SUPERIOR COURT OF JUSTICE – ONTARIO

COURT FILE NO.: CV-08-00368253-0000
MOTION HEARD: 20110818
REASONS RELEASED: 20120117

RE:

Teresina De Jesus Baptista Plaintiff v. Zoha Koziol and Aleksander Koziol Defendants

BEFORE: MASTER D.E. SHORT

COUNSEL:
Pearl Electriciteh
For the defendants, Zoha Koziol and
Aleksander Kozio (moving parties, Fax: 416-218-3184

Gordon Marsden
For a Statutory Third Party
Alberta Motor Association Insurance Company Fax: 416-593-5437

HEARD: August 18, 2011

Reasons for Decision

“A Bad Settlement Is Better Than A Good Trial”

I. Overview

[ 1 ] This motion brought on behalf of Zoha Koziol and Aleksander Koziol , the two defendants named in the title of proceedings of action CV-08-00368253 wherein Teresina De Jesus Baptista is the plaintiff.

[ 2 ] That action, which arose out of the last of three separate motor vehicle accidents, relates to a collision which occurred February 8 th , 2008, when the plaintiff’s vehicle was struck from the rear by the defendant’s vehicle and pushed into the vehicle in front of her. It is now of some significance to note that the Statement of Claim in this action was served on the Koziols on December 13, 2008. The parties have defined the within action as “Action 2” and the related accident as “Accident C”.

[ 3 ] Unfortunately for the plaintiff, she was also involved in two previous accidents.

[ 4 ] An action against other defendants involved in two earlier collisions, was commenced November 13, 2007 bearing action number 07-CV-343487 (“Action 1”).

[ 5 ] The first of those accidents, involving a Mr. Gould (“Gould”) occurred on May 19, 2005.(“Accident “A”)

[ 6 ] Subsequently Ms Baptista was involved in an accident that occurred on September 26, 2006. (“Accident B”). Two sets of defendants were involved in Accident B, those defendants named in Action 1, were named Sahdev, and Jandu.

[ 7 ] The allegations of negligence in the Statement of Claim in Action 1, as against Gould are that he ran a red light and struck the plaintiff, who was turning left on an advanced green light.

[ 8 ] The Alberta Motor Association Insurance Company (“Alberta”) was added as a statutory third party in Action 1, as Gould did not personally defend the claims against him in Action 1.

[ 9 ] The parties apparently agreed to global discoveries and ultimately a mediation relating to the plaintiff’s claims from all three accidents were addressed at an omnibus mediation in November of 2010.

II. Motion

[ 10 ] The defendant now brings this motion (after all the plaintiff’s claims apparently were settled) for a broad range of what would otherwise be relatively routine categories of relief.

[ 11 ] The moving parties, the Koziols, therefore seek an Order:

a) To consolidate Actions 1 and 2;

b) To amend their Statement of Defence to include their new crossclaim as against Gould;

c) To withdraw their Jury Notice in Action 1;

d) To then dismiss the plaintiff's claim as against all parties, without costs;

e) That the Trial Record be served on all parties within fifteen days; and

f) That the Registrar place this action on the trial list immediately after service of the Trial Record.

[ 12 ] It is then contemplated that, at that trial of the consolidated action, the Koziols will seek a contribution to the damages paid by their insurer to the plaintiff.

[ 13 ] Alberta opposes all the relief sought.

[ 14 ] Counsel for the Plaintiff did not participate in the motion.

III. The Mediation

[ 15 ] None of the parties objected before me to evidence being presented with respect to the result of the mediation.

[ 16 ] I am advised that at the mediation, counsel for Gould’s insurer, Alberta actively participated in the settlement discussions, but he ultimately was not prepared to contribute to the final settlement.

[ 17 ] The plaintiff’s evidence at her examination for discovery on July 15, 2010, was that all three accidents, namely accidents A, B, and C, contributed to her injuries.

[ 18 ] All parties attended at a global private mediation on November 11, 2010 . At that time the plaintiff settled her claims for all damages arising out of accidents A, B, and C.

[ 19 ] The evidence filed in support of the motion by counsel for the Koziols asserts that the agreed settlement of all the plaintiff’s claims was paid in the following proportions:

50% by the Koziols, defendants in Accident C;

25% by Sahdev, defendant in Accident B;

25% by Jandu, defendant in Accident B;

Nil by Gould and/or Alberta, for defendant in Accident A.

IV. The Battle Plan

[ 20 ] An Affidavit was filed by counsel on the record, for the Koziols, an “in-house litigation lawyer” at their insurer in which she sets out the now proposed strategy in some detail:

20. At the mediation, the insurers for Koziol, Sahdev, and Jandu - the parties who funded the settlement with the plaintiff - jointly agreed that they wished to proceed to a trial of the crossclaims as against Gould, whom they believe is liable for at least one third (1/3) of the plaintiff’s damages.

21. The portion of the settlement which the defendants in Accidents B and C believe should be paid by Gould is less than $200,000, that is, less than the amount of Alberta's statutory policy limits.

[ 21 ] A copy of the Minutes of Settlement filed on this motion state that the defendants will take out an order dismissing the plaintiff's action, without costs, and that the other defendants consent to an order for a trial together of the claims by Koziol, Sahdev, and Jandu as against Gould.

[ 22 ] The defendants in Accident B, have agreed on the apportionment of liability for that accident as between themselves with the Koziols admitting they were wholly liable for Accident C.

[ 23 ] In addressing the allegations of negligence in the Statement of Claim in Action 1 as against Gould, counsel observes in her affidavit:

“At the mediation, counsel for Alberta on behalf of Gould was actively participating in the settlement discussions, although he ultimately did not contribute to the final settlement. I therefore believe that Gould was not contesting liability for Accident A.”

[ 24 ] I do not treat the position taken on the mediation as in any way binding on Alberta. Nevertheless, without the driver present, it may be an uphill battle to refute the plaintiff’s version of the facts at trial.

[ 25 ] In her affidavit, counsel sets out her expectation of the probable outcome:

25. As the quantum of the plaintiffs damages has been established, and the liability of the defendants for the accidents in which they were each respectively involved is not at issue, the only remaining issue for trial is the allocation of the plaintiff's damages to each of her three accidents, and the respective contribution and indemnity of the defendants for these damages.

V. The Hurdles

[ 26 ] Counsel points out that in order for the Koziols, who are not presently parties in Action 1, to crossclaim as against Gould, Actions 1 and 2 need to be consolidated. Then the Koziols' Statement of Defence in the consolidated action must be amended to include their proposed crossclaim.

[ 27 ] Counsel addresses the consequences of such an order:

“27. As Gould did not contribute to the settlement of this matter , he cannot seek contribution and indemnity from any of the other defendants. I therefore believe that there is no basis for amending Alberta's Statement of Defence in response to the new crossclaim by the Koziols.” [my emphasis]

[ 28 ] I am not convinced of that conclusion. If a claim over is being asserted in the consolidated action why would Gould not be entitled to assert the others should contribute to any liability flowing from the accident and in a proportion perhaps different than that negotiated with the plaintiff? Certainly I would not be prepared in any event to preclude the filing of an amended pleading by Alberta in such a consolidated action.

[ 29 ] Apparently the Koziols were the only defendants who filed a jury notice. They now wish to withdraw their jury notice prior to proceeding to a trial of the crossclaims. Then only non-jury actions will be involved in the proposed consolidation.

[ 30 ] The Full and Final release provided by the plaintiff includes Mr Gould, amongst the defined “Releasees”. The document appears to follow a common boilerplate form and reads in part:

“FOR THE SAID CONSIDERATION the Releasor does hereby agree and undertake that she will not make any claim, assert any cause of action or initiate any proceeding against any person, partnership, corporation, or any other entity, who or which might claim contribution, indemnity or other relief as against the Releasees under the provisions of any statute, or at law, in this jurisdiction or any other, in respect of the subject matter of this Full and Final Release.”

[ 31 ] In the face of this form of release which at least was accepted by the Kosiols' insurer as a precondition of the payment of the settlement funds, is a claim for contribution still possible against Gould and his insurer?

[ 32 ] It is not necessary in this case to come to a firm conclusion on that issue, as a result of my conclusions as outlined below.

VI. Applicable Rule

[ 33 ] The provisions of Rule 6 dealing with a normal consolidation reads:

WHERE ORDER MAY BE MADE

6.01 (1) Where two or more proceedings are pending in the court and it appears to the court that,

(a) they have a question of law or fact in common;

(b) the relief claimed in them arises out of the same transaction or occurrence or series of transactions or occurrences; or

(c) for any other reason an order ought to be made under this rule,

the court may order that,

(d) the proceedings be consolidated, or heard at the same time or one immediately after the other; or

(e) any of the proceedings be,

(i) stayed until after the determination of any other of them, or

(ii) asserted by way of counterclaim in any other of them.

[ 34 ] Here because of the release already irrevocably given by the plaintiff for all three causes of action, the situation is clearly extraordinary. Thus, a careful parsing of the provisions of the Rule is necessitated.

[ 35 ] The proper approach on motion for consolidation is to first ascertain whether the moving party has satisfied one or more of the three "gateway" criteria. If the moving party meets one of these criteria, in exercising its discretion, the court should consider any relevant factors.

[ 36 ] In Master Dash’s reasons 101864 Ontario Ltd. v. 1721789 Ontario Inc., [2010] O.J. No. 2624 , he identifies at least 17 relevant factors to be consider on a motion to consolidate.

[ 37 ] In this case ‘these factors from his non-exhaustive list I have focused on the following:

(a) the extent to which the issues in each action are interwoven;

(b) the litigation status of each action;

(c) the timing of the motion;

(d) any prejudice a party is likely to experience if the actions are consolidated; and,

(e) whether the motion is brought on consent or over the objection of one of the parties.

[ 38 ] I turn to a consideration of the possible paths to obtain the orders sought by counsel for the Koziols.

(a) Question of law or fact in common

[ 39 ] The first of the gateway criteria is whether the first action and the second action have any question of law or fact in common.

[ 40 ] Since a full release has already been provided, does the plaintiff still have any continuing “claims”? I conclude not.

[ 41 ] Thus, the first action has no questions of fact or law to be considered. If the Plaintiff does not have a claim as against any of the Defendants how can any of the Defendants have a continuing claim for contribution and indemnity as against any of the other Defendants with regard to that non-existent liability?.

[ 42 ] As the first action has no questions of fact or law to be considered, the first action cannot have a question of fact or law in common with the second action.

[ 43 ] I conclude that the first action and the second do not have a question of fact or law in common.

(b) Relief Claimed Arises Out of the Same Occurrence or Series of Occurrences

[ 44 ] The second gateway criterion is whether the relief claimed arises out of the same occurrence or series of occurrences.

[ 45 ] In the first action, the Plaintiff claimed for damages arising from two motor vehicle accidents in 2005 and 2006. In the second action, the Plaintiff claimed for damages arising from a third motor vehicle accident in 2008.

[ 46 ] Prior to the settlement there was a series of occurrences that allegedly contributed to the plaintiff’s injuries

[ 47 ] By providing a Full and Final Release, the Plaintiff no longer has a claim for damages as against any of the Defendants in the first action or the second action.

[ 48 ] At present he first action does not have any crossclaims for contribution and indemnity by any of the Defendants as against any of the Defendants.

[ 49 ] No relief is being claimed in the first action . Since no relief being claimed in the first action, the relief claimed in the first action and the second action cannot arise out of the same occurrence as series of occurrences.

(c) Any Other Reason to Consolidate

[ 50 ] In effect, the moving party asserts that the good reason to consolidate the first action and second action is for the Koziols to be granted leave to amend their Statement of Defence to add a crossclaim for contribution and indemnity as against Gould and AMA.

[ 51 ] In the second action, the Koziols have failed to commence a third party action as against Gould and AMA for contribution and indemnity as against Gould and AMA for contribution and indemnity.

VII. Limitations Act, 2002

[ 52 ] Gould was involved in the 2005 accident. All the other defendants were well aware of the action against him by the time their actions came to discovery. There was no evidence before me as to when they became aware of that accident.

[ 53 ] Apparently none of the defendants saw fit to claim over against the other defendant drivers. This may well be a cost saving choice ,made in the expectation that everyone would eventually be “at the table”

[ 54 ] All the accidents occurred after the coming into force of the Limitations Act , 2002 . Under that statute, a basic two year limitation period applies to claims for damages.

[ 55 ] In Placzek v. Green, 2009 ONCA 83 , [2009] O.J. No. 326 (CA), J.M. Simmons J.A. addressed the Act’s approach to claims of this nature :

24 Section 18(1) is a deeming provision relating to contribution and indemnity claims. It deems the day the injured party's statement of claim is served on the contribution and indemnity claimant to be the day on which the acts or omissions on which the claim for contribution and indemnity is based took place. When read in combination with s. 4 and s. 15, s. 18 establishes the date of service of the injured party's statement of claim as the presumed commencement date for the basic two-year limitation period and the actual commencement date for the ultimate 15-year limitation period with respect to contribution and indemnity claims:

18(1) For the purposes of subsection 5(2) and section 15 , in the case of a claim by one alleged wrongdoer against another for contribution and indemnity, the day on which the first alleged wrongdoer was served with the claim in respect of which contribution and indemnity is sought shall be deemed to be the day the act or omission on which that alleged wrongdoer's claim is based took place. [Emphasis added (in original).]

(2) Subsection (1) applies whether the right to contribution and indemnity arises in respect of a tort or otherwise.

25 Finally, it is worth noting that the new Act speaks about "claims" as opposed to causes of action. "Claim" is defined in s. 1 of the new Act as follows:

1. In this Act,...

• "claim" means a claim to remedy an injury, loss or damage that occurred as a result of an act or omission.

[ 56 ] Section 5(2) of the Act establishes a presumption that a person shall be presumed to have known the relevant information when the limitation period’s commencement was triggered “ unless the contrary is proved”. There was no evidence to the contrary before me.

[ 57 ] Thus, in this case, the time for each defendant to bring any potential claim for contribution was deemed to commence on the day that defendant was served with the Statement of Claim with respect to which contribution and indemnity could be sought.

[ 58 ] Although within the Act’s ultimate 15 year time period, The Koziols have failed to issue a third party claim or to commence a claim for contribution and indemnity as against Gould and/or the AMA, within two years of the service the Statement of Claim, served on December 13, 2008.

[ 59 ] Counsel either advertently or inadvertently chose not to launch a third party or other claim prior to December 13, 2010.

[ 60 ] More than two years after passed since the Plaintiff served Jandu and Sahbev with the Statement of Claim on February 8, 2008. Neither Jandu nor Sahbev have brought motions to amend their respective Statements of Defence to commence a crossclaim as against Gould or Alberta for contribution and indemnity.

[ 61 ] The overall settlement with the plaintiff was negotiated and signed within that period, on November 11, 2010. The Notice of Motion is dated March 28, 2011.

[ 62 ] The court does not have the discretion to extend the limitation period in the circumstance of solicitor inadvertence. [see Joseph v. Paramount Canada's Wonderland, 2008 ONCA 469 , 90 O.R. (3d) 401 (CA)]

[ 63 ] I conclude that in this case, even if the motion to add was launched within the two year pear, this would not be an appropriate fact situation to justify consolidation. Regardless of that finding, I conclude that there is no discretion available in this case to extend the time for bringing such a claim and that by virtue of the clear statutory provisions the limitation period for the Koziols to commence a claim for contribution and indemnity has expired and the claim is thus statute-barred.

VIII. Disposition

[ 64 ] This was really an allocation dispute between insurers. The norm in my experience would be for a contribution to be made by each “genuine” defendant so that everyone could close their file. I suspect this was the expectation of counsel for the Koziols.

[ 65 ] Counsel for the Alberta Motor Association Insurance Company was handicapped in that the policy holder, Gould did not co-operate in the defence of the action. The plaintiff gave a release to all parties and the result may demonstrate the maxim quoted at the head of these reasons: “A bad settlement is better than a good trial.”

[ 66 ] A Google search performed on this phrase yield a blog posting by a Minnesota lawyer Seth Leventhal , posted on October 12, 2011 . [http://www.minnesota-litigator.com /2011/10/12/

bad-settlement-good-trial/ ]

“A bad settlement is better than a good trial,” is the kind of thing a trial lawyer says to a client/plaintiff when recommending a settlement offer that is less than full compensation for the wrong (that is, 99.9% of settlements) when the wronged client balks at the settlement but the trial lawyer thinks it is, on balance, a (relatively) good deal.

A very experienced and distinguished Twin Cities trial lawyer, on the other hand, was quoted this past year in the press disdainful of younger trial lawyers whose decade or more of trial work might not have included a single trial. “These whippersnappers call themselves trial lawyers…,” was the gist of his comments.

So, are there too many trials or too few these days?”

[ 67 ] As a past President of the ADR Institute of Canada, I am very aware of the positive values of negotiated resolutions. Nevertheless, counsel are entitled to play hard ball. That said, I am still hesitant to find commendable, the manner in which the Alberta Motor Association Insurance Company avoided making any contribution to the settlement of these claims.

[ 68 ] There will be no order as to costs.

Released: January 17, 2012

DS/ E46 Master D. E. Short