Jevco Insurance v. Malicia, 2024 CanLII 108216

Jevco Insurance v. Malicia, 2024 CanLII 108216

Citation: Jevco Insurance v. Malicia, 2024 ONLAT 22-011005/AABS

Licence Appeal Tribunal File Number: 22-011005/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:

Jevco Insurance

Applicant

and

Mario Malicia

Respondent

DECISION

ADJUDICATOR: Rachel Levitsky

APPEARANCES:

For the Applicant: William Sproull, Counsel

For the Respondent: No submissions were filed

HEARD: By way of written submissions

OVERVIEW

1Mario Malicia (“M. M.”), the respondent, alleged that he was involved in an automobile accident on February 21, 2020, and sought benefits from Jevco Insurance (“Jevco”), the applicant, pursuant to the Statutory Accident Benefits Schedule - Effective September 1, 2010 (including amendments effective June 1, 2016) (the “Schedule”). Jevco disagrees that M. M. was involved in an “accident” and applied to the Licence Appeal Tribunal - Automobile Accident Benefits Service (the “Tribunal”) for resolution of the dispute.

ISSUES

2The issues in dispute are:

(i) Is Jevco entitled to repayment of the following benefits:

(a) $2,200.00 for chiropractic services, proposed by 2518264 Ontario Inc. in a treatment plan dated February 26, 2020;

(b) $513.50 for physiotherapy services, proposed by 2518264 Ontario Inc. in a treatment plan dated September 17, 2020; and

(c) $297.56 for disability certificates dated July 30, 2020, December 30, 2020, and March 2, 2021?

(ii) Is Jevco entitled to interest?

3I note that issue (i)(c) above appears to have been listed in the Case Conference Report and Order of May 25, 2023, (“CCRO”) as $267.56 in error. I have reviewed the invoices from the payment of the disability certificates, and the amount claimed by Jevco in its notice letter to M. M., and it appears the correct amount is $297.56. I have revised the issue above accordingly.

4Jevco also requests a determination of whether it is entitled to terminate the payment of benefits to M. M. pursuant to s. 53 of the Schedule. This was not listed as an issue in the CCRO, and the first time this request was raised was in Jevco’s submissions.

5M. M. did not attend the case conference or provide written submissions for this hearing. Section 7(2) of the Statutory Powers Procedure Act (“SPPA”) states that, where notice of a written hearing has been given to a party to a proceeding and the party does not participate in the hearing in accordance with the notice, the Tribunal may proceed without the party’s participation and the party is not entitled to any further notice in the proceeding. I have reviewed the Tribunal’s file and I find that he was served notice, by way of email to the email address on file with the Tribunal, of the case conference and the written hearing. In addition, the Tribunal spoke with M. M. and confirmed his email address, and M. M. advised the Tribunal that he did not want to participate in any way. I am satisfied that, in accordance with s. 7(2) of the SPPA, M. M. is not entitled to any further notice in this proceeding, and I may proceed in his absence.

6Jevco provided a letter to M. M. on April 7, 2022, advising him that they would be terminating benefits pursuant to s. 53, and seeking a repayment pursuant to s. 52. Jevco’s submissions were served on M. M. on January 17, 2024, via the same email address that he confirmed with the Tribunal to be correct. I find that M. M. would have been aware that Jevco terminated his benefits almost two years prior to receiving its request to add this as an issue. This was not a novel or unanticipated issue. Further, determining whether Jevco is entitled to terminate the payment of benefits involves a similar factual and legal analysis as whether Jevco is entitled to a repayment of benefits in this case. Given those facts, as well as M. M.’s choice not to participate in this hearing or address Jevco’s submissions in this regard, I find that adding this as an issue at this juncture would not compromise the procedural fairness of this hearing. I have accordingly added the following issue to this hearing:

(iii) Is Jevco entitled to terminate the payment of benefits pursuant to s. 53 of the Schedule because M. M. wilfully misrepresented material facts with respect to the “accident” and his application for benefits?

RESULT

7M. M. was not involved in an “accident” as defined by s. 3(1) of the Schedule.

8M. M. shall repay $3,011.06 to Jevco, including interest pursuant to s. 52(5).

9Jevco is entitled to terminate the payment of benefits to M. M. pursuant to s. 53.

ANALYSIS

Positions of the Parties

10Jevco submits that M. M. was not involved in an “accident” and was instead involved in a “staged accident”. It submits that because M. M. did not participate in this proceeding, he failed to meet his onus on a balance of probabilities that he was involved in an “accident” as defined under s. 3(1) of the Schedule. Jevco also submits that M. M. made wilful misrepresentations about his involvement in the alleged “accident”, and what he misrepresented was material to his claim for accident benefits.

11M. M. did not make any submissions.

The Law

12Section 3(1) of the Schedule states that an “accident” means an incident in which the use or operation of an automobile directly causes an impairment. The burden of proof that an “accident” occurred rests on the insured person to establish a right to recover under the terms of the policy.

13Under s. 52, a person is liable to pay an insurer any benefit that is paid to the person as a result of an error on the part of the insurer, the insured person, or any other person, or as a result of wilful misrepresentation or fraud. The insurer is required to give notice of the amount that is required to be repaid. If the notice is not given within 12 months after the payment of the amount that is to be repaid, the person to whom the notice would have been given ceases to be liable to repay the amount unless it was originally paid to the person as a result of wilful misrepresentation or fraud.

14Pursuant to s. 53, an insurer may terminate the payment of benefits to or on behalf of an insured person if the person has wilfully misrepresented material facts with respect to the application for the benefit, and if the insurer provides the insured person with a notice setting out the reasons for the termination.

Was M. M. involved in an “accident” as defined by s. 3(1)?

15I find that M. M. was not involved in an “accident” as defined by s. 3(1) of the Schedule.

16On February 27, 2020, M. M. signed and submitted an OCF-1 form to Jevco indicating that he was involved in an accident on February 21, 2020. He claimed that he was a passenger in a 2014 Mazda 6 that was t-boned by a car that ran a red light and then fled the scene. M. M. claimed medical benefits and income replacement benefits. Jevco denied M. M.’s claim for income replacement benefits, but paid a total of $3,011.06 for chiropractic and physiotherapy services and the completion of three OCF-3 forms.

17A police report was prepared on November 23, 2020, which described an accident on February 21, 2020, involving a 2014 Mazda 6 which was being driven by another individual at a speed of approximately 60 km/hr. The owner, licence plate, date, and location of the accident align with the OCF-1 submitted by M. M. However, M. M. was not listed as an occupant of the vehicle in the police report; the only occupant listed was the driver.

18M. M. reported to his family physician and two s. 44 assessors that he was a front-seat passenger in the accident on February 21, 2020. He advised Dr. Alan Kruger during an assessment on February 25, 2021, that there were two occupants in the vehicle, they were driving through an intersection when another vehicle ran a red light and t-boned their vehicle, and there were no secondary collisions.

19On June 21, 2021, a report was authored by Paul Gullekson, a forensic engineer. Mr. Gullekson reviewed the event data recorder of the 2014 Mazda 6, two statements provided by the driver regarding the accident, and the police report. He opined that the driver’s version of the incident was inconsistent with the EDR data. The data indicated that there were two impacts that occurred while the vehicle was stopped with no pedal application for 5 seconds prior to both impacts. However, the driver initially indicated that she was accelerating from a stopped position at the time of the impact, and later indicated that she was “just driving along” at the time, at a speed of approximately 60 km/hr. Further, the data indicated that the front passenger seat was likely empty with a belted seatbelt at the time of both impacts, as the front passenger occupant size classification was recorded as “not adult” and the frontal air bag warning lamp was recoded as “off”. Mr. Gullekson also noted that while the police report indicated that there was one occupant in the vehicle at the time, the driver reported that there were three occupants.

20I am persuaded by the event data recorder evidence described in Mr. Gullekson’s report that M. M. was not a passenger of the vehicle when it was impacted. There are also discrepancies in the number of occupants of the vehicle described by M. M., the driver, and the police report, and these inconsistencies lead me to question M. M.’s description of the accident. Further, I am persuaded by the event data evidence that the accident did not occur in the manner reported by M. M. or the driver, as it appears the vehicle was impacted while it was stopped and there were two impacts instead of one. In the absence of evidence or submissions to the contrary, on a balance of probabilities, I find it likely that the accident was staged.

21I agree with the reasoning in M.D. v. Intact Insurance Company, 2017 CanLII 87155, that a staged accident is not an “accident” in accordance with the definition set out in s. 3(1) of the Schedule, as this would be contrary to public policy and the Insurance Act, RSO 1990, c. I.8.

22I accordingly find that M. M. has not proven on a balance of probabilities that he was involved in an “accident”.

Is Jevco entitled to a repayment of benefits pursuant to s. 52?

23I find that M. M. has wilfully misrepresented the facts with respect to the collision, and he is accordingly liable to repay Jevco $3,011.06.

24As I have found above, it is likely that M. M. was not the front-seated passenger at the time of the collision, which is what he claimed to Jevco. Further, it is likely that the accident was staged, and the collision occurred in a completely different manner than what M. M. described to Jevco. Staging an accident is not accidental; it is wilful by its nature. I accordingly find that M. M. wilfully misrepresented Jevco with respect to these details in an attempt to claim statutory accident benefits to which he was not entitled.

25On April 7, 2022, Jevco gave M. M. written notice that it was seeking repayment of $3,011.06 pursuant to s. 52 of the Schedule, as well as interest. This was comprised of $2,713.50 for medical benefits under s. 38, and $297.56 for examination expenses under s. 25.

26I find that Jevco is entitled to a repayment of the full amount that it paid to M. M. for benefits pursuant to s. 52(1)(a) of the Schedule. I have reviewed the receipts of the payments provided to the treatment provider, 2518264 Ontario Inc., and agree that the amount to be repaid is $3,011.06.

Is Jevco entitled to terminate the payment of benefits pursuant to s. 53?

27I find that the facts that M. M. wilfully misrepresented were material, as they were crucial to his ability to receive accident benefits.

28In Jevco’s letter of April 7, 2022, it provided notice to M. M. that it was denying his claim for accident benefits pursuant to s. 53(a) of the Schedule. It explained that it believed that the accident did not take place as alleged but rather was the result of actions taken to give the appearance that an accident took place, and as such it believed that M. M. was not involved in an accident pursuant to s. 3(1). I accordingly find that Jevco complied with the requirements of s. 53, and it is entitled to terminate the payment of benefits to M. M.

Interest

29Under s. 52(5), an insurer may charge interest on the outstanding balance of the amount to be repaid for the period starting on the 15th day after the notice is given under s. 52(2) and ending on the day repayment is received in full, calculated at the bank rate in effect on the 15th day after the notice under subsection (2) is given.

30As I have found that Jevco is entitled to a repayment and notice was provided, interest is payable pursuant to s. 52(5).

ORDER

31M. M. was not involved in an “accident” as defined by s. 3(1) of the Schedule.

32M. M. shall repay $3,011.06 to Jevco, including interest pursuant to s. 52(5).

33Jevco is entitled to terminate the payment of benefits to M. M. pursuant to s. 53.