Martin v. Sonnet Insurance Company, 2024 CanLII 43458

Citation: Martin v. Sonnet Insurance Company, 2024 ONLAT 23-011602/AABS-PI

Licence Appeal Tribunal File Number: 23-011602/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.

Parties

Between:

Warret Martin

Applicant

and

Sonnet Insurance Company

Respondent

PRELIMINARY ISSUE HEARING DECISION AND ORDER

ADJUDICATOR:

Kate Grieves

APPEARANCES:

For the Applicant:

Tal Eshel, Counsel

For the Respondent:

Jessica Meyerovich, Counsel

Heard:

By Way of Written Submissions

OVERVIEW

1Warret Martin (“the applicant”) was involved in an incident on November 19, 2018 sought benefits pursuant to the Statutory Accident Benefits Schedule – Effective September 1, 2010 (including amendments effective June 1, 2016) (“the Schedule”). The applicant was denied benefits by Sonnet Insurance Company (“the respondent”) and applied to the Licence Appeal Tribunal – Automobile Accident Benefits Service (“the Tribunal”) for resolution of the dispute.

PRELIMINARY ISSUE IN DISPUTE

2The preliminary issue to be decided is:

i. Is the applicant barred from proceeding to a hearing for all of the benefits claimed in his application because he failed to dispute their denial within the 2-year limitation period?

RESULT

3The applicant may proceed to a hearing for the following claims for benefits:

i. $3,221.52 for physiotherapy, chiropractic, and massage services proposed by Movement Physio in a plan submitted December 10, 2018;

ii. $185.89 for physiotherapy and massage ($1,285.89 less $1,100.00 approved) proposed by Movement Physio in a plan submitted June 4, 2019;

iii. $3,279.08 for acupuncture, physical rehabilitation and devices proposed by Movement Physio in a plan submitted August 8, 2019;

4The applicant is statute barred from proceeding to a hearing for the following benefits pursuant to section 56 of the Schedule:

i. $2,200.00 for a chronic pain assessment proposed by Ottawa Physiotherapy and Rehabilitation Centre in a plan submitted on January 21, 2020;

ii. $2,198.79 for a psychological assessment proposed by Ottawa Physiotherapy and Rehabilitation Centre in a plan submitted on January 21, 2020;

ANALYSIS

5The substantive issues in dispute include the applicability of the Minor Injury Guideline and five treatment plans:

i. $3,221.52 for physiotherapy, chiropractic, and massage services proposed by Movement Physio in a plan submitted December 10, 2018;

ii. $1,285.89 (less $1,100.00 approved) proposed by Movement Physio in a plan submitted June 4, 2019;

iii. $3,279.08 for acupuncture, physical rehabilitation and devices proposed by Movement Physio in a plan submitted August 8, 2019;

iv. $2,200.00 for a chronic pain assessment proposed by Ottawa Physiotherapy and Rehabilitation Centre in a plan submitted on January 21, 2020;

v. $2,198.79 for a psychological assessment proposed by Ottawa Physiotherapy and Rehabilitation Centre in a plan submitted on January 21, 2020;

6The limitation period for accident benefits claims is set out in section 56 of the Schedule. It states that applications to dispute the denial of a benefit shall be commenced within two years after the insurer’s refusal to pay the benefit.

7The respondent submits that there was a clear and unequivocal denial of the each of the treatment plans, triggering the limitation period, and the applicant did not appeal the denial within two years. Rather, the application was filed almost four years after the most recent denial by the respondent.

8The applicant acknowledges that he filed his application to the Tribunal more than two years after the respondent’s denial. However, the applicant submits that the respondent’s denials were deficient and therefore did not trigger the limitation period.

9However, the applicant submissions regarding the sufficiency of the denials focus on challenging the respondent’s reasons for denying the benefits, rather than the sufficiency of these reasons. He is essentially making arguments here that would be more appropriate for submissions regarding the reasonableness and necessity of the treatment plan, not for the sufficiency of its denial.

10The applicant submits that the denials were not sufficient because upon receipt of additional medical documentation, the respondent did not provide all of those records to the medical assessors or obtain addendum reports. The applicant refers to a decision from the Financial Services Commission of Ontario, Bozz Zazi v. State Farm Mutual Automobile Insurance Company, 2017 ONFSCDRS 95, wherein the arbitrator found that the applicant was entitled to a special award because the respondent failed to reassess a claim on an ongoing basis. That decision is not relevant within the context of a dispute about limitation periods and has no bearing on whether the denial notices were valid. The applicant is contesting the respondent’s conclusions in its denial.

11An insurer has a continued obligation to adjust an accident benefits claim, even after a denial of a benefit, but that obligation does not mean that a refusal can only take place once that process is complete, nor does it give rise to a new limitation period. Even if the insurer gives legally incorrect reasons for denying a benefit, a clear and unequivocal denial notice provided by the insurer is sufficient to trigger a limitation period. (See: Sietzema v. Economical Mutual Insurance Company, 2014 ONCA 111)

12While the applicant’s submissions were largely not on point, I have considered the sufficiency of the respondent’s denial notices.

13In order for the provision under section 56 to be triggered, I must determine whether the respondent’s notice of denial was proper in accordance with the principles set out in Smith v. Co-operators General Insurance Co, 2002 SCC 30 (“Smith”). According to Smith, the refusal to pay the benefit must contain straightforward and clear language, it must be directed towards an unsophisticated person, it must outline the dispute resolution process and the relevant time limits that govern the process.

14The notice must provide a valid medical and any other reason for the denial. It should explain what the insured person’s medical conditions are and why those conditions do not justify entitlement to the benefit claimed. As the Divisional Court held in Hedley v. Aviva Insurance Company of Canada 2019 ONSC 5318 (“Hedley”), boilerplate medical reasons for denials of treatment plans constitute no reasons at all. Reasons must be meaningful in order to permit the insured person to decide whether or not to challenge the insurer’s determination.

15The principles for evaluating the sufficiency of reasons were set out by the Tribunal in T.F. v. Peel Mutual Insurance Company, 2018 CanLII 39373 (ON LAT) (“T.F.”):

[…] an insurer’s “medical and any other reasons” should, at the very least, include specific details about the insured’s condition forming the basis for the insurer’s decision or, alternatively, identify information about the insured’s condition that the insurer does not have but requires. Additionally, an insurer should also refer to the specific benefit or determination at issue, along with any section of the Schedule upon which it relies. Ultimately, an insurer’s “medical and any other reasons” should be clear and sufficient enough to allow an unsophisticated person to make an informed decision to either accept or dispute the decision at issue. Only then will the explanation serve the Schedule’s consumer protection goal.

16If an insurer’s notice of a refusal to pay a benefit does not satisfy these requirements, it may be determined to be invalid, and fail to trigger the two-year limitation period under s.56 of the Schedule.

The denial of the treatment plan for $3,221.52 is defective

17By letter dated December 17, 2018, the applicant was advised of the respondent’s refusal to pay this treatment plan. I find that the denial letter was defective, as it does not identify the applicant’s medical condition(s). The letter simply says that the insurer has reviewed the OCF-1 and OCF-3 and compared it to the definition of the minor injury, and felt that the applicant’s injuries fell within that definition. It advised that an insurer’s examination (“IE”) was being arranged pursuant to section 44. I find these reasons vague, and the language boilerplate. The notice did not meet the basic requirements outlined in Smith, therefore the limitation period was not triggered by this denial letter.

18In a subsequent letter dated March 8, 2019, the respondent advised that “a decision had not been made” regarding this plan or “nature of his accident-related injuries”, and deferred its decision until further information was provided that it requested pursuant to section 33. I find this denial unclear, and it did not cure the deficiency of the first letter.

19I find that denial was not valid, the limitation period is not triggered, and applicant may proceed with his application for this claim.

The denial of the plan for $1,285.89 is defective

20I find that the letter dated June 12, 2019 wherein the respondent partially approved this plan up to the MIG limits does not comply with the requirements under section 38(8). It also fails to identify the applicant’s medical conditions. It states that the medical documentation on file indicates that his injuries are predominantly soft tissue in nature. There is reference to the Minor Injury Guideline, but the respondent does not set out the definition. In my view, this in not a valid denial as the reasons are vague, and that the respondent appears to have used boilerplate wording. There does not appear to be any subsequent denial letter that cured this deficiency.

21Given that this was not a valid denial notice, the limitation period is not triggered, and the applicant may proceed with his application for this claim.

The denial of the plan for $3,279.08 is defective

22By letter dated August 15, 2019 the respondent advised that the treatment plan was not reasonable or necessary because it was opined by the section 44 assessor that the applicant had sustained soft tissue injures, tenosynovitis, and a possible scaphoid fracture. The respondent vaguely states that it is deferring its decision regarding the treatment plan and the applicability of the MIG upon receipt of the outstanding documentation it had requested. I do not find these reasons sufficiently clear enough for an unsophisticated person to make an informed decision to either accept or dispute the determination. It is not clear if the treatment plan is denied, as it states that the respondent is “deferring its decision”. There does not appear to be any subsequent denial letter that cured this deficiency.

23This notice does not meet the basic requirements outlined in Smith, therefore the limitation period is not triggered. The applicant may proceed with this claim.

The denial of the plan for $2,200.00 is valid

24The treatment plan in the amount of $2,200.00 for a chronic pain assessment was denied by letter dated January 24, 2020. The respondent lists the applicant’s injuries as identified by the IE assessor’s report, and that it refused to pay for the treatment plan because the medical documentation on file indicates that his injuries qualify him for treatment in accordance with the MIG, as his injuries were predominantly soft tissue in nature. It notes that the respondent had previously deferred its determination on the applicability of the MIG pending receipt of additional medical information requested in accordance with s. 33 of the Schedule. Given that the documentation had not been provided, it maintained its position that the applicant’s injuries fell within the MIG, the MIG limits had been reached, and it was unable to fund the treatment plan.

25I find that this is a valid notice. It explained the applicant’s medical conditions, and why those conditions did not justify entitlement to the benefit claimed. It was sufficiently clear, provides valid reasons for the denial, outlined the dispute resolution process, and the relevant time limits that govern the process.

26The limitation period for this treatment plan was triggered by a valid denial.

The denial of the plan for $2,198.79 is valid

27By letter dated January 24, 2020 the respondent denied the plan for a psychological assessment. It sets out the reasons for the denial, and references are made to medical evidence which the respondent relied on to come to this determination. In my view, the reasons were clear and sufficient to allow an unsophisticated person to make an informed decision to either accept or dispute the decision at issue. As such, I find that this was a clear and unequivocal denial.

The application was not filed within the limitation period

28On March 20, 2020, Ontario enacted Regulation 73/20, which suspended limitation periods retroactively from March 16, 2020 and was repealed on September 14, 2020. This legislation was in force for 183 days. As such, a limitation period that began running before March 16, 2020 can be extended by 183 days. This was affirmed in McAuley v. Canada Post Corporation, 2021 ONSC 4528, where the Ontario Superior Court of Justice found that Regulation 73/20 extended all running limitation periods by 183 days.

29I have found a valid denial of two of the plans in dispute, for a chronic pain assessment and a psychological assessment, triggering the limitation period. The limitation period for both plans was triggered before March 16, 2020 (on January 24, 2020) and can therefore be extended by 183 days. The applicant had until July 26, 2022 to file his application. The application was filed with the Tribunal on September 27, 2023. Therefore, I find that the applicant did not file his application for these two plans within the limitation period.

30Pursuant to section 7 of the Licence Appeal Tribunal Act the Tribunal has statutory discretion to extend the two-year limitation period based on four factors: a bona fide intention to appeal within the limitation period; the length of the delay; prejudice to the other party; and the merits of the appeal. While the applicant referred to this section, he made no submissions on why I should exercise my discretion to extend the limitation period. I have no basis to find that any of the factors weigh in his favour in order to extend the limitation period. Therefore, I decline to do so.

ORDER

31The applicant may proceed to a hearing for the following claims for benefits:

i. $3,221.52 for physiotherapy, chiropractic, and massage services proposed by Movement Physio in a plan submitted December 10, 2018;

ii. $1,285.89 (less $1,100.00 approved) proposed by Movement Physio in a plan submitted June 4, 2019;

iii. $3,279.08 for acupuncture, physical rehabilitation and devices proposed by Movement Physio in a plan submitted August 8, 2019;

32The applicant is statute barred from proceeding to a hearing for the following benefits pursuant to section 56 of the Schedule:

i. $2,200.00 for a chronic pain assessment proposed by Ottawa Physiotherapy and Rehabilitation Centre in a plan submitted on January 21, 2020;

ii. $2,198.79 for a psychological assessment proposed by Ottawa Physiotherapy and Rehabilitation Centre in a plan submitted on January 21, 2020;