Yogesvaran v. State Farm, 2010 FSCO 3776

FACTS

The applicant Subashini Yogesvaran was injured in an automobile accident on May 13, 2007.  She applied for and received statutory benefits from State Farm.  However, State Farm discontinued her weekly income replacement benefits on Jan 16th 2008 and her housekeeping benefits on Jan 2, 2008.

The board was initially convened to determine if State Farm failed to comply with Section 27 of the Schedule by terminating her benefits.

Ms. Yogesvaran provided the courts with medical evidence and a written statement from her housekeeper stating that she required formal education on assistive devices to be able to take care of herself effectively.  However, this statement did point out that the applicant was not substantially disabled.

Law

Section 282(10) of the Insurance Act provides as follows:

(10) If the arbitrator finds that an insurer has unreasonably withheld or delayed payments, the arbitrator, in addition to awarding the benefits and interest to which an insured person is entitled under the Statutory Accident Benefits Schedule, shall award a lump sum of up to 50 per cent of the amount to which the person was entitled at the time of the award together with interest on all amounts then owing to the insured (including unpaid interest) at the rate of 2 per cent per month, compounded monthly, from the time the benefits first became payable under the Schedule.

ISSUE

1.         Is Ms. Yogesvaran entitled to a special award pursuant to subsection 282(10) of the Insurance Act?

2.         Is Ms. Yogesvaran entitled to her expenses in this arbitration?

 

RULE

The insurer must display unreasonable conduct in order to award special damages.

ANALYSIS

After an adjournment the board ruled that State Farm failed to properly terminate the benefit programs, therefore they are responsible for payment of income replacement benefits from Jan 17, 2008 until the benefits are terminated in accordance with section 27.   They are also responsible to pay housekeeping benefits from Jan 3, 2008 to May 13, 2009.

The board went on to review multiple arbitration decisions, starting with the 1993 decision in Plowright and Wellington Insurance Company where unreasonable conduct is defined as: “excessive, imprudent, stubborn, inflexible, unyielding or immoderate”.  Unfortunately Ms. Yogesvaran failed to proof unreasonable conduct as defined by the Plowright case.

Although Ms. Yogesvaran provided two pieces of medical evidence, the board found these reports were inconsistent and contained elements that could raise doubt, but not prove unreasonable conduct.  The written statement provided by her housekeeper didn’t help her to prove unreasonable conduct.  Based on these reasons, State Farm was ordered to pay the benefits as discussed above and no special damages were awarded to her.

On the issue of costs, the court asked the parties to submit all of their costs to the courts within 10 days for a decision to be delivered at a later date.

CONCLUSION

The board awarded Ms. Yogesvaran income replacement benefits and housekeeping benefits, but awarded no special damages because there was no proof of unreasonable conduct on the part of the insurer by halting payments of her accident benefits.

 

Ali Golabgir is a Paralegal student at Centennial College in Toronto studying professional communications with Omar Ha-Redeye.

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