Financial Services Commission des Commission services financiers of Ontario de l’Ontario
Neutral Citation: 2008 ONFSCDRS 107
FSCO A06-002625
BETWEEN:
LUIS GARCIA
Applicant
and
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY
Insurer
DECISION ON EXPENSES
Before: Eban Bayefsky
Heard: Written submissions received by June 19, 2008 and a telephone conference call on June 20, 2008.
Appearances: Geoffroy Pavillet for Mr. Garcia
Robert Robinson for State Farm Mutual Automobile Insurance Company
Issues:
The Applicant, Luis Garcia, was injured in a motor vehicle accident on July 7, 2004. In a decision dated March 7, 2008, I dealt with a preliminary issue in this arbitration. I made the following order, while reserving on the issue of expenses:
- Mr. Garcia is not entitled to elect a non-earner benefit.
The issue in this further hearing is:
- Is State Farm entitled to its expenses incurred in respect of the preliminary issue hearing?
Result:
- Mr. Garcia shall pay to State Farm Mutual Automobile Insurance Company expenses in the amount of $1,000.00.
EVIDENCE AND ANALYSIS:
Section 12 of Regulation 664, R.R.O. 1990, as amended, sets out the following regarding the awarding of expenses:
(2) An arbitrator shall, under subsection 282(11) of the Act, consider only the following criteria for the purposes of awarding all or part of the expenses incurred in respect of an arbitration proceeding:
Each party's degree of success in the outcome of the proceeding.
Any written offers to settle made in accordance with subsection (3).
Whether novel issues are raised in the proceeding.
The conduct of a party or a party's representative that tended to prolong, obstruct or hinder the proceeding, including a failure to comply with undertakings and orders.
Whether any aspect of the proceeding was improper, vexatious or unnecessary.
Whether the insured person refused or failed to submit to an examination as required under section 42 of the Schedule, or refused or failed to provide any materials required to be provided by subsection 42(10).
State Farm sought its expenses of the preliminary issue hearing. Mr. Garcia did not seek his expenses. However, Mr. Garcia submitted that each party should bear its own expenses.
State Farm was entirely successful in the preliminary issue hearing. The parties did not exchange any offers to settle the preliminary issue.
State Farm maintained that the case did not raise novel issues, submitting that the relevant provisions of the Schedule are clear and that the applicable case law on the re-election of benefits is well settled. Mr. Garcia argued that the case raised a new and significant issue as to the effect of section 64.1(1) (regarding unreported income) on a person’s ability to elect non-earner benefits. I find that Mr. Garcia made a novel argument about the operation of the relevant statutory provisions, but that the resolution of the preliminary issue hearing was relatively straightforward. I do not find that the proceeding raised novel issues.
State Farm suggested that Mr. Garcia’s conduct tended to prolong the proceeding in that he only decided to elect non-earner benefits at the pre-hearing conference, whereas he had long sought income replacement benefits. Mr. Garcia submitted that he elected non-earner benefits relatively late in the day because State Farm only determined that he was entitled to income replacement benefits of “nil” six months before the pre-hearing conference. I see no basis to find that Mr. Garcia’s conduct, either in general or in the context of the preliminary issue hearing itself, tended to prolong, obstruct or hinder the proceeding. While Mr. Garcia was ultimately found not to be entitled to elect non-earner benefits, I do not find that he unduly delayed the proceeding in changing his position at the pre-hearing conference.
Similarly, I do not find that any aspect of the proceeding was improper, vexatious or unnecessary. I find that Mr. Garcia was fully entitled to withdraw his claim for income replacement benefits and seek to elect non-earner benefits. While I ultimately found that he was not entitled to elect non-earner benefits, I see nothing improper, vexatious or unnecessary in his chosen course of action.
There is no issue as to Mr. Garcia’s attendance at medical examinations or the provision of required materials.
In all of the circumstances, I find that State Farm is entitled to its expenses of the preliminary issue hearing. However, in light of Mr. Garcia’s general entitlement to seek non-earner benefits and his lack of delay in pursuing this course of action, I find that the quantum of State Farm’s expenses should be tempered somewhat.
State Farm submitted a Bill of Costs totalling $1,354.52, comprised of legal fees of $1,098.84 (10.6 hours at $92.34 per hour in preparation and 1.3 hours at $92.34 per hour in attendance at the preliminary issue hearing) and disbursements of $255.68. Mr. Garcia submitted that State Farm’s counsel spent too much time in preparing for the preliminary issue hearing. I find that counsel spent a reasonable amount of time preparing for the hearing, particularly in light of the various arguments Mr. Garcia raised in his written submissions.
In light of my earlier findings, of the $1,354.52 claimed, I find that State Farm is entitled to expenses for the preliminary issue hearing in the amount of $1,000.00.
July 3, 2008
Eban Bayefsky Arbitrator
Date
Financial Services Commission des Commission services financiers of Ontario de l’Ontario
Neutral Citation: 2008 ONFSCDRS 107
FSCO A06-002625
BETWEEN:
LUIS GARCIA
Applicant
and
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY
Insurer
ARBITRATION ORDER
Under section 282 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:
- Mr. Garcia shall pay to State Farm Mutual Automobile Insurance Company expenses in the amount of $1,000.00.
July 3, 2008
Eban Bayefsky Arbitrator
Date