Ontario Superior Court of Justice

D. Cesario v. Gondek et al. R. Cesario v. Gondek et al. [Indexed as: Cesario v. Gondek]

113 O.R. (3d) 466

2012 ONSC 4563

Ontario Superior Court of Justice,

Edwards J.

November 29, 2012

Conflict of laws -- Jurisdiction -- Plaintiffs involved in motor vehicle accident in New York and in second accident in Ontario four weeks later -- Plaintiffs bringing action for damages arising out of both accidents and also suing their own insurer pursuant to underinsured provisions of their automobile insurance policy -- New York defendants' insurer registered with Financial Services Commission of Ontario and having Toronto address for consumer clients -- Ontario having jurisdiction to hear action -- Real and substantial connection between Ontario and action existing where at least one of multiple defendants is resident or domiciled in Ontario.

The plaintiffs' vehicle was rear-ended in Niagara Falls, New York by a vehicle owned and driven by residents of New York. Four weeks later, the plaintiffs were involved in another motor vehicle accident in Ontario. They brought an action for damages arising out of both accidents. They also sued their own insurer pursuant to the underinsured provisions of their automobile insurance policy. The New York defendants brought a motion for an order staying the action for lack of jurisdiction. [page467]

Held, the motion should be dismissed.

Where there are multiple defendants, and at least one of them is resident or domiciled in Ontario, there is a sufficient real and substantial connection between the claim and Ontario that the court should assume jurisdiction over all aspects of the case. Not to do so in this case would force the plaintiffs to litigate three separate actions, one in New York and two in Ontario. Such a situation would breach the principles of fairness and efficiency on which the assumption of jurisdiction is based.

MOTION for an order staying an action.

Cases referred to
Club Resorts Ltd. v. Van Breda, 2012 SCC 17, [2012] 1 S.C.R. 572, [2012] S.C.J. No. 17, 291 O.A.C. 201, 2012EXP-1452, J.E. 2012-788, EYB 2012-205198, 429 N.R. 217, 343 D.L.R. (4th) 577, 212 A.C.W.S. (3d) 712, 91 C.C.L.T. (3d) 1, 10 R.F.L. (7th) 1, 17 C.P.C. (7th) 223, apld
Other cases referred to
Cugalj v. Wick, 2012 ONSC 2407

O. Turner, for plaintiff Dominic Cesario.
M. Stepura, for defendants William Gondek and Phillip Rotella.
P. Hill, for defendant TD Insurance/Security National Insurance Company.
K. Marciniak, for plaintiff Rose Cesario.
P. Chandrashekhar, for defendant Dominic Cesario.

EDWARDS J.: -- Overview

[1] The plaintiffs have the misfortune to be involved in two motor vehicle accidents separated in time by approximately four weeks. The first accident occurred in the State of New York. The second accident occurred in Ontario.

[2] Two of the defendants in the first accident who are residents of New York State have not attorned to the jurisdiction argue that this court should not assume jurisdiction given the recent decision in the Supreme Court of Canada in Club Resorts Ltd. v. Van Breda, [2012] 1 S.C.R. 572, [2012] S.C.J. No. 17, 2012 SCC 17. The issue to be determined on the motion before this court is whether the New York defendants are entitled to a stay of the action because there is no connecting factor linking Ontario with the New York defendants.

[3] The plaintiffs have also sued their own insurer pursuant to the underinsured provisions of their automobile insurance policy. The plaintiff Rosa Cesario, who is the wife of the plaintiff Dominic Cesario, has commenced a separate action in which she has also named her husband, Dominic, as a party defendant. Rosa Cesario was a passenger in the vehicle driven [page468] by her husband in both accidents. Therefore, throughout these reasons I will refer to Rosa and Domenic Cesario as the plaintiffs. Only when necessary will I refer to Domenic Cesario in his capacity as a defendant in the action where his wife Rosa Cesario is the plaintiff.

[4] If the position of the defendants who are resident in New York State is accepted the plaintiffs will have to potentially pursue three separate actions in different jurisdictions. In one action, the plaintiffs would pursue their claim in New York State against the New York resident defendants in which the issue of liability and damages would be a live issue. The plaintiffs would also potentially have to pursue an action in Ontario against the defendant Stoutz with respect to damages suffered in the second accident. The plaintiffs may also have to pursue a third action against their own insurer TD Insurance/Security National Insurance Company ("TD Insurance") for underinsured coverage in Ontario. This third action may be made necessary given the following language from the plaintiff's policy of insurance:

In determining the amount that an eligible claimant is entitled to recover from the inadequately insured motorist, issues of quantum shall be decided in accordance with the law of Ontario, and issues of liability shall be decided in accordance with the law of the place where the accident occurred. (Emphasis added)

[5] Given the above-noted emphasized provision in the plaintiffs policy of insurance, in order for the plaintiffs to recover from their own insurer, they will have to first recover from the defendants resident in New York. This court can take judicial notice of the fact that damage assessments do vary from jurisdiction to jurisdiction and as such if the plaintiffs are forced to pursue a separate action in New York they may have to demonstrate to the satisfaction of TD Insurance that the damages awarded to them in the State of New York are in accordance with the laws of Ontario, failing which the plaintiffs would then have to commence a separate action against TD Insurance in Ontario. In addition to potentially having to pursue a claim against her own insurer separately from the action in New York (this assuming that this court agrees with the position of the New York defendants), then Rosa Cesario could also find herself in the unenviable position of having decide whether to pursue her husband in the State of New York or Ontario.

The Facts

[6] The plaintiffs are both Ontario residents who lived and worked most of their adult lives in the Province of Ontario. The plaintiff Rosa Cesario was a passenger in a vehicle driven by [page469] her husband, Dominic Cesario, on March 11, 2008 when they were rear ended in New York state by a vehicle driven by the defendant Gondek. The defendant Rotella is the owner of the rear-ending vehicle. I will refer to Gondek and Rotella as the New York defendants.

[7] The plainitffs were stopped at a red light in Niagara Falls, New York. It is a popular destination for many residents of the Province of Ontario intent on pursuing shopping opportunities in New York State.

[8] The defendant Rotella passed away on April 13, 2011. The New York defendants are represented by counsel retained by their insurer Liberty Mutual Group. Liberty Mutual (hereinafter "LM") is a listed insurer with the Financial Services Commission of Ontario ("FSCO") and has a Toronto address for consumer clients.

[9] The LM policy of insurance which afforded coverage to the New York defendants has policy limits of $500,000 with a provision that no one plaintiff can recover more than $250,000. As such, this policy of insurance actually exceeds the minimum policy limits required of a motorist in Ontario. LM as the insurer of the New York defendants is not exposed to greater policy limits by reason of the fact that this court may assume jurisdiction over the New York defendants.

[10] Liability for the first accident has not been admitted by the New York defendants. It is noteworthy that this being a rear-end accident the New York defendants did not take issue with para. 16 of the plaintiff's affidavit filed as part of the motion record where the affiant stated "I do verily believe that liability for the March 11, 2008 collision will not be a serious issue in view of the fact that this was a rear end collision." It would appear that the most significant issue arising out of the first accident will be the assessment of the plaintiff's damages and not the issue of liability of the New York defendants.

[11] As previously noted, the plaintiffs were involved in a second accident in Ontario on April 4, 2008. In this accident, the plaintiff was also a passenger in her husband's vehicle. The alleged at-fault defendant is an Ontario resident Elizabeth Stoutz.

[12] The plaintiffs commenced the subject action in Ontario for damages sustained as a result of both motor vehicle collisions, the first of which occurred in the state of New York, followed by the second collision which occurred in Ontario. Damages are claimed for injuries sustained from both collisions, within the same action, as the injuries and damages resulting from the two collisions cannot, it is argued, be separately identified and assessed. [page470]

Position of the New York Defendants

[13] The New York defendants having not attorned to the jurisdiction of this court rely almost exclusively on the lack of any presumptive connecting factor with the Province of Ontario. None of the presumptive connecting factors set forth in Van Breda are found on the facts of this case and therefore it is suggested by the New York defendants that this court cannot assume jurisdiction.

[14] In Van Breda, at para. 90, the Supreme Court of Canada enumerated the circumstances in which an Ontario court can assume jurisdiction as follows: (a) The defendant is domiciled or resident in the province; (b) The defendant carries on business in the province; (c) The tort was committed in the province; and (d) A contract connected with the dispute was made in the province.

[15] Counsel for the New York defendants argues that unless one of the above connecting factors applies then the analysis ends and this court will not have jurisdiction. As to the role of LM, counsel for the New York defendants argues that the fact that an insurance company defending the action on behalf of the defendant is an Ontario corporation cannot be a new connecting factor and cannot be grounds for an Ontario court to assume jurisdiction. See Cugalj v. Wick, [2012] O.J. No. 1719, 2012 ONSC 2407 (S.C.J.), at paras. 13 and 14.

Position of the Plaintiffs

[16] Plaintiffs' counsel argue that the defendants Stoutz and Security National Insurance Company as well as the plaintiff Domenic Cesario in his capacity as a defendant are all residents of and/or domiciled in Ontario. In his capacity as a defendant, Domenic Cesario as well as Security National Insurance Company are defendants directly as a result of the first accident which occurred in New York State.

[17] The plaintiffs therefore argue that one of the presumptive connecting factors set forth in Van Breda has been met in that two of the defendants directly related to the first accident in New York State are domiciled and resident in the province. It is argued that the presumptive connecting factor that "the defendant is domiciled or resident in the province" does not require that all of the defendants be domiciled or resident in the province (emphasis added). [page471]

[18] It is also argued by the plaintiffs that there is a third presumptive connecting factor given that there is a contract connected with the dispute made in Ontario. Specifically, the plaintiffs refer to the fact that they have sued their insurer, Security National Insurance Company, for additional insurance coverage pursuant to a policy of insurance made in Ontario. As such, it is argued that there is a "contract connected with the dispute made in the province".

[19] Finally, the plaintiffs argue that the Supreme Court of Canada in Van Breda acknowledged that a case might allege more than one tort and therefore the plaintiffs question whether a court should be limited to hearing only the specific part of the case that is connected with the jurisdiction. In that regard, the Supreme Court of Canada determined that splitting the case into parts would breach the principles of fairness and efficiency upon which the assumption of jurisdiction is based. See Van Breda, at para. 99. As part of this argument, the plaintiffs note that their actions relate to damage claims arising out of two motor vehicle collisions which occurred within four or five weeks of each other. It is suggested that given the proximity in time between the two accidents that the plaintiff's damages and injuries cannot be distinguished between one collision and another, thereby necessitating the joining of all the defendants in one action. If the New York defendants' argument were to prevail, the plaintiffs note that such a result would force them to litigate part of their tort claim in one jurisdiction and a related claim in another.

[20] Counsel for Domenic Cesario, in his capacity as a defendant, takes as a starting position that Mr. Cesario does not bear any liability for the New York accident. However, it is noted in argument that if Mr. Cesario is kept in as a defendant in the Ontario action, while the same action is stayed against the New York defendants, and were it to be found that Mr. Cesario should bear at least 1 per cent liability for the New York accident, he would then become liable to contribute on a 100 per cent basis to the plaintiff's damages. In this scenario, Mr. Cesario, in his role as a defendant, would have no recourse for contribution and indemnity as against the parties he says are liable, specifically the New York defendants, for their share of liability.

[21] Counsel for Domenic Cesario notes that the implications of the so-called "1 per cent rule" arising out of joint and several liability was not a factor considered by the Supreme Court of Canada in Van Breda as it was not relevant in that case. The Supreme Court of Canada has left open the question of the potential involvement of other parties in an action as being a [page472] relevant factor for the court to assume jurisdiction. Counsel for Mr. Cesario therefore suggests that this factor is one of utmost relevance in placing primary weight on the lack of presumptive factors connecting the New York defendants to Ontario and would result in an unduly strict and unfair outcome for the remaining defendants.

The Law

[22] There can be no dispute that at least one of the presumptive connecting factors that would allow this court to assume jurisdiction found in the Van Breda decision does not apply. Specifically, whether or not the tort was committed in the province can in no way be found to be a connecting factor given that the tort arising out of the first accident occurred in the State of New York. Van Breda makes clear that the fact that the plaintiffs may be suffering damages in the Province of Ontario, arising out of a tort committed outside of the province, will not suffice to allow this court to assume jurisdiction. See Van Breda, paras. 86 and 89.

[23] As to the first presumptive factor whether "the defendant is domiciled or resident in the province", this motion raises for determination whether the Supreme Court of Canada in Van Breda was referring to "the defendant" being domiciled or resident in the province as being the moving defendant or whether any defendant in the action domiciled or resident in the province was sufficient for a connecting factor. The answer to this question can be found in para. 99 of Van Breda, which provides:

I should add that it is possible for a case to sound both in contract and in tort or to invoke more than one tort. Would a court be limited to hearing the specific part of the case that can be directly connected with the jurisdiction? Such a rule would breach the principles of fairness and efficiency on which the assumption of jurisdiction is based. The purpose of the conflicts rules is to establish whether a real and substantial connection exists between the forum, the subject matter of the litigation and the defendant. If such a connection exists in respect of a factual and legal situation, the court must assume jurisdiction over all aspects of the case. The plaintiff should not be obliged to litigate a tort claim in Manitoba and a related claim for restitution in Nova Scotia. That would be incompatible with any notion of fairness and efficiency.

[24] If the position of the New York defendants was accepted, the plaintiffs could be forced to litigate three separate actions; one of which would be heard in the State of New York and two of which would be heard in the Province of Ontario. Such a situation would, adopting the language of Van Breda [at para. 99], "breach the principles of fairness and efficiency on which the assumption of jurisdiction is based". In addition, adopting [page473] the concluding words of LeBel J. in Van Breda [at para. 124]: ". . . keeping the case in the Ontario courts will probably avert a situation in which the proceedings against the various defendants are split". It would raise the real and quite unjust prospect of inconsistent verdicts.

[25] During the course of argument, I posed to counsel a hypothetical situation which highlights the potential absurdity of who the moving party might be seeking to fall within the language of a connecting factor being "the defendant". If the facts before this court had involved a motor vehicle accident occurring in the State of New York involving a plaintiff resident in Ontario, a defendant resident in Ontario and a defendant resident in New York State, and if the moving party was the New York resident defendant, then that party could argue that he or she not being domiciled or resident in the province clearly was not a connecting factor and Ontario should not assume jurisdiction. If on the other hand the moving party was the Ontario defendant, then that defendant could argue that he or she was domiciled or resident in the province and there would be a connecting factor to Ontario. In the situation where the moving party was the New York defendant, there would be no presumptive connecting factor established and this would result in the inevitable splitting of the case, which is precisely what the Supreme Court of Canada intended to avoid with a multiplicity of proceedings.

[26] In denying the relief sought by the New York defendants, this court is not unmindful of the words of LeBel J. in Van Breda, at para. 73, to the following effect: "The need for certainty and predictability may conflict with the objective of fairness. An unfair set of rules could hardly be considered an efficient and just legal regime. The challenge is to reconcile fairness with the need for security, stability and efficiency in the design and implementation of a conflict of laws system."

[27] Unquestionably, the need for predictability and stability referenced by LeBel J. in Van Breda, at para. 74, are critical ingredients for a conflict system. The reality of this case as it relates to the New York defendants is really a fight between the plaintiffs and LM, the insurer of the New York defendants. LM is registered with FSCO. LM must have known that there could be a day when one of its insureds would be involved in an accident with an Ontario resident. It must have been within the contemplation of LM that there could be a multiplicity of actions where their New York State insureds could be involved in a global assessment of damages arising out of more than one motor vehicle accident. These are precisely the types of cases that end up before our courts. To force an Ontario litigant to split [page474] his or her case between more than one jurisdiction would not be doing justice between the parties. As LeBel J. in Van Breda noted [at para. 75]:

[S]tability and predictability in this branch of law of conflicts should turn primarily on the identification of objective factors that might link a legal situation or the subject matter of litigation to the court that is seized of it. At the same time, the need for fairness and justice to all parties engaged in litigation must be borne in mind in selecting these presumptive connecting factors.

[28] The principle of fairness and justice referenced by LeBel J. in Van Breda causes this court to conclude that where there are multiple defendants, at least one of whom is resident in the Province of Ontario, or domiciled in the Province of Ontario (as is the case on the facts before this court, i.e., the defendant Domenic Cesario, the defendant Elizabeth Ruth Stoutz and the defendant Security National Insurance Company), then there is a sufficient real and substantial connection existing such that the court should assume jurisdiction over all aspects of the case, including that aspect of the case involving the New York defendants.

[29] The New York defendants did not address the doctrine of forum non-conveniens and the exercise of the court's jurisdiction. Forum non-conveniens comes into play once jurisdiction has been established. It has no relevance to the jurisdictional analysis itself. As the Supreme Court of Canada in Van Breda noted [at para. 102]:

Once jurisdiction is established, if the defendant does not raise further objections, the litigation proceeds before the court of the forum. The court cannot decline to exercise its jurisdiction unless the defendant invokes forum non- conveniens. The decision to raise this doctrine rests with the parties, not with the court seized of the claim.

[30] As this issue was not raised by the New York defendants, in accordance with the aforesaid comments from Van Breda, this court shall remain seized of the claim.

[31] The motion by the New York defendants is therefore dismissed. If the parties cannot agree upon an appropriate costs disposition with respect to this motion, the parties may contact the trial coordinator to arrange a time to argue the issue of costs. Prior to such an oral argument, the parties shall submit written costs submissions, limited to three pages in length.

Motion dismissed.