by Kevin MitchellThe Tort Threshold. Not all is as it seems.
The case of O’Brien v. O’Brien, 2018 ONSC 4665, is a tort threshold motion brought by some of the defendants after a jury trial where damages was the only issue. The damages quanta were found to be closer to the defendants’ position thereupon. The motion was heard by Justice McKelvey of the Superior Court with reasons, dated July 31, 2018. Regulation 461/96 was referenced, which sets out criteria to be considered upon such a motion. In deciding the motion, it was noted the jury’s verdict was not binding upon His Honour but the findings of fact implicit thereto worthy of serious consideration. It was the plaintiff’s burden, on balance, to prove the threshold was met.
Barry O’Brien was a passenger in a pickup truck piloted by his uncle, James O’Brien, which collided head on with a transport. Among other things, he sustained an ankle fracture in the accident. In respect of other injuries sustained, he had significant pre-existing health issues. Credibility at the motion was not contested and the Judge, in fact, found the plaintiff to underestimate the impact of his injuries. The plaintiff’s orthopod was preferred due to recency of assessment and area of subspecialty. The evidence of the various health practitioners was reviewed in coming to a determination about the various alleged impairments. The left ankle was found to be permanently impaired. Ankle function was found to be ‘important’ to the plaintiff. The ‘seriousness’ criterion was found to be met despite the plaintiff making significant strides to overcome many of the effects of his impairment. Despite the Judge’s review required to consider the plaintiff’s condition ‘at the time of trial’, a likely future inability to work could be considered if a proper evidentiary foundation had been laid. The concern for the Judge on motion was that the jury awarded nothing for future income loss or vocational retraining. Despite the verdict, his Honour found the ankle impairment seriously affecting the ability to continue regular employment. In conclusion, the ankle impairment was found permanent, important and serious in relation to employment but not to his usual daily activities; as the interference with hunting was not ‘most’ of his usual activities.
Said The Prince to Portia in The Merchant of Venice, “all that glitters is not gold”. The defence motion was dismissed.
Kevin is a Partner of Samis+Company. Throughout his career, he has practiced almost exclusively in the area of accident benefit and bodily injury matters arising from motor vehicle accidents. He has also defended various non-motor vehicle bodily injury claims. Kevin carries on a robust practice involving privately arbitrated disputes between insurers in both priority and loss transfer matters.
by Kevin MitchellShould you indemnify? You better you better you bet.
With tension like The Who’s iconic song, the July 17, 2018 loss transfer private arbitration award of Fred Sampliner in State Farm v. Economical dealt primarily with a dispute over the quantum of State Farm’s claimed indemnity and included issues. Economical admitted 100% liability for the February 4, 2010 accident. A confounding issue was the fact there was a live SABS claim from a prior January 22, 2008 accident, which was not loss transferable. Both claims, on the verge of trial, were settled together in April 2016. The onus shifted to Economical to show gross negligence or bad faith handling once State Farm proved the payments had been made. Depending upon the quantum at issue, this can be a costly and/or time consuming exercise for any Applicant.
Economical primarily took exception to the manner in which State Farm settled the second claim via lump sum. It also rejected various medication expenses, which were similar to those prescribed in respect of the first accident. Economical enjoyed success only with its third argument respecting repayment of hourly rates for OCF-18s paid by State Farm above the rates contained in the Professional Services Guidelines. Only one OCF-18 was clearly in excess of the posted rates. For the other five impugned OCF-18s, it involved the hourly rate for a psychiatrist, which is not subject to the Guidelines. Economical argued the rate for a psychologist should inform the decision. The arbitrator disagreed, noting differences between the two disciplines, but in accepting OHIP’s hourly rate of $176.25 still found State Farm had overpaid, which rose to the level of gross negligence but not bad faith.
In an indemnity claim of just shy of $275,000.00, less than $10,000.00 was disallowed. State Farm was awarded interest, albeit reduced in duration, and required to equally fund the arbitrator’s account, presumably as part of the umbrage felt by the arbitrator over State Farm’s agreement before the hearing to accept less than it had paid for the OCF-18s. Unfortunately, his ‘brinkmanship’ comment and the noted exceptions seem a bit out of balance when compared to State Farm’s relative success and the fact that had it settled in advance it would have achieved an indemnity recovery of about 50% rather than the 96.4% it now enjoys. The issue of costs was reserved. Neither party intends an appeal.
Without authority/evidence to support paying a psychiatrist more than OHIP does, you better bet your life a loss transfer Respondent will cut you like a knife.
Kevin is a Partner of Samis+Company. Throughout his career, he has practiced almost exclusively in the area of accident benefit and bodily injury matters arising from motor vehicle accidents. He has also defended various non-motor vehicle bodily injury claims. Kevin carries on a robust practice involving privately arbitrated disputes between insurers in both priority and loss transfer matters.
by Kevin MitchellAre they spouses? To live together, or not to live together, that is the question.
kin to the controversy unleashed by Claudius’ usurpation of the Denmark crown, the July 10, 2018 endorsement of Justice Morgan in Royal v. Desjardins, 2018 ONSC 4284, relates to judicial review of Shari Novick’s February 24, 2017 priority private arbitration award in favour of Desjardins.
On February 24, 2014, Desjardins’ insured driver struck the claimant who was a non-occupant. Her claim for accident benefits was made to Royal as the insurer of the claimant’s ‘spouse’. Definitions for that term are contained in s. 3 of the SABS, under “insured person”, and in s. 224 of the Ontario Insurance Act, “spouse”. The pertinent part of the latter definition refers to two people living together conjugally outside of marriage continuously for at least three years.
Despite dating since 2008, the claimed spouses had actually only resided in the same household for one year pre-accident. The question was, whether a literal or expanded definition of ‘lived together’ was the proper interpretation? His Honour found it to be a question of mixed fact and law to which a reasonableness standard applied. Royal preferred the literal construction. Desjardins preferred the more global view, considering features of the couple’s life together having ‘notionally’ lived together for the requisite time. It appears the arbitrator only looked to family law authorities concerning spousal support to aid in her interpretation of the legislation.
The Court of Appeal’s judgment in Economical v. Lott (1998), 155 DLR (4th) 179, was referenced, which found the contexts of the Family Law Act and Insurance Act schemes to be different despite the use of similar words. Justice Morgan found that the arbitrator erred in finding family law policy applicable to insurance law without related discussion and articulating her reasons. My view is that the arbitrator purported to choose the family law context by reason of the literal similarity between the definitions in the differing legislation. When contrasted with Justice Morgan’s opposite finding, it may be a distinction without a difference. Without further consideration of why she chose one context over the other may well have been unreasonable. But it was upon the expanded review of the couple’s life that she decided they were spouses and in favour of Desjardins. At paragraphs 25 & 27, Justice Morgan found that the outcome was unreasonable on the same basis but, more importantly, also found nobler the literal interpretation of the Insurance Act provision. Presumably, any arbitration awards equating the old s. 224 definition of ‘cohabited’ (interpreted broadly) with ‘lived together’ (altered in 2005) are now in vain. Accordingly, a declaration issued that the couple were not spouses and that Desjardins stood in priority and was required to indemnify Royal.
Will Desjardins recover the crown? It is too early to tell if it will suffer the slings and arrows of a leave application to the Court of Appeal.
Kevin is a Partner of Samis+Company. Throughout his career, he has practiced almost exclusively in the area of accident benefit and bodily injury matters arising from motor vehicle accidents. He has also defended various non-motor vehicle bodily injury claims. Kevin carries on a robust practice involving privately arbitrated disputes between insurers in both priority and loss transfer matters.
by Kevin MitchellWhy mediate? Plaintiffs dippin’ back to their bag of tricks
The February 23 and May 28, 2018 decisions of the Superior Court in Thomson v. Portelance and Canfield v. Brockville Ontario Speedway, respectively, 2018 ONSC 1278 and 2018 ONSC 3288, have Justices Firestone and Mew considering the benefit of mediation.
In the former, the tort defendant in a motor vehicle claim refused to schedule a mediation in advance of discoveries in contravention of s. 258.6(1) of the Insurance Act, which permits either party to make the request. The section is silent as to timing but very loud on how to treat non-compliance. Among other things, which mandate the mediation occur quickly and without reference to other steps in the litigation, s. 3 of Regulation 461/96 requires the defendant’s insurer pay the full freight for its cost. Whether prudent or not, due to the related restrictions, the plaintiff wanted to set the matter down quickly after fulfilling the requirement to have a Toronto action mediated. Ottawa and Essex County are also subject to the Mandatory Mediation Program. In this motion scenario, the defendants are lucky they escaped related legal costs.
In the latter, also a personal injury tort claim, there was divided success after a trial. In the broader context, the assessment of costs was at issue and the applicability of Rule 57.01 of the Rules of Civil Procedure as an aid to the court’s overarching discretion. Various of the factors were discussed and their applicability considered. Apart from neutral factors, his Honour found lead plaintiff counsel’s hourly rate too high and the number of hours spent on the case “significant” in relation to its nature. When he got to the criterion of ‘Other matters relevant to the proceeding’, he noted it was a Belleville action to which the mediation Program does not apply, further to Rule 24.1. His Honour found there was no requirement to mediate. Notwithstanding, he went on to consider extra-jurisdictional practice that looks to the justification of the refusal to mediate. Neither party had a strong position upon liability. He found the case to have merit, the defendant’s insurer uncompromising and unreasonable for it to have declined mediation. In the end, the costs reduction was $80,000.00 plus tax, which would have reduced the plaintiff’s costs claim to about the same amount as the judgment. However, the mediation refusal caused the reduction to roll back to about $60,000.00 instead, making the fee recovery $20,000.00 higher. I estimate the difference to equal between two and three times the amount it would have cost the Speedway to prepare for and attend a mediation. It appears that a lack of ‘membership’ in the mediation Program does not absolve a litigant from cost consequences, whether further to the Insurance Act or other statutory/regulatory provisions.
So take a page out of the hip-hop duo, Salt-N-Pepa’s, songbook. Be sure to mind (i.e. know) your business when you take a ride in your coupe.
by Kevin MitchellRental Car Coverage: Were the words dull and hypothetical?
In the June 5, 2018 Divisional Court ruling in Enterprise Rent-A-Car v. Intact, 2018 ONSC 3517, Enterprise appealed the judgment of Justice Morgan of the Superior Court concerning the hierarchy of coverage provisions of s. 277(1.1) of the Insurance Act applying to the use or operation of a leased vehicle. It reads much like the overlaid simplicity of Tragically Hip lyrics belying their depth.
Arising from a June 29, 2013 accident, the driver of the rental vehicle, also listed upon her father’s policy with Intact, became a defendant in the injured plaintiff’s tort action. Enterprise ultimately contributed to settlement of that action and sought recovery from Intact by way of court application. His Honour dismissed the application finding that s. 277(1.1) did not apply.
On appeal, the Divisional Court decided the standard of review as either correctness or palpable and overriding error. Neither standard was breached presumably, as the panel of three unanimously upheld the finding of the lower court without further comment upon it. The hierarchy of priority of coverage is: lessee (which is defined in subsection (4)), followed by the driver and then the owner of the rental vehicle. Enterprise could only have excess coverage if Intact fell within the first two tiers. The panel confirmed Court of Appeal authority requiring the coverage to be ‘available’ in denying it extended to only a driver listed upon the Intact policy. It was felt clear from Intact’s OAP 1, although the language is a bit tortured, that coverage would extend to a vehicle only when rented by the named insured (the father) or his spouse and driven by either of them. Enterprise argued paramountcy of the statute over the contract of insurance believing there to be a discrepancy in paragraph 2 of the statutory provision. The panel rejected any discrepancy and found the converse was the proper interpretation in that the statute can’t create coverage; it first has to founded under the terms of the policy before the statute is engaged. Since paragraphs 1 and 2 of the statute were not triggered, coverage fell to Enterprise’s insurer considering Enterprise as owner of the vehicle. Costs were fixed and payable to Intact.
Know your coverage. Don’t let the constellations reveal themselves one star at a time when you drive back to town this morning.
by Kevin MitchellDiscovery Motions – Hoist by Her Own Petard: Hamlet 2.0
In this Shakespeareanesque drama respecting three related motor vehicle tort actions, Aviva, as third party, successfully motioned under Rule 31.10, at what appears to be the outset of the trials, to discover three “non-parties”. All three plaintiffs were in the same vehicle and represented by the same lawyer but each (more likely their lawyer) elected to sue the defendant, Backs, in three different actions. Despite an earlier order to be tried together or one after the other, the actions remained separate proceedings.
The non-parties to be discovered were actually the three plaintiffs; each a technical stranger to the others’ cases. Aviva wanted testimony from the two ‘strangers’ in each case as to the effects of the accident upon each plaintiff going both to credibility and damages. The questions were refused in discoveries about two years prior as not being relevant to the action in which they were being asked.
Mr. Justice de Sa in his April 4, 2018 reasons held that use of the Rule was an exception but not meant as a means to limit access to a witness with relevant evidence. Technically, considering the order for trial together there was a right to ask the impugned questions which were clearly relevant and not collateral. The decision to sue in three actions and take a narrow view of relevance was felt to frustrate the discovery process. The plaintiffs’ positions added costs and delay to the proceedings and contravened various principles, not the least of which was their determination on the merits. Some might say that concept has suffered for some time now.
The motion was granted for discovery of each of the non-parties. Aviva was awarded $7,000.00 in costs. Rosencrantz and Guildenstern should have been so lucky. Creative use of the Rules, yes. Ultimately in the best interest of the plaintiffs, no. See Kissoon v. Aviva 2018 ONSC 2167.
http://www.canlii.org/en/on/onsc/doc/2018/2018onsc2167/2018onsc2167.html
by Kevin MitchellStar Wars Truisms: Do or Do Not, There is No Try
[et_pb_section bb_built=”1″][et_pb_row][et_pb_column type=”4_4″][et_pb_text _builder_version=”3.9″]The February 27, 2018 priority preliminary arbitration award of Ken Bialkowski in Aviva v. Intact involves an 18 year old, unemployed passenger in an Aviva insured auto injured on February 3, 2016. The issue was if Aviva’s late notice to Intact could be cured. The merits would suggest the claimant resolved with Aviva, at best, upon occupancy while at the next higher tier with Intact upon dependency.
That the award was rendered in six days is, to my mind, testament to the overarching principles at play despite that this issue is said to largely be a fact driven analysis. Upon my first run through of this case, and before I reached its conclusion, the most recent of the two main authorities relied upon came to mind; Justice Perell’s December 10, 2007 judgment in Liberty v. Zurich. Liberty had made extraordinary efforts to locate and notify a respondent insurer but still gave late notice and fell short at arbitration and on appeal. Ultimately, Liberty was found to have made reasonable efforts but the 90 days was felt to have been a sufficient time within which those efforts should have been made.
With the tools available to it, Aviva’s efforts in the case at hand fell well short in comparison and paragraph 27 of the award advises it failed on both prongs of the test. Recall the onus is on the party seeking to extend the 90 day notice period. Owing to the strictness of the rule’s application, and despite misgivings by or on behalf of the claimant, Aviva’s approach on an ‘escalating scale’ of investigation ‘commensurate with the lack of co-operation’ was in the end not consecrated. It was clear that with a basic factual foundation in hand, Aviva was within about a 24 hour period able to identify Intact and give both it and the claimant notice. Taking well more than 89 days to get to that point was their Achilles heel. With the breadth of insurers to whom a claimant can make a SABS claim, it is not without some understanding why a claimant might simply submit a claim to the insurer in respect of which they are an ‘occupant’. For the insurer first receiving the claim, if the claimant is not your named insured and an occupant of your described auto, it is potentially a lost opportunity not to make an early and robust investigation. Costs followed the cause. May the force be with Aviva if it chooses to appeal.
[/et_pb_text][/et_pb_column][/et_pb_row][/et_pb_section]by Kevin MitchellWhat goes up must come down, but what goes around does not always come around.
[et_pb_section bb_built=”1″][et_pb_row][et_pb_column type=”4_4″][et_pb_text _builder_version=”3.9″]When you represent an institutional client in priority or loss transfer disputes, is your client leaving money on the table? They probably are without realizing it. In priority, your client can claim as indemnity pretty much everything it paid out. For example, see the April 6, 2005 award of Guy Jones in Wawanesa v. Kingsway where he found surveillance, among other things, to be recoverable despite it not being mentioned anywhere in the SABS. It was not appealed. On the other hand, in loss transfer your client is arguably entitled to something less, in the nature of ‘benefits’ per s. 275 of the Insurance Act. Our Court of Appeal, in the September 11, 2012 loss transfer decision in Wawanesa v. Axa, 2012 ONCA 592, split 2-1 in favour of insurer examination expenses notbeing recoverable from a respondent. Leave to appeal was not sought. Blair, J.A., dissented but, in my opinion, made the better reasoned choice. This forum does not lend itself to why that is the case, however. Perhaps, as it is sometimes said, the dissent will someday become the majority. I recommend lawyers get into the habit of providing their applicant clients’ electronic payment summaries to respondents very early in both types of disputes, despite Requests for Indemnification existing in loss transfer. The nature of the electronic document translates a greater certainty to respondents of what has actually been paid out. Producing it early will assist a respondent dovetailing your Statutory Accident Benefits file to the amounts noted and can root out documentary deficiencies early on. Upon the summary, you would redact IE expenses, in loss transfer, and the fee accounts your client has paid to you and not much more. There will be some items over which a respondent balks as ‘loss control efforts’ or the like but, with the very high onus upon the respondent to impugn the payment, the applicant is sitting in the driver’s seat. I know of two cases that have discussed this test in priority disputes. I am of the mind more awards have been rendered in loss transfer upon which the following cases are predicated. The two cases are: the December 19, 2014 award of Bruce Robinson in Aviva v. Wawanesa and the December 7, 2017 award of Philippa Samworth in Economical v. Echelon. Neither were appealed.
Further, I subscribe to the theory that a successful litigant is entitled to costs, including repayment of portions of interim accounts rendered by the private arbitrator, relating to the prosecution/defence of the priority or loss transfer dispute. I also espouse a successful applicant to be entitled to interest upon its recovered indemnity, which can be quite substantial. Nearly $200,000.00 in interest alone was recently collected in a long standing priority dispute. To deny costs and suggest ‘it will all come out in the wash long term’ is to permit spurious claims or defences to be de rigueur and only serves to drive up costs at an industry level. Inspiring you to keep a tally when you let someone off the hook surely won’t work out for you or your client in the end. Costs make litigants and their lawyers accountable. Just ask anyone who practices before the Licence Appeals Tribunal (AABS) how they feel about compensatory costs being unavailable to either side. Early costs cases such as the March 8, 2012 award of Ken Bialkowski in Wawanesa v. Markel (loss transfer – in favour of the applicant) and the May 21, 2013 award of Vance Cooper in Security National v. Wawanesa (priority – in favour of the respondent) have lead to more and more jurisprudence in this area, in particular, the in-depth award of Scott Densem from August 22, 2014 in Economical v. Aviva, Her Majesty the Queen (MVACF), et al. None of the three awards were appealed.
[/et_pb_text][/et_pb_column][/et_pb_row][/et_pb_section]by Kevin MitchellBiblical proportions: Divining King Solomon (or Geddy Lee?) in the determination of priority disputes.
[et_pb_section bb_built=”1″][et_pb_row][et_pb_column type=”4_4″][et_pb_text _builder_version=”3.9″]In this January 5, 2018 priority dispute private arbitration award of Ken Bialkowski, the main issue was principle dependency; a construct of the definitions contained in s. 3(7)(b) of the SABS. The definition of ‘insured person’ in s. 3(1) of the SABS ties in the ‘dependant’ definition to the authorizing section for priority disputes: s. 268(2) of the Insurance Act. RBC, in respect of two claimants injured in an auto accident on April 4, 2015, sought to have TD assume handling of the SABS claims and indemnify it for benefits it had to date expended.
The elder claimants were both passengers in the RBC insured auto at the date of loss and, by s. 268(5.2), RBC would be the highest priority insurer if the two were found dependent upon their younger son. At a minimum, however, they were insured persons of RBC, based upon occupancy alone, and that is likely the reason their OCF-1s were sent to RBC in the first place. Notwithstanding, it was argued the claimants were dependent upon either of their two sons, each of which were the named insureds of the parties to the dispute.
The arbitrator started by defining the duration of the time period pre-loss to be considered that would give the best indication of the situation that existed as of the date of loss. This inquiry largely surrounded where they primarily resided. His review of the case law confirmed the preference by our Superior Court for the statistical LICO methodology over the mathematical one. The arbitrator astutely noted the mathematical approach was rooted in a criterion for dependency, which was rejected by the Ontario Court of Appeal back in 1986 in the seminal Miller v. Safeco case. RBC argued a third methodology, the plural approach. This approach is meant to determine upon whom a claimant is dependent when that claimant provides less than half of their own needs and one, of at least two individuals, provides a financial amount in excess of the claimant or anyone else who is also contributing. It, however, would appear to go against the established, and in my opinion inaccurately named, ‘51% rule’. To be accurate mathematically, it should be named the ‘50% + 1’ rule. Its distinct departure from the 51% rule is that the individual upon whom the claimant is said to be dependent contributes less than 50% of the claimant’s needs (not more) but more than the claimant or anyone else involved.
In this case it was argued by RBC the majority contributor was the eldest son; TD’s named insured. Even if RBC hadn’t admitted dependency upon its named insured (albeit not the greatest contributor), it still had the onus of proof in the dispute since it, at a minimum, was liable to pay benefits, per s. 268(3), based upon mere occupancy. The arbitrator found the sons to be equal financial contributors to their parents so, although they were each not independent, they were not considered principally dependent upon any one individual. RBC was found to be the priority insurer for both claimants and responsible for TD’s partial indemnity costs and the arbitrator’s account. The arbitrator thereby skirted support for what was said to be the genesis for the plural approach; the January 2013 award of arbitrator Scott Densem in Economical v. Aviva, which was not appealed, while yet paying homage to the 51% rule. It is too early to tell if this award will be appealed. However, with the standard of review still reasonableness, although requested to be revisited by the Court of Appeal in a pending decision where our firm was counsel, I doubt RBC will be so inclined.
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