CITATION: Hoskins v. Co-Operators General Insurance Company, 2016 ONSC 837

COURT FILE NO.: CV-13-474578

DATE: 20160203

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

BRENDA HOSKINS

Plaintiff

– and –

CO-OPERATORS GENERAL INSURANCE COMPANY

Defendant

R. Caesar, for the Plaintiff, Responding Party

R. Tilden, for the Defendant, Moving Party

HEARD: December 10, 2015

r.f. goldstein j.

[1] On July 10 2010 the plaintiff, Brenda Hoskins, had a car accident in Mississauga. Ms. Hoskins was self-employed at the time. She had three companies. Her various business ventures included breeding dogs; boarding dogs; and boarding horses. She said that her ability to work was affected by the accident. She applied for Income Replacement Benefits, or IRB’s, from her insurance company, Co-operators.

[2] There are two types of IRB’s: pre-104 IRBs and post-104 IRBs. The “104” refers to the number of weeks after the accident. There are different entitlement tests for pre-104 IRB’s and post-104 IRB’s. Co-operators paid Ms. Hoskins pre-104 IRBs after her accident but refused to denied Ms. Hoskins’ claim for post-104 IRB’s on July 6, 2012, about two years after the accident.

[3] Under the Insurance Act, a claimant cannot litigate or arbitrate a dispute with an insurance company unless mediation has been sought, and the mediation has failed: s. 281(2).

[4] The parties held a mediation on January 31, 2013. Co-operators argues that post-104 IRB’s were not dealt with at the mediation. Since post-104 IRB’s were not mediated, the mediation did not fail, Since the mediation did not fail Ms. Hoskins’ claim is now statute-barred. It is statute-barred because the mediation of this issue should have taken place within two years of July 6, 2012. The time for mediation has now passed.

[5] Ms. Hoskins argues that the issue of post-104 IRB’s was before the mediator but that he did not resolve the issue. Therefore, the mediation failed. She issued a Statement of Claim shortly after the mediation. Paragraph 1(a) of her Statement of Claim sets out her claim for post-104 IRB’s. Co-operators says that the claim in paragraph 1(a) is statute-barred. Co-operators seeks partial summary judgment on that single issue in this motion.

[6] I disagree with Co-operators. The claim for post-104 IRBs was before the mediator but not resolved. For the reasons that follow, the motion for partial summary judgment is dismissed.

FACTS

[7] Ms. Hoskins applied for accident benefits shortly after the accident. The Statutory Accident Benefits (SAB) scheme provides that a claimant who has been injured may receive IRBs for up to 104 weeks (two years) after the accident. After 104 weeks claimant may receive permanent IRBs if they meet the criteria. In essence, the scheme sets out one disability test for IRBs for the first 104 weeks after an accident, and a different test for IRBs after that.

[8] Co-operators paid pre-104 IRBs to Ms. Hoskins from September 29, 2010 to July 10, 2012. Various medical professionals assessed Ms. Hoskins on an ongoing basis in order to determine her eligibility for pre-104 IRBs as well as post-IRB’s. Co-operators paid varying amounts from week to week depending on the assessments. Several income benefit reports were generated and provided to Co-operators.

[9] On December 13, 2011 Ms. Hoskins applied for mediation. Her counsel filled out the form on her behalf. Part 2 of the form sets out the issues that are in dispute. The form set out that Ms. Hoskins was disputing weekly benefit income replacement. The form also set out that Ms. Hoskins was disputing the “amount of weekly benefits”. The form had a box to check if “entitlement to weekly benefits past 104 weeks” was in dispute. That box was not checked. Other issues were disputed.

[10] Jennifer Keyes was the claims representative dealing with Ms. Hoskins. On April 24 2012 Ms. Keyes sent an offer to settle to Ms. Hoskin’s counsel. Co-operators offered $0.00 for income replacement benefit “As there is nothing in dispute”.

[11] In fact, Ms. Hoskins did have a dispute with Co-operators about IRBs. On April 25 2012 her counsel wrote to Ms. Keyes. Counsel advised Ms. Keyes that the application for mediation did include a dispute about ongoing IRBs. The letter stated:

This will confirm that the income replacement benefits are currently in dispute and we have filed for mediation with respect to same. We are disputing the amount of benefits paid and the length of time that they have been paid. Our application for mediation should read as follows:

$400.00 per week from DL to present and ongoing less any amounts received.

If you would like to make another officer and include an amount for income replacement benefits we would be pleased to present it to our client. If you do not wish to offer anything for IRBs then we would request that you please set up your post 104 assessments.

[12] Co-operators then required that Ms. Hoskins be assessed to determine if she met the test for post-104 IRBs. Several medical professionals continued to assess Ms. Hoskins. Several reports were generated in June 2012. A claimant is eligible for post-104 benefits if she is impaired as the result of an accident and the impairment prevents her form engaging in any occupation for which she is reasonably suited by training, education, or experience.

[13] On July 6 2012 Ms. Keyes advised Ms. Hoskins by letter that Co-operators had determined that she did not qualify for post-104 IRBs and denied her claim. Ms. Keyes also enclosed a document containing information concerning Ms. Hoskin’s right to dispute the determination of ineligibility. The document was entitled Explanation of Benefits. Part 6 of the document set out the dispute mechanism. Specifically, Step 2 stated:

STEP 2: MEDIATION

If you are unable to resolve your dispute by speaking to your adjuster, you may apply to mediate your dispute through the Financial Services Commission of Ontario (FSCO) within two years of your insurer’s refusal to pay, or reduction of a benefit.

[14] Mediation is mandatory in a dispute between an insurer and a claimant before a claimant may proceed either to arbitration or to court: Insurance Act, s. 281(2).

[15] Of course, at that point Ms. Hoskins had already applied for mediation. Co-operators had not yet turned her down her claim for post-104 IRBs when she filed the application form. It is therefore unsurprising that the post-104 box was unchecked. In any event, Ms. Hoskins continued to be assessed on an ongoing basis to determine her eligibility for post-104 IRBs. Assessments were conducted both before and after Co-operators denied the claim for post-104 IRB’s.

[16] The FSCO mediation took place on January 31, 2013. Ms. Hoskins was represented by counsel. Prior to the mediation Ms. Hoskins’ counsel filed a Mediation Brief. The brief set out several issues for mediation, including this one:

Income Replacement Benefits in the amount of $400 per week from date of loss to present less any amounts already received.

[17] Several issues were in dispute at the mediation, not just IRBs. The report of the mediator indicated that the IRB issue was resolved. Ms. Hosins claimed “entitlement to a Weekly Income Replacement Benefit… from July 17, 2010 to date and on-going”. The mediator then went on to say that “This issue is resolved. Co-operators agreed to pay $224.85 per week from July 17, 2010 to July 10, 2012…” The mediator did not say that the post-IRB issue was still in dispute.

[18] Ms. Hoskins made a further attempt to mediate the remaining issues in dispute, but there was no further attempt to mediate the post-104 IRB issue.

[19] On February 5 2013, a few days after the mediation, Ms. Keyes wrote to Ms. Hoskins’ counsel. She reported that a cheque was sent to Ms. Hoskins as per the mediation agreement. The letter specifically included a reference to payment of pre-104 IRBs.

[20] On February 20 2013 Ms. Hoskins issued a Statement of Claim against Co-operators. Paragraph 1(a) stated that the Plaintiff claimed:

Income replacement benefits in the amount of $400 per week from July 17, 2010 and ongoing less any amounts already paid pursuant to s. 4(1) of the Statutory Accident Benefits Schedule.

[21] On February 21 2013, the next day, Ms. Keyes delivered a Notice of Examination to Ms. Hoskins. It is likely that Ms. Keyes was unaware that a Statement of Claim was issued. The notice stated:

Medical and Any Other Reasons for the Examination:

Insurer’s Examination has ben scheduled to determine ongoing entitlement to Income Replacement benefits, post 104 weeks from a psychological perspective.

[22] Further correspondence from Ms. Keyes on March 7 2013 and March 27 2013 also referred to pos-104 benefits. On April 10 2013 Ms. Hoskins underwent an Insurers Examination to determine her eligibility for post 104 benefits. The examiner determined that she did not meet the criteria for post-104 benefits.

[23] Ms. Keyes wrote again to Ms. Hoskins on May 2, 2013. In her letter Ms. Keyes specifically advised Ms. Hoskins that she had two years from July 6 2012 to file for mediation in order to preserve the limitation period for disputing the insurer’s position.

[24] Co-operators Statement of Defence is dated June 24 2013. Co-operators specifically pleaded that post-104 IRBs were never mediated. As a result, pleads Co-operators, the claim is statute barred.

ANALYSIS

[25] Pursuant to s. 281(1) of the Insurance Act where an insurance company and a claimant have a dispute over benefits, the claimant may proceed in one of three ways: the claimant may file a statement of claim in court; the claimant may refer the dispute to an arbitrator under s. 282 of the Insurance Act; or the insurer and the insured may agree to submit the dispute (or disputes) to arbitration under the Arbitration Act.

[26] Co-operators argues that the meditation did not deal with the post-104 IRB’s. Ms. Hoskins failed to check the box that she sought post-IRB’s when she applied for mediation. Therefore, the issue was not mediated and the mediation could not have failed. Since the mediation did not fail, Ms. Hoskins has not right to litigate the issue. Co-operators denied the claim for post-104 IRB’s on July 12, 2102. Ms. Hoskins therefore had two years from that date to mediate. Since she did not mediate the issue, mediation did not fail and the claim is statute barred.

[27] Thus, there are two issues to be determined on this motion: first, was the issue of post-104 IRB’s before the mediator? And second, if it was, did the mediation fail resolve the issue?

(a) Was the issue of post-104 IRB’s before the mediator?

[28] Co-operators argues that Ms. Hoskin’s failure to check the box on the mediation form combined with the mediator’s report indicates that the mediation did not deal with this issue.

[29] I disagree. This is a factual issue. The evidence is clear that Ms. Hoskins’ counsel intended that the mediation include post-104 IRB’s. The application for mediation was filed more than six months prior to Co-operators’ decision to reject the claim for post-104 IRB’s, so it is hardly surprising that the box was un-checked on the mediation application. Letters from Ms. Hoskins’ counsel to Co-operators made it clear that there was still an outstanding claim for post104 IRB’s and that she intended to mediate the issue. The first point raised in Ms. Hoskins’ mediation brief was the issue of ongoing income replacement “from date of loss to present”, which obviously included both pre-104 and post-104 IRB’s. Co-operators itself behaved as if post-104 IRB’s were a live issue. Ms. Keyes continued to require Ms. Hoskins to continue to attend for examinations for post-104 IRB’s even after it refused the claim and even after the mediation.

[30] I therefore find that the claim for post-104 IRB’s was before the mediator.

(b) Did the mediation fail?

[31] Ms. Hoskins could only go to litigation where mediation had been sought, and the mediation had failed: s. 281(2). See: Younis v. State Farm Mutual Automobile Insurance Co., 2012 ONCA 836, 113 O.R. (3d) 344.

[32] Subsections 280(7) and 280(8) state:

[33] [INSERT]

[34] What does it mean to fail? The scheme of the Insurance Act appears to contemplate that it is the mediator who decides whether the mediation has failed: Daneliak-Dooling v. Co-operators General Insurance Company, [2002] O.J. No. 3232, 2002 CarswellOnt 2853 (Sup.Ct.).

[35] Cornie v. Security National Insurance Company, 2012 ONCA 837, 113 O.R. (3d) 331 is not precisely on point but it deals with the interpretation of the statutory mediation scheme. Four plaintiffs had disputes with their insurance companies over accident benefits. The plaintiffs applied to FSCO for mediation. FSCO did not appoint a mediator within 60 days. The plaintiffs wrote to FSCO asking for a report that mediation had failed because it had not breen held within the prescribed time period. FSCO refused. The plaintiffs commenced a court action. The insurance companies moved to strike. The motion was dismissed, and the insurance companies appealed. They argued that the statutory scheme relied heavily on mediation, since it resolved 75% of cases. If claimants were permitted to commence a court action without FSCO mediation would “effectively gut” the statutory scheme. Juriansz J.A., writing for the Court of Appeal, rejected this interpretation. He stated at paras. 28-30:

Relying on this characterization of the purpose of the legislative framework, the appellants urge that the words of the various relevant provisions be interpreted to hold that insured persons cannot commence a court action until mediation between the parties has actually been attempted and failed, and a mediator's report has been issued.

In my view, the appellants' identification of the statute's purpose is incomplete. No doubt it is an important purpose of the legislative framework to make mediation mandatory. That, though, is not the whole story. Reading the provisions in their entire context makes clear that the purpose of the legislation is to make mandatory a mediation process that is timely and effective. The timeliness aspect of the mandatory mediation process is evident from s. 280(4)'s requirement that mediation be conducted within the time prescribed by regulation and s. 280(7)'s provision that mediation has failed when the prescribed time for mediation has expired.

The purpose of the legislative scheme of dispute resolution is to mandate a speedy mediation process, conducted and completed on a strict timetable, in order to settle disputes quickly and economically. The speedy mediation process enables insured persons to receive the benefits to which they are entitled without delay. When the legislative purpose is properly characterized to include the timely resolution of disputes, there is no reason to resist the grammatical and ordinary sense of the legislation. Therefore, I do not accept the premise on which the appellants' entire argument is based. Nevertheless, I now turn to the specific arguments they put forward regarding the interpretation of the relevant statutory and regulatory provisions.

[36] Although Cornie involved time limits set out in the Insurance Act, the interpretive principles apply. The purpose of the legislation is to make the mediation process timely and effective: Cornie, at para. 29. In essence, the Court of Appeal found that the process is hardly effective if FSCO fails to act. That interpretation applies to this case since it is not entirely clear what the mediator did (or did not do). It cannot be that the mediator is the sole arbiter of who gets to litigate and who does not.

[37] In this case, the report seems to indicate at first blush that the post-104 IRB issue was mediated and resolved. This is what the mediator reported:

Mrs. Hoskins claimed entitlement to a Weekly Income Replacement Benefit, pursuant to s. 2(2) or [sic] Part 2 of the SABS, at the rate of $400.00 per week from July 17, 2010 to date and on-going, less amounts Co-operators has paid.

This issue is resolved. Co-operators agreed to pay $224.85 per week from July 17, 2010 to July 10, 2012 subject to all applicable adjustments and minus any overpayment prescribed by the provisions of the SABS. Mrs. Hoskins accepted this in resolution of this issue.

[38] The mediator then set out two issues that were in dispute. Neither those issues was post-IRB benefits. At best, the report is ambiguous regarding post-104 IRB’s. At worst, the mediator erred.

[39] In any event, the mediation report cannot be isolated from the surrounding circumstances. Both parties continued to conduct themselves as if the post-104 IRB’s were still in issue. Ms. Keyes wrote to Ms. Hoskins confirming that a cheque was sent and that it partially dealt with the pre-104 IRB’s. She continued to require that Ms. Hoskins be assessed for post-104 IRB’s. Ms. Hoskins’ counsel issued a Statement of Claim on February 20 2013. She claimed, among other things, post-104 IRB’s. The Statement of Claim was issued less than three weeks after the mediation. The next day, February 21 2013 (possibly without knowing that the Statement of Claim had been issued) Ms. Keyes sent a letter to Ms. Hoskins requiring that she attend for yet another examination for post-104 IRB’s.

[40] If Co-operators felt that the post-104 IRB issue had not been mediated, it could have gone back to the mediator for clarification. Instead, Co-operators issued a Notice of Examination to Ms. Hoskins. It is possible that Co-operators might have treated post-104 IRB’s as a live issue for further mediation, but that does not seem to be the evidence. Rather, Ms. Keyes stated during the cross-examination on her affidavit that she set up new assessments for post-104 IRB’s from a psychological perspective because Co-operators received new information.

[41] It is true that Ms. Keyes sent Ms. Hoskins a letter on May 2 2013 stating that she had two years from July 6 2012 to mediate. That, however, was after the litigation commenced. Her position was inconsistent with the earlier Notices of Examination.

[42] The mediator simply did not resolve the question of post-104 IRB’s although the question was before him. Thus, the mediation failed for the purpose of s. 281(2) of the Insurance Act. The claim is not statute-barred, which completely resolves the motion. That is because the question of Ms. Hoskins’ entitlement to post-104 IRB’s cannot be divorced from the question of whether this is a proper case for partial summary judgment. That is because if I were to find that the mediation resolved the post-104 IRB issue then I could easily grant summary judgment and dismiss this aspect of the claim. After all, the record is all there on paper, credibility is not really in question, and the issue narrow: Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87, 366 D.L.R. (4th) 641, 2014 CarswellOnt 641. In Hryniak at para. 49 the Supreme Court resolved what it means when there is no “genuine issue for trial”:

There will be no genuine issue requiring a trial when the judge is able to reach a fair and just determination on the merits on a motion for summary judgment. This will be the case when the process (1) allows the judge to make the necessary findings of fact, (2) allows the judge to apply the law to the facts, and (3) is a proportionate, more expeditious and less expensive means to achieve a just result.

[43] Ms. Hoskins’ position is that the question of her substantive eligibility to post-104 IRB’s is not suitable for summary judgment. In effect, Co-operators does not disagree: this motion was directed solely to the issue of whether the post-104 IRB claim is statute-barred. Co-operators did not put forward any evidence dealing with the substantive aspects of the post-104 IRB claim. Co-operators obviously accepts that there is a genuine issue for trial in the absence of a statutory argument. What logically follows is that the summary judgment motion must be dismissed.

DISPOSITION

[44] The motion is dismissed. The parties provided costs outlines at the hearing of the motion. They may each file submissions of no more than two pages within 30 days of the release of these reasons.

R.F. Goldstein J.

Released: February 3, 2016

CITATION: Hoskins v. Co-Operators General Insurance Company, 2016 ONSC 837

COURT FILE NO.: CV-13-474578

DATE: 20160203

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

BRENDA HOSKINS

Plaintiff

– and –

CO-OPERATORS GENERAL INSURANCE COMPANY

Defendant

REASONS FOR JUDGMENT

R.F. Goldstein J.