Thi Nang Nguyen v. State Farm Mutual Automobile Insurance Company, 2014 ONFSCDRS 94

Financial Services Commission des

Commission services financiers

of Ontario de l’Ontario

Neutral Citation: 2014 ONFSCDRS 94

FSCO A13-004579

BETWEEN:

THI NANG NGUYEN

Applicant

and

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY

Insurer

REASONS FOR DECISION

Before: Arbitrator Richard Feldman

Heard: By way of written submissions, in accordance with Rule 68 of the Dispute Resolution Practice Code

Appearances: No written submissions were received from or on behalf of the Applicant.

Sarah Reisler, counsel, made written submissions on behalf of State Farm Mutual Automobile Insurance Company (“State Farm”)

Issues:

The issues to be decided at this time are:

Pursuant to Rule 68 of the Dispute Resolution Practice Code, should this application be dismissed without a hearing because it is frivolous, vexatious or was commenced in bad faith?
Is the Insurer entitled to its expenses and, if so, in what amount?

Result:

This application is dismissed.
The Applicant shall pay to the Insurer its expenses, fixed in the amount of $1,000.00 (inclusive of all fees, disbursements and any applicable taxes).

EVIDENCE AND ANALYSIS:

Background

The Applicant, Thi Nang Nguyen, claims to have been injured in a motor vehicle accident on August 28, 2010. She applied for statutory accident benefits under the Schedule¹ from State Farm Mutual Automobile Insurance Company (“State Farm”). Disputes arose over the Applicant’s entitlement to certain accident benefits. The parties were unable to resolve their disputes through mediation² and, in April 2013, Ms. Nguyen applied for arbitration at the Financial Services Commission of Ontario (“FSCO”) under the Insurance Act, R.S.O. 1990, c.I.8, as amended. At the time this application was filed, the Applicant was represented by Paul Druxerman, barrister and solicitor. A Response was received from the Insurer in May 2013.

On September 9, 2013, a pre-hearing conference was scheduled for March 12, 2014 and notice of the pre-hearing conference was sent by FSCO to both parties and to their respective legal representatives.

On September 11, 2013, Teddy Ouyang, a law clerk for Paul Druxerman, e-mailed staff at FSCO to advise that Mr. Druxerman no longer represented the Applicant, to request permission to withdraw the application and to request that the pre-hearing conference be cancelled. On September 19, 2013, staff at FSCO responded with an e-mail to Mr. Druxerman’s office reminding Mr. Druxerman that, to be removed from the record, Mr. Druxerman would have to comply with Rule 9.7 of the Dispute Resolution Practice Code. Also, it appears that the Applicant made no effort to comply with the requirements of Rule 70, with respect the request to withdraw the application.

On September 19, 2013, a formal letter was received by FSCO from Mr. Druxerman’s office, requesting that the application for arbitration be withdrawn and purporting to advise that Mr. Druxerman was “withdrawing” from the record as the Applicant’s legal representative since “we have lost contact with Ms. Nguyen and cannot get a hold of Ms. Nguyen after many attempts.” This letter also purported to provide the last known mailing address of the Applicant. Staff from FSCO apparently e-mailed Mr. Druxerman’s office to advise that this letter was not sufficient to comply with Rule 9.7 and to advise that the pre-hearing conference would be proceeding on March 12, 2014.

On March 12, 2014, a representative from State Farm appeared before me, along with counsel for State Farm, Sarah Reisler. Neither the Applicant nor anyone from Mr. Druxerman’s office attended before me. I attempted to reach Mr. Druxerman by telephone and was advised by the person who did answer the telephone that Mr. Druxerman had either moved or abandoned his office and left no forwarding address or telephone number. State Farm then requested that this application be dismissed pursuant to Rule 68 of the Dispute Resolution Practice Code on the basis that the proceeding was frivolous, vexatious or was commenced in bad faith.

On March 12, 2014, I wrote to the Applicant at her last known mailing address (as well as to her solicitor of record, Mr. Druxerman), advising that it was my intention to grant State Farm’s request to dismiss this application unless the Applicant could provide reasonable grounds for doing otherwise. I permitted the Applicant until April 17, 2014 to deliver any written submissions she wished me to consider, setting out the grounds upon which she objected to the dismissal of the proceeding or setting out any other issues or concerns. I never received any response to this letter from the Applicant or from anyone purporting to act on her behalf. I then provided State Farm with an opportunity to provide me with written submissions as to any orders it was seeking with respect to this matter. I received those submissions on May 21, 2014. State Farm is seeking an order dismissing this application and for its expenses, in the amount of $1,804.33 ($1,786.33 in fees and $18.00 in disbursements).

Request for Dismissal

I do not have sufficient evidence before me to conclude that this application was commenced in bad faith. It appears to me, however, that the Applicant has manifested no interest in pursuing these claims. This problem is further exacerbated by the “disappearance” of her solicitor of record. It would be unreasonable to force the Insurer to expend more time or effort on an application that has been abandoned by both the Applicant and her counsel. In these circumstances, the proceeding has now become frivolous or vexatious. I shall grant the Insurer’s motion to dismiss this application pursuant to Rule 68 of the Dispute Resolution Practice Code.

EXPENSES:

State Farm has had to prepare a Response, attend one pre-hearing conference and file brief written submissions with respect to this motion. State Farm was aware from a very early stage (September 2013) that Mr. Druxerman had lost contact with his client and was seeking to withdraw this application. In the circumstances, I find it reasonable to grant to the Insurer some of its legal expenses but find the amount claimed by State Farm to be excessive. I hereby fix the Insurer’s expenses at $1,000.00, inclusive of all fees, disbursements and any applicable taxes.

June 9, 2014

Richard Feldman

Arbitrator

Date