Alex D'Ettorre v. Coachman Insurance Company, 2011 ONFSCDRS 55

Financial Services Commission des

Commission services financiers

of Ontario de l’Ontario

Neutral Citation: 2011 ONFSCDRS 55

FSCO A07-002065

BETWEEN:

ALEX D'ETTORRE

Applicant

and

COACHMAN INSURANCE COMPANY

Insurer

DECISION ON EXPENSES

Before: Lloyd (J.R.) Richards

Heard: By telephone conference call on April 15, 2011

Appearances: Chantal Brochu for Mr. D’Ettorre

H. Jason Hickman for Coachman Insurance Company

Background:

The Applicant, Alex D'Ettorre, was injured in a motor vehicle accident on November 7, 2001. As stated in the appeal decision in this case, Mr. D’Ettorre was involved in a collision between his pickup truck and a tractor trailer. Coachman Insurance Company (“Coachman”) insured Mr. D’Ettorre and Nordic Insurance Company of Canada (“Nordic”) insured the tractor trailer. Mr. D’Ettorre commenced a third party tort claim against the Nordic insureds. Mr. D’Ettorre eventually settled his tort action and signed a release with Nordic that included an assignment to Nordic of his Statutory Accident Benefit claims against Coachman. Nordic obtained a consent judgment which repeated the terms of the settlement, including the assignment, and dismissed the action. Nordic then attempted to pursue an arbitration proceeding in Mr. D’Ettorre’s name, despite the provision in s. 65(1) of the Schedule¹ that the assignment of the right to pursue an arbitration proceeding is void.

In a preliminary issue decision dated April 22, 2009, Arbitrator John Wilson dealt with the issue of whether Nordic could proceed with a claim against Coachman in Mr. D’Ettorre’s name. Arbitrator Wilson made the following order, while reserving on the issue of expenses:

Nordic Insurance Company is not precluded from proceeding with this claim in the name of Mr. D’Ettorre.

Coachman appealed Arbitrator Wilson’s order. The parties agreed that, since the original decision was under appeal and they were awaiting a determination, they would put off a final determination of arbitration expenses until the appeal was decided. In an appeal decision dated July 28, 2010, Director’s Delegate David Evans ordered that:

The Nordic Insurance Company of Canada is precluded from proceeding in the name of Mr. Alex D’Ettorre.

Director’s Delegate Evans awarded appeal expenses to Coachman.

Issue:

The issue in this expense hearing is:

Is Coachman entitled to its expenses incurred in respect of the April 22, 2009 preliminary issue arbitration hearing?

Result:

The parties shall bear their own expenses of the arbitration.

EVIDENCE AND ANALYSIS:

Coachman seeks its expenses against Nordic in the amount of $4,351.51, inclusive of fees, disbursements and GST/HST. Nordic does not seek its expenses.

The criteria for awarding expenses and the amount which an arbitrator may order are set out in Section F of the Dispute Resolution Practice Code which reflects the Schedule to R.R.O. 990, Reg. 664, under the Insurance Act, as amended to O.Reg. 275/03. Based on the facts of this case, the relevant criteria are: degree of success, whether there were written offers to settle, the novelty of the issues, the conduct of the parties and whether any part of the proceeding was improper, vexatious, or unnecessary.

Coachman accepts that no written offers were made at the original hearing and that neither side obstructed the proceeding, was vexatious or improper. Coachman concedes that the issue in dispute was novel and that it was not successful at the original arbitration hearing. However, Coachman notes that it was wholly successful on the appeal. Coachman’s position is that the Director’s Delegate’s reasons are clear and should be applied at the arbitration hearing level.

Nordic argues that it was wholly successful at the preliminary issue arbitration hearing and that Coachman’s success on appeal should not affect the expense decision concerning the original arbitration hearing. Nordic took no position on whether either party obstructed the proceeding, was vexatious or improper. Nordic made no submissions on the novelty of the issue in dispute.

Based on the agreement of the parties, I find that at the arbitration hearing neither party obstructed the proceeding, acted improperly or was vexatious.

In my view, the most important criteria in this case are: (1) the degree of success of each party; and (2) the novelty of the issue in dispute. Nordic succeeded entirely at the arbitration hearing, although that decision was subsequently overturned.

To my knowledge there were no previous decisions concerning the type of agreement entered into by Nordic and Mr. D’Ettorre, and neither party drew my attention to any such decision. I find that the issue in dispute was novel and the parties deserved to have the issue heard and decided. I do not accept Coachman’s position that the Director’s Delegate’s reasoning on expenses should be applied to the arbitration hearing. Nordic was entitled to engage the arbitration process, and was successful at the original arbitration hearing. Coachman, likewise, was entitled to appeal the arbitration decision and to seek its expenses related to the appeal process. I do not believe that because Coachman was ultimately successful on the appeal, such success should negate Nordic’s success at the preliminary issue arbitration hearing, especially given the novelty of the issue in dispute.

For the foregoing reasons, I find that each party shall bear their own expenses of the arbitration proceeding.

June 24, 2011

Lloyd (J.R.) Richards

Arbitrator

Date