Neutral Citation: 2015 ONFSCDRS 210 FSCO A14-003810

BETWEEN:

NATALIE HARVEY Applicant

and

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY Insurer

DECISION ON A PRELIMINARY ISSUE

Before: Arbitrator Anne Morris Heard: By written submissions due July 6, 2015 Appearances: Ms. Natalie Harvey did not participate Mr. Eric Grigg participated for State Farm Mutual Automobile Insurance Company

Issues:

The Applicant, Ms. Natalie Harvey, claims to have been injured in a motor vehicle accident on April 16, 2009. She applied for and received statutory accident benefits from State Farm Mutual Automoble Insurance Company (“State Farm”) payable under the Schedule.¹ State Farm terminated certain benefits and Ms. Harvey, through her then representative, applied for mediation and then arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

The issues in this Preliminary Issue Hearing are:

Should this Application for Arbitration be dismissed without a Hearing pursuant to Rule 68 of the Dispute Resolution Practice Code (“the Code”) because it is frivolous, vexatious or was commenced in bad faith?
Is Ms. Harvey liable to pay State Farm’s expenses in respect of this Arbitration?

Result:

The Application for Arbitration is dismissed.
Ms. Harvey is ordered to pay State Farm’s expenses in the amount of $1,414.08 (inclusive of all costs, disbursements and taxes).

EVIDENCE AND ANALYSIS:

At the time this Application for Arbitration was filed, the Applicant was represented by Beckett Professional Corporation. A Response was received from the Insurer in May 2014.

A Pre-Hearing discussion in this case was held on April 22, 2015 by teleconference. Ms. Harvey did not participate and I was unable to reach her by telephone. At that time, Mr. Kenneth McNair, legal counsel, advised that his law firm, Beckett Professional Corporation, was unable to communicate with Ms. Harvey and that the law firm was seeking permission to withdraw as representatives for Ms. Harvey. The Pre-Hearing was adjourned to May 25, 2015.

I wrote to Ms. Harvey on April 28, 2015 at her last known residential address which was the address contained in the Commission Records, including those of ADR Chambers. I advised her of the second Pre-Hearing discussion, scheduled for May 25, 2015 at 1:00 pm, and advised her that her law firm intended to seek an order removing the firm as representatives of record. I also advised her that the Insurer intended to request a dismissal of the Arbitration if Ms. Harvey did not participate on May 25, 2015.

Ms. Harvey did not participate in the second Pre-Hearing discussion of May 25, 2015, and I was unable to reach her by telephone. I granted the motion of the law firm to withdraw as representatives for Ms. Harvey.

The Insurer then requested that this Application for Arbitration be dismissed pursuant to Rule 68 of the Code. Pursuant to Rule 68, an Arbitrator may dismiss a proceeding without a Hearing where the proceeding is frivolous, vexatious or is commenced in bad faith.

On May 29, 2015, I again wrote to Ms. Harvey at her last known residential address and advised her that it was my intention to grant the Insurer’s request for a dismissal unless she provided reasonable grounds why I should not do so. I advised her in accordance with Rule 68 that she had until July 6, 2015 to serve upon the Insurer and to file with me, any written submissions which she wished me to consider as to why I should not dismiss the Application for Arbitration and any other concerns or issues which she may have. I advised her that if I did not receive written submissions by July 6, 2015, her Arbitration proceeding could be dismissed without further notice. I also advised her that the Insurer might request that she pay expenses to the Insurer.

To date, I have received no submissions or response, written or otherwise, from Ms. Harvey. I asked Mr. Grigg on behalf of the Insurer to advise in writing what order was sought. He responded by letter dated June 24, 2015, advising that the Insurer would seek an order that Ms. Harvey’s Application for Arbitration be dismissed in the event that Ms. Harvey failed to provide written submissions by July 6, 2015 as requested.

The Insurer submitted that the Applicant’s failure to participate in the Arbitration process or to even instruct counsel rendered this proceeding frivolous and vexatious and that as a result it would be unreasonable to require the Insurer to expend further expense in responding to the arbitration proceeding.

I do not have sufficient evidence before me to conclude that Ms. Harvey’s Application for Arbitration was commenced in bad faith. There is evidence, however, in her failure to communicate with or instruct her lawyer, and in her failure to participate in the Arbitration Pre-Hearing process, that she has no interest in pursuing her claims. I agree that it would be unreasonable to force State Farm to expend more time, effort, or expense in this matter. I conclude on the evidence which I do have that the proceeding has now become frivolous or vexatious and I grant State Farm’s request to dismiss this appliction pursuant to Rule 68 of the Code.

EXPENSES:

The Insurer submitted that by securing a dismissal of the within proceeding, it has been entirely successful. The Insurer submitted that the Applicant’s failure or refusal to participate in these proceedings commenced on her behalf has prolonged these proceedings and caused the Insurer to incur unnecessary expense.

The Insurer submitted a Bill of Costs in the total amount of $1,414.08. I have reviewed the Bill of Costs and I am satisfied that the amount claimed is reasonable given the time required to review the file, obtain instructions, prepare and file a response, prepare for and attend two Pre-Hearing discussions, and provide written submissions.

Accordingly, and pursuant to subsection 282(11) of the Insurance Act, R.S.O. 1990, c.1.8, as amended, Ms. Harvey is ordered to pay State Farm’s expenses in the amount of $1,414.08 (inclusive of all costs, disbursements and taxes).

October 19, 2015

Anne Morris Arbitrator

Date

Financial Services Commission of Ontario