Court File and Parties
COURT FILE NO.: CV-13-0370-00 DATE: 2017-05-24
ONTARIO SUPERIOR COURT OF JUSTICE
B E T W E E N:
GORDON GRAVELLE O/A CODEPRO MANUFACTURING Plaintiff
G. Gravelle, for the Plaintiff
- and -
DENIS GRIGORAS LAW OFFICE; DENIS GRIGORAS, AN INDIVIDUAL Defendant
B. Hardick, for the Defendant
HEARD: May 9, 2017 at Thunder Bay, Ontario
Madam Justice B. R. Warkentin, R.S.J.
Reasons On Motion for Summary Judgment
[1] This is a motion by the Defendants seeking summary judgment pursuant to Rule 20 of the Rules of Civil Procedure on the basis that the Plaintiff’s action is statute barred due to the expiration of the two year limitation period for commencing an action as set out in s. 4 of the Limitations Act, 2002, S.O. 2002, c.24.
[2] The Plaintiff’s action against the Defendants is for professional negligence alleging that there was negligence by the Defendants in their representation of the Plaintiff in the sale of the Plaintiff’s interest in an electronic key cutting machine.
[3] In his action commenced on October 4, 2013, the Plaintiff is seeking in excess of 3 million dollars in damages, including punitive damages.
Background
[4] The Plaintiff entered into an agreement with a purchaser (Kaba IIco Corp. and Chuck Murray) on November 14, 2006. In March 2008 the Plaintiff retained the Defendants Denis Grigoras and his law firm Denis Grigoras Law Office, to represent him to assist in negotiating various disputes that had arisen under that agreement. Part of the negotiations resulted in a settlement that contained a clause requiring the parties to go to binding arbitration to resolve any future disputes under the agreement in North Carolina. A settlement agreement was entered into on April 22, 2008 with the binding arbitration clause as part of the agreement.
[5] The Plaintiff claims that the Defendant, Denis Grigoras advised him that the arbitration clause was unenforceable in the United States when in fact it was enforceable in the State of North Carolina. He also alleges that Mr. Grigoras was not qualified to provide legal advice on the laws of North Carolina where he was not licenced.
[6] In November 2008 the Plaintiff commenced an action against the Purchaser in the Ontario Superior Court in Thunder Bay with respect to other disputes that had arisen and in that action he sought to have the arbitration clause declared unenforceable.
[7] The Plaintiff`s evidence was that at his request, Mr. Grigoras reviewed the statement of claim for the November 2008 action and provided him with suggested revisions. The Plaintiff alleges that at that point, Mr. Grigoras should have informed him that he could not pursue his legal action against the Purchaser because the binding arbitration clause was a valid clause. The Plaintiff claims that Mr. Grigoras also had an obligation to inform him that he had provided incorrect legal advice to the Plaintiff in 2006 regarding the enforceability of the arbitration clause in the settlement agreement.
[8] The Plaintiff claims that Mr. Grigoras continued to advise him throughout 2008 that he had a strong argument in favour of having the arbitration clause declared unenforceable and by doing so, he prevented the Plaintiff from discovering the errors and negligent advice he had received from Mr. Grigoras in 2006 regarding the enforceability of the arbitration clause.
[9] In March 2009 the Plaintiff’s Thunder Bay action against the Purchaser was dismissed without prejudice. The Purchaser had opposed the action and sought to compel the Plaintiff to attend binding arbitration.
[10] In June 2009 the Plaintiff retained a new lawyer, Barry Leon to pursue his claims against the Purchaser. A new statement of claim was issued on September 23, 2010 against the Purchaser, seeking in part to declare the arbitration clause unenforceable. The Purchaser moved to have this second action stayed in favour of requiring the parties to attend binding arbitration in North Carolina as per the settlement agreement.
[11] On October 11, 2011, the Plaintiff decided to abandon his claim against the Purchaser and stipulated that he would enter into binding arbitration in North Carolina with the Purchaser as per the settlement agreement. The civil action was permanently stayed.
[12] In December 2012, after hearing from the parties during binding arbitration, the arbitrator found in favour of the Purchaser. The Plaintiff sought reconsideration of the arbitrator’s decision; however he learned that arbitration rules in North Carolina do not permit reconsideration. As such, the Plaintiff appealed to the U.S. Federal Court and was unsuccessful. The Federal Court of Appeal decision was rendered in September 2012.
[13] The Plaintiff now seeks compensation from the Defendants for lost business profits as a result of the unsuccessful arbitration as well as legal fees he incurred throughout the history of the litigation against the Purchaser regarding the settlement agreement and subsequent disputes.
[14] The Defendants deny liability for all of the Plaintiff’s claims. They also allege that the Plaintiff’s claims are statute barred by virtue of s. 4 of the Limitations Act, 2002, which provides a two year limitation period as follows:
“Unless this Act provides otherwise, a proceeding shall not be commenced in respect of a claim after the second anniversary of the day on which the claim was discovered.”
[15] It is the position of the Defendants that the two year limitation period began to run on November 23, 2009 when the Plaintiff wrote to Mr. Grigoras alleging misconduct. The letter ended with the following statement by the Plaintiff:
In the matter of Gravelle v. Kaba ILCO, you failed to advise me on the exorbitant costs associated with binding arbitration...[and] you expressly gave me consent to file a lawsuit bearing your firms [sic] name, then subsequently engaged in reprehensible misconduct which was highly prejudicial to my position, by falsely claiming to both the court and to opposing counsel, the [sic] you never authorized me to file the issued claim...
[16] The Plaintiff had commenced an action against the Defendants in late 2009 being court file number CV-09-550 claiming the Defendants were negligent regarding their advice on an unrelated matter. On March 24, 2010, the Plaintiff sought the consent of counsel for the Defendants in that action to amend the statement of claim to include the allegations of negligence regarding the North Carolina arbitration clause. The pleadings were never amended and that action was eventually dismissed for delay on July 26, 2012.
Law and Analysis
[17] The Defendants claim that the Plaintiff has missed the two year limitation period in which he should have commenced an action against the Defendants and having failed to commence his action in that period, the Defendants are entitled to summary judgment.
[18] The Plaintiff argued that the limitation period did not begin to run until October 11, 2011 at the earliest, which was the date upon which he stipulated that he would enter into binding arbitration in North Carolina and his civil action against the Purchaser was stayed.
[19] A court must grant summary judgment if it is satisfied that there is no genuine issue requiring a trial with respect to a claim or defence (Rules of Civil Procedure, RRO 1990, Reg 194, r 20.04(2)(a); Hryniak v Mauldin, 2014 SCC 7, at para 47 [Hryniak]).
[20] There is no genuine issue requiring a trial where the judge is able to reach a fair and just determination on the merits on a motion for summary judgment. When the process allows the judge to make the necessary findings of fact, to apply the law to those facts, and it is a proportionate, more expeditious and less expensive means to achieve a just result, summary judgment is the appropriate remedy (Hryniak at para 49).
[21] In determining whether or not there is no genuine issue requiring a trial, a court shall consider the evidence presented by the parties on the summary judgment motion. A judge may also weigh evidence, evaluate the credibility of a deponent and draw any reasonable inference from the evidence, unless it is in the interest of justice for such powers to be exercised only at trial (Rules of Civil Procedure, r 20.04(2.1); Hryniak at para 52).
[22] In determining whether to apply Rule 20.04(2.1), the judge should determine whether a full appreciation of the evidence and issues required to make a dispositive finding can be achieved by way of summary judgment, without a trial. The evidence need not be equivalent to that expected at trial, but the judge must be confident that the dispute can be resolved fairly (Hryniak, at paras 53, 57).
[23] There is no dispute that the limitation period to commence an action against the Defendants was two years. The question before the court on this summary judgment motion is whether or not the provisions of s. 5 of the Limitations Act were satisfied. Section 5 sets out the factors to be considered when ascertaining when a claim was or should have been known to a plaintiff:
5.(1) A claim is discovered on the earlier of,
(a) the day on which the person with the claim first knew,
(i) that the injury, loss or damage had occurred,
(ii) that the injury, loss or damage was caused by or contributed to by an act or omission,
(iii) that the act or omission was that of the person against whom the claim is made, and
(iv) that, having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it; and
(b) the day on which a reasonable person with the abilities and in the circumstances of the person with the claim first ought to have known of the matters referred to in clause (a).
(2) A person with a claim shall be presumed to have known of the matters referred to in clause (1) (a) on the day the act or omission on which the claim is based took place, unless the contrary is proved.
[24] The evidence before me on this summary judgment motion supports the Defendants’ position that the Plaintiff had discovered his claim against the Defendants more than two years prior to the date upon which the Plaintiff commenced this action on October 4, 2013.
[25] The Plaintiff’s argument was that even though he believed the advice he received regarding the arbitration clause was negligent as early as 2009; that because he also believed that his litigation against the Purchaser to set aside the settlement agreement had a strong probability of success, which created the likelihood he would not need to sue the Defendants, the limitation period as against the Defendants did not start to run until he withdrew from the litigation and agreed to binding arbitration on October 11, 2011.
[26] However, as already noted, on November 23, 2009 the Plaintiff wrote to the Defendant, Denis Grigoras with a subject line: Notice of Pending Legal Malpractice Action. In that letter the Plaintiff commented on the exorbitant costs associated with binding arbitration and threatened to sue the Defendants if his claim with the Purchaser did not settle and informed them to put their insurer on notice.
[27] This letter was followed by the letter on March 24, 2010 in which the Plaintiff sought to amend pleadings against the Defendants in an unrelated proceeding to include negligence claims regarding their failure to properly inform him about binding arbitration clauses in contracts interpreted under the laws of North Carolina.
[28] I find that by virtue of this evidence, the Plaintiff had discovered that he had a claim against the Defendants by November 23, 2009. The fact that the Plaintiff chose to continue to pursue his law suit against the Purchaser to set aside the settlement agreement, believing he would be successful does not stop the limitation period from running as against the Defendants.
[29] I therefore find that the limitation period began to run on November 23, 2009 and as such any action or claim against the Defendants would have to have been commenced on or before November 22, 2011 in order to comply with the provisions of s. 4 of the Limitation Act. The Plaintiff’s action, commenced on October 4, 2013 is therefore statute barred and shall be dismissed.
Costs
[30] The Defendants are entitled to their costs of this motion. If the parties are unable to resolve the issue of costs between themselves, they shall file written submissions on costs within 30 days of this decision. The submissions shall not exceed 5 pages.
Madam Justice B. R. Warkentin, R.S.J.