Armstrong v. The Co-operators, 2020 CanLII 121840

Licence Appeal Tribunal

Citation: Armstrong v. The Co-operators, 2021 ONLAT 20-002362/AABS

Released Date: 09/20/2021

In the matter of an Application pursuant to subsection 280(2) of the Insurance Act, RSO 1990, c I.8, in relation to statutory accident benefits.

Between:

Denise Armstrong

Applicant

and

The Co-operators

Respondent

DECISION

ADJUDICATOR: Lindsay Lake

APPEARANCES:

For the Applicant: Adam Moras, Counsel

For the Respondent: Bruce Keay, Counsel

HEARD: By Way of Written Submissions

OVERVIEW

1The applicant, Denise Armstrong, was involved in two motor vehicle accidents – one on October 27, 2015 and a second on May 2, 2017. The applicant sought benefits pursuant to the Statutory Accident Benefits Schedule – Effective September 1, 2010 (Schedule)¹ from The Co-operators, the respondent, for both accidents.

2The applicant submitted an application to the Licence Appeal Tribunal – Automobile Accident Benefits Service (Tribunal) as a result of a dispute with the respondent over benefits regarding her May 2, 2017 accident. A case conference was held on June 18, 2019 and the parties verbally agreed to settle the applicant’s claims for both the October 27, 2015 and the May 2, 2017 accidents on a full and final basis. The parties disagree regarding the events that took place after the case conference. The respondent maintained that a valid settlement agreement was entered into for both matters whereas the applicant disagreed.

3On March 3, 2020, the applicant applied to the Tribunal disputing the validity of the settlement agreement. A case conference was held on July 27, 2020 and the matter proceeded to a written hearing.

ISSUE IN DISPUTE

4The following issue is to be decided:

(i) Is there a valid settlement agreement between the applicant and the respondent regarding the applicant’s October 27, 2015 and May 2, 2017 motor vehicle accidents?

RESULT

5I find that the settlement agreement regarding both the applicant’s October 27, 2015 and May 2, 2017 accidents was valid and is not void ab initio. I also decline to grant the applicant’s request to set aside the settlement agreement on the grounds of mistake.

FACTS

6It is undisputed that the parties agreed to a full and final settlement for any claims arising from the applicant’s October 27, 2015 and May 2, 2017 accidents for the total amount of $12,000.00 at the June 18, 2019 case conference.

7On June 18, 2019, the adjuster log notes show that the handling adjuster, William Ho, prepared “release documents” and issued them to the applicant via mail and also sent them via email on the same date to the applicant’s representative, Ms. Zenan Babb, at zenan@grillo.ca.² Mr. Ho confirmed in his affidavit that he never received any notification Ms. Babb did not receive this email.³ Mr. Ho’s email addressed to Ms. Babb, however, does not show any attachments.⁴ In any event, the respondent also relied upon a letter dated June 18, 2019 addressed to Ms. Babb, which was copied to the applicant, to which the full and final releases and the Settlement Disclosure Notice (SDN) was attached.⁵

8At some point, the applicant received the settlement documents and the respondent’s June 18, 2019 letter in the mail.⁶ In her affidavit, the applicant stated that upon receipt of the documents, she called her husband who then called Grillo Law (Grillo), the applicant’s representative’s firm.⁷

9A July 4, 2019, 2:25 p.m. email from Rebecca Benevento, receptionist at Grillo, corroborates the applicant’s husband’s phone call.⁸ In her email to Ms. Babb and Igar Tsimafeyev, Ms. Babb’s assistant, Ms. Benevento advised that the “client” phoned and mentioned papers that “he” received from the respondent that “he” was told not to sign by Grillo. This email stated that if “he” did not receive a call before the end of the day that “he” was going ahead and sign them. Ms. Benevento asked either Mr. Tsimafeyev or Ms. Babb to call the applicant’s husband.

10In response, Ms. Babb sent an email dated July 4, 2019 at 2:26 p.m. to Mr. Tsimafeyev which stated, “Tell him don’t sign it we are waiting confirmation from EHC for payment of o/s account.”⁹

11Ms. Babb’s affidavit also included the following information:

(i) She asked Mr. Tsimafeyev to call the applicant’s husband and to “once again” advise him to not have the applicant sign the settlement documents;¹⁰

(ii) That Mr. Tsimafeyev confirm with her that he spoke with the applicant’s husband; and

(iii) On the same day, Ms. Babb also spoke with the applicant’s husband and advised that “it was best” that the applicant not accept the offer to settle.¹¹ Ms. Babb noted that the applicant’s husband was “upset because the process was taking too long and hung up the phone.”¹²

12The applicant stated in her affidavit that when her husband called her back, he said that he spoke with someone at Grillo, and that he was advised that she should sign the settlement documents.¹³

13On July 5, 2019, the applicant first attended the respondent’s branch office in Oshawa and was directed to the respondent’s Whitby office. When she attended the Whitby office, the applicant was advised to meet with her lawyer,¹⁴ but instead met with an unknown person there and signed the respondent’s June 18, 2019 letter, a full and final release for the October 27, 2015 accident, a full and final release for the May 2, 2017 accident, and the SDN.¹⁵

14Donna Crooks, claims representative with the respondent at its Whitby office, forwarded the applicant’s settlement documents to Mr. Ho via email on July 5, 2019 at 12:37 p.m.¹⁶

15On July 15, 2019, Grillo deposited a $12,000.00 cheque from the respondent dated July 11, 2019.¹⁷

16On September 10, 2019, Ms. Babb wrote to Mr. Ho and stated, “it has come to our attention you sent the Full and Final [sic] along with Settlement Disclosure documents directly to our client without notifying us. Our client signed the said documents without our knowledge or advice.”¹⁸ In this letter, Ms. Babb alleged unethical, deceitful, and bad faith conduct on behalf of the respondent in contacting the applicant directly when she had representation. Ms. Babb also returned the settlement funds and asserted that the applicant’s claims remained open.¹⁹

17On September 24, 2019, May Li, claims representative with the respondent, wrote to Ms. Babb.²⁰ Ms. Li acknowledged receipt of Ms. Babb’s September 10, 2019 correspondence, directed Ms. Babb’s attention to the applicant’s signature on the SDN which indicated that she had two business days from the date that the documents were signed to rescind the settlement agreement. As Ms. Babb’s letter was received 68 days after the applicant signed the full and final releases, the respondent was maintaining its position that the settlement was valid and could not be rescinded. Ms. Li also returned the settlement funds back to Ms. Babb.

ANALYSIS

18Section 9.1 of Regulation 664 governs settlement of claims for accident benefits. This section sets out requirements for an insurer to issue certain documents to the insured person, including a “disclosure notice” containing a description of the available benefits and the offer to settle made by the insurer, a statement recommending independent legal advice, and an acknowledgment by the insured that they read the disclosure notice and considered seeking independent legal, medical or financial advice before signing.²¹

19Sections 9.1(4) and (5) address an insured’s person’s right to rescind a settlement:

(4) The insured person may rescind the settlement within two business days after the later of the day the insured person signs the disclosure notice and the day the insured person signs the release.

(5) The insured person may rescind the settlement after the period referred to in subsection (4) if the insurer has not complied with subsections (2) and (3).

20In this case, the applicant does not dispute:

(i) the form or substance of the settlement documents such that the respondent complied with sections 9.1(2) or (3) of Regulation 664;

(ii) that she signed all of the documents on July 5, 2019; or

(iii) that she attempted to rescind the settlement agreement outside of the two business days provided under Regulation 664 as the “cooling off” period.

21Instead, the applicant submitted that the settlement agreement is void ab initio as it was improperly entered into. Alternatively, the applicant submitted that the settlement agreement should be set aside on the grounds of mistake.

22The respondent’s position is that the applicant executed a valid settlement agreement for both her October 27, 2015 and May 2, 2017 accidents, and that the settlement agreement should not be set aside.

23For the reasons that follow, I find that the settlement agreement regarding both the applicant’s October 27, 2015 and May 2, 2017 accidents was valid and is not void ab initio. The settlement agreement is also not set aside on the grounds of mistake.

Void Ab Initio

24It is the applicant’s position that the settlement agreement should be set aside as it is void ab initio because it was improperly entered into on the basis that the respondent cannot deal directly with an insured person once they have appointed a legal representative. The applicant submitted that the respondent breached its obligation of good faith dealings with the applicant by dealing with her directly despite knowing she had legal representation by:

(i) Sending the settlement documents directly to her; and/or

(ii) Not turning her away when she attended the respondent’s branch offices to sign the settlement documents.

25The applicant relied upon s. 64(2) of the Schedule and Rule 6.1 of the Licence Appeal Tribunal, Animal Care Review Board, and Fire Safety Commission’s Common Rules of Practice and Procedure, Version I (October 2, 2017) as amended (Rules) which concern service of documents. Rule 6.1 provides permitted means of service but does not mandate service on a legal representative when a person is represented. Further, s. 64(2) of the Schedule does not apply to the service of settlement documents. Section 64(2) only applies to documents required or permitted under the Schedule and the service of settlement documents is governed by a different regulation, Regulation 664.

26Section 9.1(2) of Regulation 664 requires an insurer to provide the documents set out paragraph [18] to the insured person. The evidence in this matter is that Mr. Ho complied with s. 9.1(2) and sent the documents directly to the applicant.

27This is also not a situation, as argued by the applicant, of the respondent interfering in a lawyer-client relationship. The applicant relied upon the Financial Services Commission of Ontario (FSCO) decision of Simms v. Markel Insurance Co. of Canada (Simms),²² where Director’s Delegate Draper held that, “once a lawyer is involved, direct communication with the insured person can be seen as interference in the lawyer-client relationship.”²³ This decision, however, is distinguishable on the facts. In this matter, the respondent sent the settlement documents to both the applicant and at least alerted Ms. Babb via email about the settlement documents on June 18, 2019. In Simms, notice was only provided to the representative and not to the insured person.

28Moreover, I am satisfied that Ms. Babb was at least aware that the applicant had received the settlement documents as of July 4, 2019. Despite Mr. Ho’s June 18, 2019 email to Ms. Babb not including the settlement documents as attachments, Ms. Babb’s email to Mr. Tsimafeyev dated July 4, 2019 indicate that she was aware of the settlement documents as she advised Mr. Tsimafeyev to “once again” advise the applicant’s husband not to sign the documents. Further, Ms. Babb also stated in her affidavit that she herself called the applicant’s husband and advised not to sign the documents on July 4, 2019 as well. Therefore, despite being aware that the applicant was in possession of the settlement documents, there is no evidence before me that Ms. Babb took any steps to request that the documents be sent to her directly from the respondent or that she even took issue with the respondent sending the documents directly to the applicant at that time.

29It was only upon Ms. Babb becoming aware that the applicant signed the settlement documents that she wrote to the respondent on September 10, 2019 and questioned the respondent’s actions in sending the settlement documents directly to the applicant. The applicant submitted that she never notified Ms. Babb that she had signed the settlement documents. However, even if there was evidence to support this submission, the applicant provided no authority for its position that because Ms. Babb was not aware that the applicant signed the settlement documents this somehow invalidates the agreement or gives rise to a finding that the settlement was not properly entered into.

30The applicant also submitted that had the respondent turned her away when she attended the respondent’s offices, “the Release and SDN would never have been signed and there would be no issue as to whether this matter has settled.”²⁴ I find that this position is not supported by the evidence.

31The applicant was initially turned away from respondent’s office in Oshawa. She was redirected to the respondent’s office in Whitby which she attended. Once there, the applicant was advised to sit down with her lawyer, but she did not heed this advice. Instead, the applicant requested someone there to assist her to sign the documents.²⁵ Therefore, I find that the applicant was turned away on two occasions by representatives of the respondent, one of which advised the applicant to attend with her legal representative prior to signing the settlement documents and the applicant still signed the settlement documents.

32For all of the reasons set out above, I find that the settlement agreement is not void ab initiio or was improperly entered into.

Mistake

33The applicant submitted that but for the mistaken advice passed along to her by her husband (i.e. that the person he spoke to at Grillo advised that she should sign the settlement documents), that no settlement agreement would have been entered into.

34To support her position, the applicant relied upon the Court of Appeal decision in Milios v. Zagas (Milios)²⁶ where, as a result of a misunderstanding of settlement instructions received from a claimant’s wife, the court exercised its discretion to not enforce a settlement agreement entered into by the claimant’s solicitor. The applicant’s position is that the Milios case is analogous as to what occurred in this matter. I disagree. In this matter, there was no agreement entered into on behalf of the applicant by a legal representative as it was the applicant herself that signed the settlement documents.

35Furthermore, I find that the applicant has failed to prove on a balance of probabilities that any mistake was made in this matter. Ms. Babb’s affidavit states that the applicant’s husband confirmed to her that he instructed the applicant to sign the settlement documents and to attend at an office of the respondent to do so.²⁷ There is no indication in this paragraph, or in Ms. Babb’s affidavit generally, that this was a mistake by the applicant’s husband or if he simply did not follow Ms. Babb’s advice given his reported dissatisfaction with the length of the settlement process. I do not have any evidence from the applicant’s husband that allows me to make this determination. Additionally, even though Ms. Babb’s affidavit stated that Mr. Tsimafeyev confirmed with her that he spoke with the applicant’s husband, I again have no evidence before me regarding what was discussed in this conversation and what instructions were provided to the applicant’s husband, as I also do not have any evidence from Mr. Tsimafeyev either.

36On the evidence, I am unable to determine that a mistake was made in this matter by the applicant’s husband informing the applicant that someone at Grillo advised that she should sign the settlement documents. Therefore, I decline to grant the applicant’s request to set aside the settlement agreement based on a mistake.

CONCLUSION

37For the reasons outlined above, I find that the settlement agreement regarding both the applicant’s October 27, 2015 and May 2, 2017 accidents was valid and not void ab initio. I also decline to grant the applicant’s request to set aside the settlement agreement on the grounds of mistake. This application is dismissed.

Footnotes

1. 1O. Reg. 34/10.
2. 2Exhibit “b” of the Affidavit of William Ho sworn October 6, 2020, Insurer’s Compendium, tab 1.
3. 3Affidavit of William Ho sworn October 6, 2020, Insurer’s Compendium, tab 1, para. 9.
4. 4Exhibit “d” of the Affidavit of William Ho sworn October 6, 2020, Insurer’s Compendium, tab 1.
5. 5Exhibit “c” of the Affidavit of William Ho sworn October 6, 2020, Insurer’s Compendium, tab 1.
6. 6Affidavit of Denise Armstrong sworn September 25, 2020, Applicant’s Affidavit Compendium, tab 1, para. 9.
7. 7Ibid.
8. 8Exhibit “a” of the Affidavit of Zenan Babb sworn September 25, 2020, Applicant’s Affidavit Compendium, tab 2.
9. 9Ibid.
10. 10Affidavit of Zenan Babb sworn September 25, 2020, Applicant’s Affidavit Compendium, tab 2, para. 13.
11. 11Ibid.
12. 12Supra note 10 at para. 14.
13. 13Supra note 6 at para. 9.
14. 14Ibid. at para. 11.
15. 15Supra note 5 and exhibit “e” of the Affidavit of William Ho sworn October 6, 2020, Insurer’s Compendium, tab 1.
16. 16Exhibit “e” of the Affidavit of William Ho sworn October 6, 2020, Insurer’s Compendium, tab 1.
17. 17Exhibit “f” of the Affidavit of William Ho sworn October 6, 2020, Insurer’s Compendium, tab 1.
18. 18Exhibit “g” of the Affidavit of William Ho sworn October 6, 2020, Insurer’s Compendium, tab 1.
19. 19Ibid.
20. 20Exhibit “h” of the Affidavit of William Ho sworn October 6, 2020, Insurer’s Compendium, tab 1.
21. 21Sections 9.1(2) and (3), Regulation 664.
22. 221999 CarswellOnt 5185 (FSCO).
23. 23Ibid. at paras. 16 and 20.
24. 24Applicant’s Submissions for Written Hearing para. 29.
25. 25Supra note 6 at para. 11.
26. 261998 CanLII 7119 (ON CA).
27. 27Supra note 6 at para. 16.```