Neutral Citation: 1995 ONICDRG 132

File No. A-010411

ONTARIO INSURANCE COMMISSION

BETWEEN:

PHILLIP ASSAM

Applicant

and

PRUDENTIAL OF AMERICA GENERAL INSURANCE COMPANY

Insurer

DECISION ON A PRELIMINARY ISSUE

Issues:

The Applicant, Phillip Assam, was injured in a motor vehicle accident on August 19, 1991. He applied for and received statutory accident benefits from Prudential of America General Insurance Company ("Prudential") payable under Ontario Regulation 672¹. Mr. Assam claimed weekly income benefits from March 22, 1992 to July 14, 1993 and ongoing beyond January 14, 1994 at the rate of $463.09 per week under section 12 of the Schedule. He referred his claims to mediation.

Prudential states that all the matters in dispute were settled at mediation, and therefore the Applicant cannot proceed to arbitration. Mr. Assam denies a settlement was concluded.

The preliminary issue to be determined is:

Did the parties settle their disputes at mediation?

The Applicant also claims his expenses incurred in the hearing.

Result:

The matters in dispute between the parties were settled at mediation. Accordingly, the Applicant cannot refer these matters to an arbitrator for determination.

The Applicant is not entitled to his expenses of this preliminary hearing.

Hearing on a Preliminary Issue:

The hearing on the preliminary issue was held in North York, Ontario, on August 14, 1995, before me, Fern Kirsch, Arbitrator.

Present at the Hearing:

Applicant:

Phillip Assam

Insurer's

Rudolph Lobl

Representative:

Barrister and Solicitor

Witnesses:

Phillip Assam

Donald Igbokwe

Exhibits:

See Schedule A

Cases referred To:

See Schedule B

Mediation Report (in part)

See Schedule C

Release (in part)

See Schedule D

Evidence and Submissions:

The question that I must decide is whether the parties settled their disputes at mediation. If there was a binding settlement, then Mr. Assam cannot proceed to arbitration. The Insurance Act² states at section 279 (2):

(2) Any restriction on a party's right to mediate, litigate, arbitrate, appeal or apply to vary an order as provided in sections 280 to 284 is void except where the restriction forms part of a settlement.

Before a settlement is entered into the insurer must provide to the insured person written notice containing a number of requirements. One such requirement is the following:

9.1 (1) In this section, "settlement" means an agreement between an insurer and an insured person that finally disposes of a claim or dispute in respect of the insured person's entitlement to one or more benefits under the Statutory Accident Benefits Schedule.

(2) Before a settlement is entered into between an insurer and an insured person, the insurer shall give the insured person a written notice that contains the following:

3. A statement that the insured person may rescind the settlement within two business days after the settlement is entered into by delivering a written notice to the insurer.

After the notice is received, "the settlement may be rescinded by the insured person, within two business days after the settlement is entered into, by delivering a written notice to the insurer."³ This "cooling-off' period provides protection for the insured person should he decide that he wishes to revoke the agreement.

The accident occurred on August 19, 1991. The mediation occurred on June 17, 1994. The report of the mediator⁴ indicated that the issues were resolved for the sum of $16,900.00 as full and final settlement. In addition, Prudential was to pay any outstanding physiotherapy expenses to June 16, 1994.

In April 1994, Mr. Assam had hired Joy Stothers, a senior benefits advisor⁵, to represent him at the mediation. Mr. Assam testified that he trusted Ms. Stothers to represent his interests, both before and during, but not after the mediation. No reason was given for this subsequent mistrust.

After mediation, Prudential sent correspondence dated June 17, 1994⁶ to Ms. Stothers, in which they enclosed a release.⁷

The release consisted of four pages.

Page four of the Release was the written notice from Prudential as required under section 9.1(2).

Page one was entitled "Full and Final Release" and contained a clause which stated the following:

...AND I HEREBY ACKNOWLEDGE RECEIPT of a Written Notice as required by s[ection]9.1 of Regulation 664 of the Revised Regulations of Ontario, 1990.

The release was signed by Mr. Assam on June 22, 1994, although Mr. Assam claimed to be unhappy with its contents. Mr. Assam confirmed that Ms. Stothers advised him at that time about the agreement, and he stated that he knew he could change his mind about signing the release. After it was signed, the release was sent to Prudential in correspondence dated June 23, 1994 and marked received by them on June 24, 1994.

Prudential immediately forwarded the $16,900.00 settlement cheque to Ms. Stothers by courier. Ms. Stothers then gave the cheque to Mr. Assam who endorsed and cashed it. The exact date when these latter events occurred is unclear.

Mr. Assam stated that he had been under a great deal of stress at the time of the mediation due to some real estate losses which occurred after the accident, as well as the death of his uncle on November 6, 1993. He also had been taking medication which he claimed confused his thinking. He stated that for these reasons he was unable to represent himself properly at mediation, and therefore misunderstood the proceeding. It was on this basis that Mr. Assam claimed that the mediation did not result in an agreement.

Mr. Assam also stated that the terms of the agreement were not met by Prudential, as physiotherapy expenses to the date of mediation had not been paid as required.⁸

Mr. Assam testified that as soon as the mediation was finished he contacted the mediator. He did not provide evidence of a date of this initial contact. He did confirm that he expressed his unhappiness with the settlement to the mediator on July 19, 1994, and was advised by her that he could not reopen the mediation.

Prudential claims that the issues were settled at mediation, and that Mr. Assam signed the release on June 22, 1994. They state that his subsequent failure to revoke the agreement by June 24, 1994 completed the agreement.

Mr. Igbokwe, the claims representative for Prudential, stated that the first time he personally spoke to Mr. Assam about his claims arising from the motor vehicle accident was on February 4, 1994.

In March 1994, Prudential made a settlement proposal directly to Mr. Assam. A full and final release was forwarded to him containing notice of the "cooling-off" period of two business days. Mr. Assam contacted Mr. Igbokwe shortly thereafter and requested that Prudential extend the "cooling off" period for a few more days. Prudential honoured the request. The matter did not settle.

Mr. Igbokwe confirmed that Mr. Assam actively participated in the mediation proceeding on June 17, 1994 represented by Ms. Stothers.

Mr. Igbokwe stated that after the mediation neither Mr. Assam or Ms. Stothers expressed any concerns about the terms of the settlement. He confirmed that the letter⁹ and Release¹⁰ with the required notice provisions, were forwarded to Ms. Stothers for signature, and received back by Prudential on June 24, 1994.¹¹

He stated that Prudential first heard about Mr. Assam's concerns with the settlement, after it received a copy of the Application for Arbitration dated August 3, 1994.

Findings:

I find that the Applicant and Prudential settled their disputes at the mediation held on June 17, 1994 which was confirmed by the failure of Mr. Assam to revoke the terms of the settlement by June 24, 1994. These findings are supported by the evidence of Mr. Assam, and Mr. Igbokwe.

Mr. Assam is a well educated man with a four year Bachelor of Arts Degree in environmental studies from Brock University. He was able to conduct this arbitration proceeding in a fairly sophisticated and shrewd fashion, despite the fact that the Insurer was represented by experienced counsel.

During his cross-examination, I observed Mr. Assam to be argumentative and evasive. I did not find him to be a believable witness.

Mr. Assam was present for the mediation, and did not deny that during this time he had the opportunity to consult with his representative and discuss with her the details and the merits of the proposed settlement.

Mr. Assam stated that although he agreed to the proposed settlement, he did not fully understand or appreciate all that transpired during the mediation discussion, because he was confused.

I do not believe or accept this assertion.

Mr. Assam had represented himself in prior negotiations with Prudential four months after his uncle had passed away. The mediation in question was seven months after his uncle's death. I do not believe that Mr. Assam was any more confused or upset during the latter formal mediation, than he was during the earlier negotiation.

I heard insufficient evidence to show that the medication that he was taking would cause mental confusion of the type alleged by Mr. Assam.

I find that Mr. Assam discussed the implications of the agreement reached at mediation with Ms. Stothers both at mediation and afterwards and he understood the agreement. I believe that if Mr. Assam had not understood the terms at settlement, he would not have signed the release six days later.

Even if Mr. Assam did not understand and was confused by the mediation process as he suggests, he had ample opportunity to consider his options.

He could have chosen not to sign the release when he subsequently met with Ms. Stothers after the mediation proceeding. Or, he could have contacted Prudential at any time up until June 24, 1994 to rescind the settlement if he had second thoughts.

Mr. Assam chose to exercise neither of these options.

He waited until July 19, 1994 to contact the mediator about his concerns with the terms of the agreement.

This is not a case of "honest misunderstanding", as outlined in the cases of Aggarwal¹² and Mouriopoulos¹³. I believe that this is simply a case where Mr. Assam had second thoughts as occurred in the case of Abedi.¹⁴ These second thoughts occurred well after June 24, 1994, the final day of the cooling-off period.

In Tiizin¹⁵, Arbitrator Palmer stated 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 this case, I heard no evidence to suggest fraud, mistake, misrepresentation or undue influence, or other vitiating factor.

In addition, I heard no evidence to support Mr. Assam's assertion that Prudential failed to pay all outstanding physiotherapy expenses to the date of mediation, so as to make the agreement void.

The account from St. Bernard's did not specifically show a physiotherapy component, nor was there sufficient evidence presented to indicate whether the taxicab trips were related to physiotherapy appointments.

In all the circumstances, I find that Mr. Assam made a final and binding settlement of his claims at mediation. This was confirmed by his signing of the Release on June 22, 1994, which he failed to revoke by June 24, 1994. Mr. Assam cannot therefore proceed to have these claims arbitrated.

Expenses:

Mr. Assam seeks an award of the expenses he has incurred in this preliminary hearing.

In the case of Pal¹⁶ on which I rely, Arbitrator Seife denied Mr. Pal's request for expenses and stated at page 13:

Under section 282(11) of the Act, the arbitrator has discretion to award to an insured person his or her expenses incurred in respect of an arbitration proceeding. The arbitrator's discretion is exercised taking into account the individual circumstances of each case, and having regard to the intent and purpose of the dispute resolution scheme of the Act.

The dispute resolution scheme is designed to facilitate the applicant's access to relatively inexpensive, speedy and informal adjudication of disputes. Mediation is an important and mandatory part of this process. It is designed to promote settlement and discourage litigation, by allowing the parties to conduct frank negotiations and resolve their disputes freely, in the manner they see fit. In my view, the parties are entitled to expect that disputes resolved in this manner will not be opened up at the whim of one party.

In this case Mr. Assam requested an arbitration of matters that were clearly settled at the mediation. He was unable to present any cogent reason or argument why I should not consider this matter settled at mediation. I find that he was not confused. He simply changed his mind. In keeping with the reasoning in the case of McCormick¹⁷, I find that this Application for Appointment of an Arbitrator was manifestly frivolous. The request for expenses is therefore denied.

Order:

1. The matters in dispute between the parties were settled at mediation. Accordingly, the Applicant cannot refer these matters to an arbitrator for determination.

2. Mr. Assam is not entitled to his expenses incurred in the arbitration.

September 22, 1995

Fern Kirsch

Arbitrator

Date

Schedule A

Exhibit 1 Funeral Service Program, dated November 6, 1993

Exhibit 2 Letter from S. Henderson, dated July 19, 1994

Exhibit 3 Release dated June 22, 1994

Exhibit 4 Cheque dated June 17, 1994

Exhibit 5 Letter from Warnock Hersey dated November 1, 1991

Exhibit 6 Note from Dr. Korda dated August 9, 1995

Exhibit 7 Letter and Invoice from St. Bernards dated January 25, 1995

Exhibit 8 Letter from Warnock Hersey dated August 20, 1992

Exhibit 9 Hospitalization Claim Form, dated September 1, 1993

Exhibit 10 Payments to Dufferin Central Physiotherapy, 5 pages

Exhibit 11 Letter from Prudential dated June 17, 1994

Other documents before the arbitrator

Report of Mediator dated June 17, 1994

Application for Appointment of an Arbitrator, dated August 3, 1994

Response by Insurer, dated August 23, 1994

Pre-hearing letter, dated May 1, 1995, February 8, 1995

Schedule B

Cases considered by the Arbitrator:

Raj Aggarwal and Allstate Insurance Company of Canada, June 17, 1993, OIC File No. A-002621

Raj Aggarwal and Allstate Insurance Company of Canada, (Appeal decision) June 30, 1994, OIC File No. P-002621

Fahimeh Abedi and Pilot Insurance Company, May 3, 1993, OIC File No. A-002705

Leon Albert Bailey and CAA Insurance Company (Ontario), October 29, 1992, OIC File No. A-001139

Rosie Buch and Pilot Insurance Company, November 7, 1994, OIC File No. A-005546 Nikolaos Mouriopoulos and The Citadel General Assurance Company, March 23, 1993, OIC File No. A-002166

Satya Pal and Guardian Insurance Company of Canada, October 24, 1994, OIC File No. A003633

Mehmet Tuzin and Allstate Insurance Company of Canada, May 28, 1992, OIC File No. A-000596

Randy A. Saunders and Canadian General Insurance Company, April 8, 1993, OIC File No. A-001531

Schedule C

Relevant portions of Mediation Report:

The mediation report dated June 17, 1994 of Serena Henderson states the following at page 2 and 3:

"6. Issues Resolved

Note: any resolution may be subject to the requirements with respect to settlements provided in section 9.1 of Regulation 664, R.O.O. 1990 as amended by Ontario Regulation 780/93, section 7.

The following issues have been resolved:

Issue: Interest

Details: On Overdue Payments

O.Reg.672, s.24(4) as amended.

Insured Claims interest on overdue payments. At mediation the parties agreed this is included in the lump sum outlined below.

Issue: Weekly Benefits

Details: Entitlement

O.Reg. 672, s. 12 or 13 as amended

Insured received weekly income benefits from August 27, 1991 up to and including March 22, 1992 and from July 14, 1993 up to and including January 14, 1994. Insured claims weekly income benefits from March 22, 1992 to July 14, 1993 and ongoing beyond January 14, 1994. At mediation the parties arrived at a lump sum resolution outlined below.

Issue: Weekly Benefits

Details: Quantum

O.Reg. 672, s. 12 or 13 as amended.

Insured received weekly income benefits at the rate of $185.00 under s. 13. Insured claims weekly income benefits at the rate of $463.09 under s. 12. At mediation the parties arrived at a lump sum resolution outlined below. Calculation for lump sum is based on $185.00 per week as per s. 13.

Issue: Lump Sum Amount: $16,900.00

Details: Resolution

At mediation the parties agreed to the following:

• Insurer will pay any outstanding physiotherapy expenses to June 16, 1994

• Insurer will pay the insured a lump sum of $16,900.00 as full and final resolution of all claims under the statutory accident benefits schedule.

• In exchange the insured will sign a full and final release for all claims under the statutory accident benefits schedule."

Schedule D

Relevant portions of the Release:

The Release was signed by the parties on June 22, 1994. The release in part states the following:

This Release is in respect of claims for Statutory Accident Benefits states in part at page 1:

"IN CONSIDERATION of the payment of $16,900.00 plus all previously paid accident benefits and which I direct to be paid to Philip Assam,

I/We hereby release and forever discharge Prudential of America General Insurance Company (Canada) form any and all actions, causes of actions, mediations, arbitrations, claims and demands for Statutory Accident Benefits including PAST, PRESENT, AND FUTURE CLAIMS under the Statutory Accident Benefits Schedule for medical benefits, rehabilitation benefits, care benefits, child care benefits, weekly benefits, under Policy No. 7092745 arising out of a motor vehicle accident which occurred on or about August 19, 1990, and from all claims which were the subject of Mediation and Arbitration under Ontario Insurance Commission File No. Mediation #010411.

AND I HEREBY ACKNOWLEDGE RECEIPT of a Written Notice as required by s. 9.1 of Regulation 664 of the revised Regulations of Ontario, 1990."

Footnotes

1. 1Prior to January 1, 1994, Ontario Regulation 672 was called the No-Fault Benefits Schedule. After that date it became the Statutory Accident Benefits Schedule - Accidents Before January 1, 1994. In this decision, the term "Schedule' will be used to refer to Regulation 672.
2. 2R.S.O. 1990, c.I.8, as amended .
3. 3Reg. 664, R.R.O. as amended, section 9.1(3).
4. 4Schedule C (Report of the Mediator in part).
5. 5Of Action Accidents Benefits
6. 6Exhibit 11
7. 7Exhibit 3 and Schedule D (Release in part).
8. 8These expenses included an account for St. Bernard's Convalescent hospital in the amount of $2,800.00 and amounts for taxicabs taken to physiotherapy on September 3, September 6, and September 13, in the amounts of $15.90, $15.70, $17.00, and $33.55 respectively.
9. 9Exhibit 11.
10. 10Exhibit 3.
11. 11Exhibit 3
12. 12Raj Aggarwal and Allstate Insurance Company of Canada, June 17, 1993, OIC File No. A-002621
13. 13Nikolaos Mouriopolos and The Citadel General Assurance Company, March 23, 1993, OIC File No.A-002166.
14. 14Fahimeh Abedi and Pilot Insurance Company, May 3, 1993, OIC File No. A-002705.
15. 15Mehmet Tuzin and Allstate Insurance Company of Canada, May 28, 1992, OIC File No. A-000596.
16. 16Satya Pal and Guardian Insurance Company of Canada, October 24, 1994, OIC File No. A-003633.
17. 17Ralph McCormick and Economical Mutual Insurance Company, October 2, 1991, OIC File No. A-000139.