Volume. 5 Issue. 51- November 24, 2021
In this week’s first case, the Tribunal found that the insurer breached its duty of good faith, in a late approval for psych treatment. Further, confirming that this was the type of behaviour that needed to be deterred. However, the Tribunal was not in position to assign an award percentage, requesting first that the parties make submissions regarding the appropriate quantum.
In the second case the Applicant’s rental was in a high rise building and home modification to accommodate his injuries were needed. The Tribunal considered what was required in order to evaluate an Applicant’s alternative housing needs.
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Tribunal Requires Further Submissions to Assess Quantum of Award
Behaviour Must be Deterred, Award Amount Pending – In Keshavarz v Aviva (20-001377) Keshavarz sought an award based upon the late approval of a psychological assessment, contending for a fact that the denial “was unreasonable as it denied the benefit based on no rationale”. It was further noted that Aviva had multiple opportunities to reconsider its position, however failed to do so, ultimately approving the assessment almost two years following submission, with no explanation. Aviva argued that the assessment had been approved in good faith, and that there was no prejudice as they had in fact approved an OCF18 for psychological treatment.
The Explanation of Benefits (EOB) denying the assessment indicated “the treating clinic has enough information to provide the applicant with psychological treatment.” The Tribunal noted that “Of significance, nowhere in the EOB does the respondent expressly state that the OCF-18 for the psychological assessment was being denied.” The Tribunal agreed with Keshavarz that “there was no reasonable explanation for why the psychological assessment was denied. In my view, denying a benefit based on no rationale is imprudent and meets the definition of unreasonable conduct,” As a result it was found that “the adjuster breached his duty of good faith to the applicant by arbitrarily denying the psychological assessment which I find unacceptable. In my view, this type of behaviour needs to be deterred.”
However, the Tribunal then took a somewhat novel approach, requesting both parties to make submissions with respect to an appropriate quantum of the award. So we do not yet have the end of this saga.
Turning a High-Rise Apartment Into a Single Family Dwelling?
In Mirzaie v Wawanesa (19-009605) Mirzaie sought a payment of $1,277,130.00 for alternative housing, with his chosen expert having opined that even were modifications implemented at his current rental apartment, it would not resolve the recommendation that he not reside in a high-rise apartment.
The first option considered was the rental of a detached home, with modification to same said to range between $233,588 and $278,780, plus a further revisionary cost to restore the house to its former state. This was not the option of choice, given the inherent difficulties of modifying a rental, in conjunction with the fact that the limited length of a lease would not provide a long term solution.
Therefore, the preferred option was the purchase of a resale home with anticipated modifications, estimated at between $1,012,580 to $1,276,780. Acknowledging that there is an obligation only to fund the purchase cost up to the cost of renovation the current home, Mirzaie’s expert contended that “due to the near impossibility and absurd costs of renovating Mirzaie ’s current high-rise building into a single-level detached home, the value of such renovations cannot reasonably be obtained…if such renovations were to be made, the cost of these renovations would be outrageous and in the multi-million-dollar range.”
Wawanesa argued the cost not to be reasonable, given the failure to consider the option of a ground floor apartment, and the unreasonable dismissal of the option of modifying Mirzaie’s current rental apartment. The Tribunal’s “major issue” was the failure to “comment on possible modifications to the Mirzaie’s existing apartment, and furthermore, no consideration was given to a ground floor apartment that may provide access to a backyard and/or open space…report only looks at detached homes that would cost more than double of Mirzaie’s remaining medical and rehabilitation limits before considering the cost of modifications. I do not find this to be reasonable.”
Further, it was noted that “one must determine what it will cost to modify or renovate Mirzaie ’s current premises even though that premises may never actually be modified or renovated”. The Tribunal did not find at all reasonable the supposition that “Changing a multi-unit apartment into a single level house would have resulted in all of the tenants being evicted, changes to zoning and millions of dollars incurred. Thus given (the) recommendations, an assessment of Mr. Mirzaie’s pre-accident unit was not completed.” Therefore, as a result “the insurer’s cost obligations with respect to the purchase of a new home cannot be determined given that (the expert) failed to assess the cost of renovating the applicant’s existing home.”
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