Interest Ordered On Unpaid ACB Benefit - Mehanna and Intact

July 26, 2017, Kitchener, Ontario

Posted by: Robert Deutschmann, Personal Injury Lawyer

Mehanna and Intact

Interest ordered on AB and HK benefits

Date of Decision Date: May 6, 2017
Heard Before: Adjudicator Jeffrey Rogers

APPEAL ORDER

1. The appeal is allowed in part.
2. Intact shall pay Mr. Mehanna further interest on the Attendant Care and Housekeeping and Home Maintenance benefits it paid in August 2016. The further interest is to be calculated with overdue dates based upon when entitlement to the benefits accrued.
3. The Arbitrator’s order regarding expenses is rescinded.
4. The issue of entitlement to expenses of the motion is remitted for re-hearing by an Arbitrator.
5. If the parties cannot agree on the amount of interest to be paid, the issue is remitted for re-hearing by an Arbitrator.
6. The appeal is otherwise denied.

REASONS FOR DECISION

Mr. Mehanna appeals the Arbitrator’s decision which found that Intact did not breach the terms of the Minutes of Settlement the parties executed. The Arbitrator denied Mr. Mehanna’s request for an order requiring Intact to pay interest and a special award. Mr. Mehanna submits that the Arbitrator erred in interpreting the Minutes of Settlement to mean that he was required to provide evidence that he incurred ongoing expenses for attendant care (ACBs) and housekeeping (HK), before Intact was required to pay those benefits.

Arbitrator Rogers Found that:

1. The Arbitrator did not err in ruling that Mr. Mehanna was required to provide proof of ongoing entitlement
2. The Arbitrator did not err in ruling that Mr. Mehanna was not entitled to a special award
3. The Arbitrator erred in his apparent conclusion that Mr. Mehanna was precluded from entitlement to interest
4. Because of the change in the result, the Arbitrator’s award of expenses to Intact must be rescinded

Mr. Mehanna was injured in a car accident on August 13, 2010. The parties attended for an arbitration hearing on February 2, 2016, but they negotiated a settlement and executed Minutes of Settlement before the hearing started. The Minutes of Settlement required Intact to reinstate and pay Mr. Mehanna monthly ACBs and weekly HK, effective February 2016. Intact did not immediately pay the benefits. In June 2016, Mr. Mehanna brought a motion seeking an order for payment of the benefits, plus interest, and a special award. The motion was heard on September 1, 2016. Intact paid the benefits plus some interest before the Arbitrator heard the motion. The issues of entitlement to further interest and a special award remained in dispute.

The Arbitrator found that the Minutes of Settlement incorporated the Schedule. He ruled that the Schedule does not require Intact to pay the benefits until it has received proof that the expenses were incurred. He found that Intact paid the benefits and interest, promptly upon receipt of proof. He found that the delay in payment resulted from Mr. Mehanna’s failure to submit the evidence to support the ongoing payments, not from any breach of the Minutes by Intact. He therefore denied Mr. Mehanna’s claim for a special award.

Mr. Mehanna sought to admit fresh evidence in the appeal. After the oral portion of the hearing was concluded, he asked the Arbitrator to consider the same affidavit he sought to admit in the appeal, but the Arbitrator refused. In the appeal, Mr. Mehanna submits that the Arbitrator’s refusal was an error. Arbitrator Evans found no error in the Arbitrator’s refusal and the request to file fresh evidence is denied.

At the hearing, Intact informed the Arbitrator that it had paid the benefits in dispute, plus interest. The details of the payments were not available at that time. The Arbitrator accepted a supplementary affidavit from Intact, setting out details of the payments. The Arbitrator did not accept a responding affidavit from Mr. Mehanna. This is the fresh evidence.

The payments speak for themselves. There is no dispute about what was paid. The proposed evidence could not have impacted the Arbitrator’s factual findings. It certainly has no impact on the outcome of this appeal.

The parties settled Mr. Mehanna’s claims for ACBs and HK and they executed Minutes of Settlement, dated February 2, 2016. The Minutes contained terms requiring Mr. Mehanna to also execute a partial release and a Settlement Disclosure Notice. The additional documents were executed and provided to Intact in April 2016. Meanwhile, Intact had received new information that Mr. Mehanna’s need for ACBs was less than it had agreed to pay.

The Arbitrator did not refer to it in his reasons, but the uncontested evidence before him was that on February 11, 2016, Intact received a copy of an Assessment of Attendant Care Needs. This was an assessment Mr. Mehanna himself commissioned. It showed monthly ACB needs of about $250 less than Intact had agreed to pay. On March 29, 2016, Intact informed Mr. Mehanna that it required him to submit Expense Claim Forms regarding any incurred expenses for ACBs, before making any of the agreed payments.

Mr. Mehanna did not immediately provide the requested forms. He brought a motion seeking a finding that Intact breached the Minutes of Settlement, an order requiring Intact to pay ACBs and HK as agreed, and an order for payment of interest and a special award. Mr. Mehanna had submitted the forms and Intact had paid the benefits at the rate agreed, plus some interest, by the time the Arbitrator heard the motion.

The remaining issues before the Arbitrator were Mr. Mehanna’s claims for further interest and a special award. The first question to be answered in resolving these issues is whether Intact breached the Minutes of Settlement by requesting the Expense Claims Forms. There is no specific reference to this requirement in the Minutes of Settlement. The Arbitrator ruled that the Minutes incorporate the Schedule. He stated:

The Arbitrator was of the opinion that moving forward the applicant still has an obligation to trigger the SABS in the usual and normal manner and in due course. To think otherwise means the insurer has allowed the applicant to opt out of the normal scheme of the SABS benefit claiming process without express language to do so, cannot be reasonably interpreted from this clause.

Arbitrator Rogers concurred with the Arbitrator’s conclusion, rejecting Mr. Mehanna’s submission that the Minutes are a contract, to be interpreted without reference to the SABS. His right to ACBs and HK does not exist without reference to the SABS. His own actions erode the logic of his submission. In moving to interpret and enforce the Minutes, Mr. Mehanna sought payment of interest and a special award. Those rights derive from the SABS, but are not mentioned in the Minutes. So, Mr. Mehanna would have it both ways: he would rely on the SABS to enforce and enhance his rights under the Minutes, but he would exclude the SABS in defining his rights. Benefits payable for any given month depends on what expenses were incurred, and is subject to other limits and qualifications.

Arbitrator Rogers reviewed the law and noted that entitlement to interest does not await establishing entitlement to an insurer’s or an Arbitrator’s satisfaction.  Interest is payable “even though the insurer has legitimate reasons for questioning the claim or requiring more information.” It is mandatory, compensatory, and flows from late payment of overdue benefits. There is no need for a finding of insurer misconduct. Accordingly, upon a finding of entitlement, interest flows even though the insurer had legitimate reasons for questioning the claim or requiring more information.

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