Anne Amidi v. State Farm Mutual Automobile Insurance Company, 2016 ONFSCDRS 210

Financial Services Commission des

Commission services financiers

of Ontario de l’Ontario

Neutral Citation: 2016 ONFSCDRS 210

FSCO A13-002558

BETWEEN:

ANNE AMIDI

Applicant

and

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY

Insurer

DECISION ON EXPENSES

Before: Arbitrator Marshall Schnapp

Heard: By written submissions completed on June 3, 2016

Appearances:

Mr. Jonathan Mackenzie on behalf of Mrs. Anne Amidi

Mr. Darrell March on behalf of State Farm Mutual Automobile Insurance Company

Issue:

The Applicant, Mrs. Anne Amidi, was injured in a motor vehicle accident on December 5, 2010 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 Mrs. Amidi, through her 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 issue in this Expense Hearing is:

1. Pursuant to section 282(11) of the Insurance Act, is either party liable to pay the opposing party’s expenses in respect of the Arbitration proceeding, and if so, in what amount?

Result:

1. The Applicant is liable to pay to the Insurer its expenses in respect of the Arbitration proceeding, fixed in the amount of $10,847.70 (inclusive of all fees, disbursements, and any applicable taxes).

EVIDENCE AND ANALYSIS:

Background

Mrs. Amidi made numerous claims against State Farm arising from an accident that occurred on December 5, 2010. In her Application for Arbitration, Mrs. Amidi claimed the following: caregiver benefits, medical benefits in the amount of $6,546.95, cost of examinations in the amount of $1,800.00, and housekeeping and home maintenance benefits. Mrs. Amidi withdrew her claims for caregiver benefits and housekeeping and home maintenance benefits well prior to the start of the Hearing.

The issues in dispute proceeded to Arbitration and were heard by me, in-person on June 23, 24, 25, and November 5, 2015, and by written submissions completed on January 15, 2016.

My decision, dated March 21, 2016, found that Mrs. Amidi was not entitled to any benefits for the reasons outlined in my decision. Pursuant to Rules 75-79 of the Dispute Resolution Practice Code (“the Code”), the parties were given 30 days to request adjudication of expenses of the Arbitration proceeding. Written submissions were received from both parties and this decision is based on those submissions.

Position of the Parties

State Farm

The Insurer takes the position that as it was entirely successful at the Arbitration Hearing it is entitled to its expenses. State Farm incurred $46,206.66 in legal fees and disbursements and asks for $22,645.83 according to the fees and disbursements allowable under the Code. However, in State Farm’s reply submissions, it submitted that it should be awarded expenses in the range of $17,500.00 to $22,500.00.

In support of the claim for expenses, State Farm relies on the following criteria set out in Rule 75.2 of the Code.

a) Each party’s degree of success in the outcome of the proceeding – State Farm relies on my decision that Mrs. Amidi was not entitled to any benefits in dispute. State Farm takes the position that the Code mandates a more results oriented approach to expenses, as highlighted by the Director’s Delegate’s ruling in Howden and Pembridge Insurance Company² and the Bhada and Security National Insurance Co./Monnex Insurance Mgmt. Inc.³ decision.

b) Any written offers to settle made in accordance with Rule 76 – On April 11, 2016, State Farm made an offer to settle. It submits this was a formal offer to settle pursuant to the Code and since the final outcome of the proceeding was less favourable to Mrs. Amidi, this factor supports a significant award of expenses.

d) The conduct of a party or a party’s representative that tended to prolong, obstruct or hinder the proceeding, including a failure to comply with undertakings and orders – State Farm is taking the position that the entire proceeding must be considered unnecessary, improper and vexatious, when, without any explanation, the Applicant failed to provide any reports or documents that showed her injuries fell outside the Minor Injury Guideline.

As well, State Farm noted the following 3 factors that should be taken into consideration.

1. Mrs. Amidi failed to produce key documents despite repeated requests from counsel and Orders from the Pre-Hearing Arbitrator. This resulted in State Farm not being able to properly evaluate Mrs. Amidi’s claims or properly prepare for the Hearing. As well, this caused State Farm to incur additional expenses related to repeated requests for the documents and the necessity of filing of Motions to obtain the documents;

2. Mrs. Amidi did not file an Arbitration brief within the time permitted by the Code which necessitated a Motion being brought at the start of the Hearing to have the brief excluded; and

3. Mrs. Amidi withdrew claims for housekeeping and caregiver benefits approximately two years after filing her Application for Arbitration which, according to State Farm, resulted in it incurring significant and unnecessary costs thrown away in defending those specific claims.

Mrs. Amidi

According to Mrs. Amidi, each party should be responsible for its own expenses of the Arbitration Hearing. She also relies on the factors set out under Rule 75.2 of the Code in support of her position. Specifically the following factors support the submission that each party should be responsible for their own expenses:

a) Each party’s degree of success in the outcome of the proceeding – Mrs. Amidi submits that while she was not successful on the issues in dispute, she was partially successful in the outcome of the Motions brought by State Farm at the start of the Hearing. In support of this argument, the following three decisions were relied upon: Villers and Pilot Insurance Company,⁴ Sellathamby and RBC General Insurance Company,⁵ and Tam and Wawanesa Mutual Insurance Company.⁶

b) Any written offers to settle made in accordance with Rule 76 – According to Mrs. Amidi, the offer made by State Farm was to settle her claim on a full and final basis and not confined to the issues in dispute and thus should not be considered in awarding expenses. Arbitrator Sapin’s decision in Tenkorang and Wawanesa Mutual Insurance Company⁷ was used to support this submission.

c) Whether novel issues are raised in the proceeding – Mrs. Amidi submits that the fact that she is deaf and the issue whether her pre-accident hearing disability should remove her from the Minor Injury Guideline was a novel issue raised in the proceeding and should be taken into account.

d) The conduct of a party or a party’s representative that tended to prolong, obstruct or hinder the proceeding, including a failure to comply with undertakings and orders – The Applicant believes that the short notice of the Insurer’s Motion to exclude the Applicant herself as a witness delayed the Hearing. Mrs. Amidi also notes that State Farm’s adjournment request for the Hearing, which was ultimately granted, prolonged the proceeding unnecessarily.

e) Whether any aspect of the proceeding was improper, vexatious or unnecessary –The Applicant submits that the Insurer’s Motion to exclude her as a witness from her own Hearing was unnecessary, and relies on my Decision where I noted that State Farm did not provide me with any authority, including a rule in the Code, FSCO decisions or case law, where a party has been denied the right to testify on their own behalf.

Mrs. Amidi also took issue with State Farm’s Bill of Costs. She noted that no docket had been provided and the lawyer’s, clerk’s and student’s hours were not particularized.

Entitlement to Expenses

Keeping in mind the criteria outlined in Rule 75 of the Code, I find each party’s degree of success the most important factor in this case. This decision is supported by the decisions provided by State Farm.

Mrs. Amidi’s claims for benefits were denied and State Farm was entirely successful in this proceeding, and the expense award should reflect the result of the Hearing.

I also find that the other criteria contained in Rule 76 should be taken into account but to a lesser degree. I agree with Mrs. Amidi that State Farm’s offer to settle should not be taken into consideration as it was not in accordance with the Rule, and was an offer to settle the entire claim on a full and final basis. I note that in State Farm’s reply submissions it conceded that its offer was for a full and final settlement and may not be fully compliant with Rule 76.

Turning to the criteria of whether novel issues were raised in the proceeding, while Mrs. Amidi’s hearing impairment and how it relates to the Minor Injury Guideline may be a novel issue, due to the fact that little or no evidence was adduced to explore this issue, I will not be considering it as a novel issue that should impact an expense award.

With respect to the conduct of a party or party’s representative resulting in behaviour that prolonged, obstructed or hindered the proceeding, including failure to comply with undertakings and orders, in this case I do not find that either party’s behaviour significantly prolonged, obstructed or hindered the proceeding. I believe, at times, both parties’ actions prolonged the proceeding but not to any great extent and not in a manner that would result in impacting an expense award.

Quantum

The in-person Hearing only consisted of Mrs. Amidi being questioned by her own counsel and State Farm’s counsel. I believe there was approximately 3 days of Hearing time used to deal with Motions and the direct and cross-examination of Mrs. Amidi.

State Farm is seeking 183.30 hours for its legal fees at the allowable rates which totals $16,478.84. Given the nature of this case and the claims being advanced, I find the amount of hours being claimed is excessive.

It is established case law that in determining the appropriate quantum of expenses, the objective is to fix an amount that is fair and reasonable given the number of issues, their complexity and the amounts in dispute. A broad-stroke approach rather than a line-by-line assessment is frequently chosen by adjudicators using a ratio in the range of 1:1 to 4:1 for Pre-Hearing preparation time to Hearing time.

I believe this is the appropriate approach in this case. Given my findings, the relevant criteria, and the straightforward nature of this case, I find the ratio of 2:1 is appropriate based on three days of actual in-person Hearing time.

Thus based on the ratio of 2 to 1, for a three day Hearing, the Insurer is entitled to 72 hours (one day is 8 hours of Hearing time, 3 x 8 = 24 hours of actual Hearing time plus an additional 48 hours of preparation time = 72 hours) at the allowable rate for counsel of $136.43, and thus State Farm is entitled to receive $9,822.96 in legal fees.

This was a very straightforward case and it was not overly complex. It was made even less complicated and challenging for State Farm given that Mrs. Amidi failed to produce any expert reports or serve any evidence prior to the Hearing. I also note that the amounts of the medical benefits in dispute were less than $10,000.00, an amount known years before the start of the Hearing.

With respect to disbursements, I note State Farm provided a breakdown of those being claimed and Mrs. Amidi did not make any submissions on the disbursements claimed. From my review of the list, it appears reasonable, and therefore I will allow the $1,024.74 for disbursements.

EXPENSES:

Having considered the degree of success of each party, the duration of the proceeding, the reasonable amount of legal services that can be claimed, the applicable Legal Aid Rates, the written submissions of the parties, the supporting documentation filed and the maximum amounts permitted under the Expense Regulation, for the reasons set out above, I find it appropriate to fix State Farm’s expenses at $10,847.70 (inclusive of all fees, disbursements, and any applicable taxes) and to order Mrs. Amidi to pay this amount to State Farm.

August 3, 2016

Marshall Schnapp Arbitrator

Date

Financial Services Commission des

Commission services financiers

of Ontario de l’Ontario

Neutral Citation: 2016 ONFSCDRS 210

FSCO A13-002558

BETWEEN:

ANNE AMIDI

Applicant

and

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY

Insurer

ARBITRATION ORDER

Under section 282 of the Insurance Act, R.S.O. 1990, c. I.8, as it read immediately before being amended by Schedule 3 to the Fighting Fraud and Reducing Automobile Insurance Rates Act, 2014, and Ontario Regulation 664, as amended, it is ordered that:

1. Mrs. Amidi shall pay State Farm its expenses in respect of the Arbitration proceeding, fixed in the amount of $10,847.70 (inclusive of all fees, disbursements, and any applicable taxes).

August 3, 2016

Marshall Schnapp Arbitrator

Date

Footnotes

1. 1The Statutory Accident Benefits Schedule - Effective September 1, 2010, Ontario Regulation 34/10, as amended.
2. 2Howden and Pembridge Insurance Company (Appeal P02-00031), May 17, 2004.
3. 3Bhada and Security National Insurance Co./Monnex Insurance Mgmt. Inc. (FSCO A07-001972), September 25, 2009.
4. 4Villers and Pilot Insurance Company (FSCO A03-000993), August 11, 2005.
5. 5Sellathamby and RBC General Insurance Company (FSCO A06-000145), May 13, 2008.
6. 6Tam and Wawanesa Mutual Insurance Company (FSCO A07-002163), August 4, 2010.
7. 7Tenkorang and Wawanesa Mutual Insurance Company (FSCO A01-001278), March 17, 2005.