Blanco v. Unifund Assurance Company, 2025 CanLII 52383

Citation: Blanco v. Unifund Assurance Company, 2025 ONLAT 24-011417/AABS-PI

Licence Appeal Tribunal File Number: 24-011417/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:

Mischa Blanco

Applicant

and

Unifund Assurance Company

Respondent

PRELIMINARY ISSUE HEARING DECISION AND ORDER

ADJUDICATOR: Ulana Pahuta

APPEARANCES:

For the Applicant: Lily Rodriguez, Paralegal

For the Respondent: Rebecca Brown Greer, Counsel Adel Pippo, Counsel

HEARD: By way of written submissions

OVERVIEW

1Mischa Blanco, the applicant, was involved in an automobile accident on February 11, 2018 and 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 the respondent, Unifund Assurance Company, and applied to the Licence Appeal Tribunal - Automobile Accident Benefits Service (the “Tribunal”) for resolution of the dispute.

2At the case conference held on January 22, 2025, the respondent raised a preliminary issue, to be heard prior to the substantive issues in dispute.

PRELIMINARY ISSUE

3The preliminary issue to be decided is:

1. Is the applicant barred from proceeding to a hearing for the issue of non-earner benefits (“NEBs”) because the applicant failed to dispute their denial within the two-year limitation period?

RESULT

4I find that the applicant is barred from proceeding with her claim for NEBs pursuant to s. 56 of the Schedule.

ANALYSIS

Law

5Section 56 of the Schedule provides that an application to dispute a denial of a benefit shall be commenced within two years of the insurer’s refusal to pay.

6In order for section 56 to be triggered, the respondent must have provided a valid notice of denial. Section 54 of the Schedule provides that if an insurer refuses to pay a benefit, the insurer shall provide the person with a written notice advising them of their right to dispute the benefit or reduction.

7Further, the Supreme Court of Canada in Smith v. Co-operators General Insurance Co, 2002 SCC 30 held that 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, and it must provide valid or other reasons for the denial.

8If the respondent’s denial satisfies these requirements, then the onus is on the applicant to establish reasonable grounds for an extension under Section 7 of the Licence Appeal Tribunal Act, 1999 (“LAT Act”). Section 7 allows the Tribunal to extend a limitation period for filing an appeal. In considering whether to exercise its discretion to extend the limitation period, the Tribunal must consider the following four factors set out in Manuel v. Registrar, 2012 ONSC 1492, to determine if the justice of the case requires the extension:

i. The existence of a bona fide intention to appeal within the limitation period; ii. The length of delay; iii. Prejudice to the other party; and iv. Merits of the appeal.

Background and parties’ positions

9The applicant was involved in a motor vehicle accident on February 11, 2018 and submitted an Application for Accident Benefits (OCF-1) on March 5, 2018 and her Disability Certificate (OCF-3) on May 4, 2018. By way of an Explanation of Benefits (“EOB”) dated May 16, 2018 the respondent advised the applicant that based on her OCF-1 and OCF-3 she suffered from a complete inability to carry on a normal life as a result of the accident. However, the respondent stated that in accordance with s. 12(4)(a) and (b) of the Schedule, it was not required to pay NEBs as the applicant was under 18 years of age, and that she was not entitled to the benefit. The EOB further stated that based on the OCF-1 and OCF-3, the applicant was not eligible to receive Income Replacement Benefits (“IRBs”).

10After the applicant turned 18 years old, the respondent sent letters dated March 25 and 29, 2019 requesting the applicant’s attendance at insurer’s examinations (“IEs”) to determine her entitlement to NEBs. By way of an EOB dated June 28, 2019 the applicant’s claim for NEBs was denied based on the resulting IE report. On September 12, 2024 the applicant submitted an application to the Tribunal disputing the NEB denial.

11The applicant argues that she is not barred from proceeding with her NEB claim under s. 56, because the respondent failed to comply with its own statutory obligations under s. 35 and s. 36 of the Schedule. She submits that the respondent failed to advise or offer her an OCF-10 election of benefits form as required by s. 35 of the Schedule. Given that she was not asked which specified benefit she was applying for, the applicant argues that this created an “equivocal sense of indeterminacy”. As a result of this equivocation, the applicant argues that the limitation period could not start to run, as she had never received a clear and unequivocal denial. The applicant further submits that the respondent’s May 16, 2018 EOB was non-compliant with s. 36(4) of the Schedule because it did not contain a medical reason for the denial.

12Finally, the applicant argues that the doctrine of discoverability as set out in Tomec v. Economical Mutual Insurance Company, 2019 ONCA 882 is applicable. She submits that she was unaware that any applicable limitation period had begun to run, due to the respondent’s non-compliance with s. 35 and s. 36 of the Schedule.

13The respondent argues that an OCF-10 election was not required under s. 35(1) of the Schedule because the applicant’s OCF-1 and OCF-3 established that she was eligible only for NEBs not IRBs. It cites Tribunal caselaw to argue that where an insurer has sufficient information to make a determination regarding eligibility for a specified benefit, it can do so without requesting an election. Accordingly, the respondent argues that it was not required pursuant to s. 32(2)(d) to advise the applicant of an election, since she did not qualify for multiple benefits.

14The respondent further submits that both the May 16, 2018 and the June 28, 2019 denial letters complied with s. 36(4)(b) of the Schedule. While it concedes that there is presently a decision from the Tribunal which found that NEBs are payable to minors, it argues that this decision was released five years after the denial was made. The respondent further cites the Court of Appeal decision Turner v. State Farm Mutual Automobile Insurance Co., 2005 CanLII 2551 (ON CA) to argue that a reason for a denial does not have to be legally correct.

15In the alternative, the respondent argues that there is no dispute that the subsequent June 28, 2019 denial letter was compliant with s. 36(4) of the Schedule and triggered the two-year limitation period. Even if this later denial letter was considered, the respondent submits that the applicant still submitted her application disputing NEB entitlement more than two and a half years after the s. 56 limitation period expired.

The respondent was compliant with s. 35 of the Schedule

16I do not agree with the applicant that the two-year limitation period did not start to run, due to the respondent’s failure to request an OCF-10 election. Section 35(1) of the Schedule holds that an election is required, if an application indicates that the applicant may qualify for two or more specified benefits. However, in the present case, the OCF-1 indicated that the applicant was working at the time of the accident, and that her injuries did not prevent her from working. As such, the respondent determined that the applicant was entitled to NEBs, not IRBs.

17I am persuaded by the Tribunal caselaw cited by the respondent, which found that an insurer is entitled to decide a claimant’s entitlement to eligibility for a specified benefit “based on the information it had available at the time” without asking for an OCF-10 election, see J.G. v. Co-Operators, 2019 CanLII 110087 (ON LAT) and MK v. TD General Insurance Company, 2020 CanLII 34500 (ON LAT).

18Further, I agree with the reasoning in Jones v. The Co-operators, 2021 CanLII 13200 (ONLAT), also cited by the respondent. In this decision, the Tribunal found that once an insurer determined that a claimant qualified for only one benefit, there was no further need to put the claimant to an election, despite the fact that he might have met the test (but did not qualify) for another benefit. The applicant has not cited any caselaw in support of her position that an OCF-10 election is required in these circumstances.

The respondent was compliant with s. 36 of the Schedule

19I find that the respondent’s denial notices were compliant with s. 36(4) of the Schedule and the principles set out in Smith v. Co-operators. The applicant submits that the May 16, 2018 EOB failed to provide a medical reason for the denial. However, I find that it was a clear and unequivocal denial, with the stated reason being that pursuant to s. 12(4)(a) and (b) of the Schedule, the respondent was not required to pay NEBs as the applicant was under 18 years of age. While subsequent Tribunal caselaw has found that NEBs are payable to minors, I agree with the reasoning in Turner v. State Farm, which found that a limitation period begins following a clear and unequivocal denial of benefits. The Court of Appeal further stated:

The purpose of the requirement to give reasons is to permit the insured to decide whether or not to challenge the cancellation. If the reasons given are legally wrong the insured will succeed in that challenge. Requiring that the reasons be legally correct goes beyond both the requirement in the relevant regulation, and the purpose of such notice.

20The May 16, 2018 EOB provided such a clear and unequivocal denial. While it did not cite a medical reason, the letter was compliant with s. 36(4)(b) in that it explained the “and any other reason” why the respondent believed the applicant was not entitled to the benefit.

21Moreover, even if I am incorrect in my assessment of the May 16, 2018 denial letter, I find that the subsequent June 28, 2019 EOB was compliant with s. 36(4)(b) of the Schedule. This denial notice included the IE report that had been conducted to assess the applicant’s entitlement to NEBs and summarized the assessor’s findings that the applicant did not suffer from a complete inability to carry on a normal life as a result of the accident. The letter provided information about the two-year limitation period to dispute the denial and the dispute resolution process. The applicant has not provided any submissions on how the June 28, 2019 EOB failed to comply with s. 36(4)(b) of the Schedule. In my view, this notice was a valid and a clear and unequivocal denial, that triggered the two-year limitation period.

22The applicant does not dispute that she failed to file her application within the two-year limitation period stipulated in s. 56 of the Schedule. However, I must still consider whether an extension is warranted under s. 7 of the LAT Act.

Section 7 of the LAT Act

23I find that the applicant has not established that an extension is warranted pursuant to s. 7.

24The applicant has not led evidence of a bona fide intention to appeal within the limitation period. She submits that due to the respondent’s procedural non-compliance, she was unaware that the limitation period had begun to run and that she believed that she had filed her application within the appeal period. The applicant raises a similar argument with respect to the second factor set out in Manuel v. Registrar, being the length of delay, arguing that there was no delay in filing due to the respondent’s procedural non-compliance. However, as noted above, I have found that the respondent was compliant with s. 35 and s. 36 of the Schedule. Moreover, I find that the delay in the present matter is substantial, being more than two years after the expiration of the time limit.

25I further agree with the respondent that permitting such a late claim would cause prejudice, creating evidentiary concerns. Finally, the applicant has not led any evidence as to the merits of her claim. Her only arguments rested on procedural compliance with s. 35 and s. 36 of the Schedule. However, no submissions or evidence was led in support of her claim for entitlement to NEBs. Accordingly, I find that the applicant has not established that an extension of the limitation period pursuant to s. 7 is warranted.

ORDER

26I find that:

i. the applicant is barred pursuant to s. 56 of the Schedule from proceeding with her application, because she failed to dispute the NEB denial within the two-year limitation period. I decline to exercise my discretion to extend the limitation period.

ii. the application is dismissed and the substantive hearing is vacated.