Citation: Storms v. Quist, 2010 ONSC 638
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Maxine Storms
Plaintiff/Appellant
– and –
Mary Quist & Associates Ltd
and Mary Quist
Defendant/Respondent
Graham Lord, for the Appellant
John Crouchman, for the Respondent
HEARD: August 4, 2009
Honourable madam justice h. macleod-beliveau
Appeal decision
1The Appellant/Plaintiff Maxine Storms (Appellant) appeals from the Judgment of Deputy Judge W. R. Lane of the Small Claims Court in Kingston Ontario dated December 8, 2008. He dismissed the Appellant’s claim for wrongful dismissal and fixed costs against her in the amount of $440.00 in favour of the Respondent/Defendant Mary Quist & Associates Ltd. and Mary Quist (Respondent).
2The issues raised by the Appellant on appeal are:
a. Did the trial judge err in applying the burden of proof?
b. Did the Respondent fail to meet the burden of proof for dismissal?
c. Did the trial judge fail to analyse the evidence and give proper reasons for decision?
d. Did the trial judge fail to draw the correct conclusions from the objective evidence?
3It is the Appellant's position that she was summarily dismissed on January 11, 2006 after six years of employment both without cause and without reasonable notice and that she is therefore entitled to damages for her wrongful dismissal.
4It is conceded by the parties that the damages would exceed the $10,000.00 monetary jurisdiction of the Small Claims Court. The parties have agreed that the damages are fixed in the amount of $10,000.00, but are disagreed as to whether or not the dismissal was for just cause and with reasonable notice.
5The Appellant's position is that the Deputy Judge made a fundamental error in concluding that the handling of the Appellant’s automobile policy within the Respondent’s office was sufficient grounds to dismiss her for cause.
6The Appellant's position is that the trial judge failed to distinguish that the Appellant's alleged misconduct in regard to her own automobile policy was outside the scope of her employment and that he failed to appreciate that the Appellant was entitled to serve her own best interests rather than the Respondent employer’s.
7The Appellant's position is that the trial judge accepted a spurious defence.
8It is the Appellant's position that the trial judge failed to put the burden of proof on the Respondent to prove just cause for dismissal including a higher standard imposed where alleged dishonesty is made. He failed to analyse the evidence of the Respondent using well-established principles of employment law on the factors which need to exist to justify a just cause for dismissal.
9The Appellant's position is that the correct conclusion in law of the Respondent’s evidence of policy manipulation, standing alone, was insufficient grounds to summarily dismiss the Appellant for cause.
10The Respondent's position is that the trial judge was correct in dismissing the Appellant's claim for damages for wrongful dismissal. The Respondent submits that the trial judge found correctly that the Appellant was dismissed for cause. The Appellant failed to use "utmost good faith" both as a customer and as an employee of the Respondent and used her knowledge and position as a senior employee in the deliberate avoidance of premiums. The premiums lost as a result amounted to $4,600.00 annually.
11A review of the facts of the case demonstrates that the Appellant was the senior employee in the Respondent’s insurance agency servicing home and auto insurance policies. Prior to her employment with the Respondent, she had 23 years experience working in the insurance industry. She was also a customer of the agency. Her auto insurance policy was looked after in the office. She knew that she was not allowed to work on her own policy of insurance, but rather had to ask another employee, to work on her personal policy. As the Appellant was the senior employee in the office, this work would be done by an employee more junior to her.
12The evidence was that there was an uncomfortable atmosphere escalating within the office which was reaching the point of affecting the business operation. One of the junior employees in the office was considering leaving the agency.
13There was clear evidence that there were personality differences and difficult staff relations within the office. This was contributed to by both parties before the court and the other two junior employees in the office. They were uncomfortable when dealing with the Appellant who demanded strict discipline at work. The junior employees were intimidated by the Appellant and followed her instructions.
14The Appellant’s relationship with the Respondent employer had also significantly deteriorated. Their relationship was described by the Respondent as “hot and cold”. Apparently, none of the employees went to the Christmas party arranged by the Respondent employer in December of 2005.
15The Respondent employer did not have any concerns about the Appellant’s work and she was a trusted employee up to November 23, 2005. The Appellant had received praise from the Respondent as recently as two months before her termination. These changes to the Appellant’s policy came to the attention of the Respondent, based on another employee’s suspicions. The Respondent requested a review by the Insurance Company involved, the Co-operators.
16Mark Feeney did the review and found that the changes resulted in substantial savings to the Appellant with resultant loss to the insurance company of premiums in the amount of $4,600 annually. Mr. Feeney confirmed that “utmost good faith” is required by insurance representatives in dealing with contractual relationships between an insured and an insurer. He found that the Appellant had violated this principle and had used her knowledge and training as a staff member and licensed agent to avoid paying the correct premiums.
17The Appellant was terminated with no cause mentioned in her letter of termination. She was also advised that sponsorship of her insurance licence by Co-operators would also be cancelled. The reasons for the Appellant’s termination were, on the evidence, still being formulated after she was terminated. No prior warnings or disciplinary action were taken prior to the Appellant’s dismissal. These events were also reported to the Superintendent of the Financial Services Commission of Ontario by Co-operators. Effectively, the Appellant would no longer be able to obtain work in the insurance field.
18Many of the alleged manipulations of the Appellant’s policy occurred much earlier than November of 2005. The Appellant’s personal automobile policy was changed on October 22, 2004 because of a careless driving charge of her husband. In August of 2005, her daughter was added to her policy. In November of 2005, a purchase of a second vehicle for her daughter and an accident involving the daughter occurred and changes were made. There was a purchase of another vehicle and insurance transfers made while the Appellant’s vehicle was being repaired.
19In evidence, the Respondent testified that the most serious concern was that the Appellant had failed to add her daughter as a G2 occasional driver to her policy when she should have in early December of 2005, which resulted in loss of premiums to the agency. The daughter had an accident later in December of 2005. The Respondent’s concerns about the Appellant’s auto insurance policy irregularities began to become serious in early January of 2006.
20An inference could be drawn from a review of the evidence before the trial judge that the Respondent wanted to terminate the Appellant to resolve the acrimony existing in the workplace and prevent other employees from leaving, and looked for a reason to make it happen without having to pay damages to the Appellant. The manipulations of the auto insurance policy and resultant premium loss to the company became the reason. Was this reason sufficient for dismissal?
21The trial judge found that it was. He found that the Appellant categorically denied any attempt by her to deceive or manipulate the policy. He found the Appellant’s reasons of misdirection to the employee making the changes on her policy or a failure by that employee to follow underwriting principles not to be credible.
22An appellate court should not interfere with a trial judge’s decision unless there is a palpable and overriding error. The trial judge’s decision is entitled to deference if there was some evidence upon which he could have relied to reach the conclusion that he did. This is so even if the reviewing court on appeal may have come to a different conclusion on the same evidence.
23The trial judge found on the balance of probabilities and taking into account all of the evidence that the Appellant deliberately attempted to manipulate the amendments to her policy to obtain some financial advantage by deliberately ignoring underwriting principles dictated by the insurance industry. He found that the Appellant’s dismissal was justified. There was evidence before the trial judge that entitled him to make those findings. The loss of premiums of $4,600.00 he considered as significant which he was entitled to find.
24While the reason for the original suspicion of the Appellant may have been to find reasons to remove her from the office to resolve staffing issues and to suit the Respondent’s business interests, I find that once the issue was raised, the trial judge found that the investigation by the Respondent revealed a proper basis for the dismissal. Following the reasoning in McKinley v. B.C. Tel [2001] S.C.R. 161 (S.C.C.), a balance must be struck between the severity of an employee’s misconduct and the sanction imposed.
25There was, in fact, a significant loss of premiums to the employer. This manipulation of her policy of auto insurance did, in fact, contravene underwriting principles according to the evidence of Mr. Feeney whose evidence was not contradicted. It did result in a financial loss to the insurance company. While the Respondent was not totally clear in her evidence what, if any, underwriting principles it did contravene, the evidence of Mr. Feeney was clear that the contravention existed.
26The trial judge did not accept that this loss was as a result of another employee making errors. He found that these acts were done by others, but were directed by the Appellant and controlled by her because of her position in the office and were done for her or her family’s direct financial benefit. The trial judge was clear in his findings of deliberate manipulation of the policy by the Appellant and a resultant financial loss to the Respondent. He was entitled on the evidence to make the findings that he did.
27I find no merit in the Appellant’s argument that the manipulation of her own policy was outside her scope of employment. I find no basis to carve out that aspect of her behaviour when the trial judge found that the policy was changed at the Appellant’s direction which took direct advantage of her position as a senior employee in the office and her influence over other more junior employees.
28There was a lack of “utmost good faith” on the part of the Appellant demonstrated in the evidence and confirmed by the trial judge. There was also misconduct and an element of dishonesty that was not trivial and was not condoned by the Respondent. On this basis, the employer can terminate for cause as set out in Ontario Regulation 288/01 under the Employment Standards Act, 2000.
29To be clear, this is not to say, however, that the underlying motivations and actions of the Respondent employer in how this termination came about or in the treatment of the Appellant at her dismissal meeting were laudable in any way.
30I find that the trial judge was alive to the issues in the trial. He took into consideration all the motivations for the Appellant’s dismissal including the discord within the office. I find no error made by the trial judge in applying the burden of proof, in analysing the evidence, in the reasons given or in the conclusions and inferences that he drew from the objective evidence before him.
31I therefore can find no merit in the grounds raised on this appeal.
32In the result, the appeal is dismissed.
33I will receive brief written submissions on costs by March 31, 2010.
MacLeod-Beliveau, J
Released: January 27, 2010
CITATION: Storms v. Quist, 2010 ONSC 638
COURT FILE NO.: DC-08-575-00AP
DATE: 2010-01-27
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Maxine Storms
Plaintiff/Appellant
– and –
Mary Quist & Associates Ltd
and Mary Quist
Defendant/Respondent
appeal decision
MacLeod-Beliveau, J
Released: January 27, 2010