Financial Services Commission of Ontario
Commission des services financiers de l’Ontario
Neutral Citation: 2009 ONFSCDRS 159
Appeal P09-00017
OFFICE OF THE DIRECTOR OF ARBITRATIONS
ZULLY TELLO MEDINA
Appellant
and
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY
Respondent
BEFORE:
David Evans
REPRESENTATIVES:
Nancy Ng for Ms. Tello Medina
Darrell March for State Farm Mutual Automobile Insurance Company
HEARING DATE:
By teleconference on October 1, 2009
APPEAL ORDER
Under section 283 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:
- Pursuant to Rule 70 of the Dispute Resolution Practice Code, Ms. Tello Medina is permitted to withdraw her appeal of the arbitrator’s decision dated April 17, 2009 on the condition that she pay State Farm Mutual Automobile Insurance Company its expenses of this appeal including oral submissions fixed at $300, inclusive of GST.
November 18, 2009
David Evans Director’s Delegate
Date
REASONS FOR DECISION
I. NATURE OF THE APPEAL
Ms. Zully Tello Medina seeks to withdraw her appeal of the arbitration decision dated April 17, 2009. The parties dispute its terms.
II. BACKGROUND AND ANALYSIS
Ms. Tello Medina was injured in a motor vehicle accident on July 31, 2006. State Farm paid benefits pursuant to the SABS–19961 but subsequently terminated them. This led to mediation and arbitration. Ms. Tello Medina had partial success at arbitration: her claims for weekly caregiver benefits were denied but she was awarded some housekeeping benefits.
The arbitrator’s reasons are 17 pages long, but under the heading Expenses he simply stated “Each party shall bear their expenses in this matter.”
Ms. Tello Medina served a Notice of Appeal regarding the expense order, relying on a settlement offer dated September 28, 2007.
State Farm filed a Response to Appeal which was 15 paragraphs long, relying on the criteria for awarding expenses set out in Rule 75.1 of the Dispute Resolution Practice Code.
Prior to the filing of written submissions, Ms. Tello Medina then indicated that she wanted to withdraw her appeal. The parties could not agree on its terms, leading to a brief teleconference.
The parties concur that the only disagreement about terms between them is legal expenses. Ms. Tello Medina offers to pay State Farm $300; State Farm seeks $1,000.
Withdrawal is governed by Rule 70 of the Code. Rule 70.3 in particular provides that where a party does not agree to the withdrawal, an adjudicator may (a) permit the withdrawal on such terms and conditions as he or she considers just and (b) award expenses to either party as permitted by Rule 75 and following.
Ms. Tello Medina submits that the insurer’s expenses are excessive, since it did not have to prepare and file submissions. State Farm submits that it had to set out in some detail in its Response to Appeal why it believed the appeal should be dismissed.
Considering that Rule 78 only allows counsel for insurers to obtain the Legal Aid rate (subject to the experience allowance), I am not persuaded that counsel would have reasonably spent enough time to warrant the $1,000 sought.
Furthermore, there may have been merit in the appeal. For instance, in Qureshi and State Farm Mutual Automobile Insurance Company, (FSCO P09-00030, October 14, 2009), the issues of entitlement to and the quantum of the legal expenses of the arbitration proceeding were referred back to the arbitrator precisely because no reasons for an expenses award were given. Indeed, the very arguments raised by State Farm in its Response in this case dealt with matters that should likely have been considered at first instance.
In any event, I do not believe that $1,000 as a term of withdrawal is appropriate. On the other hand, I would have thought something more than the $300 would be suitable. However, since I may also consider the expenses of the withdrawal hearing, and that Ms. Tello Medina was successful to the extent that she does not have to pay State Farm $1,000, I believe that $300 is an appropriate amount, net of the expenses of this very brief hearing for which neither party had to prepare submissions.
Ms. Tello Medina is permitted to withdraw her appeal for $300, inclusive of the expenses of this withdrawal hearing.
November 18, 2009
David Evans Director’s Delegate
Date
Footnotes
- The Statutory Accident Benefits Schedule — Accidents on or after November 1, 1996, Ontario Regulation 403/96, as amended.