Neutral Citation: 1993 ONICDRG 51
File No. A-006359
ONTARIO INSURANCE COMMISSION
BETWEEN:
IVORAL G. MALABRE
Applicant
and
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY
Insurer
DECISION ON PRELIMINARY ISSUE
Issue:
The Applicant, Ivoral G. Malabre, was injured in a motor vehicle accident on February 24, 1993. He applied for and received statutory accident benefits from the Insurer, payable under Ontario Regulation 6721. Weekly income benefits were terminated by the Insurer on July 3, 1993. The parties were able to resolve their dispute through mediation, but the Applicant applied for arbitration under the Insurance Act, R.S.O. 1990, c. I.8, as amended, to determine if the agreement reached at mediation is binding.
The issue in this hearing on a preliminary issue is:
- Was a valid agreement reached at the mediation conference on October 12, 1993?
The Applicant also claims interest on any outstanding amounts owing, and his expenses incurred in the hearing.
Result:
A valid agreement was reached at the mediation on October 12, 1993.
The Applicant is entitled to his expenses of the arbitration of the preliminary issue.
Hearing:
The hearing on the preliminary issue was held in North York, on June 16 and 17, 1994, before me, K. Julaine Palmer, arbitrator.
Present at the Hearing:
Applicant:
Ivoral G. Malabre
Applicant's
William Morris
Representatives:
Barrister and Solicitor
Sandra Windsor
Law Clerk
Insurer's
Robert S. Franklin
Representative:
Barrister and Solicitor
Insurer's
Robert DeGroot
Officer:
Claims Superintendent
Witnesses:
Ivoral Malabre
Helen Stoesz
Lorna Beckford
Robert Degroot
David Bailey
Mr. Malabre was assisted from time to time in giving his evidence by Billroy Powell, an interpreter in Jamaican Patois.
The parties filed 13 exhibits at the hearing.
Applicant's and Insurer's Submissions:
Ivoral Malabre was injured in a motor vehicle accident on February 24, 1993. At that time he was still suffering from the effects of an accident in which he had been seriously injured in March 1989. The Applicant contended that a rehabilitation case manager, Helen Stoesz, was retained by State Farm Mutual Automobile Insurance Company ("State Farm") prior to the mediation which was scheduled to be held October 12, 1993.
The Applicant alleged that Ms. Stoesz delivered a report to the offices of State Farm in Mississauga, by hand, on October 7, 1993. State Farm contended that this report did not reach the attention of either the file examiner or his supervisor prior to the mediation held on October 12, 1993.
The Applicant contended that the information contained in Ms. Stoesz' report was so significant that it rendered any agreement which was concluded on October 12, 1993, invalid. He contended that there was a duty on State Farm to disclose the existence of Ms. Stoesz' report to the mediator at the mediation conference. The Applicant further submitted that had the mediator been aware of Ms. Stoesz' report, the mediator would not have allowed the settlement which took place to result from the mediation conference.
The Insurer contended that there was no known duty in law with respect to the disclosure of the reports, even if they were in existence prior to the mediation conference, which it did not admit. The Insurer alleged that there was nothing in the reports of Helen Stoesz which Ivoral Malabre did not personally know at the time of the mediation conference.
Evidence and Findings
As a result of the accident of February 24, 1993, Mr. Malabre applied for and received weekly income benefits, in the amount of $185.60 per week, from March 31, 1993 to July 6, 1993, under section 12 of the Schedule. State Farm refused to pay weekly income benefits subsequent to July 6, 1993. Mr. Malabre referred the issue of his entitlement to weekly income benefits prior to March 31, 1993 and after July 6, 1993, to mediation, under section 280 of the Insurance Act.
Mr. Malabre's claim for weekly income benefits prior to March 31, 1993 and after July 6, 1993 was dealt with in mediation during the period August 30, 1993 to October 12, 1993. The parties signed a document entitled "MEMORANDUM OF AGREEMENT' on October 12, 1993. The document provides:
As a result of our mediation meeting, the parties have agreed to the following resolution:
In full settlement of Mr. Malabre's claim for weekly income benefits beyond July 6, 1993 and prior to March 31, 1993, State Farm will pay Mr. Malabre the sum of three thousand five hundred dollars ($3500.00) and also pay Mr. Malabre for all supplementary medical and rehabilitation expenses which he incurred on or before October 12, 1993 provided that appropriate claims for these expenses are submitted to State Farm and Mr. Malabre is entitled to re-imbursement for these expenses under section 6 of the No Fault Benefit Schedule. Mr. Mabre [sic] agrees to provide State Farm with a full and final release of all benefits under the No Fault Benefits Schedule.
In this arbitration, Mr. Malabre is claiming weekly income benefits, under section 12 of the Schedule, after October 12, 1993. He is also claiming the cost of a medical device, transportation and supportive counselling under section 6 of the Schedule. These items were recommended by Ms. Helen Stoesz, rehabilitation consultant, in her Report to State Farm dated October 6, 1993.
In the M. Tuzin and Allstate Insurance Company of Canada, May 28, 1992, OIC File No. A-000596 (Decision on Preliminary Issue), I made the following observations with respect to the role of an arbitrator in enquiring into the circumstances of a settlement agreement reached by the parties.
It is not the role of an arbitrator to go behind a settlement which has been achieved between competent parties, in cases where there has been no fraud, mistake, misrepresentation, undue influence, unconscionability, or other vitiating factor.
Mr. Malabre is not claiming the agreement reached at mediation should be set aside because he was unaware of the nature or the content of the agreement. The wording of the agreement, itself, is clear and unambiguous. Mr. Malabre does not claim to be under any legal disability. He is a 43 year old man who left school in Jamaica at age 14 after completing the fifth grade. He came to Canada at age 17. He was accompanied at the mediation by his girlfriend, Lorna Beckford, who testified at the hearing. Ms. Beckford has a certificate from a community college and work experience in the travel industry.
Mr. Malabre claims there was a duty to disclose the Stoesz report to him prior to reaching any agreement at mediation. He further claims that the mediator would have refused to allow the settlement which occurred, if the mediator had been in possession of the Stoesz report. In effect, without stating it, the Applicant's position appears to be that the agreement reached at the mediation was unconscionable, in light of the information contained in the Stoesz report.
Helen Stoesz, who holds a master's degree in social work, testified that she has been a private rehabilitation consultant since 1989. Ms. Stoesz testified that in September 1993, she learned from Mr. Malabre that Dr. Bruce Graham, his family doctor, wished her to become involved in his rehabilitation following the 1993 accident. Previously, Ms. Stoesz had worked with Mr. Malabre after his 1989 accident. Ms. Stoesz spoke with both Mr. Malabre and Dr. Graham before she telephoned David Bailey, claims representative of State Farm on September 28, 1993. During that conversation Ms. Stoesz related that Dr. Graham had asked for her involvement and Ms. Stoesz confirmed the Insurer's willingness to pay for an initial assessment report.
Ms. Stoesz's report of October 6, 1993, was delivered by her, personally, to the reception desk of the Insurer's offices on Hickory Drive in Mississauga on October 7, 1993. Ms. Stoesz indicated to the receptionist that she wished David Bailey, the claims representative handling Mr. Malabre's file, to have the report right away. She testified she was assured this would be done.
The account accompanying Ms. Stoesz' report is date-stamped "State Farm Mutual Automobile Insurance Co. Oct 27 9:42 PM '93". The Insurer's witnesses, the claims representative and the claims superintendent, who were present for the mediation claimed not to have been aware of Ms. Stoesz' report at the mediation. In fact, the claims representative denied he had ever heard of or spoken to Ms. Stoesz by telephone in late September 1993 and emphatically denied he had engaged her to provide him with any report whatsoever.
In arriving at my decision on this preliminary issue, I have had regard to the content of the Stoesz report, without considering whether there was any duty on the Insurer's part to disclose this report. The four page report is a complete summary of the medical diagnosis, treatment, and prognosis for Mr. Malabre since the 1993 accident, and describes his vocational, social and family situation. It ends with a rehabilitation appraisal and four specific recommendations.
In my view, the report contains no information which would render the settlement reached at mediation unconscionable. However, the information summarized from a neuropsychological assessment obtained after the 1989 accident might have shed some light on Mr. Malabre's intellectual capacity and social presentation.
I make no finding as to whether Helen Stoesz was retained by State Farm to conduct an initial rehabilitation assessment, nor whether her report was in the Insurer's hands prior to the October 12, 1993 mediation. To make such findings would require me to prefer the evidence of Helen Stoesz over that of David Bailey, or vice versa. In light of my view of the contents of the report, it is unnecessary for me to make such a finding.
Similarly, I make no comment on whether an Insurer owes a duty to an insured person under the Schedule to disclose at mediation the content of any report which it has received. I would only note that the Schedule does not required under section 23(2) [section 2.55 of the policy] that a copy of a report from a qualified medical practitioner, psychological advisor or chiropractor obtained under that section be provided to the insured person. Conversely, section 7(4) of Ontario Regulation 676 [section 4.18 of the policy] dealing with "Uninsured Automobile Coverage" provides that the Insurer shall provide a copy of such a report to the person or his representative.
In the result, then, I find no vitiating factor such that the agreement reached by the parties on October 12, 1993, should not be upheld. As I have stated before, all parties to such settlements must deal with each other in good faith. Signing such an agreement is a serious matter.
Expenses:
The Applicant seeks an award of the expenses he has incurred in this arbitration. An award for expenses may be made under section 282(11) of the Insurance Act, which provides as follows:
The arbitrator may award to the insured person such expenses incurred in respect of an arbitration proceeding as may be prescribed in the regulations to the maximum set out in the regulations.
The prescribed expenses and amounts are set out in Schedule 1 of the Dispute Resolution Practice Code and in Ontario Regulation 664, R.R.O. 1990, Dispute Resolution Expenses.
In Ralph McCormick and Economical Mutual Insurance Company October 2, 1991, OIC File No. A-000139, Arbitrator Susan Naylor made the following comments about expenses, with which I agree:
The discretion to award expenses should be exercised, having regard to the intent and purpose of the legislative scheme. The arbitration process has been established under the Insurance Act, as amended, in order to facilitate applicants' access to relatively inexpensive, speedy and informal adjudication of disputes regarding no-fault benefits. The discretion to award expenses should be exercised in accordance with this objective, having regard to the individual circumstances of each case.
Accordingly, it is appropriate to award an applicant his or her expenses, unless, in the circumstances of the particular case, it is determined that the application for appointment of an arbitrator was manifestly frivolous or vexatious, or that the applicant's conduct unreasonably prolonged the proceedings.
The Director of Arbitrations approved this statement of the principles guiding an award of expenses in the appeal decision in Vito Luigi Calogero and The Co-Operators General Insurance Company, February 13, 1992, OIC File No. P-000251.
In this case, the Applicant raised serious questions about whether an agreement concluded at mediation should be upheld. I exercise my discretion in allowing Mr. Malabre his expenses as set out in Schedule 1 of the Dispute Resolution Practice Code. In the event that the parties cannot agree as to the total amount of expenses, a party may apply for assessment of the expenses.
Order:
A valid agreement was reached at the mediation on October 12, 1993.
The Applicant is entitled to his expenses incurred in respect to the arbitration of the preliminary issue.
August 29, 1993
K. Julaine Palmer
Arbitrator
Date