Insured Contradicts Own Evidence and Is Denied Further IRBs

February 23, 2017, Kitchener, Ontario

Posted by: Robert Deutschmann, Personal Injury Lawyer

Income Replacement Benefits- what constitutes self-employment; insured fails to prove entitlement to increased IRBs; insured contradicts own evidence; video surveillance shows insured working

Kozumplik and Aviva

Date of Decision: February 6, 2017
Heard Before: Adjudicator Jeffrey Musson

Mike Kozumplik, was injured in a car accident on August 29, 2004 and sought accident benefits from Aviva, however, when the parties were unable to resolve their disputes through mediation Mr. Kozumplik applied for arbitration at the FSCO.

Issues:

1. What is the additional amount that Mr. Kozumplik is entitled to for post-104 IRBs from August 29, 2006 to June 25, 2013, if any?
2. Is Mr. Kozumplik entitled to interest for the overdue payment of benefits?

Result:

1. Mr. Kozumplik is not entitled to any further post-104 IRBs from August 29, 2006 to June 25, 2013.
2. Mr. Kozumplik is not entitled to interest for the overdue payment of benefits.

BACKGROUND

Both Aviva and Mr. Kozumplik agree that Mr. Kozumplik qualified for post-104 IRBs from August 29, 2006 until June 25, 2013, and that Mr. Kozumplik suffered a complete inability to work in any employment for which he was reasonably suited by education, training or experience. Aviva conducted an Insurer’s Examination on Mr. Kozumplik which concluded that IRBs should not be considered past June 25, 2013. Mr. Kozumplik agreed with the conclusions of Aviva’s Examination.   The disagreemnt between Aviva and Mr. Kozumplik is in regards to the amount of IRBs to which Mr. Kozumplik is entitled.

At the time of the accident, Mr. Kozumplik owned numerous residential properties in the London and Sarnia areas. He would purchase, renovate, rent, and in some cases sell.

Mr. Kozumplik immigrated to Canada from the Republic of Czechoslovakia in 1968. After coming to Canada, he worked at various physically demanding jobs, and ultimately with Ford Talbotville, where he continued to work for 20 years until accepting a buyout from the company. In approximately 1976-77, while still working at Ford, Mr. Kozumplik obtained his real estate license, and has maintained this license every year since that time. It was apparent from Mr. Kozumplik’s testimony that he has worked hard for many years since coming to Canada. 

DECISION

The Arbitrator found Mr. Kozumplik’s testimony to be circumspect at times, especially when he was asked details as to what work he did or did not perform on his properties during the time in dispute, perhaps trying to mold his answers to what he thought the Commission would want to hear, as opposed to being completely honest and forthright with his answers. Ultimately, he testified, but provided very little credible documentation to back up his testimony, such as when he testified that his properties were so run down post-accident that he could not get them insured. No letters were submitted by Mr. Kozumplik to show this was the case.

Mr. Kozumplik testified that he would purchase distressed residential properties in the London/Sarnia area, renovate the units and then rent or sell them. His largest purchase was a 12-unit residential building in the Sarnia area. The 12-unit building was purchased with the intent of it becoming an income-generating property for him and his wife. After a while, he converted the apartments into condominium units. He testified that after the accident, he was only able to convert one of the rental units into a condominium unit.

Mr. Kozumplik claims the value of his properties has declined because of the accident, thereby creating a loss of competitive advantage; however, he submitted no proof (appraisals) that this in fact was the case. He testified that he was forced to sell his Sarnia apartment building; however, no proof was submitted as to the difference between the purchase or sale price. Regardless, business profit or loss is an item that is claimed as part of a tort action, not as part of an accident benefits claim.

Mr. Kozumplik testified that prior to the accident, he would complete large tasks such as replacing roofs as well as electrical and plumbing work on his units. He testified that it was a physically demanding job. As a result, he tried teaching people the skills required to complete these tasks; however, these individuals all ending up quitting at some point. Mr. Kozumplik also testified that his wife handled the bookkeeping and prepared leasing/rental documents for the properties.

The issue of CPP/disability was brought forward at this Hearing. Mr. Kozumplik testified that after his accident, he did not apply for CPP/disability, even though as an autoworker for 20 years, he contributed to CPP/disability through his earnings. On March 27, 2015, Aviva asked for clarification as to why Mr. Kozumplik chose not to apply for CPP/disability; however, an Insurer does not have the legislative authority to force an Insured to apply for CPP/disability. One can understand the benefit that Aviva would obtain; however, Mr. Kozumplik would derive no benefit from applying, and in fact, it would be a zero-sum gain because Aviva would be entitled to a claw back against any IRBs payable.

The Arbitrator found Mr. Kozumplik’s testimony provided little credible insight. He testified that he did not work for the time in dispute; however, this contradicted other evidence presented at the Hearing that shows that in fact he was self-employed during the time his post-104 IRBs were in dispute.

The Arbitrator reviewed the law, definitions of Self-Employment, and previous decisions and determined that Mr. Kozumplik was self-employed during the period when the quantum of his IRBs is in dispute.

Mr. Kozumplik testified that since the accident he has to hire people to complete all work on the properties. Mr. Kozumplik testified that whatever maintenance the tenants cannot complete, he hires someone to complete the work since he cannot physically complete it himself and although Mr. Kozumplik produced various receipts they were unverifiable because none of the people who performed the work testified at the Hearing.   Mr. Kozumplik confirmed in his testimony that he still makes decisions about the properties. In addition, he would complete work at the properties if the tenants forgot to complete things, such as cutting the grass. Mr. Kozumplik also testified that on some occasions, his wife would do some of the work on the units, such as painting, cleaning and preparing the units for rental.

Aviva produced surveillance taken of Mr. Kozumplik showing him going to Home Depot, but not what he was doing at Home Depot. It also showed him going to one of the units afterwards, but again, not what he was doing. There was also surveillance showing him cutting grass and doing lawn maintenance.  This is damaging but not overly so. Surveillance is a snapshot in time, and specifically in this case, 4.5 minutes out of approximately 70 months, and therefore the Arbitrator found the surveillance of little value in determining if Mr. Kozumplik was working.

Mr. Kozumplik’s wife testified that Mr. Kozumplik performed minor repairs on the properties such as changing washers on a sink, fixing taps that were leaking and other similar types of repairs. After the accident, she testified she has also been doing some of the light repair work, such as painting, tiling and cleaning up the units to prepare them for new renters, and that now Mr. Kozumplik hires people to handle the duties that he was responsible for prior to the accident.

An expert vocational rehabilitation and labour market expert testified that the what Mr. Kozumplik does now at his properties does not amount to actual employment. Based on the evidence submitted at the hearing the Arbitrator disagreed with this opinion. It was important to note that the expert also testified that the roles of both Mr. Kozumplik and his wife were virtually the same as they related to the properties both pre- and post-accident.

IRBs

Both parties agree that the correct calculated weekly amount of pre-accident income is $273.68

The key question is: was Mr. Kozumplik employed between the dates of August 29, 2006 and June 25, 2013?  Mr. Kozumplik failed to provide any evidence as to how his post-accident income should be calculated differently from how Aviva’s accountant completed the calculation.

A review of tax returns shows Mr. Kozumplik made money every year from 2006-2013, and he claimed self-employment income during this period. The overwhelming evidence shows that Mr. Kozumplik earned self-employment income. Based on the evidence submitted that Arbitrator noted that Mr. Kozumplik’s tax returns contradict his own testimony, adversely affecting his credibility.

The onus is on Mr. Kozumplik to prove his case. Based on the evidence, Mr. Kozumplik was self-employed during the period in dispute, and based on the evidence, the Arbitrator denied Mr. Kozumplik any further IRB payments.

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It is important that you review your accident benefit file with one of our experienced personal injury / car accident lawyers to ensure that you obtain access to all your benefits which include, but are limited to, things like physiotherapy, income replacement benefits, vocational retraining and home modifications.