ACCIDENT BENEFITS NEWSLETTER - OCTOBER 2005

Catherine Zingg

Monks v. ING Insurance Company of Canada (2005) O.J. No. 2526, O.S.C. - Ms. Monks was a Rehabilitation Case Worker/Insurance Adjuster/Registered Nurse who suffered injuries in three separate motor vehicle accidents. The first was relatively minor in which she suffered a whiplash injury on February 16, 1993. On July 2, 1995, she was struck from behind by a pick-up truck and suffered numbness and paraesthesia. Following this accident an MRI showed that she was suffering from a narrowing of her spinal canal to about 6.0mm. This rendered her particularly susceptible to spinal cord injury resulting from sudden extensions of her neck as there was no reserve room. On December 23, 1998 she was in an SUV that hit a bridge abutment in the US. Her symptoms became increasingly severe and she underwent surgery on September 27, 1999. As matters worsened further surgery took place on January 2001. Following that operation she developed spastic quadriparesis particularly in the lower extremities, chronic pain in her neck and shoulders, extreme fatigue, gait ataxia, gastrointestinal dysfunction, nuerogenic bladder, neurogenic bowel, decreased concentration and memory, sleepapnea, narcolepsy symptoms and depression. Judge Lalonde held that her impairment was “directly caused” by the use or operation of a motor vehicle, and that the accident made a significant or material contribution to the plaintiff’s current condition and to the deterioration or duration of her symptoms, in that it precipitated or reinforced the need for surgery” (p.215).

The Judge stated that his conclusion did not negate or ignore that there were additional contributory causes to the plaintiff’s condition, including pre-existing injuries and prior accidents. The plaintiff was awarded $46,718.04 for past benefits for medical and rehabilitation expenses incurred from May 2002 to the present. Past benefits for attendant care in the amount of $140,901.02 for the period extending from May 31, 2002 to January 1, 2005 was ordered. ING was to provide Ms. Monks with attendant care on a 24 hour basis. Ms. Monks was also awarded a leased van modified with a platform and $225,000.00 for home renovations. Housekeeping and IRBs were also awarded along with aggravated damages in the amount of $50,000.00. The Judge remarked that he would have awarded $100,000.00 in aggravated damages to the plaintiff had she not been responsible for some of the delays incurred in renovating her home or in choosing to move to another home (p.292).

Oxford Mutual Insurance Company and The Co-Operators, 04-CV-2274714CM2, August 18, 2005, Stewart J. - The Co-operators appealed from a decision of Arbitrator Guy Jones in which he held that Joshua Williams was not a dependant of his mother, pursuant to s.2(6) of the SABS. As a result of this finding, the Co-operators was held liable for accident benefit payments to Joshua, who suffered severe injuries in a motor vehicle accident on July 7, 2002. At the time of the accident he was driving a vehicle that was insured with the Co-operators. He had been living with his mother Ulrike Williams and his stepfather Grant Huigenbos who was insured with the Oxford Mutual Insurance Company.

In March 2002, Joshua had been charged with assault and uttering death threats against his former girlfriend. The Court approved of his mother acting as surety for Joshua at a bail hearing on April 2002. Ms. Williams was to set out written rules and Joshua was allowed to leave the house to attend work, but was to refrain from going to the local bars or to associate directly or indirectly with any of his exgirlfriend’s family or friends.

In determining whether Joshua was a dependant of his mother, Arbitrator Jones observed that one of the criteria in determining dependency in SABS cases is the time frame to be examined. He found that the applicable time frame was at least from the time of Joshua’s return from British Columbia and not simply the time when he was on bail as submitted by counsel for the respondent. Under the terms of the surety, Ms. Williams exercised a degree of supervision and control over Joshua. However, Arbitrator Jones found that Joshua was, to a large degree, independent of his mother for his own care, whether it be physical, emotional or otherwise (p.4). He concluded that at the time of the accident Joshua was primarily independent and principally dependent for care upon himself.

Judge Stewart noted that there was no definition of “care” in the SABS. He found, however, that“principally dependent for care”is a phrase that must be determined in the facts of each case. In finding that Joshua was a dependent of his mother, the Judge stated:

Although Joshua was working, he was living at his mother’s home, was under her supervision and was obligated to oblide by her rules. This living situation was cemented by the terms of the Court Order under which he was granted bail. His mother, Ms. Williams, was likewise legally obligated to enforce her rules. Failure to do so would invite serious consequences. Until his criminal troubles had been resolved, which could take some considerable and indefinite time, Joshua’s mother was constructively his jailor, albeit a loving and caring one. He was under her charge.

The description does not derive from a “snapshot view, but flows from what I consider to be the correct perception of the nature of the relationship between Joshua and his mother and the duties and the very significant obligations of “care” that arise therefrom ... (p.6).

Vossos and Western Assurance Company, A04-001072, September 9, 2005 - Arbitrator Sone ordered the applicant to produce a report of Dr. Shawn Scherer, a rehabilitation psychologist who had prepared a report for the defence in the related tort action. The arbitrator found that the report was relevant as it dealt with the question of whether Mr. Vossos currently suffered from a complete inability to carry on a normal life. Although prepared for the tort action, it addressed the question that the arbitrator would be determining. The insurer’s assessments were all more than a year old and Dr. Scherer’s report would provide additional, relevant information to the arbitrator that was not otherwise currently available. The arbitrator acknowledged that ordering the production of the report may lengthen and add cost to the hearing process. However, it was noted that Mr. Vossos might have to obtain a further responding report for the tort proceedings in any event. As there was no overlap with other reports, the arbitrator found that production would not resolve in a “doubling up” of similar reports. Finding that it was important that the hearing arbitrator have the best evidence before him or her, the arbitrator ordered the production of the report.

Lowe and The Guarantee Company of North America et. al Docket No. C40670, July 15th, 2005 - The Court of Appeal allowed an appeal from an order dismissing an action against a DAC and two of its employees. The two main issues in the appeal were:

1. Whether it was plain and obvious that no cause of action lay against a DAC and its employees for conducting a prescribed assessment negligently and/or in bad faith?; and
2. Was it plain and obvious that the DAC and its employees were protected from suit by the doctrine of witness immunity?

The Court answered, “No” to both questions, set aside that part of the motion judge’s order and allowed the plaintiffs 21 days to amend their Statement of Claim.

Implementation of the Code of Conduct has led to the exclusion of representatives from hearings at FSCO in some cases – Thind v. ING, Aug. 14, /05, A04B-001459; Harris v. Wawanesa, Aug. 16, /05, A04B-002032; and Mahendrarajah v. American Home, Aug. 22, /05, A04B001270.

Tupe and Allstate Insurance Company of Canada, A04-001367, September 9, 2005 - Arbitrator Miller held that Allstate’s medical examinations scheduled with Dr. Hershberg pursuant to s.42 of the Schedule was not reasonably necessary. In November 2003, Ms. Tupe was examined by Dr. Van Reekum, a Neuropsychiatrist, who found that Ms. Tupe’s suffered from a complete inability to engage in any employment as a result of the car accident in accordance with s.5(2)(b). In March 2005 Dr. Hershberg conducted a paper review of the medical evidence on behalf of Allstate. He did not agree with Dr. Van Reekum’s report. In a letter dated December 16, 2004 Allstate wrote to Ms. Tupe’s counsel advising him that a medical examination was scheduled with Dr. Hershberg for April 7, 2005. On February 28, 2004. On February 28, 2004 Ms. Tupe’s counsel advised that she would not be attending the appointment with Dr. Hershberg. On May 19, 2004 Allstate again wrote to Ms. Tupe’s counsel advising that an examination was scheduled with Dr. Hershberg for August 8, 2004. Both of these letters referred to a “defence medical” that had been scheduled for Ms. Tupe. The arbitrator found that it was reasonable for Ms. Tupe to conclude from the letters, which did not adhere to the requirements of subsection 42(2) of the Schedule, that it was not the intention of Allstate to set up an appointment with Dr. Hershberg, pursuant to s.42 of the Schedule, to adjust her claim, but rather it was a request by Allstate for a “defence medical” to bolster its case, once the settlement talks did not succeed. Allstate’s motion for a stay of the arbitration was denied.

Ohayon and ING Wellington Insurance Company, A04-000524, September 16, 2005 - The insurer’s motion for an order requiring the applicant to attend a neuropsychological assessment and a psychiatric assessment and, in the alternative, an Order staying the arbitration until the applicant agreed to attend the assessments was dismissed. The applicant was awarded $600.00 in costs. Arbitrator Rogers found the proposed examinations were not for the purpose of determining whether the applicant was entitled to a benefit (p.4). It was found that ING had not complied with the notice provisions and the arbitrator found that the motion could be dismissed for that reason alone. Letters sent to Mr. Ohayon did not fulfil the insurer’s obligation to “state the reasons why the insurer requires the examination” (p.4). Where there have been no previous examinations, Arbitrator Rogers observed that an insurer will usually meet its onus of establishing that it requested assessment is authorized by s.42. He found, however, that the timing of the request is critical. He found that ING had extensive medical information from the applicant in English (the applicant was a resident of Israel) since July 2004 (p.5). However, the issue of IEs was not raised until after an adjournment of the first date set for the hearing. The arbitrator found that it was likely that the insurer was only seeking evidence for the hearing. Arbitrator Rogers found that that view was “reinforced by ING’s position that it was not able to provide necessary information to an assessor, because productions were not complete” (p.5). Arbitrator Rogers found that s.42 places no obligation on the insurer to provide information. Rather, the obligation is placed on the insured person to provide the person conducting the examination with “such information as is reasonably necessary”.

Liberty Mutual Insurance Company v. Fernandes, Court File No. 03-CV-257310CM1, September 22, 2005 - The insured/defendant brought a motion under Rule 21 of the Rules of Civil Procedure for an order to dismiss the insurer’s action. The plaintiff/insurer had commenced an action against the defendant/insured for a declaration that the defendant did not sustain a catastrophic impairment as a result of the accident, a declaration that the defendant was not entitled to attendant care benefits, and a declaration that the defendant was not entitled to medical and rehabilitational benefits relating to treatment plans submitted by Dr. Michael Moreira from January 9, 2003 to July 8, 2003. Judge Morawetz held that the test under Rule 21 had been met and found that the plaintiff (insurer) could not succeed with the action. In making this finding, the Judge stated:

I agree with the views expressed by Lax J. in Snushall v. Fulsang (2003) OJ. No. 1493 and Pedlar J. in Travellers Casualty and Surety Co. of Canada v. Scanlan (2004) OJ. 986 SCJ. In reading s. 37, together with s.40 of the Schedule, both of which are procedural in nature, and thereafter s.279-283 of the Insurance Act, one is driven to the conclusion, that based on a plain reading of these sections, the CAT DAC is binding on the insurer and the insurer has no independent right to commence an action to seek the declarations that this plaintiff is seeking. The Insurance Act sets up a complete code to deal with catastrophic impairment issues, including a dispute mechanism. It is not absurd to suggest that an insurer should be bound by the findings of an independent DAC as to whether an insured person meets the test of catastrophic impairment. The rights of an insurer are indeed restricted by s.279-283 but this is what the Legislature intended. Simply put, the CAT DAC finding is binding on the insurer. (p.8)