December 08, 2017, Kitchener, Ontario
Posted by: Robert Deutschmann, Personal Injury Lawyer
SK v Allstate Insurance Company of Canada LAT 16-004212 2017 CanLII 77394 (ON LAT)
Decision Date: November 10,2017
Heard Before: Adjudicator Chloe Lester
STATUTE BARRED FROM BRINGIN IRB CLAIM: can a sec. 33 request trigger the sec. 56 limitation period; When does limitation period begin; applicant fails to provide information; triggers limitation period; applicant now statute barred from proceeding with the claim.
SK was injured in a car accident on May 28, 2012. SK is self-employed and due to the accident was unable to continue working. He applied for IRB’s under the SABs from Allstate for June 4, 2012 until May 28, 2014.
Allstate requested several documents in order to determine entitlement and the quantum of IRB which SK failed to provide. SK was held in non-compliance effective January 14, 2013 and no benefits were payable to him.
A dispute arose between the parties as to how to calculate the quantum of IRB, and for what time period. Also, Allstate is raising a preliminary issue that SK is statute barred because he failed to commence his application to the LAT within 2 years after the insurer’s refusal to pay the amount claimed. SK filed an application for dispute resolution to the Tribunal on December 1, 2016. At the time of the hearing, Allstate confirmed that other than the limitation period and SK’s failure to provide the requested documents, his impairments meet the test for entitlement to an IRB.
- Is SK statute barred from proceeding with his claim for an IRB pursuant to s. 56 of the Schedule?
- Has SK failed to comply with a s. 33 request and should he be held to be in a period of non-compliance effective January 14, 2013?
- Is SK entitled to receive a weekly IRB in the amount of $362.13 per week or in some other amount from June 4, 2012 until May 28, 2014?
- Is SK entitled to interest on the overdue payment of benefits?
- SK is statute barred from proceeding with his claim as he failed to submit an application to the Tribunal within 2 years of Allstate’s refusal to pay the amount claimed.
Allstate claims SK is statute barred from proceeding with his claim for income replacement benefits as SK did not submit his application to the Tribunal within the two-year limitation period. Section 56 states that SK has two years to file for mediation or court proceeding after the “insurer’s refusal to pay the amount claimed”. Since April 1, 2016 the legislation has changed to reflect that the parties are only able to file an application for dispute resolution to the Tribunal, therefore, an application must be filed to the Tribunal within two years after the “insurer’s refusal to pay the amount claimed”.
The application was received by the Tribunal on December 1, 2016. Allstate argues that its letter to SK and Explanation of Benefits dated February 8, 2013, which withheld payment of the IRB for being in non-compliance with a s. 33 request is sufficient to warrant the insurer’s refusal to pay. SK submits that a s. 33 request cannot trigger a s. 56 limitation and therefore is not a valid refusal to pay the benefit. If it can, the denial has to be clear and unequivocal and explain the dispute resolution process which as stated in Falcon v. State Farm. He claims the s. 33 letters do not comply with the requirements highlighted in those decisions.
The Adjudicator reviewed the evidence, the law, and the Schedule and determined Section 33 of the Schedule allows an insurance company to request information from an applicant that is “reasonably required to assist the insurer” in order to determine entitlement to a benefit, in addition to other requests. SK had 10 days to comply with that request otherwise the insurance company has the right to withhold payment of the benefit. Once SK complies with the request the benefit will be reinstated. If SK has a reasonable explanation for the inability to produce the documents after the 10 days, the benefit is still payable during the period of non-compliance.
In accordance with s. 33, Allstate requested information regarding entitlement to the IRB and since SK was self-employed, they requested business and personal tax records in order to calculate the quantum of IRB. The parties acknowledge that the requests were reasonable. The first request for documentation was in a letter dated July 17, 2012. This letter did not specify that the request was being made under s. 33, however it requested many of the same documents necessary to determine entitlement and the quantum of the IRB. Subsequently, the information was requested under s. 33. Those letters were dated September 12, 2012, December 17, 2012, and February 8, 2013. The s. 33 letters detailed the required documents, and the fact that that SK had 10 days to do produce the information. They also identified the repercussions for failing to do so.
The letter dated December 17, 2012 stated that if the documents were not received by January 14, 2013 there would be no further payments of medical, rehabilitation or income replacement benefits. No documents were produced to Allstate by the January 14, 2013 deadline. As such, a letter dated February 8, 2013 was sent by Allstate placing SK in a period of non-compliance where the benefits were withheld and were no longer payable to him. In other words, Allstate was refusing to pay the amount claimed.
The refusal is reiterated in the Explanation of Benefits (OCF-9) which was attached to the February 8, 2013 letter. In part 2 of the letter, the box “not eligible/stoppage of benefit” is checked off. This also supports Allstate’s position that it was refusing to pay the amount claimed.
Even though a s. 33 request cannot trigger a limitation period – the refusal to pay a benefit that stems from a s. 33 request can. In this case, the refusal to pay the benefit began on January 14, 2013 which is outlined in the February 8, 2013 letter and Explanation of Benefits.
The Adjudicator found that the letter and Explanation of Benefits (OCF-9) was a valid refusal. The Adjudicator also found that SK did not provide a reasonable explanation for failing to comply with Allstate’s request and therefore remained in a period of non-compliance effective January 14, 2013. The parties agree that it was a reasonable request in order to assess SK’s entitlement to IRB.
SK had two years from that date of the effective termination, January 14, 2013, to file an application for dispute resolution services. He failed to do so and therefore is statute barred from proceeding with his claim.