Fawsiya Farah v. State Farm Mutual Automobile Insurance Company, 2008 ONFSCDRS 144

Financial Services Commission des Commission services financiers of Ontario de l’Ontario

Neutral Citation: 2008 ONFSCDRS 144

FSCO A06-000999

BETWEEN:

FAWSIYA FARAH

Applicant

and

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY

Insurer

Before: Joyce Miller

Heard: July 18, 2008, at the offices of the Financial Services Commission of Ontario in Toronto.

Appearances: No one appeared for Ms. Farah Arthur Curry appeared for State Farm Mutual Automobile Insurance Company

BACKGROUND:

The Applicant, Fawsiya Farah, was injured in a motor vehicle accident on February 1, 2004. She applied for and received statutory accident benefits from State Farm Mutual Automobile Insurance Company (“State Farm”), payable under the Schedule.¹ State Farm terminated weekly income replacement benefits on September 24, 2005. The parties were unable to resolve their disputes through mediation, and Ms. Farah applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

After applying for arbitration, Ms. Farah did not attend a resumed pre-hearing or respond to the pre-hearing arbitrator’s letters regarding whether she consented to the withdrawal of her legal representative. Neither did Ms. Farah provide the relevant productions requested by State Farm, nor did she attend at the arbitration hearing. As a result, State Farm is now requesting that Ms. Farah’s application for arbitration be dismissed.

The issues in this motion are:

Should Ms. Farah’s Application for Arbitration be dismissed? State Farm’s motion requests an order that Ms. Farah’s Application for Arbitration be dismissed for unreasonable and unnecesary delay; in the alternative for the abandonment of Ms. Farah’s claim and in the further alternative for Ms. Farah’s failure to produce all outstanding undertakings, as set out in the “Response by Insurer to an Application for Arbitration,” and any other relief set out in the Notice of Motion.
Is State Farm entitled to its its expenses for the Application for Arbitration as well as expenses for this motion?

Result:

Ms. Farah’s Application for Arbitration is dismissed on the basis that she has abandoned her case.
Ms. Farah shall pay State Farm $3,000 inclusive of GST for its expenses.

EVIDENCE

The following facts appear in the Commission’s file record and in State Farm’s Motion Record which includes an Affidavit by James Leone dated June 16, 2008 and supporting documentary evidence.

After two failed mediations, Ms. Farah applied for arbitration on April 25, 2006.
After several adjournments, a pre-hearing was convened on June 7, 2007. Arbitrator Sapin presided at the pre-hearing. Ms. Farah attended the pre-hearing with her representative², as did State Farm with its representative.
On July 9, 2007, Arbitrator Sapin issued her pre-hearing letter which indicated the issues in dispute, and the date that the parties agreed for the hearing as well as, the standard notice of Rules 32 and 34.1 of the Dispute Resolution Practice Code (Fourth Edition Updated — October 2003) (the “Code”) in respect of exchange of documents.
On July 3, 2007, the Case Administrator sent a Notice of Hearing to the parties confirming that the arbitration in this case will be held on February 19, 20, and 21, 2008.
On August 9, 2007, Arbitrator Sapin sent a letter to Ms. Farah asking her, pursuant to Rule 9 of the Code to provide the Commission with her consent in writing to Mr. Tago’s withdrawal as her legal representative within ten days of receipt of her letter.

The letter goes on to state that pursuant to Rule 9.6 Ms. Farah must notify the Commission and counsel for the insurance company of her decision to represent herself.

On September 12, 2007, Arbitrator Sapin wrote to Ms. Farah noting that she had not received a response to her letter of August 9, 2007. As well, she advised Ms. Farah that State Farm wished to have a resumption of the pre-hearing to discuss outstanding production issues and whether Ms. Farah was intending to represent herself at the arbitration hearing.
On November 13, 2007 a notice of resumption of pre-hearing for December 7, 2007 was sent to all the parties. The resumption was to be by teleconference.
On December 7, 2007, Arbitrator Sapin wrote a letter to the parties noting that Ms. Farah did not participate at the resumed pre-hearing. She noted that she was satisfied that Ms. Farah received notice of the pre-hearing resumption “as notice was sent via registered mail to the address Ms. Farah provided to the Commission. The notice has not been returned to the Commission.”

Arbitrator Sapin went on to state in her letter:

Given Ms. Farah’s unexplained lack of participation in these proceedings since the pre-hearing of June 7, 2007 and lack of any communication with either counsel for State Farm or the Commission since that time, there is a realistic prospect that Ms. Farah may not attend the arbitration hearing. In that case, State Farm is entitled to ask that Ms. Farah’s Application for Arbitration be dismissed and for its expenses of the proceedings.

State Farm should serve Ms. Farah with notice that it intends to request a dismissal of the proceedings and an award of costs if Ms. Farah fails to attend the hearing, together with a copy of its Bill of Costs, 30 days prior to the date of the arbitration hearing.

In his Affidavit Mr. Leone, at Paragraph 16, attests that on January 16, 2008 he served Ms. Farah with a motion record to dismiss her Application for Arbitration.
On February 14, 2008 Ms. Farah and State Farm engaged in settlement talks that failed.
On February 15, 2008, in the late afternoon, the Commission received a fax from Ms. Farah’s doctor, Dr. George Otto, advising that based on his assessment that Ms. Farah “is unable to work or attend any meetings/hearings from February 15, 2008 up to and including February 24, 2008 due to illness.”
On receipt of this note, I instructed the Case Administrator to advise State Farm’s counsel, Mr. Darrell March, that Ms. Farah would not be attending the arbitration hearing on February 19, 2008. A voice mail message was left for Mr. March, circa 4:00 p.m. In addition, as acknowledged at paragraph 18 of Mr. Leone’s affidavit, the Commission on February 15, 2008 at 4:15 p.m. faxed a copy of Dr. Otto’s letter to the offices of Mr. March, advising that Ms. Farah would not be attending the arbitration hearing.
On Tuesday, February 19, 2008, Mr. March, counsel for State Farm, attended at the Commission, advising that he had no knowledge that the Applicant would not be attending as he had left the office early on February 15, 2008, it being a holiday weekend.

As presiding Arbitrator at the hearing, I found that it was Mr. March’s imprudent choice not to check his voice mail for any messages sent within ordinary business hours or to check in with his office before the hearing for any updates on the file, such as the fax sent on Friday during ordinary business hours. Accordingly, I adjourned the hearing on the basis that Mr. March’s office was given sufficient notice that for a medical reason the Applicant would not be attending the hearing.

On April 15, 2008 State Farm requested a resumption of the pre-hearing for the purposes of requesting a dismissal of the arbitration. A Motion Hearing was set for July 18, 2008.
On April 28, 2008, a Notice of Motion Hearing was sent to all the parties.
On June 16, 2008, State Farm successfully served by courier Ms. Farah with its Motion Record, Affidavit, and supporting documentation.³

ANALYSIS AND FINDINGS

Ms. Farah did not attend at the Motion Hearing. I am satisfied that Ms. Farah received the notice of motion. There is no indication in the file that Ms. Farah had advised the Commission of any change in her address. Nor is there any indication in the file that the notice of motion was returned to the Commission for failure to deliver. As well, I am satisfied that Ms. Farah received State Farm’s Motion Record, which was successfully couriered to her. Accordingly, I find that Ms. Farah had ample notice of this Motion wherein State Farm was seeking an order dismissing her arbitration.

In reviewing the history that has led to this motion hearing and the fact that there has been no indication from Ms. Farah since June 7, 2007 pre-hearing that she wishes to pursue her arbitration and more importantly the fact that Ms. Farah knowing that this was a motion to dismiss her case with costs did not file any submissions in response nor did she attend at the motion hearing, I can only conclude that not only has Ms. Farah abandoned her Application for Arbitration, but that her Application for Arbitration is vexatious within the meaning of Rule 68 of the Code.

Accordingly for these reasons I exercise my discretion, pursuant to Rule 68 of the Code, to dismiss Ms. Farah’s Application for Arbitration.

EXPENSES:

Ms. Farah had notice that State Farm would be asking for its expenses in this motion hearing and for the arbitration hearing. She has chosen not to respond. State Farm was successful in this motion hearing. Accordingly, having considered the criteria for determining entitlement to expenses as enumerated in section 12(2) of Ontario Regulation 664, R.R.O. 1990, as amended, specifically a party’s degree of success in the outcome of the proceeding, I exercise my discretion to award State Farm its expenses.

State Farm asks for $4,069.19 inclusive of GST for legal fees. I have reviewed State Farm’s Bill of Costs and have considered the reasonable amount of time to have spent on this matter, which includes the fact that State Farm had sufficient notice that the arbitration hearing would not go ahead, and have fixed its costs at $3,000.

Accordingly, I find that Ms. Farah shall pay State Farm $3,000 inclusive of GST, for its expenses.

August 28, 2008

Joyce Miller Arbitrator

Date