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From the Bench: An Insured’s Failure to Attend an IME pursuant to the Policy may result in a Denial of Section B Benefits

Ruling makes it clear insurance companies, pursuant to Section B, have the authority to designate a medical practitioner of their choosing.

Greenidge v Allstate Insurance Company, 2018 ABQB 266

Case Facts

Allstate Insurance Company (the “Insurer”), issued an SPF No.1 policy (the “Policy”) to a vehicle owned by Ms. Jenine Greenidge (the “Insured”). The Insured was involved in a motor vehicle accident. The Insured made a claim pursuant to Section B of the Policy alleging soft tissue, whiplash related injuries, and TMJ injuries.

The Insurer arranged for the Insured to undergo an independent medical evaluation (“IME”) with Dr. Grade (the “Examiner”). Although the Examiner permitted a chaperone and an interpreter, they did not permit video recording of the evaluation. The Insured refused to attend the examination without video recording. As no IME pursuant to Section B proceeded, the Insurer denied all further benefits.

The Insured argued the Insurer owed her a duty of utmost good faith and they breached this duty by denying her the ability to have the IME video recorded. The Insurer argued the Insured breached the Policy and is no longer entitled to Section B benefits for failure to attend the IME.

Analysis

Utmost Good Faith

Justice Nielsen reiterated insurance contracts are contracts of utmost good faith. The insured bears the onus of proving a breach of the duty of good faith by the insurer. The insurer must have acted without reasonable justification. However, the insured’s failure to comply with the terms and conditions of the policy may terminate the insurer’s obligations under the policy.

Breach of Section B

Special Provision 4 gives an insurer the right to have an insured attend a medical examination. Furthermore, the insurer is given the authority to name the examiner and the insured must attend examination:

[24]    Special Provision 4 gives the insurer the right to have the insured attend a medical examination. Such medical examination is to be conducted by a duly qualified medical practitioner named by the insurer. The insured must afford the duly qualified medical practitioner an opportunity to examine the insured’s person.

[25]    Clearly, the right to name the medical practitioner who will conduct a medical examination lies with the insurer. Nothing in the wording of Section B restricts the right of the insurer to choose the medical practitioner. In this case, Allstate selected Dr. Grade. There is no suggestion that Dr. Grade was not duly qualified.

The medical examiner is given the right to determine the terms of the examination. There is no provision restricting the manner in which medical practitioners perform their examinations:

[26]    The medical examiner has the right to determine the terms upon which a medical examination would be conducted. Nothing in Section B restricts the medical practitioner in the manner of conducting the examination.

The Examiner permitted a chaperone and an interpreter, but did not allow video recording of the evaluation. Pursuant to the provisions of Section B, or lack thereof, the Examiner was entitled to do so. There was no evidence suggesting the Insurer was dealing with the Insured unfairly. Pursuant to Section B, the Insurer has the right to select the medical practitioner. Furthermore, the Insurer was found to be reasonably justified insisting the Insured attend the Examiner’s IME.

The Insured argued the Alberta Rules of Court, particularly Rule 5.42(1)(b) which permits video recording medical examinations, applied. Justice Nielson, however, rejected this argument stating it was clear the legislature did not incorporate Rule 5.42 into the SPF No.1 nor was there any suggestion the Insured and Insurer considered the Rules applying to the contractual arrangement:

[36]    However, the legislature has chosen not to incorporate reference to Rule 5.42 in the Automobile Accident Insurance Benefits Regulation. It would, therefore, not be appropriate to read into SPF No. 1 a term that Rule 5.42 applies to medical examinations pursuant to SPF No. 1.

[37]    Finally, there is nothing to suggest that Allstate and Ms. Greenidge turned their minds to the possibility of any Rules applying to the terms of their contractual arrangement. Once again, it would be inappropriate to imply such a term now when neither party had considered this to be part of their agreement.

Justice Nielson found the Insurer did not breach the terms of the Policy nor its duty of utmost good faith by discontinuing coverage pursuant to Section B. Section B gave the Insurer the right to select its examiner and the Examiner was entitled to set out the terms of the examination. The Insured failed to comply and Section B coverage was denied:

[38]    Special Provision 4 is unambiguous. Allstate had the right to select Dr. Grade as a duly qualified medical practitioner to conduct a medical examination of Ms. Greenidge. Dr. Grade was fully entitled to establish an examination policy as to how the Medical Examination would be conducted. Dr. Grade did so. That examination policy prohibited the video recording of medical examinations conduced pursuant to Special Provision 4.

[39]    Allstate did not act unfairly in insisting that Ms. Greenidge attend the Medical Examination with Dr. Grade on the terms as determined by Dr. Grade. Allstate did not place any unwarranted conditions on payment of benefits. Ms. Greenidge refused to attend the Medical Examination. Consequently, Allstate denied coverage to Ms. Greenidge pursuant to Section B. It did not deny such coverage without reasonable justification.

Denial of Coverage for TMJ Injuries

Pursuant to Special Provision 6(b), an insured cannot bring an action to recovery under Section B unless the provisions are complied with. This includes compliance with an IME. The Insured had commenced a claim in relation to both the whiplash and TMJ injuries; however, she breached her compliance by failing to attend the IME.

Justice Nielson found Special Provision 6(b) refers only to the amount of the “claim” and does not refer to “subclaims” or “separate claims”. As such, the Insurer was entitled to deny the Insured further coverage for any injuries allegedly suffered as a result of the motor vehicle collision:

[44]    Special Provision 6(b) does not refer to “subclaims” or “separate claims” based on the nature of the injuries suffered. Rather, Special Provision 6(b) simply refers to an action to recover the amount of a “claim”. Once Ms. Greenidge was in breach of Special Provision 4, she was no longer entitled to commence an action against Allstate to recover an amount in relation to any injuries which she alleged she suffered as a result of the motor vehicle accident.

[45]    Allstate was, therefore, entitled to deny Ms. Greenidge any further coverage for any injuries allegedly suffered by her including the TMJ injuries.

In Conclusion

This decision represents a significant win for insurance companies. Justice Nielson has made it clear insurance companies, pursuant to Section B, have the authority to designate a medical practitioner of their choosing. Furthermore, the medical practitioner has the right to set the terms upon which the medical examination will be conducted. Unless the insurance company was biased in selecting the medical practitioner, the insurer is justified in insisting the insured attend the medical examination. Failure to do so may permit the insurance company to deny coverage under Section B.

Moving forward, this decision provides insurance companies a leg to stand on in denying terms suggested by Plaintiff Counsel in relation to the conduct of an independent examination. Plaintiff Counsel has no authority to demand the examination be conducted in a certain manner (i.e. video recorded); this decision falls solely to the medical practitioner. Plaintiff Counsel who continue to push for conditions on medical examinations run the risk their client will be denied Section B benefits for breaching the Policy for failure to attend a requested examination.