Neutral Citation: 1994 ONICDRG 109
File No. A-007153
ONTARIO INSURANCE COMMISSION
BETWEEN:
WICTORIA KOWALIW
Applicant
and
WAWANESA MUTUAL INSURANCE COMPANY
Insurer
DECISION ON PRELIMINARY ISSUE
Issues:
The Applicant, Wictoria Kowaliw, was injured in a motor vehicle accident on February 16, 1991. She applied for and received statutory accident benefits from the Wawanesa Mutual Insurance Company ("Wawanesa") payable under Ontario Regulation 6721. Weekly income benefits were terminated by the Insurer in September, 1991. The parties participated in two mediations, in an attempt to resolve Ms. Kowaliw's claim for ongoing benefits. Wawanesa claims that the dispute was settled and therefore the Applicant cannot proceed to arbitration. In the alternative, it claims that the Application for the Appointment of an Arbitrator was brought out of time.
The Applicant denies a settlement was concluded and also denies that the Application for the Appointment of an Arbitrator was made out of time.
The preliminary issue to be determined is:
Is the Applicant precluded from proceeding to arbitration, either on the basis that the application for the appointment of an arbitrator was made out of time, or on the basis that the dispute was settled?
Result:
The matters in dispute between the parties were settled at mediation. Accordingly, the Applicant cannot refer these matters to an arbitrator for determination.
Hearing:
The hearing was held at the offices of the Ontario Insurance Commission in North York, Ontario, on October 24, 1994 before me, Frederika Rotter, Senior Arbitrator.
Present at the Hearing:
Applicant:
Wictoria Kowaliw
Applicant's
Yaroslav Mikitchook
Representative:
Barrister and Solicitor
Insurer's
Guy M. Farrell
Representative:
Barrister and Solicitor
Insurer's
Mina Cosolo
Claims Supervisor:
Ukrainian Interpreter:
Victor Tsimagouridze
Documents before the arbitrator
The documents before the arbitrator and a list of authorities referred to are listed in Appendix A. A copy of the Adjournments Policy of arbitration unit is at Appendix B.
Evidence and Findings
Request for Adjournment
The hearing was held on Monday October 24, 1994. The first issue before me was a request for an adjournment by the Applicant. Mr. Mikitchook, the Applicant's counsel, indicated that an adjournment was being sought "for reasons of privilege", in order to allow the Applicant to retain new counsel in this matter.
The Ontario Insurance Commission arbitration file shows that on 3:40 p.m. of the working day prior to the hearing, namely Friday, October 21, 1994, counsel sent a facsimile letter to the office of the Registrar, which states as follows:
For reasons I cannot disclose for reasons of privilege, I am unable to continue to act for Mrs. Kowaliw and accordingly, am seeking an adjournment for her to obtain other counsel.
A handwritten notation by the Registrar indicates that he spoke with Mr. Mikitchook by telephone, and advised him to attend at the hearing and address the arbitrator with respect to his request for an adjournment.
I declined to grant the adjournment. The request for the adjournment did not comply with the process outlined in the Adjournments Policy of the Commission, which had been brought to the attention of the parties at the pre-hearing. A copy of the Adjournments Policy was enclosed with the pre-hearing letter and is attached hereto, at Appendix B.
Neither the Commission nor the Insurer had sufficient notice of the adjournment request. No reasonable or sufficient grounds for requesting the adjournment were advanced. After some discussion with counsel for the Applicant, he conceded that the "privilege" considerations he had raised were relevant to the substantive issue in dispute between the parties, but had no bearing on the preliminary issues before me. Accordingly, I proceeded with the hearing on the preliminary issue.
Was the dispute settled?
Wawanesa claims that the parties settled the issue of Ms. Kowaliw's entitlement to ongoing weekly income benefits. If a binding settlement was reached, then Ms. Kowaliw cannot proceed to arbitration.
Wawanesa presented evidence in support of its claim that this dispute was settled through Mina Cosolo, Claims Supervisor.
She testified that the motor vehicle accident occurred on February 16, 1991. Wawanesa initially paid Ms. Kowaliw weekly income benefits until July 19, 1991, and informed her of the termination in a letter dated June 10, 1991 (Exhibit 1). After some discussion with the Applicant, her benefits were extended to September 9, 1991 (Exhibit 2).
Ms. Kowaliw disputed the termination of her benefits, and a mediation took place between November, 1991 and January, 1992. That mediation resulted in a procedural settlement, as evidenced by the Report of Mediator dated January 14, 1992. The parties agreed that Ms. Kowaliw would be reassessed by two doctors, Drs. Kronby and Newall, and benefits would be reinstated or not, based on the results of the assessments.
Ms. Cosolo testified that Wawanesa received a report from its assessor, Dr. Kronby, dated February 18, 1992. Dr. Kronby examined the Applicant on February 18, 1992 and concluded that she was not "significantly disabled from doing her previous chores as a homemaker as of the present time".
Dr. Newall was not able to provide an assessment for Ms. Kowaliw, so she was seen by Dr. Lotto on April 29, 1992. The Applicant's counsel felt, based on the assessment of Dr. Lotto, that his client should be entitled to benefits for at least one month past the date of that assessment (Exhibit 4).
Subsequently, in a letter dated August 8, 1992 (Exhibit 5), Mr. Mikitchook referred to "the issue of resolving my client's claim in totality". He referred to amounts which he considered were due and also referred to a claim for "my clients [sic] future disability payments".
Further negotiations took place between the parties, as evidenced by a letter from Mr. Mikitchook to Wawanesa, dated October 5, 1992 (Exhibit 6).
Finally, on December 10, 1992, Mr. Mikitchook wrote to Wawanesa as follows: (Exhibit 7)
Further to my telephone conversation with you on November 16th, 1991 I have now received instructions from my client to settle in the sum of $8,750.00.
Kindly forward your companies [sic] cheque and I shall hold same in escrow pending my client signing and my forwarding to you a duly executed Full and Final Release.
The original letter, Exhibit 7, bears a handwritten notation, as follows: "8375.00 pd to lawyer in trust".
Ms. Cosolo testified that the handwriting was hers, and that she had made the note on December 15, 1992 following a conversation with Mr. Mikitchook on that day. She testified that the conversation was more fully documented in Exhibit 8 - a handwritten document entitled "Adjuster Notes". The document is dated December 15, 1992 and refers to the Applicant's name and claim number. It states as follows:
called insd's lawyer - Mr. Mikitchook
599-2811
discussed his letter of Dec. 10/92
our original offer was 7500 (keeping in mind I would also settle for 8000)
Lawyer got instructions to settle for 8750.00
I maintained our figure of 8000.00 all in.
after a lot of arguing back and forth we decided to split the difference
our offer was based on benefits up to our IME report of Feb. 14/92
their IME was done on April 29\92 - prognosis was at that time 2 mos/after IME date
if we were to calculate extra benefits up to at least 1/2 way to Apr 29/92, we would be paying around 8300.00
therefore settled for $8375.00
make cheque payable to lawyer in trust
he will send release
file is settled
Ms. Cosolo testified that based on her conversation with Mr. Mikitchook, as documented in the note, she prepared a release form, and had a cheque issued to Mr. Mikitchook, in trust. She testified that it was her understanding, from the conversation, that Mr. Mikitchook had authority and instructions from his client to settle.
Exhibit 9 is a hand-completed form dated December 15, 1992, entitled "Claim File Transaction". The document verifies that a cheque to Mr. Mikitchook "In Trust", in the amount of $8375.00 was issued in respect of Ms. Kowaliw's claim. A column headed "closed claim supp SP" is checked off. The document bears the handwritten notation "paid final as per settlement - close file". The document bears Ms. Cosolo's initials. Ms. Cosolo testified that she completed the form on December 15, 1992, following her conversation with Mr. Mikitchook.
The cheque was issued and paid out into Mr. Mikitchook's trust account. Ms. Cosolo testified that she did not receive the release, as had been agreed to. Instead, she received a letter from Mr. Mikitchook on May 4, 1993,(Exhibit 10) acknowledging receipt of the cheque from Wawanesa which was "deposited in my trust account pending my client's execution of the Full and Final Release". The letter indicates that in the interim, Ms. Kowaliw's condition had "turned for the worse". The letter then states:
With respect to the cheque forwarded to you with the contents of the consultation report I am prepared to recommend my client accept same for all payments due to her to and including the cut off date we agreed upon. Thereafter, I propose that my client's claim be calculated at the usual rate.
Ms. Cosolo testified that this was the first indication that Wawanesa had received about a problem with the purported settlement. Ms. Cosolo replied to Mr. Mikitchook by way of a letter dated June 9, 1993, (Exhibit 11) indicating that Wawanesa's position was that the cheque which had been issued represented a Full and Final Settlement of Ms. Kowaliw's claim.
Ms. Kowaliw subsequently re-mediated her claim for weekly benefits in April, 1994. She took the position that the cheque issued represented a settlement only of her claims up to April 1, 1992. Wawanesa claimed that the payment represented a Full and Final Settlement. Wawanesa argued that the Applicant could not proceed to arbitration since her claim was settled by the payment of $8375.00 in December, 1992.
It also took the position that the Application for the Appointment of an Arbitrator was made out of time, pursuant to section 281 (5) of the Insurance Act.
I find I need not deal with the issue of the timeliness of the application for the appointment of an arbitrator. I conclude that the Applicant and Wawanesa did indeed settle their dispute on December 15, 1992, based on the evidence before me, which was not contested by Ms. Kowaliw. It was not until some five months after receipt of the final settlement cheque that Ms. Kowaliw's counsel indicated to Wawanesa that there might be a problem with respect to the settlement.
Ms. Kowaliw was represented by experienced legal counsel whom she retained for the purpose of representing her with respect to her claim under the Schedule. This is not a case of "honest misunderstanding", of the terms of a legal contract, such as occurred in the cases of Raj Aggarwal and Allstate Insurance Company of Canada, June 17, 1993, OIC File No. A-002621, Nikolaos Mouriopoulos and the Citadel General Assurance Company, March 23, 1993, OIC File No. A-002166 and Samuel David and Simcoe & Erie General Insurance Company, July 15, 1994, OIC File No. A-006399.
The facts in this case are similar to the facts in Rosie Buch and Pilot Insurance Company, November 7, 1994, OIC File No. A-005546. In that case, I referred to the statement of Arbitrator Palmer in Mehmet Tuzin and Allstate Insurance Company of Canada, May 28, 1992,
OIC File No. A-000596, that as a general rule:
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, or other vitiating factor.
In the present case, counsel for the Applicant has failed to raise or refer to any vitiating factor. This is a case like Fahimeh Abedi and Pilot Insurance Company, May 3, 1993, OIC File No. A-002705, which "simply involves one party having second thoughts". However, such second thoughts cannot relieve Ms. Kowaliw of her obligations under a legal and binding contract.
I find that Ms. Kowaliw entered into a final and binding settlement of her claims on December 15, 1992.
In the absence of any evidence to support Ms. Kowaliw's position that this matter was not the subject of a final settlement, I am declining to exercise my jurisdiction to make an award of expenses in favour of Ms. Kowaliw.
Order:
The matters in dispute between the parties were settled at mediation. Accordingly, the Applicant cannot refer these matters to an arbitrator for determination.
November 18, 1994
Frederika Rotter
Senior Arbitrator
Date
APPENDIX A
Documents Before the Arbitrator
Exhibits
Exhibit 1
Letter dated June 10, 1991 from Wawanesa to Wictoria Kowaliw
Exhibit 2
Letter dated October 28, 1991 from Wawanesa to Wictoria Kowaliw, with Assessment of Claim form
Exhibit 3
Report of Dr. Kronby, dated February 18, 1992
Exhibit 4
Letter from Mr. Mikitchook to Wawanesa dated July 17, 1992
Exhibit 5
Letter from Mr. Mikitchook to Wawanesa dated August 8, 1992
Exhibit 6
Letter from Mr. Mikitchook to Wawanesa dated October 5, 1992
Exhibit 7
Letter from Mr. Mikitchook to Wawanesa dated December 10, 1992
Exhibit 8
Wawanesa's adjuster notes dated December 15, 1992 regarding Kowaliw claim
Exhibit 9
Hand-completed form dated December 15, 1992, entitled "Claim File Transaction"
Exhibit 10
Letter from Mr. Mikitchook to Wawanesa dated May 4, 1993
Exhibit 11
Letter from Wawanesa to Mr. Mikitchook, dated June 9, 1993
Other documents before the arbitrator
Report of Mediator, dated January 14, 1992
Report of Mediator, dated April 7, 1994
Application for appointment of an arbitrator, dated May 2, 1994
Pre-hearing letter dated August 11, 1994
Cases referred to
Raj Aggarwal and Allstate Insurance Company of Canada, June 17, 1993, OIC File No. A-002621
Rosie Buch and Pilot Insurance Company, November 7, 1994, OIC File No. A-005546
Samuel David and Simcoe & Erie General Insurance Company, July 15, 1994, OIC File No. A-006399.
Nikolaos Mouriopoulos and the Citadel General Assurance Company, March 23, 1993, OIC File No. A-002166
Mehmet Tuzin and Allstate Insurance Company of Canada, May 28, 1992, OIC File No. A-000596
Fahimeh Abedi and Pilot Insurance Company, May 3, 1993, OIC File No. A-002705