Interim Payment for Home Renovations Denied

February 24, 2017, Kitchener, Ontario

Posted by: Robert Deutschmann, Personal Injury Lawyer

Kirton and Belair – Interim Benefits; CAT injury; Insured denied payment of interim benefits for house renovations pending arbitration of case

Kirton and Belair

Decision Date: 2016-08-31
Heard Before:  Adjudicator Thérèse Reilly

Issues:

Mr. Kirton was hurt in a car accident on May 15, 2014 and sought accident benefits from Belair, however, when the parties were unable to resolve their disputes through mediation Mr. Kirton applied for arbitration at the FSCO.

1. Is Mr. Kirton entitled to an interim payment for a rehabilitation benefit in the amount of $427,751.00 and additional disbursement expenses also for home modifications, pursuant to sections 2(2) and/or 16 of the Schedule pending the hearing of the Arbitration Hearing?
2. Is either party entitled to their expenses for this Motion and, if so, in what amount?

Result:

1. Mr. Kirton is not entitled to an interim payment for a rehabilitation benefit in the amount of $427,751.00 and additional disbursement expenses for home modifications.
2. The question of expenses related to this Motion is deferred to the Hearing Arbitrator.

Mr. Kirton is 66 years old and suffered an array of injuries and impairments as a result of the car accident. He filed an Application for Arbitration on June 2, 2015 seeking a number of benefits, including rehabilitation benefits for home modifications and attendant care benefits, the latter of which is not under consideration at this Motion. As of the date of this decision, the Hearing date has not yet been scheduled.

The issue in this Motion is whether Mr. Kirton is entitled to an Interim Order for $427,751.00 in rehabilitation benefits in the nature of home modifications, plus additional disbursement expenses. Much of the debate involves Belair’s Independent Examination (“IE”) of that claim. Mr. Kirton agreed to and allowed Belair’s IE to be conducted by a home construction engineer and housing expert, but objected to an occupational therapist (“OT”) being present at the IE.  

Mr. Kirton maintains that Belair originally denied entitlement based on the need to complete a catastrophic determination (“CAT”), and now claims a denial on the basis that Mr. Kirton failed to attend an IE which he asserts is not reasonable and is not necessary. Mr. Kirton asserts he meets the test for interim benefits on a prima facie basis. Mr. Kirton raises a further argument that Belair’s disregard of its obligations in assessing a CAT, and its disregard of the notice provisions in section 38(8) of the Schedule, are further grounds to award the interim benefits for the home modifications. Lastly, Mr. Kirton argues the Interim Order would satisfy the goals of the Schedule which is consumer protection legislation.

Belair denies that its denial of the housing modifications was on the basis of a CAT, and maintains that the determination of CAT is not relevant to this claim for interim benefits. It does not concede that Mr. Kirton has met the test for the home modifications on a prima facie basis. Belair maintains that it is entitled to have an OT present at the IE to assess the home modifications, and this is the central issue in this Motion. It is not reasonable to deny Belair the right to have an OT assessment to assess the Housing Claim. Belair relies on sections 44(9) and 37(7) of the Schedule as a full defence to the home modification claim. It maintains that Mr. Kirton failed to attend a section 44 assessment, and as a result is in breach of section 44 of the Schedule. Pursuant to s. 37(7) of the Schedule, no benefit is payable.

Belair states Mr. Kirton cannot obtain an Interim Order when there is a genuine argument that he failed to comply with obligations under the Schedule, and which would result in a no entitlement decision at the Hearing. 

The Arbitrator reviewed the evidence and the Statutory Provisions for Interim Benefits.

He noted that Mr. Kirton spent several months in and out of various hospitals following the May 15, 2014 car accident. He was finally discharged from the hospital on January 22, 2015. Mr. Kirton submitted the Housing Claim to Belair for rehabilitation benefits under section 16 of the Schedule in the amount of $427,600.00, which arise from a housing assessment set out in a Home Accessibility Report, dated December 31, 2014, prepared Adapt-Able Design Group. Mr. Baum is a builder with extensive experience addressing and constructing homes for persons with accommodation requirements (“Applicant’s Housing Expert”). The Report serves as the primary basis for the recommendations that Mr. Kirton requires a wheelchair accessible home environment. Mr. Kirton’s two-storey home has no wheelchair access. The Housing Claim was subsequently submitted to Belair by an OCF-18, dated January 27, 2015, which was prepared by Mr. Kirton’s treating OT, Heidi Reznick (“Applicant’s OT”; “Ms. Reznick”).

On January 9, 2015, Mr. Kirton also advanced an application by an OCF-19, for a Determination of CAT based on Mr. Kirton having sustained a GCS score of 9 or less with ongoing brain impairment.

On January 20, 2015, Belair confirmed that the OCF-19 was being referred for a paper-review. The letter acknowledged there was no OCF-18 attached to the Reply Letter and now was the time for Mr. Kirton to produce one. On January 21, 2015, Belair retained Accessible Solutions Inc. to assess the Housing Claim, and instructing them to contact Applicant’s counsel directly to schedule an IE to address the request for home modifications.

On January 30, 2015, Applicant’s counsel received a telephone call from Accessible Solutions, who advised that the assessment would be a two-person assessment which included the involvement of an OT. The same day, Applicant’s counsel wrote a letter to Belair stating that he had no objection to Belair retaining its own housing expert to respond to the Report, but did take issue with the fact that the expert had advised that a two-person assessment would be required which included an OT.

Applicant’s counsel in oral argument at the Motion stated that Mr. Kirton consented to the housing assessment to be conducted, but despite his consent and invitation, Accessible Solutions never attended at his home to review or refute the recommendations in the Report.   In oral argument, Mr. Kirton maintained Belair’s request for the OT is not necessary or reasonable. Belair had already conducted a 4.5 hour in-person IE for the CAT assessment on September 21, 2015. Belair, however, continues to maintain its position that Mr. Kirton “has been non-compliant having failed to attend a further OT assessment (in response to a housing claim) in tandem/concert with the IE completed by Accessible Solutions, (to which Mr. Kirton has consented).” Counsel for Mr. Kirton stated further that the right to an IE is not unfettered. The request for an IE must be reasonable.

Belair completed its paper-review IE of the CAT application and advised Mr. Kirton on March 23, 2015 that it found Mr. Kirton had not sustained a CAT impairment as a result of the accident. Mr. Kirton went for further medical examinations. On April 2, 2015, an OCF-18 for the costs of a CAT assessment was submitted to Belair. On August 5, 2015, Belair indicated it required another OCF-19. On the same day, Mr. Kirton submitted an OCF-19.  In response, Belair scheduled an in-person IE which was completed by Belair’s OT, Ms. Freedman. Ms. Freedman completed a report which confirmed Mr. Kirton’s wheelchair dependency, and based on her report, Belair, on October 30, 2015, accepted that Mr. Kirton was CAT.

Mr. Kirton maintains that Belair’s initial assessment of CAT status disregarded the “Bright Line GCS Rule” basis for an assessment of CAT. Based on that authority, the determination should result in an easy determination of the CAT status. Mr. Kirton maintains ongoing delay was caused by Belair in the CAT assessment due to its refusal to arrange for an assessment of Mr. Kirton’s GCS score until after a further OCF-19 was submitted. Mr. Kirton raised a further compliance issue in that Belair ignored the ten-day rule in section 38(8) of the Schedule.

Mr. Kirton states Belair failed to provide any reply to the OCF-18 nor did it offer any reasons as to why it did not consider the home modifications to be reasonable and necessary other than to state it was largely dependent on a CAT. Mr. Kirton further argues that Belair failed to provide an OCF-9 denying the amount of the Housing Claim and did not submit an OCF-25 setting out the particulars of any IE that it required Mr. Kirton to attend to determine his entitlement to the Housing Claim.

Belair maintains that it is entitled to schedule a section 44(9) OT assessment to assess Mr. Kirton’s functional restrictions and needs in the home from a disability perspective, which medical opinion/functional opinion is not within the scope of practice of a construction engineer technologist housing expert. It states that Mr. Kirton does not argue that the housing expert is able to conduct the functional assessment and make conclusions about the physical/mental limitations on his functionality. This is in the realm of the OT; the housing expert’s role is to provide an opinion on what housing modifications are required in the home to accommodate Mr. Kirton’s functional limitations and the costs of the same.” In essence, Belair is entitled to evaluate the Housing Claim under section 44 by obtaining an OT assessment in addition to an evaluation. This is the central issue in this Motion.

Belair argues that there is no doubt that from a review of the Report itself, the home designer relied on Mr. Kirton’s OT opinions to then provide an opinion on what housing modifications were necessary to accommodate those limitations and the costs of same.

Belair’s position is that Mr. Kirton relied on two areas of expertise (home modification expertise and the opinion of the OT) regarding Mr. Kirton’s functionality, and that it is prima facie entitled to section 44 assessments in the same two areas of expertise, being Belair’s OT’s opinion on Mr. Kirton’s functional limitations in the home, as well as the resulting housing modifications and costs.

Belair disagrees that its housing expert was required to provide a written explanation of his limits of expertise in Order to assess Mr. Kirton’s functional needs from a disability perspective. Belair accepts as correct that “dates and times of the examinations were not scheduled and set out in an OCF 25 as there was a disagreement on whether Belair is entitled to evaluate the Housing Claim.

As to the reasonableness of the section 44 assessments, it is Belair’s position that its request was timely (following the submission of the Housing Claim on receipt of the Report), and it would be prejudiced without having an OT assessment to respond to a Report which is based on the opinion of the Housing Expert. At the time of the Housing Claim, there were no prior section 44 assessments conducted by Belair (only a paper review to address the Glasgow Coma Scale, February 12, 2015). Belair’s position is that it is a well-known principle that Belair is prejudiced by not being able to obtain a functional OT assessment “contemporaneous with the timing of the claim”. At the Hearing, the reasonableness and necessity of the Housing Claim will be determined as of the date of the Housing Claim.

Applicant’s Failure to Comply with Section 44(9) and 37(7) of the Schedule - Belair relies on section 44(9) and the remedy in section 37(7) of the Schedule as a defence to the Housing Claim. It claims Mr. Kirton failed to attend a reasonable section 44 examination with an OT under section 44(9) and, as a result, pursuant to s. 37(7) of the Schedule, Mr. Kirton is not entitled to payment of the Housing Claim.

Belair maintains therefore an award for interim benefits is inappropriate in a case where there is a genuine issue of whether Mr. Kirton failed to comply with section 44 and, if successful at the Hearing, would result in a decision of no entitlement. It argues Mr. Kirton failed to attend a section 44 examination with an OT under section 44(9), and therefore may not be entitled to the Housing Claim at the Hearing.

Belair claims it never denied the Housing Claim on the basis of a CAT. Mr. Kirton was ultimately accepted as CAT, but this would not change its position regarding the Housing Claim. Belair agrees that while its Reply letter does state that the home modification is largely dependent on the CAT, its letter clearly states Belair is seeking a section 44 assessment and counsel would be contacted to arrange for the date. Belair states it did not deny the claim based on non-CAT status. It proceeded to evaluate entitlement pursuant to section 44 of the Schedule, as it has a right to do so for all benefits claimed, including the Housing Claim. Further, it maintains the history of the CAT is not relevant to the determination of the issue at this Motion. It submits it is inappropriate and would be an error of law to evaluate or make any findings with respect to the history of the CAT claim, or when or why Mr. Kirton should be found CAT,

In considering whether Mr. Kirton has established a prima facie case, Arbitrators have disagreed about the standard of proof—i.e., whether a mere showing of a prima facie case is enough, or whether it must be a “strong” prima facie case, convincing case, or a compelling case. The standard of proof has also been expressed as one which is “somewhat higher than at a hearing.” Mr. Kirton must establish some need or urgency, but which need not be financial in nature.

Two further factors are often considered in an Interim Order being whether a party has “failed to abide by or has blatantly disregarded the SABS and whether granting the Order would advance the insurance scheme”.

Belair states that Arbitrators have been unanimous in holding that it is extraordinary to grant monetary relief to a party prior to a Hearing on the merits, even in the realm of consumer protection. Moreover, Belair asserts that it is inappropriate to award interim benefits in a case such as this involving “very expensive home modifications that can never be returned or repaid if it is decided at the full hearing that some or all of the home modifications were not necessary.” While Arbitrators can order the benefits repaid if it is decided against entitlement, this Insurer can’t recover because the money is already spent.  Interim benefits are also intended to cover a short period of time. This would not be applicable here as the Motion relates to home modifications. The award need also not be for the same amount or time period.

Belair contends that the standard for interim relief is more stringent than put forth by Mr. Kirton. It contends that Mr. Kirton must establish a convincing case for entitlement to get interim benefits

Mr. Kirton  has made out a prima facie case for entitlement for the Housing Claim by establishing a need, necessity and urgency, and providing the medical evidence which demonstrates the severity and seriousness of Mr. Kirton’s impairment and injuries, and grounds to support a claim for home modifications to address these impairments.  Mr. Kirton has referred to a lack of financial resources to pay for the modifications. Mr. Kirton has also presented considerable arguments about Belair’s disregard of the Insurance Act and s. 38(8) of the Schedule.

As the discussion above reinforces, there is no standard criterion to determine an award for interim benefits. The Arbitrator found the Motion for interim benefits raises a difficult question of law in the absence of a single test to award interim benefits.

I find that Mr. Kirton has presented considerable evidence about the injuries and impairment to support the claim. However, the Housing Claim has set out a very high amount of payment for the home renovations, which in the circumstances of this case may not be repayable should the benefits not be awarded at the Hearing. Further, Mr. Kirton has presented what appears to be an “all or nothing approach” to the quantum. No evidence has been presented to allow the Arbitrator to determine if the entire amount sought is reasonable and necessary, or some part thereof.

The Arbitrator agreed with Belair that whether CAT was properly denied and if there was any delay associated with the CAT determination process is not a relevant consideration at this Motion. The fact that Mr. Kirton was accepted as CAT and the extent of the injuries and impairments is relevant, but a review of the appropriateness of the denial or acceptance of CAT is to be determined by the Hearing Arbitrator at the Hearing. As such, the Arbitrator did not accept the arguments advanced by Mr. Kirton that Belair blatantly disregarded the Insurance Act and Schedule in this regard as a ground to award the interim benefit.

The Arbitrator also found that it was reasonable and necessary for Belair to schedule a section 44 OT assessment to assess Mr. Kirton’s functional requirements in addition to the IE by its housing expert, to assess the required home modifications and resulting costs. Belair is entitled to schedule a section 44(9) OT assessment to assess Mr. Kirton’s functional restrictions and needs in the home from a disability perspective which medical opinion/functional opinion is not within the scope of practice of a construction engineer technologist housing expert.

It seems inherently unfair in these circumstances and prejudicial to Belair to deny it the right to schedule an IE and have an OT assist to assess Mr. Kirton’s disability and to assess the functional requirements relating to the Housing Claim.

The Arbitrator found that Mr. Kirton’s position in insisting against the OT assessment frustrated the attempts of Belair to schedule the assessments. Belair did not provide an OCF-9 denying the amount of the Housing Claim, and did not submit an OCF-25 setting out the particulars of any IE that it required Mr. Kirton to attend to determine his entitlement to the Housing Claim. However, Belair, as outlined in its Reply Letter and as acknowledged by Applicant’s Counsel in the January 30, 2015 and July 5, 2015 letters, made it very clear that it was seeking an IE to assess the Housing Claim, and this included having the OT assessment. Based on the correspondence exchanged, the parties were aware that Belair was seeking the OT assessment, in addition to the housing assessment, so that it could fully assess the Housing Claim and Mr. Kirton’s entitlement to the interim benefit. Mr. Kirton’s insistence against the OT assessment and involvement frustrated the attempts by Belair to set dates and times of the assessments, and caused further delay with respect to the assessment of the Housing Claim.

Regarding non-compliance with section 38(8) of the Schedule, and without the functional assessment by Belair’s OT, Belair would not be in a position to outline the reasons for or against the Housing Claim and complete the assessment of the aspects of the home modifications that were reasonable and necessary. Belair was precluded from and not provided the opportunity to fully assess the Housing Claim.   Belair states it treated the January 8, 2015 letter from Mr. Kirton (which enclosed the Report with an OCF-18 to follow) as a claim for the housing benefit, and thus there was no reason to repeat Belair’s request for a section 44 assessment when they in fact received the OCF-18.  The Arbitrator accepted this as a reasonable explanation. Non-compliance with section 38(8) and not providing an OCF-9 and OCF-25 when balancing the evidence is inconsequential and without result.

As noted above, the decisions presented by the parties outline that the interim benefit remedy sought at this Motion is extraordinary and not routine. In this case, a pivotal factor is Belair’s defence based on non-compliance by Mr. Kirton with sections 44(9) and 37(7) of the Schedule. Belair maintains it is inappropriate to award interim benefits when there is a genuine argument that Mr. Kirton failed to comply with its obligations under the Schedule, and which would result (if successful on that defence) in a decision at the Hearing of no entitlement.

The Arbitrator agreed with Belair that this issue is central to this Motion, and found Mr. Kirton failed to attend a section 44 IE and in so doing was in breach of section 44 of the Schedule. Belair is entitled to the remedy provided under section 37(7). On this basis it is an inappropriate case to award interim benefits at this Motion.

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Deutschmann Law serves South-Western Ontario with offices in Kitchener-Waterloo, Cambridge, Woodstock, Brantford, Stratford and Ayr. The law practice of Robert Deutschmann focuses almost exclusively in personal injury and disability insurance matters. For more information, please visit www.deutschmannlaw.com or call us at 1-519-742-7774.

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.