Neutral Citation: 1996 ONICDRG 78
ONTARIO INSURANCE COMMISSION
BETWEEN:
JEANNE LECLERC
Applicant
and
ALLSTATE INSURANCE COMPANY OF CANADA
Insurer
DECISION ON A PRELIMINARY ISSUE
Issues:
The Applicant, Jeanne LeClerc, was injured in a motor vehicle accident on February 26, 1992. She claimed benefits from Allstate Insurance Company of Canada ("Allstate") and her claims were mediated pursuant to the Insurance Act, R.S.O. 1990, c.I.8, as amended (the "Act"). The Report of Mediator dated July 29, 1992 indicates that all issues mediated were fully and finally settled. Mrs. LeClerc disputes that her claims were settled. Pursuant to the Act, she applied on January 27, 1995 for arbitration of her claims for accident benefits as provided under the Statutory Accident Benefits Schedule - Accidents Before January 1, 1994 (the "Schedule").
The issue in this hearing is:
- Is Mrs. LeClerc entitled to proceed to the arbitration of her claims?
(a) Were her claims against Allstate settled at mediation on July 27, 1992?
(b) Are Mrs. LeClerc's claims against Allstate barred by the limitation period set out in section 281(5) of the Act?
Result:
Mrs. LeClerc is not entitled to proceed to arbitration of her claims against Allstate.
Mrs. LeClerc is not entitled to her expenses incurred in the arbitration pursuant to section 282(11) of the Act.
Allstate is not entitled an award to be paid by Mrs. LeClerc pursuant to section 282(11.2) of the Act.
Hearing:
The hearing was held in Sudbury, Ontario, on February 6, 1996 before me, Beth Allen, arbitrator. Written submissions were submitted by the parties by March 8, 1996.
Present at the Hearing:
Applicant:
Jeanne LeClerc
Applicant's Representative:
Michael J. Mason Barrister and Solicitor
Insurer's Representative:
Richard F.L. Rose Barrister and Solicitor
Insurer's Officer:
Livinia Del Bel Belluz Claims Manager
Witnesses:
For The Applicant:
Jeanne LeClerc
For The Insurer:
Frank Castaldo Livinia Del Bel Belluz
Exhibits: Listed in Schedule "A."
Authorities: Both counsel submitted bound briefs of legal authorities.
THE SETTLEMENT ISSUE:
Background:
Mrs. LeClerc is a 53 year old woman whose first language is French. She is, however,
conversant in English. She waived her right to an arbitration conducted in French and the hearing proceeded in English. At the commencement of the hearing, I confirmed with Mrs. LeClerc that she was comfortable with proceeding in English.
Mrs. LeClerc was involved in three motor vehicle accidents, the first on May 11, 1990, the second on October 1, 1990 and the third on February 26, 1992. Canadian Surety is the insurer for the second accident. Allstate is the insurer for the third accident, which is the subject matter of this arbitration.
Mrs. LeClerc applied to Allstate for accident benefits by application dated March 5, 1992. An Assessment of Claim by Insurer dated March 16, 1992 indicates that Mrs. LeClerc's claim for disability benefits was denied pending investigation of the claim. A further Assessment of Claim by Insurer dated June 17, 1992 similarly denied a claim for housekeeping expenses.
In November 1992, Mrs. LeClerc filed an Application for the Appointment of a Mediator in connection with her dispute with Allstate.
On March 1, 1992, Canadian Surety received an application for disability benefits, primary care and housekeeping benefits from Mrs. LeClerc in connection with the October 1990 accident. These benefits were denied so she applied for mediation of these claims as well.
Mrs. LeClerc's claims against Allstate and Canadian Surety were jointly mediated in a face-to-face mediation which took place on July 27, 1992 in Sudbury, Ontario. Present at the mediation were: the mediator, Mrs. LeClerc, Allstate's representative, Ms. Del Bel Belluz and Canadian Surety's representative, Mr. Castaldo.
On the day of the mediation, two Memoranda of Agreement dated July 27, 1992 were signed - one by Mrs. LeClerc, Ms. De Bel Belluz and the mediator and the other by Mrs. LeClerc, Mr. Castaldo and the mediator. Two Reports of Mediator, one dated July 29, 1992 (re: Allstate) and the other dated July 28, 1992 (re. Canadian Surety) indicate that full and final lump sum settlements inclusive of interest were reached. The Report of Mediator with respect to Allstate indicates a settlement of Mrs. LeClerc's weekly benefits, primary care and supplementary medical and rehabilitation claims. The Report of Mediator with respect to Canadian Surety reports a settlement of weekly benefits, primary care, dependant care and medical expenses. According to Mr. Castaldo, the housekeeping claim was omitted by the mediator in error. Mr. Castaldo explained that the housekeeping claim against Canadian Surety was settled, although it was not included in the Report of Mediator. Mr. Castaldo claimed that he contacted the mediator to have the Report of Mediator amended, but it was never amended. However, he pointed out that the Memorandum of Agreement refers to the housekeeping claim.
Confirmations of Settlement were also signed - one by Ms. Del Bel Belluz on August 11, 1992, another by Mrs. LeClerc on September 23, 1992 in connection with the Allstate matter; and one by Mr. Castaldo on August 13, 1992 in connection with the Canadian Surety matter. Mr. Castaldo claimed that Mrs. LeClerc also signed a Confirmation of Settlement, although Canadian Surety did not have a copy of it on file.
Both Allstate and Canadian Surety released to Mrs. LeClerc lump sum settlement cheques of $6,250 and $7,250 respectively.
Subsequently, by applications dated January 18, 1993 and March 18, 1993, Mrs. LeClerc applied for arbitration against Allstate and Canadian Surety respectively, but eventually withdrew these applications by letter dated May 27, 1993. She never reapplied for arbitration against Canadian Surety, however, she made the current application for arbitration against Allstate on January 27, 1995.
ARGUMENTS ON THE SETTLEMENT ISSUE
Mrs. LeClerc's Argument:
Counsel for Mrs. LeClerc argued that the settlement reached at mediation was not valid because Mrs. LeClerc could not understand the content or consequences of the mediation process. Mrs. LeClerc testified as to her understanding of the consequences of the July 27, 1992 mediation. She indicated that she thought that her claims against both insurers were settled up to July 27, 1992, but she would still be entitled to claim benefits after mediation.
Mrs. LeClerc claims that during mediation, which was conducted mainly in English, she was disadvantaged by: a language barrier, a lack of education and psychological problems which made her incompetent to reach a valid settlement agreement. In her view, the matter, not having been validly settled, should proceed to arbitration.
Mrs. LeClerc admitted that the mediator translated into French those parts of the discussions which she indicated she did not understand. Mrs. LeClerc pointed out that the mediator spoke French during caucuses with her. Despite this, Mrs. LeClerc argued that she did not understand the proceeding. According to Mrs. LeClerc, the language barrier coupled with her minimal formal education resulted in her failure to understand the effect of the mediation process on her rights. Mrs. LeClerc has a grade seven elementary school education and left school at about age 16.
Under cross-examination by counsel for Allstate, Mrs. LeClerc admitted to signing the Memorandum of Agreement with respect to Allstate, but did not recall whether the mediator had translated it to her. She also denied remembering whether the mediator translated the Memorandum of Agreement with respect to Canadian Surety.
Mrs. LeClerc appeared to experience memory problems during the hearing. When asked questions about the mediation process, she could not recall a great deal. She testified that, at the time of mediation, she was under the psychiatric care of Dr. McFarthing and believed she was also taking psychiatric medication at the time. At the mediation Mrs. LeClerc submitted a psychiatric medical report dated July 22, 1992, prepared by Dr. McFarthing. This report relates Mrs. LeClerc's history of psychiatric ailments dating back to 1990. According to Mr. Castaldo, the report was produced at mediation but not discussed. Mrs. LeClerc testified that she suffered from emotional problems at the time of mediation which included panic attacks and nightmares resulting from being victimized in a robbery of her business in 1988 or 1989. She indicated that she was experiencing memory problems, nervousness and stress during the mediation.
In conclusion, counsel for Mrs. LeClerc argued that during mediation Mrs. LeClerc was in a position of unequal bargaining power in relation to the other parties to the mediation and had been subjected to high-pressure settlement negotiations. She was disadvantaged by a language barrier and a lack of education and was emotionally unfit to understand the process. She was confused by the multiplicity of automobile accidents in which she had been involved and the changes in the legislative schemes governing her accidents. Moreover, she was not represented by legal counsel at the mediation. For all of these reasons, counsel for Mrs. LeClerc argued that the principle of non est factum is applicable to set aside the settlement purportedly reached at mediation.
Allstate's Argument:
Allstate's position is that because the parties fully and finally settled Mrs. LeClerc's claims at mediation she is not entitled to proceed to arbitration.
Counsel for Allstate submitted that three documents clearly evidence that the mediation of July 27, 1992 resulted in a valid settlement of all of Mrs. LeClerc's accident benefit claims against Allstate: the Memorandum of Agreement, the Report of Mediator and the Confirmations of Settlement signed by both Ms. Del Bel Belluz and Mrs. LeClerc. This evidence is further substantiated by Canadian Surety's evidence that similar documents generated by the same mediation process confirmed a settlement of Mrs. LeClerc's claims against it.
Allstate also relies on the oral evidence of its witnesses, Ms. Del Bel Belluz and Mr. Castaldo who were present at the mediation in question and testified about their understanding of the July 27, 1992 mediation.
Mr. Castaldo and Ms. Del Bel Belluz confirmed that mediation was conducted mainly in English. The mediator translated into French any portion of the discussion that Ms. LeClerc did not understand. The mediator explained the relevant disability test to Mrs. LeClerc. According to Ms. Del Bel Belluz the mediation lasted about five hours in total - from about 9:00 a.m. to 2:00 p.m. Initially, the four participants met together for about two hours. The mediator caucused jointly with the insurance representatives for about fifteen minutes in Mrs. LeClerc's absence. Next, there was a discussion among all participants for about one-and-a-half hours. The mediator then caucused with Mrs. LeClerc separately and, in conclusion, all the parties met together for about fifteen minutes.
Ms. Del Bel Belluz indicated that the lump sum amount of $6,250 was arrived at during negotiations between herself, as the Allstate representative, and Ms. LeClerc. According to Ms. Del Bel Belluz, Mrs. LeClerc understood that the lump sum amount included interest and that it was in settlement of all present and future claims against Allstate. Ms. Del Bel Belluz described the tenor of the mediation as involving an open exchange of opinions through which the parties grew to understand each other's respective positions. Both Mr. Castaldo and Ms. Del Bel Belluz emphasized that, with respect to Mrs. LeClerc's claims against their respective principals, all issues were on the table when they made their respective offers of settlement.
The Memorandum of Agreement with respect to Allstate was prepared by the mediator and states as follows:
The insurer shall pay the insured a lump sum payment of $6,250 in settlement, full and final of all issues of this mediation, inclusive of interest. This includes weekly benefits, medical expenses, child care and housekeeping.
According to Ms. Del Bel Belluz and Mr. Castaldo, this Memorandum of Agreement was read to Mrs. LeClerc in both English and French before she signed it. Subsequently, Ms. Del Bel Belluz received the Report of Mediator and the Confirmation of Settlement, the contents of which were in accord with the Memorandum of Agreement. The Confirmation of Settlement contains what Mrs. LeClerc admitted is her signature. Allstate sent the lump sum cheque to Mrs. LeClerc on July 30, 1992. Mrs. LeClerc did not deny cashing the cheque.
Both Mr. Castaldo and Ms. Del Bel Belluz testified that during the mediation Mrs. LeClerc did not appear to be experiencing emotional problems or displaying irrational behaviour. Mr. Castaldo testified that he had a number of prior dealings with Mrs. LeClerc in connection with two of her accidents. On only one occasion, during a meeting with her, did Mrs. LeClerc get upset and leave the meeting in anger, flailing her arms. Mr. Castaldo indicated that he did not have the general impression that Mrs. LeClerc was high-strung. Both Mr. Castaldo and Ms. Del Bel Belluz thought that Mrs. LeClerc clearly understood that there had been a full and final settlement of all claims against Allstate and Canadian Surety.
During cross-examination, counsel for Allstate elicited evidence suggesting that Mrs. LeClerc was not as unsophisticated as her testimony suggests. He questioned her about her business experience. Mrs. LeClerc admitted that, for about a three-year period, she had operated a jewellery business. Although she hired someone to keep the books, she dealt with the other aspects of the business. She also admitted that the business was successful and that when she was robbed in 1988 or 1989, she lost over $100,000. Mrs. LeClerc also admitted to having other experience in the sales field.
Mrs. LeClerc also admitted during cross-examination that she had some assistance from both her friend, Simone Bradley, and her husband, before the July 27, 1992 mediation. At the time, Ms. Bradley was also involved with a claim for accident benefits. Although Mrs. LeClerc admitted that by the time of the mediation she had retained three lawyers in connection with her accidents, it was not clear whether she had received advice from any of them before the July 27, 1992 mediation.
Reasons for decision on the settlement issue:
I have reviewed all of the evidence and have come to the conclusion that Mrs. LeClerc and Allstate validly settled Mrs. LeClerc's claims for weekly benefits, primary care and supplementary medical and rehabilitation benefits.
I took into account Mrs. LeClerc's claims of a language barrier, her lack of formal education and her emotional problems. I also considered whether the evidence supports a finding that Mrs. LeClerc was a victim of unequal bargaining power and high-pressure negotiations. However, I find Ms. Del Bel Belluz' and Mr. Castaldo's evidence about the mediation to be credible and more convincing than that of Mrs. LeClerc.
On the language issue, Ms. Del Bel Belluz and Mr. Castaldo testified independently that the mediator translated portions of the mediation discussions at Mrs. LeClerc's request and read the the Memoranda of Agreement to Mrs. LeClerc in both English and French. Significantly, Mrs. LeClerc confirmed an important aspect of their evidence. She admitted that the mediator translated the mediation discussions to her when she requested. Her memory was inconsistent as to whether mediation documents were translated. But she did not deny that the documents were translated to her.
It is not disputed that the mediator translated the mediation discussions when needed. I find, however, that the Ms. Del Bel Belluz' and Mr. Castaldo's evidence regarding document translation is reasonable. They both witnessed the translation of the Memoranda of Agreement and Mrs. LeClerc signing the Memoranda. I conclude it is logical that, if the mediator made the effort to translate the discussions leading up to the signing of the Memoranda, it would be reasonable for him to have translated the contents of the Memoranda before Mrs. LeClerc signed them.
I therefore find, that Mrs. LeClerc was afforded the opportunity to understand and did in fact understand the mediation discussions.
I add to this finding my observations of Mrs. LeClerc during the hearing. Prior to the arbitration Mrs. LeClerc apparently waived her right to have the hearing conducted in French. She expressly waived this right at the hearing. At the commencement of the hearing, I instructed Mrs. LeClerc to advise me of any difficulty she might experience understanding the arbitration proceeding. The arbitration was conducted entirely in English. I find that Mrs. LeClerc did not demonstrate difficulty comprehending what was being said. While she asked for clarification of questions on a few occasions, once questions were rephrased, her answers were appropriate. Her requests for clarification were not inordinate and were not unlike the requests made by English-speaking witnesses who are inexperienced in legal proceedings.
I found that participants in the hearing, including myself, had to ask Mrs. LeClerc on a number of occasions to repeat herself. However, these requests stemmed more from the fact that Mrs. LeClerc spoke quickly than from her inability to speak English comprehensibly. On the whole, Mrs. LeClerc's oral evidence reflected that she had adequate facility with English during the arbitration proceeding.
In coming to this conclusion, I recognize that the mediation in question took place almost three-and-a-half years before arbitration and it is possible that Mrs. LeClerc's English skills have improved over this period. However, I find it more likely that her English skills at arbitration approximated her skills at mediation. She had the added advantage at mediation of having a French-speaking mediator who translated parts of the discussions and the documents to her. This strengthens my finding that she did not suffer from a language barrier at mediation.
I considered whether Mrs. LeClerc's minimal education rendered her too unsophisticated to have understood the mediation process and its consequences on her rights. Again, I looked at her conduct in the hearing. While she seemed nervous at the hearing, Mrs. LeClerc seemed to understand the proceeding. She did not appear confused. I find it unlikely that she would have been significantly less sophisticated at mediation almost three-and-a-half years earlier.
I was further persuaded of her level of sophistication by the evidence that prior to mediation she had operated over a three-year period, what Mrs. LeClerc admitted to be a successful jewellery business.
I accept Allstate's evidence that Mrs. LeClerc displayed no signs of emotional instability during mediation. Ms. Del Bel Belluz and Mr. Castaldo described a five-hour process where the mediator took the time to translate portions of the discussions into French and to read every document to Mrs. LeClerc in English and French. Mrs. LeClerc admitted that she told the participants she was nervous and that the mediator reassured her that everything would be explained to her and she need not worry. This evidence accords with Ms. Del Bel Belluz' evidence that the rapport in the mediation was congenial and open.
I found persuasive Ms. Del Bel Belluz' evidence about the circumstances after she, Mrs. LeClerc and the mediator signed the Memorandum of Agreement (re. Allstate). Ms. Del Bel Belluz testified that she was present when Mrs. LeClerc signed the Memorandum. She described Mrs. LeClerc's demeanor as being "pleased." According to Ms. Del Bel Belluz, Mrs. LeClerc shook hands with her after the Memorandum was signed.
While I accept the medical evidence that Mrs. LeClerc was having emotional problems at the time of mediation, I heard no persuasive evidence that her emotional state hampered her understanding of mediation and its consequences. Furthermore, I accept the Allstate witnesses' accounts of the length, nature and mood of the mediation negotiations. I, therefore, find that Mrs. LeClerc was neither a victim of unequal bargaining power nor subjected to high pressure negotiations. The principle of non est factum clearly does not apply in this case.
The limitation issue:
Allstate also argued that Mrs. LeClerc is prevented from having her case arbitrated because she exceeded the two-year limitation period set out in section 281(5) of the Act. In view of my determination that Mrs. LeClerc is not entitled to proceed to arbitration because there was a valid settlement of her claims against Allstate, I need not decide the issue of whether she met the limitation period in filing her application for arbitration.
Conclusion:
In conclusion, I find that at the July 27, 1992 mediation, Mrs. LeClerc and Allstate validly settled all of Mrs. LeClerc's present and future claims against Allstate inclusive of interest. For this reason, Mrs. LeClerc is not entitled to proceed to arbitration of her claims against Allstate.
Expenses and an assessment of costs:
Allstate submitted that Mrs. LeClerc should be disallowed her expenses incurred in the preliminary hearing. Mrs. LeClerc made no submissions in this regard.
An arbitrator has the discretion under Section 282(11) of the Act to award expenses. This provision states:
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.
Past arbitration cases have provided guidelines for the exercise of this discretion. In the McCormick1 case Senior Arbitrator Naylor indicated that it is appropriate to award an applicant his or her expenses unless it is found that the application for arbitration was "manifestly frivolous or vexatious, or that the applicant's conduct unreasonably prolonged the proceedings." Arbitrators in other cases have declined to award arbitration expenses when applicants have advanced fraudulent or ingenuine claims.2
Based on the circumstances of this case, I decline to award Mrs. LeClerc her expenses of the arbitration. I find that Mrs. LeClerc unduly prolonged the arbitration proceedings by raising the unfounded claim that the settlement reached at mediation was invalid. The evidence discloses that this claim is entirely without merit. For this reason, I find that Allstate should not be made to bear the expenses Mrs. LeClerc incurred in this proceeding.
I, therefore, find that Mrs. LeClerc is not entitled to her expenses of the preliminary hearing.
Counsel for Allstate also submitted that an award should be imposed against Mrs. LeClerc under section 282(11.2) of the Act. An arbitrator has the discretion under this provision to award to the insurer an amount to be paid by the applicant if he or she commences an arbitration that is frivolous, vexatious or an abuse of process. This section states:
If an insured person commences an arbitration that, in the opinion of the arbitrator, is frivolous, vexatious or an abuse of process, the arbitrator may award an amount to be paid by the insured person to the insurer that does not exceed the amount assessed against the insurer in respect of the arbitration under section 14. 1993, c. 10, s.33.
Mrs. LeClerc presented evidence of her emotional problems. Although I found that her claim in this proceeding lacks merit, I recognize that she might have been motivated to proceed in this manner by her emotional distress.
I, therefore decline to excercise my discretion to award an assessment against Mrs. LeClerc.
Order:
Mrs. LeClerc is not entitled to proceed to arbitration of her claims against Allstate.
Mrs. LeClerc is not entitled to her expenses incurred in the arbitration pursuant to section 282(11) of the Act.
Allstate is not entitled an award to be paid by Mrs. LeClerc pursuant to section 282(11.2) of the Act.
May 15, 1996
Beth Allen Arbitrator
Date
Schedule "A"
Exhibit 1
Insurer's bound document brief, 29 tabs.
Exhibit 2
From Insurer's document brief:
Unbound exhibits:
Exhibit 2
Handwritten list of medical benefit payments
Exhibit 3
Medical Report of Dr. Joel E. Andersen, dated February 26, 1992
Exhibit 4
Memorandum of Agreement dated July 27, 1992
Exhibit 5
Report of Mediator dated July 28, 1992
Exhibit 6
Report of Mediator dated April 16, 1992
Exhibit 7
Application for Appointment of an Arbitrator dated March 18, 1993
Exhibit 8
Medical letter from Dr. A. M. McFarthing dated July 22, 1992
Exhibit 9
Statement by Mrs. LeClerc dated March 30, 1992
Exhibit 10(a)
Statement of Claim (Jeanne LeClerc et al. v. Allstate) dated September 30, 1992
Exhibit 10(b)
Notice of Discontinuance (Jeanne LeClerc et al. v. Allstate) dated June 23, 1993
Exhibit 11(a)
Handwritten list of medications
Exhibit 11(b)
Medical report from Dr. A.M. McFarthing dated September 6, 1995