What happens when a tolling agreement is made, the LAT application is withdrawn, and the tolling agreement term expires before the Applicant re-files their LAT application?
In M.H. and Western Assurance Company, the Applicant applied for and received IRBs from her insurer after an accident in 2012. In early 2014, the insurer requested new OCF-3 forms from the applicant in order to assist in determining whether she continued to be entitled to IRBs at the post-104-week mark. The Applicant’s family doctor provided two OCF-3 forms. In the following month, the Applicant underwent seven insurer’s examinations for the purpose of determining her ongoing entitlement. The insurer denied the Applicant’s post-104-week IRBs on the basis of these reports. The Applicant’s family doctor received a copy of two of these reports.
The Applicant applied to the LAT to appeal the denial. At the case conference, she withdrew her claim for IRBs pending the completion of a catastrophic assessment and further settlement discussions. In turn, the Insurer agreed to extend, or “toll,” the limitation period for the Applicant’s IRB denial. On consent, the parties agreed to toll the limitation period for a fixed period of ten months. The Applicant did not re-file her LAT application for dispute resolution of the denial of her post-104-week income replacement benefits until six months after the expiration of the tolling agreement.
The parties disagreed about what was in issue. The Insurer framed the issue as pertaining to Section 7 of the LAT Act, which affords the Tribunal the discretion to extend a limitation period if several factors are met. The Insurer argued that the Applicant is not only statute-barred from proceeding with her application due to her failure to appeal the Insurer’s denial within two years, but also that there is no reason why the Tribunal should extend the limitation period on the basis of section 7. The Applicant framed the issue as a technical, procedural failure by the Insurer to meet the consumer protection standards imposed by the Statutory Accident Benefits Schedule. She argued that the Insurer’s denial of her IRB was not a valid denial under section 37(5) of the Schedule, as it failed to provide all of the IE reports on which it relied to the practitioner who signed her OCF-3. Accordingly, the Applicant argued that the limitation period never actually began to run despite the actions of the parties.
Adjudicator Boyce decided that the Applicant cannot successfully argue that there was never any limitation. The conduct of the parties after the Applicant’s application to the Tribunal support the position that the Insurer’s denial was not only proper, but that the Applicant was well aware that her claim has been denied and the limitation period was triggered. Specifically, the Applicant applied to the Tribunal within the limitation period of the denial and then extended the limitation period by her own agreement. Further, the Applicant’s decision to withdraw her claim for IRB at the case conference level while simultaneously agreeing to toll the limitation period on consent is compelling evidence that she believed the Insurer’s denial was valid.
Adjudicator Jesse A. Boyce rejected the Applicant’s argument and found no evidence that the Insurer did not comply with the principles articulated by the Supreme Court in Smith v. Co-Operators General Insurance Company, 2002 SCC 30 at para 14. He emphasized that as long as an insurer provides a valid refusal, a limitation period should be strictly applied. In addition, a clear and unequivocal notice given by the insurer terminating the insured’s benefits is sufficient to trigger the limitation period. In this case, the Insurer’s denial was clear and unequivocal notice to the Applicant and triggered the limitation period in spite of any alleged technical compliance issues.
The Applicant’s attempt to argue that the Insurer’s notice of denial was characterized as disingenuous and likened to a Hail Mary. Adjudicator Boyce disagreed with her position that statute-barred her from proceeding with her application despite the Insurer not providing the treating practitioner with all of the insurer’s examination reports constitutes a “retroactive certification” of a denial by the Tribunal. Accordingly, the Applicant was found to be statute-barred from proceeding with her LAT application.
Adjudicator Boyce also declined to exercise the Tribunal’s discretion to extend the limitation period under Section 7 of the LAT Act.
This decision is a warning to parties that enter into tolling agreements that the terms of those agreements can and may be used later to defeat claims that do not conform to the terms of the tolling agreement and can diminish procedural arguments that there was never a limitation clock ticking in the first place.