported denial letter, there was the following additional text regarding non-earner benefits (NEBs): “you do not qualify for a non-earner benefit because you qualify for an income replacement benefit.”

17The applicant stated that the purported denial letter does not meet the “clear and unequivocal” test because it does not clearly state whether the applicant’s IRBs are being denied and is equivocal because “it both states that Mr. Tagoe qualifies and does not qualify for IRBs”.

18The applicant submitted that a person cannot reasonably be expected to make such a determination based on this purported denial letter, which states, in unqualified form, both that Mr. Tagoe qualifies for IRBs and does not qualify for IRBs.

iii. Respondent’s Position

19TPIC submits that the applicant did not file the LAT Application until February 3, 2021 - approximately 32 months past the 2-year limitation period prescribed by s. 56 of the Schedule.

20The respondent submits that its May 20, 2016, EOB form sent to the applicant satisfied all of the required criteria to trigger the 2-year limitation period of the applicant to dispute his IRB refusal. Specifically, it outlined 1) the reason why the applicant was not eligible for IRBs; 2) confirmed that he did not qualify for these benefits; 3) contained an “Applicant’s Right to Dispute” document which provided guidance as to how the applicant could dispute TPIC’s refusal; and 4) provided a clear warning about the 2-year limitation period. The respondent points out that the applicant was also represented by legal counsel at all material times.

21The EOB stated that the applicant did not qualify for an income replacement benefit because he did not suffer from a substantial inability to perform the essential tasks of his employment. The EOB went further to state that the OCF-3 dated May 3, 2016, also indicated that the applicant continued to work, and that he had “no initial eligibility” for the income replacement benefit.

THE LAW

i. Test for Income Replacement Benefits

22It is important to this case to recall that the insurer’s obligation to pay IRBs, eligibility criteria, and the method of calculating benefit amounts are set out in the Schedule. At section 5(1)1 and section 6(2)b, the Schedule defines the level of impairment which must be suffered by the applicant to be eligible for IRBs. These change over time after the accident. For this case, the relevant requirements are:

a. Within 104 weeks after the accident, the insured person suffers a “substantial inability to perform the essential tasks of his or her pre-accident employment…or self-employment.”; and

b. “After the first 104 weeks of disability, the insured person is suffering a complete inability to engage in any employment or self-employment for which he or she is reasonably suited by education, training or experience.”

ii. Limitation Period – Section 7 of the Licence Appeal Tribunal Act

23With respect to the granting of an extension of time, section 7 of the LAT Act states:

Extension of time

Despite any limitation of time fixed by or under any Act for the giving of any notice requiring a hearing by the Tribunal or an appeal from a decision or order of the Tribunal under section 11 or any other Act, if the Tribunal is satisfied that there are reasonable grounds for applying for the extension and for granting relief, it may,

(a) extend the time for giving the notice either before or after the expiration of the limitation of time so limited; and

(b) give the directions that it considers proper as a result of extending the time.

ANALYSIS

24Under s. 56 of the Schedule, an applicant has two years to commence an application in respect of a denial of benefits from the date that an insurer refuses to pay the amount claimed.

25The parties’ positions are relatively straightforward: the respondent argues that it issued a clear, unequivocal denial of IRBs in its EOB dated May 20, 2016, triggering the limitation period and that the applicant did not dispute or appeal the denial within two-years from that letter; the applicant argues that the respondent did not request that he make an election in respect of his weekly benefits, and that in any event no election was ever made by the applicant until June 25, 2018, when he applied for post-104 IRBs.

26For the reasons that follow, I agree with the respondent and find that the applicant is statute-barred from proceeding with his claim for IRBs.

(i) Was the Respondent’s Notice of Denial Proper?

Smith v. Co-operators

27It is first important to determine whether the respondent’s notice of 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 person 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.

28The respondent takes the position that the May 20, 2016 EOB form, in response to the first OCF-3, met all of the required criteria to trigger the 2-year limitation period of the applicant to dispute his IRB refusal. TPIC states that the EOB outlined the reason why Mr. Tagoe was not eligible for IRB’s; confirmed that the applicant did not qualify for these benefits; and included a “Right to Dispute” and a clear warning about the 2-year limitation period.

29As indicated above, the respondent’s 2016 EOB contained an error insofar that the NEB section included the following statement: “You do not qualify for a non-earner benefit because you qualify for an income replacement benefit.” However, the substance of the sentence should not be interpreted without the benefit of the form and substance of the entire EOB. The sentence which includes this error appears below this lengthy explanation of why the IRB is being denied by the respondent:

You do not qualify for an income replacement benefit because you do not suffer from a substantial inability to perform the essential tasks of your employment…As indicated within your OCF 1 - Application dated 05 04 2016, you do not suffer a disability under this benefit heading. We also note that the OCF 3 - Disability Certificate dated 05 03 2016, also indicates that you continued to work. No initial eligibility.

30The remaining sections of the EOB further clarify why the applicant was not entitled to an NEB and make no mention of IRB entitlement. This is relevant because it further eliminates ambiguity in relation to the IRB reference which seemingly was made in error. Specifically, in section 3 of the EOB, the respondent states that the NEB claim is being denied because the impairment falls under the minor injury guideline:

Reasons why expenses are payable / not payable:

1- Based on medical documentation, your impairment is a minor injury.

No Attendant Care Benefits are available as per Section 14. No optional benefits and no initial eligibility considerations.

31On the evidence and notwithstanding the above error, I find that the respondent’s EOB conveys clear and concise language with respect to S.T. not being eligible for IRBs. In fact, it goes on to provide particulars as to why S.T. does not qualify for IRBs and explicitly references the first OCF-3.

32On the evidence, I find that the respondent’s EOB letter to S.T. satisfied the basic requirements of Smith because it stated the reasons for the denial of the IRBs; it clearly indicates the applicant is not eligible for IRBs; provides particulars as to why he is not eligible; and it provides, in straightforward language, the dispute process available to S.T. should he disagree with the denial. The respondent provided a clear indication of a denial.

33I find that while the error contained in the NEB section may have presented as confusing, it must be read within the context of the form, which was received by the applicant’s counsel. The section of the form which pertains to IRB eligibility sits directly above the NEB section, wherein the error is located. I am persuaded that the respondent’s clear language of “you do not qualify for an IRB benefit” which appears under the appropriate IRB section would extinguish any such uncertainty, and at a minimum, place counsel on notice that the IRB was being denied. If counsel did in fact find this confusing, there was no effort made to obtain clarification. As such, I find nothing to substantiate the applicant’s argument that the denial was uncertain or ambiguous.

(ii) The Language of a Pre-emptive Denial

34The applicant submits that any pre-emptive denial, such as the purported denial (if found to be valid), is premature. The applicant states: 1) even if it were found that the purported denial was clear and unequivocal, it is nevertheless invalid because it was premature; and 2) because the applicant returned to work in 2016, the applicant had no valid claim for IRBs and it was therefore premature for the respondent to deny IRBs when they had not been applied for.

35I disagree. There is a considerable body of case law that deals with premature benefit claims and with claims that are denied pre-emptively by an insurer. I find that a benefit can be denied by an insurer pre-emptively and that the use of the phrase “you do not qualify” would be found to be acceptable under the Schedule.

36Here, I find that the respondent’s ’s use of the phrase “you do not qualify” to be a clear indication of a denial and, ultimately, a refusal to pay benefits.

(iii) The Respondent’s Request for further Information

P.F. and Aviva General Insurance Company

37The respondent refers to the decision of Adjudicator Harmison in P.F. and Aviva General Insurance Company³, which confirmed that an respondent’s invitation to submit further documentation regarding the IRB claim does not “override or supplant” an earlier clear denial of the IRB in the first place.

38The applicant’s assertion that it relied on the respondent’s continued requests for employment-related documentation to suggest that the EOB denial for IRBs was overridden is not persuasive. The EOB cannot be said to be overridden on the basis that the respondent made requests for further information and documentation.

Sietzema v. Economical Mutual Insurance Company

39Further, I find the facts of this matter are similar to those in Sietzema v. Economical Mutual Insurance Company⁴, where the Court found that the fact the applicant had a legal representative, such as S.T. did, to advise him of his rights, that it shielded any perceived ambiguities in the language because counsel would have known that a limitation period applied and would, presumably, have known that the inclusion of appeal instructions meant that it had been triggered. I find that use of the words “you do not qualify”, as they appear in the EOB, constitute a denial, triggering the limitation period.

40Sietzema also stands for the proposition that as long as it is clear enough to know that a benefit was denied and not being paid, that is enough to know whether an applicant can challenge it or not. I am satisfied by the evidence before me that S.T. received sufficient information to indicate that a challenge was necessary - he received notice of the respondent’s intention to not pay an IRB benefit in the EOB and was not receiving payment of such benefit.

Limitation Period - Section 7 of the Licence Appeal Tribunal Act

41Section 7 of the Licence Appeal Tribunal Act⁵ (“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.⁶ 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.⁷

42Having determined that TPIC’s denial was valid, I find that S.T. has not provided a compelling reason as to why the extension of the limitation period should be granted under section 7.

43First, although the respondent issued a proper denial, I find the fact that S.T. submitted a second OCF-3 (May 20, 2016) electing IRBs, nearly 3 years following the completion of his OCF-1 and OCF-3, to be an indication that he believed that applying for IRBs was still an option.

44I do find his conduct to be evidence of an intention to at least apply for an IRB. However, the factor outlined in Manuel states that it must be a bona fide intention to appeal, which S.T. did, but approximately 8.5 months after the deadline. Unfortunately, I find that S.T. has not provided compelling evidence of a bona fide intention to appeal.

45For instance, when the applicant received the EOB on May 20, 2016, the applicant did not demonstrated that he took any issue with the denial; nor did he seek to clarity his position or alleged confusion if he disagreed with the respondent’s denial.

46Second, if the applicant did not accept the respondent’s position in the EOB, I am left without an explanation as to why he did not then appeal immediately, as it would have been well within the limitation period to do so. Instead, he waited until approximately 8 months after the limitation period elapsed to appeal to the Tribunal. I find that this is an extraordinary lapse of time given the facts of this case.

47Third, the potential for prejudice to an applicant is always present. Here, the prejudice to S.T. is that he will be barred from proceeding with an application for a benefit he may very well need. However, I find there is also prejudice to the respondent in this matter, as it issued a valid denial and did nothing wrong procedurally that would invite a second opportunity for S.T. to claim an IRB. An extension of time would undermine the certainty of the limitation period insurers rely on and TPIC would be faced with the burden of defending against an additional claim after several years without medical assessments to address it.

48Fourth, I find that the merit of his claim is limited because of his ineligibility for an IRB based on his return to work following the date of loss.

49The merits of S.T.’s case for post-104 IRBs do not appear strong to me. To qualify for IRBs under section 5 of the Schedule beyond a period of 104 weeks, an insured must establish eligibility for the benefits within the first 104 weeks after the accident under section 5(1) of the Schedule.⁸

50Notwithstanding the applicant’s May 17, 2016, OCF-3, he returned to his employment tasks. It is unclear if his return included modified duties or tasks. S.T. claims that he has reached a point of complete inability to do his job or any job to which he is reasonably suited. To date, he has offered no explanation or support for this position. Having considered the OCF-1 and OCF-3’s, along with all other evidence, I am not persuaded that the applicant would meet the post-104 IRB test. The evidence before me does not provide support in this regard.

51Accordingly, for these reasons, I find on a balance of probabilities, that S.T. has not provided compelling evidence for the Tribunal to exercise its discretion under section 7 of the LAT Act to extend the limitation period.

CONCLUSION

52I find that the respondent provided the applicant with a valid denial. The denial was clear and unequivocal and provided the applicant with the requisite information to determine whether to dispute the denial while also triggering the limitation period.

53I find S.T. is statute-barred from proceeding with his application for IRB at the Tribunal and decline to extend the limitation period under section 7 of the LAT Act.

Released: February 28, 2022