[10]           Zurich retained its own expert, James Hrycay. Unsurprisingly, his opinions differ in almost every respect from those of Mr. McCarthy.  He was of the opinion that the truck was travelling at a much higher speed prior to leaving the road, and attributed the accident to inattentiveness on the part of the driver, causing her to steer “less left” as she rounded the bend.

[11]           Mr. Hrycay was also cross-examined. He agreed that, even with his higher speed numbers, the truck was still travelling below the speed limit, and below the critical speed for that particular curve.  He also agreed that it appeared that the plaintiff had already commenced a turn to the left into the curve, suggesting that, at some level, she had made a conscious decision to turn her vehicle to the left.  Despite that, he was unprepared to accept the theory that the plaintiff turned the truck to the right in an evasive manoeuver.

[12]           The independence and objectivity of Mr. Hrycay will be an issue if this matter reaches trial. The plaintiff’s factum indicates that his evidence was rejected for lack of objectivity and independence in the following reported decisions:  Docherty (Litigation Guardian) v. Lauzon, [2010] O.J. No. 5017 (S.C.J.) at paras. 102-3;  Elliott v. Hill Bros. Expressways Ltd., [1998] A.J. No. 524 (Q.B.) at paras. 42-3;  Garant v. Impens, [1986] O.J. No. 1190 (H.C.J.) at p. 4;  and Stroud v. Nicholson, [2005] O.J. NO. 3671 (S.C.J.) at paras. 56-60.


Fernandes v. Penncorp, 2013 ONSC 1637 (CanLII)  http://canlii.ca/t/fwmmj

[41]           What follows is taken from the Affidavit of Documents of Penncorp, completed in the name of Janet Mayo, who describes herself in paragraph 1 of the affidavit as “the Senior Claims Advisor of the Defendant”.  Ms. Mayo made the decisions regarding the payment or non-payment of Avelino’s claim on behalf of Penncorp…

[45]           Ms. Mayo made a note to her file on December 21, 2005 that she discussed the surveillance with Avelino that had taken place on August 3, 10 and 11 and that it showed him actively physically working.  She stated that she tried to close the claim on the basis of partial disability.

[63]   …..Penncorp did not pay him for six years from August 2005 until September 2011 for his inability to work at his occupation of bricklaying.  They finally conceded in September 2011 that he was entitled to be paid for two years under the policy, by reason of his inability to do his own occupation.  The failure of Penncorp to pay Avelino what it contracted to pay him, both from being disabled from doing bricklaying and from doing any other occupation for which he is reasonably suited by education, training and experience, has humiliated Avelino.  It has made him dependent on Tracy financially.  He was a proud, self-reliant man who always worked to the fullest extent possible.  He has suffered great mental distress as a result of the failure of Penncopr to pay him what it contracted to pay him.  I find that this would have been in the reasonable contemplation of the parties as the likely result of Penncorp’s failure to honour its obligations to Avelino under the contract of insurance when they entered into the contract.

[64]  ….There is no evidence that Ms. Mayo ever considered the detailed description of the heavy nature of bricklaying work that Avelino submitted with the questionnaire dated December 6, 2005.  After Avelino submitted this document at the request of Penncorp she tried to settle the claim with Avelino on the basis that he was partially disabled.  In my opinion there was never any doubt on the information that Pencorp had that Avelino was totally disabled from performing “any of the important daily duties pertaining to his occupation” of brick layer…..

[65]           I am of the opinion that Penncorp’s handling of Avelino’s claim demonstrates bad faith. Penncorp  breached the duty of an insurer in handling a claim under an insurance contract set out by Justice O’Connor in 702535 Ontario adopted by the Supreme Court of Canada in Fidler. What Ms. Mayo, on behalf of Penncorp, was doing in trying to settle the claim on the basis that Avelino was partially disabled in December 2005 and then in denying Avelino any benefits for six years, was what Justice O’Connor stated that an insurer ought not to do, namely, “deny coverage or delay payment in order to take advantage of the insured’s economic vulnerability or to gain bargaining leverage in negotiating a settlement.”  Ms. Mayo took an adversarial approach to Avelino’s claim for benefits for inability to do his own occupation. It is most distressing that she ignored the detailed job description of his occupation of bricklaying that Avelino provided in the questionnaire dated December 6, 2005 requested by Penncorp.  She did not deal with his claim “fairly” and in a “balanced” way.  This conduct constitutes “an independent actionable wrong”.  It meets the test for punitive damages as being “highhanded, malicious, arbitrary or highly reprehensible misconduct.”


McQueen v. Echelon General Insurance Company, 2009 CanLII 66152 (ON SC) http://canlii.ca/t/26t7v

[5]             The Plaintiff has had 21 denials of 16 separate benefits over a period of three years. The Plaintiff applied for mediation to resolve the dispute regarding her entitlement to accident benefits, specifically, the termination of her housekeeping benefits, the rejected claims for transportation expenses and the Defendant’s refusal to fund the psychological assessment recommended by Dr. Gouws.  Two mediations were held; both failed.

[39]        Laurie Walker, for the Defendant gave evidence that she believed the Plaintiff had a working vehicle during the material times.  On cross-examination, Ms. Walker testified that she was operating on an assumption that the plaintiff had a vehicle. She was not aware that the Plaintiff was without a vehicle, although Ms. Walker did not raise that as a reason for the denial of expenses during the course of the claim’s administration. The Plaintiff telephoned the Defendant through Laurie Walker requesting transportation for her treatment, other social re-integration and appropriate errands; she was denied.  The Plaintiff testified that she has incurred an obligation to pay others.

[42]        He reported that the Emergency Department records indicated there was a questionable loss of consciousness at the time of the accident and currently she complains of headaches, dizziness and impaired balance.  He recommended a neurological assessment as well as a psychiatric/psychological assessment.  This recommendation was followed up with Laurie Walker, for the Defendant; however, Ms. Walker failed to submit the recommendation to the Family Doctor, who was to carry out the Assessment.

[43]        Eventually, Ms. Walker made the recommendation for “Treatment” however; the recommendation was supposed to be a request for an “Assessment.”  Moreover, the Defendant failed to submit a request for Assessment and did not notify the Plaintiff of the recommendation of Dr. Kwok. (Ex.: 1a, Tab 31).

i) The Defendant’s actions

[53]        The Plaintiff is of the view that the Defendant intentionally placed barriers in her way with the intention of limiting the Defendant’s financial exposure.  The Defendant disagrees.

[54]        The Defendant retained an adjuster, Ms. Laurie Walker, a woman of 20 years experience and who was acting President of the Ontario Insurance Adjuster’s Association. Curiously, Ms.Walker was ultimately removed from the Defendant Insurance Company’s file as matters started to reach critical mass.


Elaiathamby and State Farm  [+]  Arbitration, 2008-10-21

Mr. Elaiathamby adds that State Farm breached its duty to fairly adjust his claim by considering the drivers’ and passengers’ common race and ethnicity as suspicious. [See note 6 below] He maintains that the Company’s use of race and ethnicity in adjusting practice violates the Ontario Human Rights Code prohibition against racial or ethnic discrimination in services and contracts….

State Farm put forward no evidence or rationale justifying its use of common race or ethnicity as a suspicious factor. Mr. Rosen accused both Mr. Elaiathamby and his passenger of lying and attempting to commit insurance fraud, without introducing evidence of similar past or current conduct. His admission that he considered common race and ethnicity suspicious during the initial investigation couples with his evidence State Farm would not accept the legitimacy of the accident absent a videotape of the actual incident.

State Farm’s imposition of this extremely high burden of proof together with the unsubstantiated accusations and explicit racial consideration persuades me the adjustment of Mr. Elaiathamby’s claim has been tainted by brazen discrimination since inception. These practices must not be condoned, and may be subject to further investigation, condemnation or penalty by other authorities.

While human rights violations must, in my view, be given serious consideration in relationship to claims for special awards, violations of the Human Rights Code are not alone compensable within the context of the Insurance Act. [See note 8 below] It is not a generalized inquiry into an insurer’s conduct [See note 9 below], where there must be a linkage between the insurer’s consideration of the violating factors and the unreasonable delay or denial. [See note 10 below] My opinion is that the violation must be a significant contributing factor to the insurer’s decision-making.

Here State Farm’s evidence is quite unequivocal and unrefuted, that it has relied on its expert’s opinion that the vehicle damages did not match almost immediately after the initial investigation of Mr. Elaiathamby’s claim. I accept that ethnic or racial considerations added to State Farm’s overall prejudice against Mr. Elaiathamby, but find the prejudicial flavour was not significant. I find that State Farm principally and reasonably relied on its expert’s opinion, and therefore that Mr. Elaiathamby is not entitled to a special award under subsection 282(10) of the Insurance Act


Elaiathamby and State Farm – Appeal  [+] Appeal, 2010-10-01

However, this testimony does not support the Arbitrator’s finding that the prejudicial flavour of relying on common ethnicity was insignificant. Rather, common ethnicity is significant – that is, a component of an investigation into an alleged staged accident – when there are other Suspicious Loss Indicators. Furthermore, there is again the issue of the period after Mr. Jenish testified and before the Arbitrator issued his decision. By that point, the Jenish report provided little support for State Farm’s position, yet benefits continued to be denied, presumably on the basis of the Suspicious Loss Indicators referred to by Mr. Rosen. The trouble is, if other factors supporting a denial of benefits – such as the engineering report – are fewer, the relative importance of common ethnicity as a factor is that much greater. It follows that Mr. Elaiathamby was entitled to an explanation from the Arbitrator at least as to how the common ethnicity issue was still insignificant during that post-hearing period when benefits continued to be denied, yet there were so few other factors supporting the denial.

However, in this case, the Arbitrator specifically found that “the adjustment of Mr. Elaiathamby’s claim has been tainted by brazen discrimination since inception.” This means that State Farm’s justification for withholding benefits was hardly overwhelming or unchallenged. However, the Arbitrator dismissed the claim for a special award on the basis that State Farm was entitled to rely on the Jenish report and acted reasonably in so doing throughout the period of denial of benefits. For the reasons set out above, these reasons are inadequate. They were conclusory and constitute an error of law.


Michalski and Wawanesa  [+]  Arbitration, 2005-12-13

I find Wawanesa knew Mrs. Michalski was catastrophically impaired at the outset and acted on that knowledge, in some respects. I find Wawanesa acted on the basis that Mrs. Michalski was catastrophically impaired when it hired Ms. B. Whittingham as case manager…

I find Wawanesa determined that Mrs. Michalski sustained a catastrophic impairment even before it received her completed application for benefits, because it retained a case manager. However, it failed to inform Mrs. Michalski that it had made such a determination as required by section 40(2)(a) of the Schedule . Mrs. Michalski was entitled to notice of Wawanesa’s determination that she sustained a catastrophic impairment by December 18, 2001.

Taking that inconsistent position at the outset of the claim conflicts with Wawanesa’s obligation under section 32 of the Schedule , to provide information to assist Mrs. Michalski in applying for benefits.

…I find Wawanesa did not provide such information. I find it did not provide those forms to Mrs. Michalski before March 2003, when, following inquiries by her counsel, Wawanesa required her to provide the forms, completed by a physician who opined that she sustained a catastrophic impairment.

…Mrs. Whittingham, the case manager, agreed to consult with Dr. Dobrowolski in relation to any further reductions in care. Despite their plan, I find neither sought Dr. Dobrowolski’s opinion with respect to Mrs. Michalski’s needs.

Each of the case manager’s subsequent reports to Wawanesa, in March, April, May, June and July, 2002 state in the body of the report that Dr. Dobrowolski continues to report further improvement. I find each of those comments at significant odds with the contents of Dr. Dobrowolski’s notes, records, reports to third parties, and an implausible summary of his opinion.

…I find that in recommending and effecting further reductions in Mrs.Michalski’s attendant care, the occupational therapists and the case manager shut their eyes to relevant information which they agreed would be sought in making that decision, and were wilfully blind. Wilful “blindness arises where a person who has become aware of the need for some inquiry declines to make the inquiry because he does not wish to know the truth.”

….Wawanesa disregarded its obligations under section 32 of the Schedule to identify the benefits to which Mrs. Michalski was entitled; provide her with a written explanation of the benefits available to her; and provide information to assist her in applying for benefits as required by sections 32(b) and (c) of the Schedule . Wawanesa also failed to inform Mrs.Michalski or her husband, that family members could be paid for their services, as part of its obligation under subsections 2(7), 32(b) and (c) of the Schedule….

… misinformed her of the amount of her entitlement, and misinformed her that the amount of her benefit was insufficient to cover the cost of her care. Wawanesa failed to identify her entitlement to housekeeping benefits.

As a result of Wawanesa’s failures and misinformation…Wawanesa thus both withheld and delayed attendant care and housekeeping benefits…

I find the basis on which Wawanesa reduced Mrs. Michalski’s attendant care benefits was unreasonable commencing in March 2002. I make this finding because the reductions were based on “partial” assessments in which the assessors were wilfully blind, done in an arbitrary manner, without the benefit of attendant care DACs, in contravention of the Schedule . Further, the manner in which the reductions was effected was not evenhanded. The reductions were always effected by lopping off the paid care; never the care the family members provided without receiving payment.

I find Wawanesa’s actions from the inception of the claim to the date of the hearing bear little resemblance to the attendant care process set out in section 39 of the Schedule ….

…Insurers have been sheltered from special awards where they rely on an opinion as to medical condition or disability which supports their position, and which the arbitrator subsequently rejects….In my view, such shelter is not afforded to an insurer where an opinion is erroneous and unsound because the assessor is wilfully blind and this is apparent from the reports.