Kalk v. Intact Insurance Company, 2022

Facts of the Case 

On August 16th, 2016, Ms. Kerli Kalk (“K.K.”) was involved in a motor vehicle accident when a drunk driver crossed the centreline and struck her vehicle head-on. She sustained significant injuries requiring multiple surgeries and spent nearly two months in hospital and in-patient rehabilitation. 

The insurance provider, Intact Insurance Company (“Intact”), paid medical and Attendant Care Benefits (“ACB”) up until the capped limit provided by the Schedule for injuries that are not considered catastrophic. 

K.K. appealed to the Licence Appeal Tribunal arguing that her impairments met the threshold of catastrophic impairment and that she was entitled to further attendant care and other benefits.  

The matter was adjudicated by Arbitrator, Jeffrey Shapiro.  

Issues in the Case 

At issue in this case, was whether K.K. sustained a catastrophic impairment as defined by the Schedule and whether she was entitled to additional benefits, including an ongoing attendant care benefit ($6,000), ongoing housekeeping, home maintenance benefits ($100/week), entitlements for physiotherapy and occupational therapy services totaling $7,249.88, and an additional award for unreasonably withheld or delayed payments, plus interest for all payments.  

Also, at issue was whether K.K. was liable to repay Intact $1,263.80 for overpayment of income replacement benefits.  

Decision 

After hearing the evidence, Shapiro found K.K. to be catastrophically impaired under Criterion 7, one of the two criteria put forward, and was therefore entitled to some (but not all) of the benefits she sought. 

As such, Shapiro found that K.K. was entitled to additional attendant care benefits, housekeeping benefits, and occupational therapy services, including interest, but was not entitled to physiotherapy benefits or an award for unreasonably delayed payments.  

Additionally, K.K. was required to repay the income replacement benefits for the disputed period.  

Reasons 

At the time of the accident, K.K. was an active 24-year-old who had completed a 3-year RMT course and was partway through the certification examinations. She enjoyed an adventurous lifestyle that included rock climbing, sky diving, and water sports. 

The Accident 

K.K. was traveling at 60 km/h when a drunk driver traveling at 80+ km/h crossed the centreline and struck her vehicle head-on, causing both cars to spin around. The engine compartment of her vehicle was forced into the passenger compartment, pinning her ankles and legs, requiring the Jaws of Life to remove her.  

K.K.’s injuries included a collapsed lung and multiple fractures, as well as an apparent mild traumatic brain injury. Treatment required 10 days in hospital where she underwent various surgeries and 6 weeks of in-patient rehab where at one point she was housed in the same room as the driver who struck her.  

Shapiro acknowledged that while K.K. showed great progress in her recovery, her recovery was “far from complete,” and noted that she was unable to sit the final RMT exams because she believed the work would be too demanding given her impairments, asserting that her life remained “quantifiably altered.” [10] 

Shapiro found there was little doubt that the accident was physically and emotionally traumatic or that her injuries were significant, observing that at face value K.K. “seems normal in the first few moments, but when working with her one quickly sees that she’s struggling mentally, socially, and physically.” [11] 

Catastrophic Impairment 

To be deemed “catastrophic,” an applicant must meet the threshold of at least one of 8 categories of impairments listed in the Schedule.  K.K. submitted she met the definitions of two of these categories, 7 and 8.  

Category 7 relates to a combined physical and mental behavioral impairment that produces a Whole Person Impairment (“WPI”) rating of 55% or more using a specified rating system. To determine her WPI rating, K.K. relied on evidence from multidisciplinary reports provided by the Canadian Medical Assessment Centre (“CMAC”), while Intact relied on reports from the HVE team. 

K.K. argued that her WPI rating was in the range of 60-65%, while Intact claimed it was only 44%. While both parties rated K.K’s physical injuries similarly, there were discrepancies in each party’s findings in the areas of neurological and mental/behavioral realms. Ultimately, Shapiro determined K.K.’s WPI rating to be 59%, which surpassed the threshold, deeming K.K.’s impairments as catastrophic under category 7. 

Under Category 8, the applicant must establish impairments in mental and behavioral functioning in at least three of the four domains that include the areas of activities of daily living, social function, concentration, persistence and pace, and adaptation.  

K.K. argued that her impairments “significantly impede useful functioning,” while Intact countered that her “impairment levels are compatible with some but not all useful functioning.” [34]  

Shapiro found the evidence put forward by Intact to be credible, citing K.K.’s ability to get married and maintain a stable relationship, take vacations, maintain consistent employment, and manage domestic chores, including cooking and cleaning.  

Shapiro also found that there were some impairments, evidenced by a reduction in trips and the expected related activities for a woman of K.K.’s age in addition to her employer’s claim that, despite accommodations, she still struggled at work. However, Shapiro found that these impairments were not significant enough to impede useful function. 

Therefore, Shapiro found that K.K.’s mental and behavioral impairments alone (Criterion 8) did not render her catastrophically impaired, but rather it was the combination of her mental and physical impairments, together, that deemed her catastrophically impaired under the Schedule’s definition in Criterion 7.  

Attendant Care Benefit Entitlement  

Section 19 of the Schedule states that an insurer is responsible for “all reasonable and necessary expenses incurred by or on behalf of an insured person as a result of an accident for attendant care services provided by an aide or attendant.” [37] 

Intact had approved benefits for the 2-year non-catastrophic eligibility period. K.K. claimed that Intact was unreasonable when they refused to deem her impairments as catastrophic, and therefore disputed the rate of payment and period of eligibility. Intact argued that the benefits provided were in line with their not-catastrophic finding and that even if the impairments were catastrophic, K.K. would still need to prove entitlements to attendant care benefits.  

Shapiro did not find the rates to be incorrect or benefits unreasonably withheld by Intact given their belief that the impairments were not catastrophic.  

Nor did he find K.K.’s claims to be reasonable for certain benefits, such as “6 hours a day to ensure comfort, safety, and security in her home environment and more than 10 hours a day (637.4 min/day) to get in and out of a wheelchair and/or to be self-sufficient in case of an emergency,” along with daily hairstyling. [41] However, Shapiro did find that some daily hygiene items were reasonable and suggested that K.K. might consider employing an OT to help her adjust to her limitations, rather than calling upon an attended care provider.  

Housekeeping Benefits 

Shapiro found that K.K. was entitled to housekeeping benefits at $100/week ongoing as her impairments caused her to struggle with more involved tasks. K.K. was to be reimbursed for some (but not all) related past housekeeping expenses, as early on it was not clear that K.K. would be deemed catastrophically impaired.  

Repayment of Income Replacement Benefits  

Shapiro supported Intact’s claim that K.K. was overpaid due to a delay in their benefit assessment process and found that she was liable to repay the $1,263.80 amount. 

Physiotherapy and OT Entitlements  

Sections 14 and 15 of the Schedule state that an insurer is liable to pay for medical expenses that are reasonable and necessary as a result of the accident. [49] 

Shapiro found that the physiotherapy costs claimed by K.K. were unnecessary as K.K. had access to OHIP-funded physiotherapy, making Intact not liable for these costs.  

However, Shapiro disagreed with Intact that OT services were not necessary and found that these services did help K.K. regain some of her function; therefore, the plan was “reasonable and necessary.” [51] 

Interest 

Shapiro found that K.K. was entitled to interest on incurred amounts for attendant care benefits, housekeeping benefits, and OT services.  

Award 

Shapiro found Intact’s denials of a catastrophic impairment to be reasonable given their reliance on its insurer examination assessor report, and that they did not unreasonably withhold or delay payments. Therefore, K.K. was not entitled to an award.  

Conclusion and Order 

In summary, Shapiro deemed K.K. catastrophically impaired and found her entitled to the Attendant Care Benefit up to $2,327.34 per month on all incurred amounts from August 16, 2016, through March 4, 2021, and after this date and ongoing at a rate of $1,667.10. 

Shapiro also found her entitled to $100.00 per week for housekeeping benefits from the date of the decision and ongoing, for OT services for $4,486.85, plus interest.  

Shapiro found K.K. liable to repay Intact the income replacement benefits of $1,263.80, plus interest, and that she was not entitled to $2,763.08 for physiotherapy services or an award. 

Source consulted: canlii.org