Financial Services Commission des
Commission services financiers
of Ontario de l’Ontario
Neutral Citation: 2016 ONFSCDRS 218
FSCO A14-000507
BETWEEN:
(NOEL) TERAN JOHNSON
Applicant
and
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY
Insurer
DECISION ON A MOTION
Before: Arbitrator Marshall Schnapp
Heard: By telephone conference call on June 22, 2016 and by written submissions completed on June 29, 2016
Appearances:
Mr. (Noel) Teran Johnson participated
Ms. Marie Lampropoulos participated for State Farm Mutual Automobile Insurance Company
Issues:
The Applicant, Mr. (Noel) Teran Johnson, was injured in a motor vehicle accident on December 1, 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. Johnson, through his former 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 Motion are:
Should Mr. Johnson’s Application for Arbitration be dismissed?
Is Mr. Johnson required to pay State Farm its expenses of the Arbitration proceeding, and if so, in what amount?
Result:
Mr. Johnson’s Application for Arbitration is dismissed.
Mr. Johnson shall pay to State Farm its expenses in the total amount of $750.00 (inclusive of fees, disbursements and any applicable taxes).
EVIDENCE AND ANALYSIS:
State Farm’s Position
The parties reached a settlement of this matter on December 17, 2014. On the same date State Farm’s counsel sent the settlement documentation to be executed by Mr. Johnson to his former counsel.
On March 23, 2015, counsel for State Farm followed up as they had not received back the executed settlement documentation. Mr. Johnson’s former counsel advised they had not been able to have Mr. Johnson attend their office but had an appointment scheduled for the following week.
Counsel for State Farm then followed up again on June 30, 2015 and September 14, 2015 and did not receive a response. On September 15, 2015, State Farm then advised it would bring a Motion to request the claim be dismissed. In response, Mr. Johnson’s former counsel advised they were meeting with him the following week.
Despite repeated attempts to meet with Mr. Johnson, his former counsel was not able to do so. On April 8, 2016, I granted Mr. Johnson’s former counsel’s request to be removed as his representative.
A resumption of the Pre-Hearing discussion was held on June 29, 2016 to clarify Mr. Johnson’s intentions on his Application for Arbitration and State Farm’s request for costs in this matter due to Mr. Johnson not executing the settlement documentation.
In State Farm’s written submissions, received on June 29, 2016, they note it was not until June 22, 2016 that they were able to obtain a clear position from the Applicant that he was agreeable to withdrawing his Application for Arbitration and he provided his consent to dismiss the matter.
State Farm submits that it has taken over a year to try to finalize the settlement of this matter and have Mr. Johnson execute settlement documents. According to State Farm, they have incurred 7.8 hours of time, totalling $1,234.50, since December 17, 2014 to attempt to finalize this matter. They note that these costs would not have been incurred if the Applicant would have finalized the settlement documentation as per the agreement reached on December 17, 2014.
Thus State Farm is requesting the Application for Arbitration be dismissed and it be awarded $1,234.50
Mr. Johnson’s Position
During the Motion, Mr. Johnson advised that he was consenting to his Application for Arbitration being dismissed. However, he did not believe he should have to pay any costs to State Farm. He submitted there were a few reasons he did not execute the settlement documentation. First, he was incarcerated for a period of time and therefore could not attend at his lawyer’s office to sign the documents. As well, he advised that on another occasion, his lawyer attended at his office at an unreasonable time so he was sent away to come back during business hours.
Mr. Johnson was provided the opportunity to provide further written submissions in response to those filed by State Farm requesting expenses but he did not submit any.
Conclusion
I am relying on Rule 68 of the Dispute Resolution Practice Code (“the Code”), which allows for the dismissal of a proceeding without a Hearing, and Section 4.1 of the Statutory Powers Procedure Act, which allows for a disposition without a Hearing on consent of both parties.
Given the history of this matter and Mr. Johnson’s consent to having his Application for Arbitration dismissed, it is now dismissed.
EXPENSES:
With respect to expenses, my jurisdiction to decide the issue is set out in subsection 282(11) of
the Insurance Act which states:
The arbitrator may award, according to criteria prescribed by the regulations, to the insured person or the insurer, all or part of such expenses incurred in respect of an arbitration proceeding as may be prescribed in the regulations, to the maximum set out in the regulations.
An adjudicator may award expenses to a party if the adjudicator is satisfied that the award is justified having regard to the criteria set out in Rule 75.2. The items and amounts which may be awarded are in Rule 78 and the Schedule to the Expense Regulation found in Section F of the Code.
The relevant criteria for the award of expenses in this case are: (1) Each party’s degree of success in the outcome of the proceeding, and (2) Whether any aspect of the proceeding was improper, vexatious or unnecessary.
State Farm was entirely successful in the outcome of this proceeding. I note this matter was settled on December 17, 2014; however, Mr. Johnson did not execute the settlement documents as per the agreement between the parties. This necessitated State Farm having to follow up and attend two additional Pre-Hearings.
However, in the circumstances, including Mr. Johnson not being able to execute the documents for a period of time, the $1,234.50 in costs being requested by State Farm appears excessive. I believe in this case it is reasonable for State Farm to be awarded $750.00 for legal costs to compensate them for having to follow up on this matter and participate in a short Pre-Hearing and Motion by teleconference due to Mr. Johnson’s failure to execute the settlement documents.
August 18, 2016
Marshall Schnapp
Arbitrator
Date
Financial Services Commission des
Commission services financiers
of Ontario de l’Ontario
Neutral Citation: 2016 ONFSCDRS 218
FSCO A14-000507
BETWEEN:
(NOEL) TERAN JOHNSON
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:
Mr. Johnson’s Application for Arbitration is dismissed.
Mr. Johnson shall pay to State Farm its expenses in the total amount of $750.00 (inclusive of fees, disbursements and any applicable taxes).
August 18, 2016
Marshall Schnapp
Arbitrator
Date
Footnotes
- Effective September 1, 2010, the Statutory Accident Benefits Schedule – Effective September 1, 2010 (the “new SABS”) came into force. The transition rules in the new SABS provide that, subject to certain exceptions, benefits that would have been available pursuant to the Statutory Accident Benefits Schedule – Accidents on or after November 1, 1996 (the “old SABS”) shall be paid under the new SABS, but in amounts determined under the old SABS.