NOTE: This decision was overturned on appeal on October 1, 2012
In the decision Marcia Henry and State Farm Automobile Insurance Company [FSCO A09-000213] FSCO Arbitrator Denise Ashby ordered the insurer to pay a claimant’s income replacement benefits (IRB) with interest. The insurer was also ordered to pay a special award of $23,000.00 for unreasonably withholding the benefit.
Marcia Henry was a full-time emergency triage nurse in a hospital. The medical experts identified that she was only capable of engaging in sedentary work. Despite that, State Farm terminated her income replacement benefits prior to the 104-week mark, taking the position that she did not suffer a substantial inability to perform the essential tasks of her pre-accident work.
The Arbitrator also considered Ms. Henry’s entitlement to IRB’s after the 104-week mark, when the eligibility criteria changes to having to suffer a complete inability to engage in any employment for which she is reasonably suited, based on education, training and experience.
Although Ms. Henry took courses to upgrade her resume following the accident, it was determined that she still remained competitively unemployable when compared to her pre-accident job. The Arbitrator noted that, “It is unrealistic to believe that a woman of Ms. Henry’s age, disability and expected level of income would be hired over similarly educated, healthy and younger candidates who would likely have lower salary expectations.”
The Arbitrator went on to state that,
The accident occurred in February 2007. For the majority of her studies Ms. Henry was not engaged in employment and was able to work at her own pace. Notwithstanding this flexibility, it took four years to complete her degree. While Ms. Henry’s extensive experience and academic success might appear to make her an attractive candidate for employment as a nursing or public health instructor, her lack of teaching experience and accommodation requirements negate this. I accept that Ms. Henry enrolled in post-graduate studies as part of a career plan which would have seen her transition from the physically demanding role of emergency department nurse to a more sedentary role in public health. However, the injuries sustained in the accident prevented her from implementing her plan. Therefore, I find that Ms. Henry is entitled to post-104 week income replacement benefits.
With regard to a special award, the Arbitrator made the following comments:
State Farm stubbornly held to the opinion of its medical assessments of 2007 that Ms. Henry was not substantially disabled. Notwithstanding there was compelling evidence that Ms.
Henry continued to require significant medical intervention including shoulder surgery in June 2009.
An insurer has a continuing obligation to adjust a claim. State Farm failed to meaningfully revisit its opinion as the 104 week period elapsed and Ms. Henry had not returned to work.
I find that State Farm unreasonably withheld income replacement benefits from Ms. Henry and as a consequence she is entitled to a special award. As State Farm essentially abdicated its responsibility to adjust the file in respect of the post-104 week period, the award should be at the higher end of that available.
The full decision can be read by clicking below.
Smitiuch Injury Law recently won an arbitration decision, DiMarco and Chubb Insurance Company, at the Financial Services Commission of Ontario (FSCO) regarding what is deemed to be an “accident”.
Marilena DiMarco was riding her bicycle on a training ride for a charitable event when she and her group went through a town that was having a street festival. Because the street was closed the group rode their bicycles on the sidewalk. A van was parked half-way on the sidewalk. When Ms. DiMarco swerved to avoid the van, she lost her balance and fell, hitting the van with her hand in the process. Chubb Insurance refused to accept the incident as a “motor vehicle accident” as defined in The Insurance Act and Statutory Accident Benefits Schedule (SABS) and refused to pay for badly-needed treatment and other accident benefits.
Arbitrator Deborah Pressman stated the following:
In this case, Ms. DiMarco was compelled to manoeuvre on the sidewalk around a vehicle that was parked in her way. This automobile set in motion a chain of events directly resulting in Ms. DiMarco’s fall from the bicycle. There was no intervening act that caused Ms. DiMarco to fall. There were no other impediments around the automobile or near Ms. DiMarco. Therefore, there was a direct and proximate cause between the “use or operation” of the automobile and Ms. DiMarco’s injuries.
Peter Cho, an associate lawyer at Smitiuch Injury Law Professional Corporation, represented Ms. DiMarco at the arbitration hearing. He was assisted by Chris Jackson, Accident Benefits Manager.
The decision can be read by clicking on the attached. DiMarco and Chubb Insurance Company of Canada FSCO Decision A10-003967
A recent decision by FSCO Arbitrator Jeffrey Rogers supports that a mediation can be deemed to have failed if it has not been mediated within the 60 day timeframe noted in both The Insurance Act as well as The Dispute Resolution Practice Code.
In the decision, Leone and State Farm, Arbitrator Rogers states the following:
Since the prescribed time for mediation had expired when Mr. Leone filed his Application for Arbitration, there was no jurisdictional barrier to his doing so. This conclusion is consistent with the scheme and intent of the Act, the Schedule and the Rules as they aim to promote prompt payment of benefits and speedy dispute resolution. The legislation and the Rules are all replete with fixed time limits intended to serve this purpose. Accepting State Farm’s position would mean that there is no fixed time for completing mediation. That would render meaningless the requirement in the Act and the Rules for the prompt appointment of a mediator.
Section 281.1 of the Act, section 51(1) of the Schedule and Rule 11 of the DRPC require that an Application for Mediation be filed no later than 2 years from the date the insurer provided written notice of refusal to pay an amount claimed. Accepting State Farm’s submission that the Application is not filed until a mediator is appointed would mean that an insured person does not know whether he or she has met this limitation when delivering an Application to the Commission. It would mean that the period differs from application to application and that close to 1 year of the permitted time was consumed by the delay in this case. Conceivably, if delays increase to the point where it takes 2 years to appoint a mediator, an insured person who attempts to file an Application immediately upon denial would see his or her rights extinguished, before the first step in the dispute resolution process has occurred. The Legislature could not have intended that absurd result.
A decision from the Superior Court of Justice of Ontario was released that declares a mediation by the Financial Services Commission of Ontario (FSCO) failed if it has not been mediated within 60 days of the application being submitted.
In Cornie v. Security National [2012 ONSC 905], which was heard with three other similar cases, Justice J.W. Sloan renders the following decision:
It currently appears that FSCO’s Dispute Resolution Services’ Mediation Unit is functioning without timelines and has been doing so for years.
The SABS [Statutory Accident Benefits] are for the benefit of injured motor vehicle victims and are often required in a timely fashion.
It makes perfect sense that the legislation and the DPRC [Dispute Resolution Practice Code] refer to a 60 day time limit to deal with such disputes.
In contrast to the injured victims, insurance companies are not in a vulnerable position. While there is nothing to suggest that these insurance companies are in any way responsible for the delay in mediation, there is no evidence that the delay in mediation is of any real consequence to them.
Justice Sloan found the insurance companies’ postion that accident victims must simply wait to be “preposterous” and suggests that FSCO can continue to try to comply with the 60 day period or seek a change and/or ask for some legislative direction to extend the 60 day period in appropriate circumstances.
It remains to be seen if this motion decision will be appealed.
The Toronto Star has published an article identifying the lengthy wait times at the Financial Services Commission of Ontario (FSCO) for mediations of accident benefits denied by insurance companies.
Our firm’s own Michael Smitiuch was interviewed and quoted in the article. He identifies the significant hardship that these delays often mean for clients and notes this to be an access to justice issue.
To read the Toronto Star Article, click here.
A story written in the Toronto Sun looks at the current debate over the definition of catastrophic impairment and details the ongoing battles of Robert Kusnierz, whos recent Ontario Court of Appeal win supported the combining of physical and psychological impairments for determining a whole body impairment.
You can read the article in full by clicking here.
The Canadian Broadcasting Corporation (CBC) in Toronto recently aired an expose on the increase in denials for medical and rehabilitation treatment by Ontario’s no-fault automobile insurers and the significant delay in obtaining justice for unreasonable denials.
To read the article and watch the archived video, click here.
In a recent arbitration decision through the Financial Services Commission of Ontario (FSCO), The Personal Insurance Company of Canada was subjected to a $28,000.00 special award for unreasonably withholding accident benefits from their insured.
In Hoang and Personal, Arbitrator Denise Ashby found that The Personal unreasonably withheld payment for lost educational expenses and the costs of rehabilitation support worker services for Christopher Hoang, an 11 year-old boy who suffered a catastrophic brain injury from a motor vehicle accident.
Arbitrator Ashby noted that The Personal failed to reasonably assess the medical information available and acted unreasonably in denying his claim. She noted that The Personal’s reliance on insurer’s examinations, “…in the face of the overwhelmingly consistent opinions and reasoning of the [treatment] Team and the other professionals who followed Christopher, amounts to an unreasonable disregard of the available information relating to the two rehabilitation benefits.”
A recent Arbitration ruling by the Financial Services Commission of Ontario (FSCO) has ordered Economical Insurance to pay a $6,000.00 special award for unreasonably withholding attendant care benefits from one of their policyholders. In the matter of Mr. S. and Economical Mutual Insurance Company, the Arbitrator identified that the insurer relied on its own surveillance and not even their own medical experts when determining the amount of the attendant care benefit.
A golf cart driving on a highway without insurance is still a ‘motor vehicle’ for the purposes of accident benefits. Arbitrator Kominar – “…certain classes of vehicles, including golf carts, when they are operating on property other than highways, it does not follow that ‘if’ those conveyances choose to venture out, illegally, onto highways that they are exempt from insurance requirements…”