ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: 05-CV-302078 PD1
DATE: 20120723
B E T W E E N:
NORMA RAMOS CARLOS Plaintiff - and - JESUS M. CARLOS Defendant
Alimisse O. Mundulai, for the Plaintiff Michael A.. Katzman, for the Defendant HEARD: February 6, 7, 8 and 9, 2012 at Toronto
MATLOW J. :
[ 1 ] By my handwritten endorsement released on May 22, 2012, judgment was granted dismissing this action. What follows are the reasons for judgment that I stated would follow. As well, I now add that the counterclaim, which I failed to address in my earlier endorsement, is also dismissed.
[ 2 ] At the opening of trial, counsel for the plaintiff requested that, even if I should dismiss the plaintiff’s claim, I should assess damages. Counsel for the defendant made no objection and, accordingly, I agreed to do so. However, having regard to my findings of fact and my conclusions set out below, there is no basis on which I could reasonably assess the plaintiff’s damages at any other than nil.
[ 3 ] This action arises out of a tragic event that occurred on April 20, 1989, at a time when the parties were married to one another. On that day the plaintiff was operating a motor vehicle in which the parties’ eight-year old daughter was a passenger when it was involved in an accident that resulted in the death of their daughter and injuries to the plaintiff.
[ 4 ] When the daughter was three years old, the parties enrolled in a policy of life insurance on the life of their daughter that provided initially for payment of a death benefit of $75,000 to each of the parties. Following the death of the daughter, the defendant submitted claims on his behalf and on behalf of the plaintiff for payment of the death benefits and shortly thereafter he received, at a time when the plaintiff was still hospitalized because of her injuries, two cheques from the insurer, each in the sum of $77,420.55, one payable to the plaintiff and one payable to him. The defendant then endorsed the plaintiff’s signature on the cheque payable to her and deposited both cheques into the joint bank account that the parties had maintained. That account was the only bank account that the parties had.
[ 5 ] The plaintiff’s claim in this action, which was commenced on December 12, 2005, is for payment of $422,579.45 for general damages, $15,000 for general damages and $77,420.55 for damages for the proceeds of the life insurance payable to her which she alleges the defendant fraudulently misappropriated and used for his own purposes without her knowledge or consent.
[ 6 ] The plaintiff was trained as an accountant in the Philippines and received certification before she came to Canada and worked in that field after her arrival until the accident and again later. Even before the accident occurred, she suffered from anxiety and depression but her cognitive skills were always sufficiently intact to enable her to understand issues that she faced in her life, to make the required decisions and to instruct her lawyers when she needed legal assistance. She is obviously intelligent and articulate but, as a witness, she was hopeless beyond belief. Nothing in the evidence, including the medical evidence, provided an explanation for her bizarre performance even with the allowances that I made to take into account the trauma of the accident and its likely impact on her.
[ 7 ] It is not easy to describe the plaintiff’s evidence. She testified, without objection, with the aid of notes that she said she had made shortly before the trial. Those notes contained a reminder for her not to lie. She did not say what the source or sources of the information recorded in her notes were or say anything else about how they were made that could reasonably help me form any view about how helpful they could be. Throughout the entirety of her examinations, she repeatedly reminded me that her memory was poor and that she could not recall even the day before. It seemed that hardly a question was asked that was not met with a similar reminder. As well, she repeatedly gave conflicting and internally inconsistent evidence about matters that were critical. In particular, her evidence about when she first learned about the insurer’s cheques ranged from shortly after her discharge from hospital to various points of time up to and including 2005 just before before this action was commenced. Her evidence about how she was able to instruct her lawyer in 1998 to seek information from the insurer about the cheques in light of her other evidence that she did not know about them until 2005 is impossible for me to understand.
[ 8 ] According to her evidence, she remained in intensive care in a hospital for about two weeks following the accident and then was moved to a ward where she remained for a further two months. She could not explain the allegation in paragraph 6 of the statement of claim that “she suffered severe head injuries that required more than six (6) months of hospitalization …” She went on to say that she is a very strong person and that two years following the accident, she was working and managing her own affairs.
[ 9 ] She stated that when she returned home from the hospital, she asked the defendant what he did with the insurance proceeds. However, it is not clear from her evidence what, if any, reply he gave.
[ 10 ] According to the evidence of Barry H. Smith, a lawyer retained by the plaintiff shortly before, he sent a letter dated December 1, 1998, to the defendant stating, in part, the following:
Please be advised that we have been retained by your former wife, Norma Carlos, with respect to her dire financial circumstances.
Furthermore, we understand that the life insurance proceeds with respect to your daughter’s policy in the amount of $150,000.00 was received by you alone, of which only $52,000.00 has been accounted for. We understand that you paid the loan on your Mercedes automobile of $32,000.00, paid approximately $10,000.00 in order to lease another Mercedes vehicle and spent a further $10,000.00 on a stereo that remains in your possession. We shall require an accounting of what happened to the balance of the insurance proceeds of approximately $100,000.00.
[ 11 ] Mr. Smith was called by the defendant to give evidence. He stated that he had been retained by the plaintiff at some time prior to December 1, 1998. When he met the plaintiff, she seemed “fragile and confused” but he had “no reason to doubt her capacity”, particularly her capacity to sue for the claims she asserts in this action. Later, on the plaintiff’s instructions, he prepared a draft separation agreement dated February 23, 1999, that included a mutual release, that was signed by the parties. It reads as follows:
GENERAL RELEASE
(a) The parties each accept the provisions of this agreement in satisfaction of all claims, and causes of action each now has including but not limited to claims and causes of action for support, interim or permanent maintenance or support, possession of or title to property, or any other claim arising out the relationship of the parties, EXCEPT for claims and causes of action arising under this agreement.
(b) Nothing in this agreement will bar any action or proceeding by either of the parties to enforce any the terms of this agreement.
[ 12 ] On March 14, 2002, he wrote to Sun Life Assurance Company, where the defendant had earlier been employed, stating the following:
Please be advised that we are the solicitors acting for Norma Carlos with respect to an investigation relating to a life insurance policy on Mrs. Carlos’ deceased daughter, Jennifer Grace R. Carlos. In this regard, we enclose herewith authorization entitling us to all the information with respect to any and all policies on Jennifer.
Would you kindly check your records as Mrs. Carlos was advised by her former husband, Jesus Carlos, a Sun Life Agent, that there was, indeed a policy of insurance on Jennifer.
We look forward to your early reply once you have had the opportunity of checking your records with respect to this matter and providing us with details as to any and all policies on Jennifer’s life and what sums, if any, were paid out on these policies and to whom.
Sun Life Financial replied to Mr. Smith by letter dated June 21, 2002, providing him the information that he had requested.
[ 13 ] Mr. Smith testified that, in December, 1998, the plaintiff “had a suspicion that there had been a $150,00.00 insurance policy from which she did not benefit”. However, she did not follow up on her suspicions before deciding to sign the separation agreement “because she needed the money”.
[ 14 ] Mr. Smith did not know what, if anything, the plaintiff did between then and 2002 to identify the insurer that had issued the policy. However, he recalled that it was the plaintiff who gave him the name of the insurer but he could not recall when that occurred. It did not occur to him that, having regard to the defendant’s employment with Sun Life, it would likely have been “the logical company”.
[ 15 ] I find that Mr. Smith was an honest and reliable witness and I accept all of it. His evidence was reasonable and supported in large part by the other evidence, including the undisputed documentary evidence, and it was not challenged by the plaintiff except in those parts of her evidence that were clearly wrong.
[ 16 ] The defendant defended this action on numerous grounds. According to his own evidence, he told the plaintiff while she was still in the hospital shortly after the accident that he would proceed to make the required claims to the insurer on their behalf. He then proceeded to do so and, because of the plaintiff’s inability to sign her signature at the time, he obtained her permission to sign her name, as he did, to endorse the insurer’s cheque payable to her. After he deposited both cheques into their joint bank account, he used the proceeds, as he was entitled to do in the circumstances, to pay certain pressing joint debts, including for her needs during her recovery, and make certain purchases and investments totaling close to $150,000. Those expenditures are described in paragraph 6 of the amended statement of defence. The defendant stated that all of the payments made were for their mutual benefit and made with the plaintiff’s prior and subsequent knowledge and approval.
[ 17 ] He further testified that he and the plaintiff entered into a separation agreement in writing dated February 23, 1999, and that the agreement included mutual releases, set out above, by which all of the plaintiff’s claims were extinguished. And, finally, he alleges that, at the time this action was commenced, the plaintiff’s claims were, and have remained ever since, statute-barred.
[ 18 ] I find that the defendant, too, was an honest and reliable witness and I accept all of his evidence. I am satisfied that his memory was intact and that his account of the matters in issue was likely accurate and true. His evidence was also reasonable in light of the surrounding circumstances when the insurer’s cheque was endorsed by him on behalf of the plaintiff and when both cheques were deposited and the proceeds used as he described. The plaintiff’s medical condition at the time and the fact that the parties did their banking through a joint bank account support the defendant’s version of what occurred.
[ 19 ] In contrast, as indicated above, I find that the plaintiff was an extremely unreliable witness. It is difficult for me to recognize whether her repeated claims of loss of memory were genuine or feigned or a mixture of both. However, I conclude that her evidence included at least a high component of deliberately false evidence which the plaintiff sought to conceal by relying on her impaired mental state as an excuse or explanation. In any event, it makes no difference to the ultimate assessment that I make of her evidence; where it conflicts with any other evidence, I reject it.
[ 20 ] On all of the evidence, I am persuaded that the plaintiff played an active role in the management of the financial affairs that she conducted with the defendant while they were married. She participated in their decision to purchase the insurance policy on their daughter and she knew about the claims made to the insurer and what the defendant did with the proceeds, with her full knowledge and concurrence, long before December, 1998, at the latest when she retained Mr. Smith. It follows that, by the application of both the Limitations Act, 2002 and its predecessor, the plaintiff’s claims were statute-barred before this action was commenced.
[ 21 ] There is no explanation to be found in the evidence to explain what steps, if any, the plaintiff, or anyone on her behalf, did to investigate the facts relating to her claims in this action between December, 1998, and when she commenced this action in December, 2005. The only reasonable inference that can be drawn is that she was in need of money in 2005 and that she hoped to obtain some by means of this action, knowing that she was asserting claims that had absolutely no merit.
[ 22 ] If the plaintiff genuinely believed that she had, or reasonably might have had, a valid claim against the defendant arising out of what he did with the proceeds of the insurer’s cheques, she would have included that claim as an asset in the affidavit sworn by her on July 16, 1991, that she filed in support of the parties’ joint petition for a divorce but no mention of such a claim was made there.
[ 23 ] As well, if the plaintiff genuinely believed that she had, or reasonably might have had, a valid claim against the defendant, she would not have given the defendant the wide release that was included in the parties’ separation agreement. I find that the release, by its terms, applies to the claims that the plaintiff now makes. She had legal representation at the time she signed the separation agreement freely and no valid basis is raised now for why she should be excused from the consequences of its provisions.
[ 24 ] Written submissions with respect to costs may be made by exchanging copies in a fair sequence and by leaving copies for me no later than on August 24, 2012.
Matlow J.
RELEASED: July 23, 2012
COURT FILE NO.: 05-CV-302078 PD1
DATE: 20120723
ONTARIO SUPERIOR COURT OF JUSTICE B E T W E E N :
NORMA RAMOS CARLOS - and - JESUS M. CARLOS
REASONS FOR JUDGMENT MATLOW J.
RELEASED: July 23, 2012