Neutral Citation: 2017 ONFSCDRS 335 FSCO A14-005135

BETWEEN:

MENGISTU AMANUEL Applicant

and

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY Insurer

Before: Alan Mervin Heard: August 28, 2017, at the offices of the Financial Services Commission of Ontario in Toronto.

Appearances: Mr. Yafet Tadesse for Mr. Amanuel Mini (Manmeet) Kohli for State Farm Mutual Automobile Insurance Company Mr. Alex Tzaferis, appearing as Friend of Tribunal

Issues:

The Applicant, Mengistu Amanuel, was allegedly injured in a motor vehicle accident on July 14, 2012. He applied for and received statutory accident benefits from State Farm Mutual Automobile Insurance Company (“State Farm”), payable under the Schedule.¹ State Farm terminated certain benefits and the parties were unable to resolve their disputes through mediation. Mr. Amanuel then 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 hearing are:

Should the Applicant be allowed to withdraw his Application for Arbitration?
Is either party entitled to its expenses?

Result:

The Applicant’s Application for Arbitration is withdrawn without prejudice.
Each party shall bear its own expenses.

EVIDENCE AND ANALYSIS:

Preliminary Issue: The Adjournment Request

The Applicant did not appear at the hearing, although the hearing had been ordered to proceed on a peremptory basis at the last pre-hearing. Instead, the Applicant’s nephew, Yafet Tadesse appeared on his behalf.

Prior to the commencement of the hearing, I heard a motion filed by Mr. Alex Tzaferis, the Applicant’s solicitor, requesting removal of Mr. Tzaferis and his firm as solicitors of record. I granted the relief requested in the motion and removed Mr. Tzaferis and his firm as solicitors of record. However, I requested that Mr. Tzaferis remain as Friend of the Tribunal, should Mr. Tadesse or the Tribunal require assistance to explain the history of this case.

The hearing then commenced, with Mr. Tadesse explaining that his uncle had requested that he appear on his behalf, as his uncle was not feeling well. He presented no medical evidence, or any other explanation for his uncle’s absence, but he advised that his uncle was requesting an adjournment to retain new representation, as Mr. Amanuel no longer wanted Mr. Tzaferis or his firm to represent him.

The Insurer opposed any further adjournment of the hearing, submitting that, despite the fact that the hearing was peremptory on the Applicant, the Applicant did not appear. Further, although the Applicant representative’s motion for removal was to be heard on the first day of the hearing, it was the Applicant who had earlier advised that he no longer wanted Mr. Tzaferis or his firm to represent him, which Mr. Tadesse confirmed after speaking with his uncle on the telephone at the hearing.

As the applicant knew that he no longer want Mr. Tzaferis or his firm to represent him, he could have sought out new representation much earlier.

Under these circumstances, in my view, a further adjournment was not appropriate, and I refused the request.

Background

This matter came to hearing because the Applicant rescinded a previous settlement of the claims in this arbitration that had been reached by the parties during the “cooling off” period,² after a misunderstanding occurred between the parties with respect to the terms of the settlement.

The settlement was never finalized, and at the hearing, I was advised that the Insurer had reinstated the benefits claimed by the Applicant, and that all triable issues, with the exception of two outstanding medical treatment plans which had not yet been paid, had been resolved. The Insurer advised that the parties had come to an agreement with respect to the expenses and disbursements prior to the hearing. Mr. Tzaferis, who remained as Friend of the Tribunal, confirmed that this agreement had been reached while he was still representing the Applicant.

Further, the parties had agreed that the Insurer would fund the two outstanding medical treatment plans when they were incurred. They had not yet been incurred, because, although Mr. Amanuel required further treatment, he had an issue with the clinic that he had been attending, and as a result, he wanted nothing further to do with that clinic.

Mr. Amanuel had not provided instructions as to how to proceed, despite being advised by his representative that there were no remaining triable issues. However, Mr. Tadesse explained that there were issues between Mr. Amanuel and the clinic, particularly with respect to the billing practices of the clinic. This was further compounded by an error made by the Insurer, in correspondence sent after the initial settlement was reached, which apparently disclosed that a lump sum was paid out by the Insurer. In fact, no such lump sum had been paid out.

The Insurer subsequently sent correspondence to Mr. Tzaferis when it became aware of the error, advising that an error had been made and no lump sum had been paid.

Mr. Amanuel, according to his nephew, apparently did not understand this, and was requesting a hearing to investigate the clinic.

When it was explained to Mr. Tadesse that this was not an issue to be determined at this arbitration, he requested a recess to telephone his uncle and explain what had transpired at the hearing.

When the hearing resumed, Mr. Tadesse advised that Mr. Amanuel now understood that this hearing will not deal with an investigation into the clinic or its billing practices. He then requested that Mr. Amanuel be allowed to withdraw his application.

The Insurer’s Position

Ms. Kohli, on behalf of State Farm, opposed the request for withdrawal and requested that the arbitration be dismissed with prejudice. She submitted that all of what had occurred had been explained to the Applicant previously on several occasions, but the Applicant refused to withdraw, resulting in further delay. Because this matter had now proceeded to a hearing, the Insurer had sustained further unnecessary costs. As well as a dismissal with prejudice, the Insurer also requested an Expense Order in their favour, irrespective of whether the arbitration was ultimately dismissed with or without prejudice, or withdrawn.

The Insurer had also requested its expenses for preparation and attendance at the motion to remove the Applicant’s representative. I advised the parties that I would deal with the motion expenses when the main hearing concluded.

The Applicant’s Position

Mr. Tadesse requested that the Applicant be allowed to withdraw his Application for Arbitration after his request for a further adjournment was denied. He also requested that no order for expenses be made against him.

Findings:

Having heard the submissions of both parties, I find that in the circumstances of this case, it is appropriate to allow the Applicant to withdraw his application for arbitration. The error made by the Insurer in reporting the terms of the settlement to Mr. Tzaferis appears to have contributed in some way to the misunderstanding and breakdown between the Applicant and his former representative. It is not hard to understand why the Applicant did not want to settle the matter or withdraw the application for arbitration while it appeared to him that there was still a live issue involving the therapy clinic. Once this was explained to him again, this time by telephone with his nephew speaking to him at the hearing, aided by Mr. Tzaferis, he was now prepared to withdraw the application.

Under these circumstances, I find that the Applicant may withdraw his application, without prejudice.

EXPENSES:

The Insurer requested an expense order in its favour. The Insurer submitted that because of the Applicant’s non-attendance and refusal to instruct counsel, it incurred extra time and preparation. This could have been avoided at a much earlier stage, had the Applicant made the request to withdraw earlier. The Insurer also submitted that the Applicant’s refusal to execute the tentative settlement reached contributed to the additional expenses.

The Insurer submitted that, as well as preparing for the arbitration, it was necessary to prepare, review, and attend at the motion to withdraw brought by the Applicant’s former solicitor, and should be awarded some amount to reflect its costs. Ultimately, although it had been explained by his representative an earlier stage that there were no triable issues remaining, the Applicant did not request a withdrawal until after the commencement of the hearing. Further, the Applicant did not appear in person at the hearing, and produced no medical evidence confirming his nephew’s explanation that he was ill.

Although the Applicant’s behaviour resulted in delay in the proceedings, and contributed to extra costs incurred by the Insurer, I am not prepared to attribute this delay entirely to the Applicant.

The error made by the Insurer in reporting the terms of the settlement appears to me to have been partly responsible for the Applicant’s mistrust and misunderstanding.

I have considered the submissions of the Insurer with respect to expenses of the motion, and the hearing. While I might have ordinarily ordered a modest expense order in favour of the Insurer, under the circumstances of this case, I find that each party shall bear its own costs of the arbitration and the motion. I therefore make no order for expenses.

December 19, 2017

Alan Mervin Arbitrator

Date

Financial Services Commission of Ontario