Denial of Benefit Not Clear and Unequivocal - Two Year Limitation Not Running - MA v Intact Insurance Company, LAT 16-003510 2017 CanLII 76933

December 04, 2017, Kitchener, Ontario

Posted by: Robert Deutschmann, Personal Injury Lawyer

MA v Intact Insurance Company, LAT 16-003510 2017 CanLII 76933 (ON LAT)

Date: November 2, 2017
Heard Before:  Adjudicator Thérèse Reilly

LIMITATION PERIOD: without a clear and unequivocal notice of termination  of benefits the two-year limitation clock does not begin to run

MA was injured in a car accident on May 20, 2013 and sought accident benefits from Intact. When benefits were denied and mediation failed, MA applied to the LAT for arbitration.

Intact asserts that its refusal was clear and unequivocal. It properly denied the attendant care benefit (ACB) on June 16, 2014 for non-attendance at the IE. The application was filed November 4, 2016, two years after the refusal to pay the ACB.  The claim for ACB is statute barred pursuant to section 56 of the Schedule. MA denies there is a proper denial of the ACB. The refusal was not clear and unequivocal. The limitation period was not triggered by a refusal to pay the benefit.   Further, MA did not miss the IE as the IE was not properly constituted.

Issue:

1. Is MA’s claim for attendant care benefits statute barred because the application for attendant care benefits was filed more than 2 years after Intact’s refusal to pay the attendant care benefit pursuant to section 56 of the Schedule?

RESULT

1. MA’s claim for attendant care benefits is not statute barred pursuant to section 56 for failure to file the application within two years of Intact’s refusal to pay the attendant care benefit. The denial of the attendant care benefit was not proper as the denial was not clear and unequivocal.

On January 15, 2014, Intact sent a letter to MA requesting an In Home Occupational Therapy Assessment of Attendant Care Needs (Form 1) for the ACB.  On March 5, 2014, MA submitted a Form 1 completed by her Occupational Therapist, (the OT) for ACB in the amount of $7,260.16 per month. The Form 1 is dated February 18, 2014. MA also submitted an OCF-18 on March 7, 2014 for the ACB benefit and other benefits.

On March 18, 2014, Intact sent a letter to MA in response to the OCF-18 for ACB submitted on March 7, 2014 which stated it enclosed a notice of examination for an IE to address the benefits claimed. The letter stated that if MA did not attend the IE, she may not be entitled to the goods and services claimed. The Notice of Examination that was stated to be attached to the letter was not attached to the copy of the letter submitted as evidence by MA.   The letter of March 18, 2014 to MA stated that pursuant to section 44 of the Schedule, MA’s participation was required at an IE to determine her ongoing entitlement to the ACB benefit.

On April 24, 2014, Intact sent a letter to MA’s counsel with Notice of Examinations attached. The letter stated the enclosed NOE was to assess the ACB as per the submitted Form 1 and was scheduled for May 1, 2014 at 3:00 p.m.  One of the attached NOE scheduled an IE for May 1, 2014 at 3 pm and stated it was for medical benefits. The second NOE attached to the letter scheduled an IE with the Insurer OT for May 1, 2014 at 3:00 p.m. and refers to the submitted OCF-18 and states the reason for the IE is to assess the claim for an ACB benefit.  Although Intact checked off the box for rehabilitation and medical benefits, the form stated it was to assess the claim for the ACB.

MA’s counsel wrote two letters to Intact acknowledging the request for the IE on May 1, 2014. On April 4, 2014 counsel wrote to Intact acknowledging the request for the IEs with Intact’s OT and advised MA would be in attendance at the IE scheduled for 3 pm May 1, 2014 for medical benefits. The letter of April 16, 2014 acknowledges the NOE for the Form 1 for ACB and confirms MA will be available for the IE scheduled to assess the ACB.

MA did not attend the IE on May 1, 2014.

On June 16, 2014, Intact advised MA that her ACB benefit was suspended effective May 2, 2014 for non-attendance at the May 1, 2014 IE. The letter stated Intact had made arrangements for her participation in an IE to assess her continued entitlement to ACB benefits. Based on this and section 42 (15) of the Schedule, she was no longer entitled to receive ACB which was suspended effective May 2, 2014. The letter stated that no benefit will be payable until MA participates in a rescheduled examination. If she did so, Intact would reconsider her entitlement to continue the benefit. The letter included the 2 year limitation period warning. The letter also stated that in accordance with section 42 (15) of the Schedule, if she subsequently attended this rescheduled IE, Intact would reconsider her entitlement to the ACB.

POSITION OF THE PARTIES

Pursuant to section 56 of the Schedule, an application in respect of an accident benefit has to be commenced within two years from the date of an insurer’s refusal to pay a benefit. The two-year limitation period starts when an insurer provides an insured with a refusal to pay which is clear, unequivocal and advises MA of the dispute resolution options in straightforward and clear language.

Intact’s position is that it validly denied the ACB claim. The refusal was clear and unequivocal. It provided reasons for Intact’s decision that MA was no longer entitled to the attendant care benefits. The language made it clear and MA would have known that she would not get any further attendant care benefits. The test for  the  commencement  of  the  limitation  period  is  a clear  and unequivocal refusal of benefits by an respondent and reasons that allows an insured to decide to challenge the refusal.

The refusal letter sent to MA also included the relevant statutory references,  as  well  as  step-by-step  information  with  respect  to  the  procedure  for engaging in the dispute resolution process.  Intact submits that  there  could  be  no  confusion  that it  was refusing to pay attendant  care benefits or as to why  it was refusing  to do so.  The letter of denial also included the warning about the two-year limitation period as the letter provided MA with notice of rights to mediation, followed by litigation or a neutral evaluation and the notice stated the warning about a two-year limit.

MA claims MA did not miss the two-year limitation period because 1) the IE was never properly scheduled in the first place and 2) MA did not receive a clear and unequivocal denial of the ACB. MA maintains the May 1, 2014 IE was to address medical benefits. It was not clear it was for ACB and as such the IE for ACB was not properly constituted. MA never actually missed the IE because it was never constituted properly. Second, the denial letter from Intact is confusing and equivocal because it does not terminate the benefit indefinitely or set out a stoppage date. If MA did subsequently attend the rescheduled IE, Intact would reconsider entitlement.

MA asserts this is not a case where the refusal sets out a clear termination or stoppage date.  The letter invited MA to reschedule, signaling that payment was still a possibility.  In this case, MA maintains that by inviting MA to contact Intact to reschedule the missed assessment and then telling her that her entitlement would be reconsidered, Intact used language that invited the possibility of future payment.

The Arbitrator reviewed the evidence and the law and determined that the NOE was properly scheduled. It stated the reason for the IE was the assessment of the ACB. In total three NOEs were sent to MA and two were for the IE scheduled for May 1, 2014 at 1:30 p.m. The NOE clearly stated that the IE was to address the ACB claim. These were sent to MA. Her counsel confirmed receipt of the NOE for the ACB by letter dated April 16, 2014 and acknowledged MA would be attending. There is no basis to hold the IE was not properly scheduled when the NOE stated such and counsel then actually acknowledged the scheduled appointment for the IE and the reason was to assess the ACB. Counsel acknowledged this in its letter to Intact dated April 16, 2014. The IE for the ACB was properly constituted.

Was Intact’s denial clear and equivocal?

There is a two-part test that must be met to establish the denial was valid and proper. The letter of June 16, 2014 refers to a suspension of the ACB benefit which could be reconsidered if MA attended the rescheduled IE. The letter stated, “No benefit will be payable until you participate in a rescheduled examination”. The letter made it clear the ACB would not be payable and the benefit was stopped. The denial letter also states the payment is suspended until MA attended the rescheduled IE and Intact refers to section 42 (15) of the Schedule.

The Adjudicator found the denial is not clear and unequivocal. It states the payment is stopped but it also states the payment is suspended until MA attended the rescheduled IE. This signalled a possibility of payment and the insurer had not made a final determination that the benefit was not payable. Accordingly, MA is not statute barred from pursuing their claim for ongoing payment of the attendant care benefits. The claim for ACB can proceed to a hearing.

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