Licence Appeal Tribunal File Number: 22-012715/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:
Mickey Rooney
Applicant
and
Allstate Insurance Company
Respondent
DECISION
PANEL:
Yanick Charbonneau, LAT Member
Brian Norris, LAT Member
APPEARANCES:
For the Applicant:
Ashu Ismail, Counsel
Joseph Campisi, Counsel
For the Respondent:
Ian Kirby, Counsel
Court Reporter:
Guido Riccioni
HEARD: Via videoconference on December 18, 2023
OVERVIEW
1Mickey Rooney, (the “applicant”), was involved in an automobile accident on September 24, 1996, and a separate automobile accident on December 3, 1996, and sought benefits from Allstate Insurance Company of Canada (the “respondent”) pursuant to the Statutory Accident Benefits Schedule - Accidents on or after November 1, 1996 (the “Schedule”) and as amended in Ontario Regulation 780/93: (the “Reg”).
2The applicant and respondent entered into an agreement to settle some of the applicant’s claims for benefits. Accordingly, the applicant signed a Release and Settlement Disclosure Notice on December 19, 2000, (the “Release”). The Release addressed all statutory accident benefits arising out of the motor vehicle accidents of September 24, 1996, and December 3, 1996, excepting only supplementary medical or rehabilitation expenses incurred after December 5, 2000.
3The applicant claimed entitlement to additional benefits following the agreement to settle and execution of the Release. However, the respondent refused to pay most of the benefits claimed because it believed that they were captured in the Release. The applicant submitted an application to the Licence Appeal Tribunal – Automobile Accident Benefit Service (the “Tribunal”) to resolve the dispute, but was largely unsuccessful (see M.R. vs Allstate Canada, 2020 CanLII 80282 (ON LAT) and M.R. v. Allstate Insurance Co., 2021 CanLII 30278 (ON LAT)).
4The adjudicator in the prior hearings determined that, amongst other things, the Applicant was not permitted to rescind the settlement agreement outlined in the Release because the applicant never repaid the settlement funds to the respondent.
5Since then, the applicant has repaid the amounts paid pursuant to the settlement outlined in the Release and seeks to rescind the settlement, pursuant to section 9.1(4) of the Schedule, as amended by the Reg. She takes the position that the settlement is not valid because the documents failed to comply with the settlement provisions outlined in the Schedule, as amended in the Reg.
ISSUES
6The issue in dispute is:
i) Have the parties entered into a valid Settlement Agreement under s. 9.1 of Regulation 664 under the Insurance Act, R.R.O. 1990?
RESULT
7The Settlement Agreement is valid pursuant to s. 9.1 of Regulation 664.
ANALYSIS
8The onus is on the applicant to demonstrate that this matter is not subject to the prior decisions involving her and the respondent.
9Pursuant to Pope v. Pilot Insurance Company, 2024 ONSC 2932 (“Pope”), the onus lies with the respondent to demonstrate that the Settlement Agreement outlined in the Release complies with the Reg.
Res judicata does not apply
10As noted, the parties were previously before the Tribunal to address the applicant’s entitlement to certain benefits under the Schedule. The primary issue at that hearing was whether the Release captured the applicant’s entitlement to certain benefits, including housekeeping and home maintenance and attendant care benefits. In the decision, released September 23, 2020, the adjudicator commented that the settlement related to the Release was valid. The decision was upheld in a reconsideration decision released March 25, 2021.
11The panel finds that the principle of Res judicata does not apply to the present proceedings, which involves a rescission application. The rescission application was not decided by this Tribunal on the merits.
12There are four necessary conditions for Res judicata to apply: the same parties were involved in both actions; the prior claim must be within the jurisdiction of the Tribunal hearing it; the prior adjudication must have been on the merits; and the prior decision must have been a final decision.
13The respondent submits that the September 23, 2020 decision concluded that the settlement was valid. The applicant responds that the prior finding regarding the validity of the release was not based on the merits of the dispute but, rather, a single comment made during the analysis of a separate issue – whether the Release included indemnity for certain benefits.
14The Panel agrees with the applicant and concludes that the prior finding on the validity of the settlement was not made on its merits. The prior hearings failed to include any analysis or consideration as to whether the settlement agreement outlined in the Release complied with the Schedule. Considering this, the Panel finds that the doctrine of Res judicata does not apply.
15As a result, the applicant is not barred from pursuing her claim before the Tribunal.
Was a Settlement Disclosure Notice required pursuant to s. 9.1 of the Schedule?
16The panel finds that a requirement for a Settlement Disclosure Notice was required pursuant to s. 9.1 of the Schedule, as amended by the Reg.
17Pursuant to s. 9.1(2)-(3), when entering into an agreement to settle an insured’s claims, the insurer is required to give the insured person a written notice that contains the following:
The insurer’s offer with respect to the settlement;
A description of the benefits that may be available under the Schedule;
A description of the impact of the settlement, including a statement of the restrictions contained in the settlement on the insured person’s right to pursue dispute resolution such as mediation and litigation;
A statement that the insured person may rescind the settlement within two business days after the settlement is entered into by delivering a written notice to the insurer;
A statement of the tax implications of the settlement;
If the settlement provides for the payment of a lump sum in an amount offered by the insurer and, with respect to a benefit under the Statutory Accident Benefits Schedule that is not a lump sum benefit, the settlement contains a restriction, a statement of the insurer’s estimate of the commuted value of the benefit and an explanation of how the insurer determined the commuted value;
A statement advising the insured person to consider seeking independent legal, financial and medical advice before entering into the settlement.
18The respondent relied on the Court of Appeal decision in Igbokwe v. HB Group Insurance Management Ltd., 2001 CanLII 3804 (ON CA) (“Igbokwe”). In Igbokwe, the insured chose to litigate entitlement to accident benefits in the Superior Court and filed a Statement of Claim. Upon filing the Statement of Claim, the insured was therefore subject to the offer and acceptance provisions outlined in Rule 49 of the Rules of Civil Procedure which the Court found superseded the provisions in s. 9.1 of the Schedule, as amended by the Reg.
19Here, the applicant submits that the settlement disclosure provisions in s. 9.1 of the Schedule takes precedent over Rule 49. She submits that the Statement of Claim she filed which led to the settlement agreement involved income replacement benefits ("IRBs"). She argues that there is no Rule 49 offer to supersede the provisions in s. 9.1, and that the settlement they engaged in was a partial settlement. Nevertheless, she maintains that the settlement agreement outlined in the Release is invalid because the respondent has failed to meet its obligations outlined in s. 9.1 of the Reg as it failed to include the commuted value of attendant care benefits (“ACBs”) in the settlement disclosure notice.
20The panel agrees with the applicant that s. 9.1 of the Schedule, as amended by the Reg, applies. Indeed, the applicant issued a statement of claim against the respondent with respect to her claims for accident benefits, which engaged the Rules of Civil Procedure. However, there is no Rule 49 offer to settle before the panel to evoke the provisions outlined in the Rules of Civil Procedure that would trump the mandatory provisions outlined in s. 9.1. The Schedule is consumer protection legislation and any provisions in it that protect the insured person must apply unless expressly overruled by other legislation. The Schedule cannot be usurped by Rule 49 of the Rules of Civil Procedure without an offer made pursuant to Rule 49.
The Settlement Notice that was provided complies with s. 9.1 of the Reg.
21The panel finds that the parties have entered into a valid Settlement Agreement, because the Settlement Disclosure Notice complies with the requirements of s. 9.1, given it was accurately stated in the Notice that it was impossible to set the commuted value of the ACBs because such benefits were not part of the settlement claim for the benefits being resolved.
22Section 9.1 requires a statement of the insurer’s estimate of the commuted value of the benefit and an explanation of how the insurer determined the commuted value.
23The applicant submits that there are incorrect or incomplete statements in the Settlement Disclosure Notice and that the respondent was required to provide information that is specifically relevant to her claim. She submits that there is no settlement without the commuted value of the benefits payable. She relies on the Court of Appeal of Ontario case Opoku v. Pal, 2000 CanLII 1539 (ON CA) (“Opoku”). Opoku states that “the main purpose of the commuted value requirement (CVR) was to require the insurer to provide the insured with relevant information to assist the insured in making a meaningful comparison between the proposed lump sum payment and the real value of the periodic benefits, or to put it colloquially, to make a comparison on an ‘apples to apples basis.” This decision is binding on the Panel.
24The respondent directed the Panel to Schedule B of the Notice, which it submits sets the commuted value of the benefits, notably IRBs. It further submits that, given that nothing was claimed for ACBs, housekeeping or home maintenance, the value of zero cannot be commuted by the insurer. Further, according to the respondent, there is no evidence before the Panel to indicate that the applicant even required attendant care.
25The panel finds that the notice provided sufficient and meaningful information for the applicant to make an informed decision as to whether to accept the terms of the settlement agreement.
26The panel agrees that the respondent was not required to give the commuted value of payment(s) that had not been claimed by the applicant, such as ACBs, because it was impossible to do so. This involves calculations and projections of the duration, terms, and quantum of a stream of future payments that the applicant has not claimed, as outlined in Opoku.
27Here, the parties decided that no claim for ACBs would be part of the settlement agreement, and therefore, it cannot be said that the applicant was deprived of meaningful or important information regarding the commuted value of benefits that she was not claiming. To put it simply, it is unrealistic to expect the respondent to be able to provide the commuted value of a benefit that was never claimed and the quantum of it is zero.
28At paragraph 66 of the original decision, upheld in Opoku, the Court acknowledged that precise compliance with the CVR would not always be required, particularly so in cases where the insurer's opinion is that the insured person will not require any benefits in the future (in which case the commuted value could simply be reported as nil). The Court upheld this principle in Pope.
29In any event, the need for ACBs was not demonstrated by the applicant at the time of the Settlement Notice. Had the applicant claimed for ACBs, the compliance requirements of s. 9.1(5) would have been more stringent in terms of requiring the calculation of the commuted value of the ACBs. Despite her submissions for this hearing that there is evidence of her need for ACBs, the fact is the Applicant never claimed entitlement to ACBs at the time of, or prior to, the settlement agreement. As a result, the Panel finds that the compliance requirements of s.9.1(5) are not engaged.
30The panel concludes that it is not reasonable to expect the respondent to commute the value of all possible benefits, including those that were not part of the Settlement Agreement. Thus, we find that the Settlement Agreement is valid pursuant to s.9.1 of Regulation 664.
CONCLUSION AND ORDER
31The Panel finds that the Settlement Agreement is valid pursuant to s. 9.1 of Regulation 664.
32The Application is dismissed.
Released: July 12, 2024
__________________________
Yanick Charbonneau
Adjudicator
_________________________
Brian Norris
Adjudicator