A big thank you to our valued clients at Economical for hosting us at their Hospitality Suite at the 94th Annual IBAO Convention in Ottawa. A great time was had by all!
A big thank you to our valued clients at Economical for hosting us at their Hospitality Suite at the 94th Annual IBAO Convention in Ottawa. A great time was had by all!
Senior associate Paul J. Barnes was recently successful in having a multiple-issue FSCO arbitration dismissed against one of our clients after the claimant failed to attend the scheduled arbitration hearing.
The claimant’s previous counsel had removed himself from the record several months before the arbitration when it became apparent that the claimant was incarcerated and would be unable to attend the hearing. Despite the claimant being a guest of Her Majesty in the months leading up to the hearing, Paul prepared for the arbitration due to the possibility that it could proceed. After the claimant (nor anyone on his behalf) failed to show up at the hearing, Paul successfully moved to have the matter dismissed, with costs to our client.
Some wins are easier than others.
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Yetman v. Marzec, 2014 ONSC 4624 (CanLII), <http://canlii.ca/t/g8htk> – statutory third party and costs award
State Farm was a statutory third party in this MVA trial, as it had taken an off-coverage position against its insured. There was another claimant who had previously settled with State Farm for $100K, meaning that there was only $100K of available limits left for this plaintiff. At trial, a jury awarded the plaintiff a bit over $1 million. The plaintiff would only get the $100K from State Farm, but he wanted his costs of $421K and disbursements of $113K from it as well.
There had been previous offers exchanged, which the judge considered. The plaintiff had offered to settle for $200K + costs, and State Farm had countered with $100K plus costs, with costs to be determined. On the eve of trial, the plaintiff offered to settle for $101K plus costs and interest. I assume that State Farm’s refusal of what appears on its face to be a reasonable offer was because the plaintiff’s costs and disbursements were very high by that point and State Farm could not envision paying $100K in damages and $300K (or more) in costs and disbursements.
The trial judge was not happy with State Farm and how it conducted the trial, saying that “…positions were advanced by the Statutory Third Party in relation to liability that had no evidentiary support, thereby prolonging the length and complexity of the trial.” She said that since the statutory third party got full litigation rights according to statute, it should also be exposed to full costs consequences. She ordered State Farm to pay the $100K in damages, plus costs of $350K and disbursements of $100K. When adding State Farm’s own defence costs – probably at least another $300K – this file probably cost State Farm close to, or perhaps even more than, $1 million.
Sharon’s comments: I think the question in hindsight is whether this outcome was at all foreseeable. It seems to me that State Farm ought to have known it was unlikely to win on liability, given its inability to rely on its own insured and considering the judge’s comments. The fact that the jury awarded the plaintiff $1M would suggest that this was a relatively serious case. I understand that the plaintiff initially wanted $200K in damages and that State Farm had $100K of available limits, but you still have to wonder whether State Farm ought to have realized the potential exposure in taking this to trial.
This case is also illustrative of the fact that insurers will have full costs exposure even when they are on as statutory third parties.
Stephen Azzopardi v. John Doe, 2014 ONSC 4685 (CanLII), http://canlii.ca/t/g8ml4 – OPCF44R coverage
The plaintiff was driving his motorcycle when he claimed an unidentified vehicle cut him off and forced him to brake. He put his leg out and suffered severe orthopedic injuries. He sued the Personal under the unidentified provisions of his OPCF44R. The Personal brought a motion seeking a finding that their exposure was limited to $200K, on account of the fact that there were no witnesses and no corroborating physical evidence.
The judge decided that the nature of the plaintiff’s injury was such that it corroborated the plaintiff’s version of events. On that basis, he decided that this was an issue for trial, and he/she dismissed the Personal’s motion. He felt that corroborative evidence does not have to be limited to physical evidence at the scene, such as skid marks, but can be physical evidence extrinsic to the plaintiff’s self-report that supports and is consistent with the plaintiff’s story.
Sharon’s comments: This decision suggests that any plaintiff who is injured in a single vehicle accident could blame it on an unidentified vehicle and succeed in obtaining OPCF44R coverage. It seems to me that the plaintiff’s injury is supportive only of the fact that he put his foot out and suffered orthopedic injuries, not that there was an unidentified vehicle that caused him to put his foot out in the first place. Perhaps an animal ran across his path. As Jean Chretien famously said, “A proof is a proof, and when you have a good proof, it’s because it’s proven”. It seems to me that this judge’s decision eviscerates the plain meaning of the OPCF44R wording. The insurer will have to make the same argument at trial and hope that the trial judge is better at statutory interpretation than the motions judge.
Sant v. Sekhon, 2014 ONCA 623 (CanLII), <http://canlii.ca/t/g8vx4> – when joint and several liability bites you in the backside
This was an appeal of a jury trial verdict, by the insurer of a truck involved in a truck/car collision. The truck had a green light and collided with a car that went through the intersection on a red light. The plaintiff was a passenger in the car. At trial, the jury found the truck 5% liable, and the car driver 95% liable. The Court of Appeal found that the standard of care was that a driver who has a green light has a right to assume that drivers facing a red light will stop, but that driver must also exercise proper care. The court upheld the jury finding, with costs payable of $30,000.
Sharon’s comments: Because it was a jury trial, we do not have the details as to the damages. It is very rare that the Court of Appeal will alter a jury verdict. Even so, the truck’s insurer had no choice but to appeal the trial finding of 5% liability. Chances are that the car owner had $1 million of insurance. If the plaintiff was catastrophically injured, damages were likely to be well over $5 million (or maybe even over $10 million). With joint and several liability, even though the truck driver was deemed only 5% responsible, its insurer would be on for 100% of the damages over the car owner’s policy limits.
The Economical Mutual Insurance Company v. Zurich Insurance Company, 2014 ONSC 4763 (CanLII) http://canlii.ca/t/g8wjt – loss transfer
This is a loss transfer matter arising out of an MVA, where Economical’s insured was hit by a dump truck insured by Zurich on July 18, 2005. Economical paid the ABs and sent a notice of Loss Transfer on November 8, 2005. This was followed by several Requests for Indemnification dated Jan. 30, 2006, Feb. 21, 2008, and April 17, 2008.
At arbitration, Zurich relied on the limitation period, which it said commenced on Jan. 30, 2006, the date of the first request for indemnification. The arbitrator found that each request invoked a separate limitation period, or a “rolling limitation period”. This was an appeal of that decision by Zurich.
The judge agreed with the arbitrator, and with Economical. He said that loss transfer is different than a tort claim and is not based on negligence. Since the Insurance Act provides for arbitration, the limitation principles applicable to tort did not apply.
Nandal v. Toronto Transit Commission, 2014 ONSC 4760 (CanLII), http://canlii.ca/t/g8mr4 – slip and fall
The plaintiff slipped and fell on a stairway at a TTC station. She thought she must have slipped on debris, but could not say for sure. There was no evidence of any debris, and the stairs were of non-slip tile. The TTC brought a motion for summary judgment. It argued that the standard for an occupier is not perfection, and that the plaintiff had to show that the TTC was negligent. The judge agreed with the TTC and dismissed the plaintiff’s action.
Argyropoulos v. Toronto Transit Commission, 2014 ONSC 3261 (CanLII), http://canlii.ca/t/g825d – another TTC slip and fall
This was a costs decision following a jury trial on a slip and fall on an escalator. The jury dismissed the plaintiff’s action. Damages were assessed at $2,583 generals, 10K for past treatment expenses, nothing for past income losses, and nothing for the FLA claimants. The TTC requested $90K in costs and $52K in disbursements.
The plaintiff had served a Rule 49 offer in 2009 for $789K plus costs of $118K and disbursements of $50K. The TTC served a Rule 49 offer in 2013 for a dismissal with costs payable by the plaintiff of $5K, plus its disbursements of $40K.
The plaintiff argued that the TTC should be denied its costs because success at trial was divided. The judge said that there was no merit to that argument, as the jury found no liability and the action was dismissed. Damages were assessed by the jury only because it was ordered to do so; an assessment of damages in the absence of any liability finding is not a “partial success”. Without a finding of liability, the plaintiff had no entitlement to compensation from the defendant.
The plaintiff also argued that the TTC should be denied costs because it conducted the litigation in a way that was improper, vexatious, and unnecessary. The judge said that there was nothing that the TTC did that constituted misconduct. He said, “As was its right, the TTC took a consistent position throughout the litigation that there was no liability, a position that the jury accepted. While the TTC’s offer dated October 8, 2013, is an important factor to be considered in determining the quantum of costs, the terms of that offer are not a sufficient basis to depart from the general rule that the successful party is entitled to costs. The TTC also was within its rights to conduct surveillance. Whether it used this evidence at trial is a tactical decision it was entitled to make <although the judge did find that 29 days of surveillance was excessive -SS>. The TTC was entitled to use only a roster mediator and not to agree to a second pre-trial conference.”
The judge did not assess costs as against the FLA claimants. He awarded $30K to the TTC for costs, and $43K for disbursements.
Sinclair v. Town of Markham, 2014 ONSC 1550 (CanLII), <http://canlii.ca/t/g8z2w> – slip and fall on snow and ice
The plaintiff slipped and fell on ice, and sued the Town and the Town’s snow removal contractor. The Town was an added insured under the contractor’s policy and it wanted the contractor to assume its defence. The contractor’s insurer declined to do so, so the Town issued a third party claim as against the insurer and brought a motion to compel the insurer to defend it.
The insurer argued that the Statement of Claim did not specify where the fall occurred, and that it only owed the Town a defence if the contractor was negligent. The judge found that while the claim did not specify an exact location, the Town had demanded and received particulars clearly showing the fall occurred on a sidewalk. Further, every one of the allegations against the Town fell within the policy coverage. The insurer not only owed the Town a defence, the judge found that the insurer had to fund the Town’s separate defence. The Town was awarded costs of $10,000.
Sharon’s comments: We keep seeing these same types of motions over and over again, where a winter maintenance contractor’s insurer in a slip and fall action refuses to assume the defence of its added insured property owner. In virtually every case, the insurer ends up being compelled to assume the occupiers’ defence. Not only that, but by refusing to assume the added insured’s defence from the start, the insurer is pretty much guaranteeing that its legal costs will double. For example, the insurer here will be paying the legal fees to defend its own insured, and the legal fees for the separate defence of the Town. On top of that, it had to pay its own lawyer for this ill-advised motion, plus another $10K for costs awarded to the Town.
To all CGL insurers of snow removal contractors: where the owner/occupier is an added insured on the contractor’s policy, unless there’s some solid evidence of a problem with the property (e.g. a known leaky roof causing ice build-up, poor lighting, potholes, etc.), you will owe the occupier a defence. It would be better to assume their defence sooner rather than later, before your own defence costs skyrocket.
____________________________________________________________________________________________________________________________MISC. CIVIL PROCEDURE
Cromb et. al. v. Bouwmeester et al., 2014 ONSC 5318 (CanLII), <http://canlii.ca/t/g90rh> – surveillance and privilege
The defendant in this MVA ordered three rounds of surveillance on the plaintiff. It disclosed the first two, but claimed litigation privilege over the third. The plaintiff brought a motion for, among other things, full disclosure of the third report. The judge ordered it disclosed, saying that the refusal to disclose the third round raised questions as to whether that evidence was detrimental to the defendant’s case. She suggested that the defendants were cherry-picking favourable evidence, and that this created a significant risk of the court not receiving a full and accurate picture of the plaintiff’s true level of functioning.
Sharon’s comments: I disagree with this. Surveillance captures the plaintiff at different points in time and it is not one continuous event. It is done for the purpose of litigation so it is privileged at first instance. The defendant is obligated to disclose the particulars, but it ought not to have to disclose the entire report. The rules are clear that if the surveillance is not disclosed, the party cannot rely on it at trial (unless for impeachment).
____________________________________________________________________________________________________________________________Signal Chemicals Ltd. v. Singh, 2014 ONSC 5228 (CanLII), http://canlii.ca/t/g8zxh – undertakings
The defendant did not comply with a previous Master’s Order to answer various refusals, and the plaintiff had brought a successful motion to strike the defence. The Master had found that trial was 1½ months away and felt that she had no choice but to strike the defendant’s pleading. The defendant appealed. The judge foundthat the Master committed an error of law when she said that she had no choice in the matter, since she did have discretion. In addition, this was hardly the eve of trial and there was still plenty of time. The judge reinstated the pleading that had been struck out, but gave the defendant a week to answer the refusals or else his pleading really would be struck.
Sharon’s comments: This just goes to show that even where a party has failed to comply with its undertakings, even when trial is approaching, the court will bend over backwards to give the party one more chance to comply.
Cuff v. Gales, 2014 ONSC 4756 (CanLII), http://canlii.ca/t/g8ngs – more undertakings and refusals motions
Although this is a standard undertakings and refusals case motion, the motion records of both parties were deficient and the judge was quite vocal about it. Even though the defendant got most of what it asked for, no costs were awarded.
The judge came up with some “rules” for these motions:
a) Page numbering
b) A list of all of the undertakings, highlighting those alleged not to have been complied with, followed by related excerpts from the transcript.
c) A Refusals and Undertakings chart, including all related correspondence.
d) An affidavit identifying all correspondence sent and received in relation to the undertakings
The responding party:
c) An affidavit setting out the full sequence of events in complying with undertakings, including the following:
– A list of the undertakings, the steps taken to comply, and the status of compliance.
– Any letters sent to non-parties and replies received;
– Any motion brought to compel production from a non-party.
Sharon’s comments: This judge wants to see all the letters, motions, and documents. Some masters and judges get annoyed if you include all of this. The moral of this story, articling students and junior lawyers, is that you will probably get chastised for deficiencies in your undertakings motions no matter what you do.
Kechichian v. McIntyre, 2014 ONSC 4879 (CanLII), http://canlii.ca/t/g8qw7 – misc. personal injury
The plaintiff had been doing some work at his friend, the defendant’s, home and ended up with a partial amputation of his thumb. The jury trial took less than 2 ½ days, after which the plaintiff’s action was dismissed. The defendant had originally offered to go out without costs, and then offered $50K++ at pretrial, so he sought his costs.
The judge was annoyed at both parties. He found that this was a very basic trial between friends that was “devoid of any legal argument”. The judge likened this trial to a Small Claims Court trial and said that the issues were so simple that counsel could have “winged it”.
Defence counsel in his costs submissions described his fee as being flat rate. The judge did not like that either, stating that this may be what the insurer and counsel agreed on, but that it did nothing to inform the court. He said it provided neither calculation of the hours incurred or a description of the actual work done. He awarded costs of $2,500 – no doubt significantly less than what the defendant had been seeking.
Sharon’s comments: Ouch.
Cruz v. McPherson, 2014 ONSC 4841 (CanLII), <http://canlii.ca/t/g8qxl> – personal injury firms and paralegals
The plaintiffs were in an MVA, and retained a paralegal firm for their accident benefits. The paralegal firm’s brochure stated that it was in partnership with Fireman Wolfe, so the plaintiffs thought that Fireman Wolfe would be handling their tort claim. Fireman Wolfe did not start a tort claim within the limitation period. The plaintiffs sued the law firm, the paralegals, and lawyers Jack Fireman and William Wolfe personally, for breach of contract, negligence, and negligent misrepresentation.
The lawyers brought a Rule 21 motion for a determination that the lawyers did not have a contract with the plaintiffs, that the lawyers as individuals ought not to have been named, and that the tort of negligent misrepresentation was not properly made out. The judge agreed that the individual lawyers were improperly named, but found that it was not plain and obvious that the law firm itself did not owe a duty of care to the plaintiffs. Accordingly, he struck out the action as against the lawyers personally, but allowed the case against the law firm to continue.
Douglas v. Stan Ferguson Fuels Ltd., 2014 ONSC 4709 (CanLII), http://canlii.ca/t/g8lp6 – subrogation
The defendant did an inspection of the plaintiffs’ oil furnace system and shortly afterwards, delivered fuel oil to the plaintiffs. The entire delivery escaped into the ground. The fuel company immediately began remediation, but it was the plaintiffs’ own insurer, State Farm, who paid all the costs.
State Farm issued a subrogated action as against the fuel company in the plaintiffs’ name. The husband and wife plaintiffs separated, declared bankruptcy, and sold the premises. State Farm brought a motion for the right to continue its subrogated action in the plaintiffs’ name, or to be added as a plaintiff in its own right. The defendant fuel company argued that because of the bankruptcy, the plaintiffs had no capacity to bring or continue the action, and asked that the subrogated claim be struck.
The judge did not buy the fuel company’s argument. He said:
 The Defendants, who, having allegedly caused the loss, retained the oil remediation specialists and thereafter handed over the total costs for remediation of the property to the Plaintiffs’ insurer, seek to avoid a trial of the action on the merits by asserting that the Bankruptcy and Insolvency Act extinguishes or trumps the subrogation rights of an insurer that is subrogated to recover from a potential tortfeasor. In short, to grant the order requested by the Defendants would be to allow the potential wrong-doer to profit from the fact that the Plaintiffs were insured.
 To give effect to the relief requested by the Defendants in their cross-motion would be to incorrectly emphasize form over substance, which is the opposite of the substantive principle articulated by the Supreme Court in Somersall v. Freidman.
 Further, to give effect to the Defendants’ position would offend the second of the two underlying objectives of the doctrine of subrogation as articulated by Iacobucci, J. in Somersall v. Freidman, specifically: First, it is important to keep in mind the underlying objectives of the doctrine of subrogation which are to ensure … (ii) that the loss falls on the person who is legally responsible for causing it. (emphasis added)
The judge found that State Farm had the right to continue and control this action to pursue its subrogated claim against the Defendants, without need of amending the Statement of Claim to itself as a party.
Danovic v. Wagner, 2014 ONSC 2664 (CanLII), http://canlii.ca/t/g7ms1 – fatal attraction
Ontario’s very own “fatal attraction”. A frightening example of the kind of crazy people one can meet on internet dating sites… I recommend you read the case for yourselves.