Paul Johnson v. State Farm Mutual Automobile Insurance Company, 2015 ONFSCDRS 239

Financial Services Commission des

Commission services financiers

of Ontario de l’Ontario

Neutral Citation: 2015 ONFSCDRS 239

FSCO A14-001926

BETWEEN:

PAUL JOHNSON

Applicant

and

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY

Insurer

DECISION ON A PRELIMINARY ISSUE

Before: Arbitrator H. Michael Kelly, Q.C.

Heard: By teleconference on September 9, 2015

Appearances: Mr. Paul Johnson did not participate

Mr. Brian Leila participated for Mr. Paul Johnson

Mr. Peter Pietraszek participated for State Farm Mutual Automobile Insurance Company

Issues:

The Applicant, Mr. Paul Johnson, was a pedestrian injured in a motor vehicle accident on December 27, 2011 and sought accident benefits from State Farm Mutual Automobile Insurance Company (“State Farm”), payable under the Schedule.¹ The parties were unable to resolve their disputes through mediation, and Mr. Paul Johnson, through his representative, applied for 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 Mr. Brian Leila and Fair Claims Consultants be removed as the representative of Mr. Paul Johnson in this Arbitration proceeding?
Should Mr. Paul Johnson's Application for Arbitration be dismissed?
Should State Farm be entitled to recover from Mr. Paul Johnson its expenses of the Arbitration?

Result:

Mr. Brian Leila and Fair Claims Consultants are hereby removed as the representative of Mr. Paul Johnson in this Arbitration proceeding.
Mr. Paul Johnson's Application for Arbitration is dismissed.
State Farm shall have its expenses of the Arbitration, payable by Mr. Paul Johnson in the amount of $678.00, inclusive of HST.

EVIDENCE AND ANALYSIS:

Chronology

Mr. Johnson applied for Arbitration by Application for Arbitration, received by FSCO on February 25, 2014, seeking Non-Earner Benefits; Attendant Care Benefits; Medical Benefits; Costs of Examinations and Interest. His representative was Mr. Brian Leila, licensed paralegal, of Fair Claims Consultants.

A Pre-Hearing proceeded before me in person at the offices of ADR Chambers, on February 9, 2015 at 2:30 p.m. Neither Mr. Johnson nor Mr. Leila attended. State Farm's counsel, Mr. Christopher Whibbs, and its staff adjuster attended. The Pre-Hearing was adjourned to March 24, 2015 at 9:00 a.m., in person, at ADR Chambers. My Pre-Hearing letter, dated February 11, 2015, copied to Mr. Johnson at his address on file with ADR Chambers, advised that his failure to attend on March 24, 2015 could result in the dismissal of his Arbitration.

On March 24, 2015, State Farm's representative and counsel attended. Neither Mr. Johnson nor Mr. Leila attended. Efforts by ADR Chambers staff to contact Mr. Johnson and Mr. Leila by phone during the meeting were unsuccessful. The Pre-Hearing was further adjourned to May 21, 2015 at 12:00 p.m., in person, at ADR Chambers, and my Pre-Hearing letter, dated March 25, 2015, sent by registered and regular mail to Mr. Johnson warned that if neither Mr. Leila nor Mr. Johnson attended at the Pre-Hearing Resumption on May 21, 2015, I would consider (1) directing that the Arbitration file be closed, and (2) awarding costs against Mr. Johnson in favour of State Farm.

The May 21, 2015 Pre-Hearing was the third time that Mr. Johnson and Mr. Leila failed to attend a scheduled Pre-Hearing, and failed to provide notice beforehand of their inability or unwillingness to attend. Mr. Whibbs advised me that State Farm was seeking an Order dismissing the Arbitration and awarding costs to State Farm. I decided to schedule a Preliminary Issue Hearing to address State Farm's request.

The Preliminary Issue Hearing was scheduled to proceed on July 24, 2015 at 9:30 a.m. at ADR Chambers. Mr. Leila was notified. The notice was sent to Mr. Johnson by regular and registered mail. Canada Post records confirm that the registered letter was returned to sender, delivery to Mr. Johnson having failed.

On July 24, 2015, Mr. Leila attended, as did State Farm's counsel and staff member. Mr. Leila sought an Order removing him as Mr. Johnson's representative. According to the e-mail and oral submissions of Mr. Leila, Mr. Johnson was in frequent contact with his representative, Mr. Leila, until approximately August 2014, when, dissatisfied with the handling of his file by Mr. Leila, he advised Mr. Leila that Mr. Leila was to cease acting for him. Mr. Johnson stated that he would be retaining a new representative. Mr. Leila ceased working on the file, but neglected to make an immediate application to be removed as Mr. Johnson's representative. A few months later, Mr. Leila's office received a telephone call from an unidentified source, advising that the caller is in the process of taking over the Johnson file. The caller did not identify himself/herself or leave a telephone number. Mr. Leila received no further contact from that potential new representative. Mr. Leila advised that Mr. Johnson's telephone number was no longer in service, and no response was received by him to letters sent by him to Mr. Johnson. A few days before the July 24, 2015 Preliminary Issue Hearing, Mr. Leila attended at Mr. Johnson's last known address and found that Mr. Johnson was no longer there. The current tenant advised that Mr. Johnson had not been there for “over a year”. A neighbour advised him that a man fitting Mr. Johnson's description had been removed from that address by ambulance, in or about the autumn of 2014.

As Mr. Leila had attended the Preliminary Issue Hearing on July 24, 2015, and was prepared to make further effort to find out the current contact particulars for Mr. Johnson, and to take the proper steps pursuant to Rule 9.7 to advise Mr. Johnson of his request for removal, I decided to treat the Preliminary Issue Hearing on July 24, 2015 as a Pre-Hearing. I therefore scheduled a Preliminary Issue Hearing to proceed by teleconference on September 9, 2015 at 10:00 a.m. My Pre-Hearing letter, dated July 31, 2015, sent to his last known address, provided Mr. Johnson with the date and time for the Preliminary Issue Hearing, the alternative ways he could participate, and the issues that would be determined at the Hearing. The letter also advised him that should he not contact ADR Chambers or participate in the Hearing, I would consider the dismissal of his Application and consider State Farm's request for expenses.

On September 9, 2015 at 10:00 a.m. I was unsuccessful in contacting Mr. Johnson by telephone, and he neither attended at ADR Chambers nor contacted ADR Chambers by telephone (either that day or beforehand). Mr. Peter Pietraszek, legal counsel for State Farm, participated in the conference call, as did Mr. Leila. Mr. Leila advised that his continuing effort to contact Mr. Johnson was unsuccessful. The Preliminary Issue Hearing proceeded in accordance with Rule 37.9 of the Dispute Resolution Practice Code (“the Code”).

Removal of Representative

I am satisfied that Mr. Leila has been unable to either locate or maintain contact with Mr. Johnson, and unable to receive instructions from him. The professional relationship between them has completely broken down. I am satisfied that Rule 9.7 has been followed and that an Order removing Mr. Leila and his firm, Fair Claims Consultants, as representative of Mr. Johnson is appropriate, and I so Order.

State Farm consented to this Order.

The Dismissal

In view of Mr. Johnson's failure to participate in the Pre-Hearings and the Preliminary Issue Hearing and his failure to maintain contact with his representative, or to retain a new representative or otherwise contact ADR Chambers to advise of his intention to proceed with his Arbitration self-represented (as required by Rule 9.6 of the Code), I must conclude that he no longer has any interest in proceeding further in this Arbitration proceeding. I am satisfied that Mr. Johnson was given notice of all of the proceedings related to his Arbitration at his last known address

Mr. Johnson bears the onus of proving entitlement to the claimed benefits. He has a duty to proceed with his Application in a reasonable fashion, by maintaining contact with his representative, informing his representative and/or ADR Chambers of any changes to his contact particulars, and responding to notices to attend Pre-Hearings. If he intended to proceed without a representative, then he must, himself, maintain contact with ADR Chambers, and, inter alia, attend scheduled Pre-Hearings. He has simply failed to do so.

For the reasons set out above, Mr. Paul Johnson's Application for Arbitration is dismissed.

EXPENSES:

Mr. Whibbs provided a Costs Outline to and including May 21, 2015. Subsequent services by his firm were provided with respect to the July 24, 2015 and September 9, 2015 proceedings. Although the costs summary was not unreasonable, I feel that the proper award for costs would be $678.00 inclusive of HST, and I hereby order that Mr. Paul Johnson pay to State Farm the sum of

$678.00, inclusive of HST, for expenses of the Application.

November 11, 2015

H. Michael Kelly, Q.C.

Arbitrator

Date