CITATION: Zgrablic v. State Farm Fire and Casualty Company, 2019 ONSC 1968
DIVISIONAL COURT FILE NO.: 220/18
DATE: 20190327
ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT
KITELEY, PARAYESKI, and FAVREAU JJ.
BETWEEN:
MARY ZGRABLIC and LEONARD ZGRABLIC
Mary Zgrablic, acting in person
Applicants
– and –
STATE FARM FIRE AND CASUALTY COMPANY
Adam Bucci, for the Respondent
Respondent
HEARD at Toronto: March 27, 2019
PARAYESKI J. (Orally)
[1] The applicants seek judicial review leading to the setting aside of an award or umpire’s report made by Umpire Philip Garbutt on March 28, 2018. He was appointed an umpire under section 128 of the Insurance Act by means of an order granted by Justice Gans on November 15, 2017.
[2] The award concerned two types of losses that flowed from a fire in residential property rented by the applicants. The fire occurred on February 15, 2017. State Farm provided a renter’s policy. The damages addressed by the award were:
(1) Coverage “B” Contents; and
(2) Coverage “C” Additional Living Expenses.
[3] The contents award was for $18,034.50. The additional living expenses award was for $0.
[4] The issues to be determined by this Court are as follows:
(1) Did the umpire exceed his jurisdiction in quantifying the losses under Coverage “B” Contents by participating in negotiations that included the execution of a partial, full and final release in respect of those contents; and
(2) Did the umpire exceed his jurisdiction in interpreting the amount of damages for additional living expenses to be limited to “actual losses sustained” as against the amount of any lost benefit as is argued by the applicants.
[5] The parties agree that the standard of review of an appraisal award under section 128 of the Insurance Act is that of reasonableness. The standard has been recognized by this Court in its decision in Mandhani v. Wasanesa Mutual Insurance Company, reported at 2018 ONSC 4282.
[6] In that decision, the earlier decision of this Court in Sead v. ING Halifax Insurance, reported at 2005 41991 (ON SCDC), 2005, 78 O.R. (3d) 481 was cited as standing for the proposition that courts ought not to interfere with an umpire’s award unless there is a proof of misconduct or that jurisdiction has been exceeded.
[7] In their materials, the applicants raised issues of procedural fairness and the denial of natural justice; however, these need not be addressed because of how this hearing proceeded before us.
[8] Relative to Coverage “B” Contents, at the outset of her submissions, the applicant advised that the applicants no longer dispute whether or not there was a settlement relative to the amount of this claim. Rather, they dispute their obligation to execute a partial, full and final release in respect of the same.
[9] In the course of the hearing, State Farm advised that it has paid the amount of the umpire’s award to the applicants and is not insisting upon a partial, full and final release from them. State Farm advised that it would rely upon the transcript of the hearing before the umpire to establish, if necessary, the settlement relative to Coverage “B” and appraiser’s costs.
[10] Accordingly, there is no reason to set aside the umpire’s appraisal on Contents. Given the payment and the position on the release, there appears to be no live issue remaining relative to Coverage “B” Contents.
[11] With respect to Coverage “C” Additional Living Expenses, the landscape also changed in the course of the hearing before us. The applicants argued that by coming to his appraisal of nil, the umpire acted outside of his jurisdiction by interpreting the wording of the policy. The respondent acknowledges that policy interpretations, which it disputes happened here, would be outside of the umpire’s jurisdiction.
[12] We tend to agree that all the umpire did in reaching his appraisal on this coverage was to employ common sense and plain language, but that need not be considered further. That is because the respondent advises that it would not oppose the applicants’ right to return to court relative to Coverage “C”.
[13] That concession includes the ability of the judge in that case to address both policy wording and the amount of damages, if any. Specifically, the respondent agreed that it would not argue that the judge hearing the issue or issues would in any way be bound by the umpire’s appraisal of nil should the court accept the applicants’ interpretation for coverage.
[14] It is anticipated that the policy interpretation to be dealt with in another court would revolve around whether entitlement is limited to actual costs incurred for additional living expenses or whether the applicants might be entitled to damages relative to a loss of the benefit of a second room not withstanding that they did not pay for one.
[15] This would appear to fully address the areas of concern raised by the applicants on the topic of Coverage “C” Additional Living Expenses. Similarly, therefore, there is no reason to set aside the umpire’s appraisal relative to additional living expenses.
[16] For these reasons, the application for judicial review is dismissed.
KITELEY J.
[17] I have endorsed the Applicant’s Application Record (Volume 1) as follows: “This Judicial Review Application is dismissed. Neither party shall pay or be paid costs of the application.”
___________________________ PARAYESKI J.
I agree
KITELEY J.
I agree
FAVREAU J.
Date of Reasons for Judgment: March 27, 2019
Date of Release: March 28, 2019
CITATION: Zgrablic v. State Farm Fire and Casualty Company, 2019 ONSC 1968
DIVISIONAL COURT FILE NO.: 220/18 DATE: 20190327
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
KITELEY, PARAYESKI, and FAVREAU JJ.
BETWEEN:
MARY ZGRABLIC and LEONARD ZGRABLIC
Applicants
– and –
STATE FARM FIRE AND CASUALTY COMPANY
Respondent
ORAL REASONS FOR JUDGMENT
PARAYESKI J.
Date of Reasons for Judgment: March 27, 2019
Date of Release: March 28, 2019