Licence Appeal Tribunal File Number: 22-005728/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:
Kirsten Degutis
Applicant
and
Economical Insurance Company
Respondent
DECISION
ADJUDICATOR: Ulana Pahuta
APPEARANCES:
For the Applicant: Sylvia Guirguis, Counsel
For the Respondent: Julianne Brimfield, Counsel Ethan Edwards, Counsel
HEARD: By way of written submissions
OVERVIEW
1On November 30, 2021, Kirsten Degutis’ (the “applicant’s”) daughter (“E.J.”), was involved in an automobile accident. E.J.’s father was the driver and the only other occupant of the vehicle. E.J. was initially diagnosed with injuries including acute severe traumatic brain injuries and pulmonary contusion. However, on December 10, 2021 life support systems were discontinued at which time E.J. died of her injuries.
2As a result of the accident, the applicant sought benefits pursuant to the Statutory Accident Benefits Schedule - Effective September 1, 2010 (including amendments effective June 1, 2016) (the “Schedule”) from Economical Insurance Company, the respondent. The applicant was denied benefits by the respondent, and applied to the Licence Appeal Tribunal - Automobile Accident Benefits Service (the “Tribunal”) for resolution of the dispute.
PRELIMINARY ISSUE
3The preliminary issue to be decided is:
- Is the applicant an “insured person” as defined by section 3 of the Schedule?
SUBSTANTIVE ISSUES
4The substantive issues in dispute are:
Are the applicant’s injuries predominantly minor as defined in s. 3 of the Schedule and therefore subject to treatment within the $3,500.00 Minor Injury Guideline limit?
Is the applicant entitled to $1,795.00 for a social work assessment, proposed by Eden Dales Social Work and Psychotherapy in a treatment plan dated March 3, 2022?
Is the applicant entitled to $209.84 for psychotherapy expenses, submitted on a claim form (OCF-6) dated February 28, 2022?
Is the respondent liable to pay an award under s. 10 of Regulation 664 because it unreasonably withheld or delayed payments to the applicant?
Is the applicant entitled to interest on any overdue payment of benefits?
RESULT
5On the preliminary issue, I find that the applicant is not an “insured person” for the purposes of s. 3(1) of the Schedule.
6As a result, the applicant is not entitled to accident benefits from the respondent and the application is dismissed.
ANALYSIS
Background and Parties’ Positions
7At the time of the accident, the applicant did not own or have use of an automobile and was not a named insured on an accident benefits policy. Rather, on February 22, 2022, the applicant applied for accident benefits as a “dependent”, under her parents’ policy with the respondent.
8By way of letter dated March 10, 2022, the respondent advised the applicant that she may not be an “insured person” pursuant to s. 3(1)(a) of the Schedule and indicated that there was a dispute between the respondent and Co-operator’s General Insurance (“Co-operators”), the insurer of the applicant’s former common-law spouse (E.J.’s father) who was the driver of the vehicle. On March 21, 2022 Co-operators advised that they would not be accepting the applicant’s claim. On April 19, 2022 the respondent advised that it would not be proceeding with the applicant’s claim, as it had determined that the applicant did not meet the definition of an “insured person” pursuant to s. 3(1)(a)(ii) of the Schedule.
9The applicant submits that at the time of the accident, she was a dependent of her parents and as such, meets the definition of “insured person”. While she concedes that on November 30, 2021 she had already moved out of her parents’ home into a rental apartment, the applicant argues that she had only been living alone for two weeks prior to the accident, from November 15, 2021. However, the applicant and E.J. had been living with the applicant’s parents for almost a year from November/December 2020, after her relationship with E.J.’s father had ended.
10For that year, the applicant claims that she was entirely dependent on her parents. She did not pay rent or any household expenses other than contributing $300/month for groceries, paying for her cellphone, bus pass, gas for her mother’s vehicle and $200 in Montessori fees for E.J. The applicant also paid $600 in monthly installments to her father for her student loan. On November 30, 2021, the applicant submits that while she was living alone, she was on medical leave from September 2021 as a result of her pre-existing stress, anxiety and depression. She argues that this two week period in between moving out of her parents’ home and the accident is not an accurate period of time to assess her dependency status. Rather, the appropriate gauge would be the twelve month period prior to the accident.
11The respondent submits that at the time of the accident, the applicant was living independently and was covering her rent and all of her expenses without any financial contribution from her parents. In an April 7, 2022 statement to the respondent, the applicant confirmed that on November 30, 2021 she was not financially dependent on anyone. It argues that the two week period beginning November 15, 2021 accurately reflects the applicant’s dependency status, was her “new normal” and was intended to be permanent.
12The respondent further argues that regardless of the time period chosen, the applicant was not a “dependant” as she was earning sufficient income to support herself. She had been employed full-time since August 2019 and in 2021, the twelve month period before the accident, had earned $35,500.00, enough to fund her expenses. Even at the time of the accident the applicant had been receiving $1,782.20 per month in short-term disability (“STD”) benefits and as such, was able to financially support herself.
Law
13Section 2(4) of the Schedule provides that benefits are payable to “insured persons.”
14The definition of an “insured person” in s. 3(1)(a)(ii) of the Schedule includes a dependent of the named insured, who was not involved in an accident, but who suffers psychological or mental injuries as a result of an accident that resulted in a physical injury to their child.
15Section 3(7)(b) further states that a person is a dependent of an individual if the person is principally dependent for financial support or care on the individual or individual’s spouse.
16Both parties agree that “dependency” is further assessed according to the following four criteria, citing the Ontario Court of Appeal decision Miller v. Safeco Insurance Co. of America, (1984) 1984 CanLII 2019 (ON HCJ), 48 O.R. (2d) 451 (H.C.J.), affirmed 1985 CanLII 2022 (ON CA), 1985 50 O.R. (2d) 797, RBA and State Farm v. Bunyan, 2013 ONSC 6670:
i. Amount of dependency;
ii. Duration of dependency;
iii. Financial or other needs of the alleged dependent; and
iv. The ability of the alleged dependent to be self-supporting.
The applicant has not established that she was principally dependent on her parents
17I find that the applicant has not met her burden to prove that at the time of the accident, she was a dependant of her parents.
18The parties provide extensive submissions on the appropriate time period to accurately assess the applicant’s dependency. However, I agree with the respondent that regardless whether the two week period immediately preceding the accident or the twelve month period pre-accident is chosen, the applicant has not established that she was financially principally dependant on her parents.
19If the two week period pre-accident is considered, the applicant admitted in her April 7, 2022 statement to the respondent that she was not financially dependent on anyone during this time-frame. The applicant further confirmed that she had not received any financial assistance from her parents since her November 15, 2021 move. As such, the applicant has not established that she was principally dependant on her parents from November 15, 2021 until the time of the accident.
20With respect to the longer twelve month timeframe, both parties reference the statistical approach of the Market Basket Measure (“MBM”) for determining whether a person can financially provide for their basic needs. The applicant references the 2021 MBM of $47,813.00 for a reference family. However, I agree with the respondent that a reference family encompasses four people. In 2021, the applicant would either have been a two-person family during the period that her daughter was living with her (pre-October 2021), or a single person from October 2021 when E.J. began living with her father. As such, the annual MBM would have been a maximum of $34,178.05 for a two-person family.
21The applicant’s income tax return for 2021 confirms that the applicant earned $35,500.00 in employment income. As such, I agree with the respondent that the applicant would have been able to fund 100% of her expenses based on the MBM. The respondent cites J.W.C. v. Certas Direct Insurance Company, 2018 CanLII 132573 (ONLAT) and K.J. v. Aviva Insurance Canada, 2019 CanLII 72225 (ONLAT) to argue that if an applicant’s income is sufficient to meet 50% or more of their financial needs, they cannot be considered financially dependant.
22The applicant argues the $35,500.00 amount is not an accurate reflection of her income, because since September 2021, she had been receiving STD benefits being 67% of her regular salary. She goes on to state that STD benefits would have been available to her until February 2, 2022, at which point she would have been eligible for long-term disability benefits.
23I am not persuaded by the applicant’s argument that the 2021 employment income indicated on her income tax return is not an accurate reflection of her income for the year. The applicant appears to be arguing that only the STD amount of 67% of her income should be considered, as this was the amount she was receiving at the time of the accident. The applicant further argues that there is no evidence that she would be able to return to full-time hours given her medical leave. However, given that the applicant is proposing that the twelve month period pre-accident should be considered when assessing her dependency status rather than the limited two week period, similarly, the applicant’s full income over the twelve month period should be considered as well. I find it inconsistent to claim that her living and financial arrangements over a twelve month period should be considered, but not her employment income over the same period.
24The applicant argues that in the twelve month period pre-accident, she was entirely dependant on her parents. They provided room and board, and paid her expenses other than the $300/month for groceries she contributed, her cellphone, bus pass, gas for her mother’s vehicle and $200 in Montessori fees. However, despite the fact that the applicant’s parents paid these expenses during this timeframe, I agree with the respondent that the applicant’s income and resources were sufficient to meet more than 50% of her financial needs, ranging even closer to the majority of her expenses. Further, the applicant has demonstrated her capacity to support herself. The applicant had been employed for more than two years at the time of her accident.
25The respondent further relies on K.J. v. Aviva Insurance Canada to argue that in similar circumstances, despite the fact that a claimant lived at home without paying rent, she was not a dependant especially when she was working full-time hours. Rather, the claimant in K.J. was found to be benefitting from the generosity of her parents but was still capable of funding her own expenses. I find the decision cited by the respondent to be persuasive.
26The applicant argues it is distinguishable, since unlike the claimant in K.J., she was struggling with her mental health and employment at the time of the accident, such that she was not in a stable position. However, the clinical notes and records of the applicant’s family physician indicate that the applicant herself identified this instability as being “situational” and was related to living with her parents, that there were disagreements and her depression and anxiety skyrocketed as a result. The applicant also reported that her leave of absence was until she could move out of her parents’ house on November 15, 2021, although this date was not confirmed. As such, I do not agree with the applicant that the evidence establishes that she was unable to meet the majority of her financial needs due to mental health concerns or that she did not intend to return to work.
27Both during the two week period pre-accident and the longer twelve month preceding period, the applicant was employed and earning sufficient income to meet most of her financial needs. The applicant has not established that she was principally dependent on her parents for financial support.
ORDER
28For the reasons outlined above I find that the applicant has not established that she was a dependant of her parents at the time of the accident. The applicant is not an “insured person” for the purposes of s. 3(1) of the Schedule.
29As a result, the applicant is not entitled to accident benefits from the respondent and the application is dismissed.
Released: August 2, 2024
__________________________
Ulana Pahuta
Adjudicator