Financial Services Commission of Ontario

Neutral Citation: 2017 ONFSCDRS 61

FSCO A15-004646 and A15-004647

BETWEEN:

BLANCA SANCHEZ AND DOROTEO SANCHEZ Applicant

and

CUMIS GENERAL INSURANCE COMPANY Insurer

REASONS FOR DECISION

Before: Arbitrator Lynda Tanaka

Heard: In person at ADR Chambers on February 13, 2017

Appearances: Mrs. Blanca Sanchez and Mr. Doroteo Sanchez did not participate Ms. Jane Conte did not participate for Mrs. Blanca Sanchez and Mr. Doroteo Sanchez Mr. Peter Durant participated for CUMIS General Insurance Company

Issues:

The Applicant, Mrs. Blanca Sanchez ("Applicant BS"), and the Applicant, Mr. Doroteo Sanchez ("Applicant DS"), were injured in a motor vehicle accident on February 7, 2014 and sought accident benefits from CUMIS General Insurance Company ("CUMIS"), payable under the Schedule.¹ The parties were unable to resolve their disputes through mediation, and the Applicants, through their 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 Hearing are:

1. Should the Applicants' Applications for Arbitration be dismissed?
2. Are the Applicants liable to pay CUMIS's expenses in respect of the Arbitration and if so, in what amount?

Result:

1. The Applicants' Applications for Arbitration are dismissed.
2. The Applicant, Mrs. Blanca Sanchez, is liable to pay CUMIS's expenses in the amount of $2,629.70. The Applicant, Mr. Doroteo Sanchez, is liable to pay CUMIS's expense in the amount of $1,367.92.

EVIDENCE AND ANALYSIS:

Chronology

The two Applications for Arbitration were formally related by FSCO as the claims arise from the same accident and are by two spouses. Both Applications for Arbitration were the subject of a Pre-Hearing, held on February 18, 2016. The issues in dispute included, for Applicant BS, weekly income replacement benefits, medical benefits and the cost of an examination plus interest and expenses, and for Applicant DS, medical benefits and the cost of an examination plus interest and expenses.

On January 18, 2017, Arbitrator Smith refused a request to adjourn the Hearing brought by the Applicants and consented to by CUMIS. The basis of the adjournment request, briefly stated, was the late retainer of new counsel and the difficulties in getting the Applicants' files from the previous representative and CUMIS, thereby compromising counsel's preparation for the Hearing.

The Hearing was scheduled for three days to commence on February 13, 2017 at 10:00 a.m. As of 10:03 a.m., neither the Applicants nor their counsel had appeared at the Hearing. I waited 30 minutes and then resumed the Hearing. Only counsel for CUMIS was in attendance. The CUMIS representative had advised her counsel that, because of a health issue, she could not attend the Hearing but was available by telephone.

Neither Applicant nor their counsel alerted counsel for CUMIS that they would not be attending the Hearing.

The Pre-Hearing letter of February 18, 2016 in each file specifically provides that if a party failed to comply with the requirements set out in the letter, an adjournment request due to production issues "will likely be refused". Further, the same letter provides that the Applicants must provide a list of witnesses at least 60 days before the first day of the Hearing. Also, the same letter provides that, where a notice of Hearing has been sent to a party and a party does not attend, the Arbitrator may proceed with the Hearing in the party's absence or without the party's participation and the party is not entitled to any further notice in the proceeding.

I was advised by counsel for CUMIS that he had not received a witness list from the Applicants, or a list of documents for the Arbitration Brief.

The Dismissal

For the reasons that follow, the Applicants' Applications for Arbitration are dismissed.

I am satisfied that the Applicants and their counsel were given notice of all of the proceedings related to the Arbitration at their last known address and that they were aware that the Hearing was scheduled for February 13, 2017 at 10:00 a.m. and the offices of ADR Chambers.

Pursuant to Rule 37.7 of the Dispute Resolution Practice Code ("DRPC") and in accordance with the notice given in the Pre-Hearing letter of February 18, 2016, the Arbitration Hearing proceeded in their absence.

The Applicants bear the onus of proving entitlement to the claimed benefits. Since they did not appear at the Hearing and no evidence was presented to support their claims, their Applications for Arbitration are dismissed.

EXPENSES:

Applicant BS (A15-004646)

I find Applicant BS is liable for a portion of the expenses of CUMIS for this Arbitration. The Pre-Hearing letter of February 18, 2016 set out the criteria for the recovery of expenses and the potential liability for the other party's expenses.

Applicant BS has failed to comply with the provisions of the Pre-Hearing letter of January 18, 2015 and the DRPC. Specifically, she has not provided a witness list or document brief. Further, neither she nor her counsel advised CUMIS or its counsel that they would not be appearing at the Hearing so that the opposing party could avoid the costs of preparing for the Hearing.

Document A at the Hearing is the Costs Outline for CUMIS in this application (A15-004646). The claim is for $4,219.49. Document A sets out CUMIS's position on each of the criteria contained in the Expense Regulation in Section F of the DRPC. CUMIS alleges that the proceeding was complex because Applicant BS refused to attend the required Insurer Examinations despite seeking certain benefits. CUMIS alleges that the claims are frivolous and vexatious because Applicant has failed to comply with appropriate requests from CUMIS to attend examinations and to provide documentation. The conduct of Applicant BS tended to lengthen unnecessarily the duration of the proceeding because there was a significant delay before CUMIS was provided with notice of change of representative and, despite the refusal of the adjournment request, Applicant BS continued to be non-compliant. CUMIS alleges that Applicant BS continued with her claims for income replacement benefits despite failing to produce any evidence at all to support her claim and refused to withdraw her claim for medical benefits despite not having produced any evidence that she did not sustain a minor injury and failing to attend the Insurer Examination on the medical issues.

Therefore, I find that CUMIS is entitled to be paid its expenses.

With respect to the quantum of the expenses, there was no offer to settle of which I was advised. I was advised by Mr. Durant, counsel for CUMIS, that he could not discern from his records what time had been spent on this file as opposed to the time spent on the related file dealing with a claim by Applicant DS. He therefore split the time equally between the claims for expenses for each file.

CUMIS is seeking to recover the time of senior counsel (28 years' experience), three law clerks, a student at law, and counsel with 12 years' experience (Mr. Durant). Document A indicates that Mr. Durant's partial indemnity or Legal Aid Rate is $99.40. Applying that rate to his 21.3 hours of preparation and attendance at the Pre-Hearing and settlement conference results in a figure of $2,117.22. Document A includes 12 hours for attendance at the Hearing but the Hearing lasted less than one hour. I award one hour for the attendance at the Hearing at the rate of $99.40. The total expense for fees is $2,216.62 plus HST of $288.16.

Disbursements claimed total $131.04 with HST of $17.04. Document A includes a typographical error in that the total of those two numbers is given as $245.08 when the total in fact is $148.08. Also, the disbursements include a claim for local travel expenses to attend at the Pre-Hearing in the amount of $20.49 which I find is not properly recoverable. I award the balance of the expenses for telephone calls, clinical notes and records and photocopies for a total of $110.55. HST on this amount is $14.37 for a total of $124.92.

Applicant BS is liable to pay CUMIS's expenses in respect of the Arbitration in the amount of $2,504.78 for legal fees and $124.92 for disbursements, inclusive of HST for a total of $2,629.70.

Applicant DS (A15-004647)

I find Applicant DS is liable for a portion of the expenses of CUMIS for this Arbitration. The Pre-Hearing letter of February 18, 2016 set out the criteria for the recovery of expenses and the potential liability for the other party's expenses.

Applicant DS has failed to comply with the provisions of the Pre-Hearing letter of January 18, 2015 and the DRPC. Specifically, he has not provided a witness list or document brief. Further, neither he nor his counsel advised CUMIS or its counsel that they would not be appearing at the Hearing so that the opposing party could avoid the costs of preparing for the Hearing.

Document B at the Hearing is the Costs Outline for CUMIS in this application (A15-004647). The claim is for $4,219.49. Document B sets out CUMIS's position on each of the criteria contained in the Expense Regulation in Section F of the DRPC. In quantum it reflects the same number of hours and the same amount of expense as Document A. The issue of complexity, however, is not raised in this file as the only benefits sought were medical benefits and one cost of examination. CUMIS alleges that the claims are frivolous and vexatious because Applicant DS has failed to pursue the application. CUMIS alleges that the conduct of Applicant DS tended to lengthen unnecessarily the duration of the proceeding because there was a significant delay before CUMIS was provided with notice of change of representative and, despite the refusal of the adjournment request, Applicant DS knowingly continued with the proceeding without any intention of participating.

Unlike the related file, A15-004646, there is no allegation here of non-compliance with requests to attend for Insurer Examinations. However, Applicant DS did fail to produce documents and a witness list and did not attend at the Hearing.

Therefore, I find that CUMIS is entitled to be paid its expenses.

With respect to the quantum of the expenses, there was no offer to settle these claims of which I was advised.

As this file is, by its nature, less complex than that of Applicant BS because there is no claim for a weekly benefit and because there is no allegation of non-attendance at Insurer Examinations, I am reducing the expense for fees for preparation to reflect those facts. While I recognize that Mr. Durant has arbitrarily split the time in half between the two files, in my view, Applicant DS should be liable for a lower amount of fees. I also am of the view that there should be only one fee for the Hearing time of one hour that I have awarded on the related file. I award $1,100.00 for the legal fees in this matter. HST on that amount is $143.00 resulting in a total of $1,243.00 for legal fees including HST.

Disbursements claimed total $131.04 with HST of $17.04. Document B includes a typographical error in that the total of those two numbers is given as $245.08 when the total in fact is $148.08. Also, the disbursements include a claim for local travel expenses to attend at the Pre-Hearing in the amount of $20.49 which I find is not properly recoverable. I award the balance of the expenses for telephone calls, clinical notes and records and photocopies for a total of $110.55. HST on this amount is $14.37 for a total of $124.92.

Applicant DS is liable to pay CUMIS's expenses in respect of the Arbitration in the amount of $1,243.00 for legal fees and $124.92 for disbursements, inclusive of HST for a total of $1,367.92.

February 21, 2017

Lynda Tanaka Arbitrator

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. The Applicants' Applications for Arbitration are dismissed.
2. The Applicant, Mrs. Blanca Sanchez, is liable to pay CUMIS's expenses in the amount of $2,629.70. The Applicant, Mr. Doroteo Sanchez, is liable to pay CUMIS's expenses in the amount of $1,367.92.

February 21, 2017

Lynda Tanaka Arbitrator

Footnotes

1. 1The Statutory Accident Benefits Schedule - Effective September 1, 2010, Ontario Regulation 34/10, as amended.