Financial Services Commission des Commission services financiers of Ontario de l’Ontario
Neutral Citation: 2018 ONFSCDRS 25
FSCO A14-002671
BETWEEN:
MYRNA DOUCE
Applicant
and
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY
Insurer
REASONS FOR DECISION
Before: Alan Mervin
Heard: January 25, 2018, at the offices of the Financial Services Commission of Ontario in Toronto.
Appearances: Eli Jakubovic for Mrs. Douce Laura Emmett for State Farm Mutual Automobile Insurance Company
Issues:
The Applicant, Myrna Douce, was injured in a motor vehicle accident on January 14, 2011. She applied for and received statutory accident benefits from State Farm Mutual Automobile Insurance Company (“State Farm”), payable under the Schedule.1 State Farm terminated benefits, and the parties were unable to resolve their disputes through mediation.
Mrs. Douce 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 motion for removal of Harvey Katz Professional Corporation from the record as the Applicant’s representative succeed, and should his firm be permitted to withdraw?
Should the Arbitration be dismissed in the absence of the Applicant?
Is the Insurer entitled to its expenses of this arbitration, and if so, in what amount?
Result:
The Applicant’s representative’s motion for withdrawal as representative is granted. Harvey Katz, LLP is removed as representative of record for the Applicant.
The Application for Arbitration is dismissed.
The Insurer is entitled to its expenses, in the amount of $4,500.00 plus $585.00 for HST.
EVIDENCE AND ANALYSIS:
Preliminary matters: The motion for removal of the Applicant’s representative.
On January 5, 2018, Mr. Jakubovic sent a letter requesting that he and his firm be allowed to withdraw as the Applicant’s representative in this matter, due to a breakdown in the solicitor-client relationship. Mr. Jakubovic advised that he had been unable to contact his client for several months despite several attempts to do so. He was unaware of her whereabouts, and had no instructions as to how to proceed in this matter.
I advised him by letter that, in the absence of written instructions from the Applicant consenting to his request for removal of his firm, a motion would be required, in accordance with the requirements of Rule 9 of the DRPC. The motion would need to be served on all parties, and was to be returnable at the commencement of the scheduled hearing on January 25, 2018.
At the commencement of the hearing at 10:00 a.m., Mrs. Douce had not appeared. In order to ensure that Mrs. Douce was not delayed, I adjourned the hearing until 10:30 a.m.
At 10:30 am, Mrs. Douce had still not appeared. Mr. Jakubovic then proceeded with his motion for removal and provided a Motion Record outlining some 17 attempts to contact the Applicant without success, at the telephone number she had provided.
The Affidavit of Raquel Fontes, a law clerk at Harvey Katz Professional Corporation, sworn January 5, 2018, advised that numerous attempts to contact the applicant were made between January 23, 2017 and November 16, 2017, all unsuccessful. Most of the calls were taken by voicemail with messages left instructing her to call her lawyer and schedule an appointment, but none were returned.
In February 2017, the parties apparently had reached a tentative settlement of the issues in the arbitration, and Mr. Douce, the Applicant’s spouse, scheduled an appointment by phone for February 8, 2017, at which time Mrs. Douce was to attend at her lawyer’s firm and sign the release and disclosure notice. The day before the appointment, Mr. Douce called to advise that Mrs. Douce was sick and would reschedule when she was feeling better. The rest of the attempts to contact the Applicant were met with voicemail, except for a call on August 16, 2017, when the Affiant spoke to a person who identified herself as a relative of the Applicant, who advised Ms. Fontes that the Applicant would be away, “for a while”. She requested that Ms. Fontes call back and leave a message, which she did. In addition, correspondence was sent to the Applicant requesting that she contact her lawyer, on April 26, 2017.2 and a follow up letter on November 16, 2017.3
The Applicant did not respond to any of the attempts to contact her. According to the Applicant’s representative, she has not been heard from since February 2017, up to and including the day of the hearing. As a result, the Applicant never signed the Release and Settlement Disclosure Notice, and the settlement was not completed.
The matter was then scheduled for a hearing. However, at the pre-hearing, the Applicant’s representative advised that he would be moving to have his firm removed from the record as he had lost contact with his client, and the pre-hearing letter dated January 19, 2018, contained a notice advising State Farm not to prepare for a contested hearing. That letter contained a warning that should the Applicant attend at the scheduled hearing, the hearing would be converted to a resumption of pre-hearing; should the Applicant not appear the arbitrator may proceed with the hearing and proceed in the party’s absence. Further, the letter advised that should the party not attend, the party is not entitled to any further notice of the proceeding. A similar warning regarding non attendance, was contained in the Notice of Hearing sent to the Applicant dated December 22, 2017.
Having examined the Motion Record provided, I am satisfied that the Applicant was properly served at her last known address. The Insurer did not oppose the motion. Having heard the submissions of Mr. Jakubovic and having reviewed the Motion Record, I am satisfied that there has been a breakdown in the solicitor –client relationship. I am therefore granting the motion. The firm of Harvey Katz LLP are removed as solicitor of record in this matter.
THE REQUEST FOR DIMISSAL:
After Mr. Jakubovic withdrew, and no one appearing on the Applicant’s behalf, Ms. Harper requested that the Application for Arbitration be dismissed with expenses in favour of State Farm.
As the burden of proof rests on the Applicant, in the absence of any evidence on her behalf, I granted the Insurer’s motion to dismiss the Application for Arbitration.
EXPENSES:
The Insurer then requested an order for expenses in the amount of $4,500.00. The Insurer submitted a draft bill of costs, ostensibly to illustrate that a significant amount of work was done by the Insurer, to prepare for this arbitration, despite the ultimate non attendance of the Applicant, and the amounts that the Insurer might otherwise be entitled to on a private retainer, if not limited by the Expense Regulation. The total submitted on a partial indemnity basis, was $21,204.61; on a substantial indemnity basis, $27.396.60, and at actual rates, $31,203.16. The disbursements including HST, totalled $5,877.07, but included the $3,000.00 filing fee paid by the Insurer, which is usually not reimbursable.
The Insurer submitted that its request for an order of $4,500.00 is reasonable under the circumstances. In its draft bill of costs, the Insurer outlines the work put in by 3 lawyers:
Laura Emmett
57.2 hours
Sonia Fabiani
0.3 hours
Jacqueline Woodward
0.08 hours
Various Clerks
20.3 hours
Laura Emmett-57.2 hours;Sonia Fabiani-0.3 hours; and Jacqueline Woodward-.08 hours; and 20.3 hours by various clerks in the office.
In making an award of expenses under Section 282(11) of the Insurance Act, the arbitrator may award all or part of such expenses to the maximum set out in the regulations. An arbitrator shall consider only the criteria set out in Rule 75.2 of the Dispute Resolution Practice Code. Those criteria are:
(a) each party’s degree of success in the outcome of the proceeding;
(b) any written offers to settle made in accordance with Rule 76;
(c) whether novel issues are raised in the proceeding;
(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;
(e) whether any aspect of the proceeding was improper, vexatious or unnecessary;
(f) whether the insured person refused or failed to submit to an examination as required under section 42 of the Schedule or refused or failed to provide any material required to be provided by subsection 42(10); and,
(g) whether the insured person refused or failed to submit to an examination as required under section 44 of the Schedule, or refused or failed to provide any material required to be provided under subsection 44(9).
The criteria that I consider relevant to this arbitration are the Insurer’s degree of success and the conduct of a party or a party’s representative that tended to prolong, obstruct or hinder the proceeding.
As Mrs. Douce did not appear at the hearing and offered no evidence in support of her case, in the absence of any explanation as to why she did not appear, the arbitration was dismissed in its entirety. The Insurer was therefore 100% successful in this arbitration.
With respect to the aspect of prolonging this proceeding, having heard the submissions of the Insurer, it was believed that the parties had settled this matter in February 2017. At that point in time, the parties had agreed that the Applicant would withdraw her Application, and that there be no costs to either party. Prior to the tentative settlement, however, the Insurer advised that it had to hire an investigator with respect to entitlement. There was a dispute between the parties as to whether the claims of the Applicant had been incurred and, despite many requests by the Insurer, documentary evidence with respect to proof that the services had been incurred had not been forthcoming. The Insurer found it necessary to interview the service provider with respect to entitlement. At the interview, the Applicant’s representative restricted the questioning of the service provider.
Further, as the documentation required to prove entitlement was not forthcoming, the scheduled 2-day hearing set to proceed on January 3 and 4, 2017 had to be adjourned. Notwithstanding the late adjournment request, the Insurer had to prepare for a 2-day hearing, assuming that the matter would proceed.
The lack of production of the appropriate documentation, the failure of the Applicant to complete the settlement, and the unexplained absence of the Applicant from February 2017, to the present, all required the Insurer to take extra steps and incur extra costs before this hearing could be completed. The bulk of the preparation took place prior to the January 2017 adjournment. However, the Insurer still had to attend at the hearing in January 2018.
Significant extra preparation time and expense could have been avoided, had the Applicant’s actions not delayed the proceeding.
In the absence of any submissions by the Applicant with respect to expenses, I find that the Insurer’s request for an expense order in its favour for $4,500.00 is reasonable. As the Insurer made no submissions as to disbursements, the order is inclusive of fees and disbursements, with an additional $585.00 for HST.
January 31, 2018
Alan Mervin Arbitrator
Date
Financial Services Commission des Commission services financiers of Ontario de l’Ontario
Neutral Citation: 2018 ONFSCDRS 25
FSCO A14-002671
BETWEEN:
MYRNA DOUCE
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:
The firm of Harvey Katz, LLP is removed as representative of record for the Applicant.
Mrs. Douce’s Application for Arbitration is dismissed.
Expenses in the amount of $5,085.00, inclusive of fees, disbursements and HST, are awarded to State Farm.
January 31, 2018
Alan Mervin Arbitrator
Date
Footnotes
- The Statutory Accident Benefits Schedule — Effective September 1, 2010, Ontario Regulation 34/10, as amended.
- Exhibit A to Affidavit of Raquel Fontes, Motion Record of the Applicant’s Representative
- Exhibit B to Affidavit of Raquel Fontes, Motion Record of the Applicant’s Representative