Ontario Superior Court of Justice

Paraie et al. v. Cangemi et al. [Indexed as: Paraie v. Cangemi]

113 O.R. (3d) 231
2012 ONSC 6341

Ontario Superior Court of Justice,
Lederer J.
November 9, 2012

Conflict of laws -- Jurisdiction -- Ontario-resident plaintiff injured in motor vehicle accident in New York involving New York-resident defendant -- Plaintiff suing defendant in Ontario and also suing his own automobile insurer under uninsured and underinsured motorist coverage provisions in policy as damages might exceed defendant's policy limits -- Ontario not having jurisdiction -- Plaintiff's insurance contract not presumptive connecting factor as it was not "contract connected with dispute" -- Any possible connection both speculative and contingent.

The plaintiff, a resident of Ontario, was injured in a motor vehicle accident in New York State when his vehicle was struck behind by a vehicle owned and operated by the defendant C, a resident of New York State. The plaintiff sued C in Ontario and also sued his own automobile insurer, relying on the uninsured and underinsured motorist coverage in his policy, as C's policy limits were US$300,000. The plaintiff conceded that general damages were unlikely to exceed $300,000 but suggested that there was a possibility that the award would be higher when loss of income was taken into account. C brought a motion to stay [page232] or dismiss the action for lack of jurisdiction. The plaintiff argued that his insurance policy was a presumptive connecting factor that prima facie entitled the court to assume jurisdiction.

Held, the motion should be granted.

The plaintiff's automobile insurance contract was not "a contract connected with the dispute". Any possible connection was both speculative and contingent. A plaintiff should not be able to bootstrap defendants into an action in Ontario by relying on a secondary and contingent claim against his or her own insurer which happens to be present in the province. If that conclusion was wrong and the insurance contract was a presumptive connecting factor, the presumption was rebutted as the contract had little or nothing to do with the subject matter of the litigation or, alternatively, the connection was so weak that C should not be called upon to answer the proceedings in Ontario. Finally, if Ontario had jurisdiction, New York was the preferable forum.

MOTION to dismiss or stay an action.

Cases referred to
Club Resorts Ltd. v. Van Breda, [2012] 1 S.C.R. 572, [2012] S.C.J. No. 17, 2012 SCC 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
Doiron v. Bugge, [2005] O.J. No. 4285, 258 D.L.R. (4th) 716, 204 O.A.C. 30, 20 C.P.C. (6th) 213, 142 A.C.W.S. (3d) 956, 2005 36252 (C.A.) ;
Gajraj v. DeBernardo (2002), 60 O.R. (3d) 68, [2002] O.J. No. 2130, 213 D.L.R. (4th) 651, 160 O.A.C. 60, 40 C.C.L.I. (3d) 163, 2002 44959 , 114 A.C.W.S. (3d) 636 (C.A.), consd

Other cases referred to
Lemmex v. Bernard (2002), 2002 44962 (ON CA) , 60 O.R. (3d) 54, [2002] O.J. No. 2131, 213 D.L.R. (4th) 627, 160 O.A.C. 31, 13 C.C.L.T. (3d) 203, 26 C.P.C. (5th) 259, 114 A.C.W.S. (3d) 638 (C.A.);
Leufkens v. Alba Tours International Inc. (2002), 2002 44958 (ON CA) , 60 O.R. (3d) 84, [2002] O.J. No. 2129, 213 D.L.R. (4th) 614, 160 O.A.C. 43, 13 C.C.L.T. (3d) 217, 26 C.P.C. (5th) 247, 114 A.C.W.S. (3d) 637 (C.A.);
Luk v. Pottery Barn, [2010] O.J. No. 5239, 2010 ONSC 5540 (S.C.J.) ;
Pavacic v. Nicely Estate (2008), 2008 24228 (ON SC) , 91 O.R. (3d) 49, [2008] O.J. No. 2043, 63 C.P.C. (6th) 17, 167 A.C.W.S. (3d) 674 (S.C.J.);
Sinclair v. Cracker Barrel Old Country Store, Inc. (2002), 2002 44955 (ON CA) , 60 O.R. (3d) 76, [2002] O.J. No. 2127, 213 D.L.R. (4th) 643, 160 O.A.C. 54, 13 C.C.L.T. (3d) 230, 26 C.P.C. (5th) 239, 114 A.C.W.S. (3d) 635 (C.A.)

Statutes referred to
Family Law Act, R.S.O. 1990, c. F.3

Rules and regulations referred to
Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rules 17.02 , 17.06 , 21.01(3)

Christopher Bialkowski, for plaintiffs (responding parties).
Gary Sonik, for Cynthia Cangemi, defendant (moving party).

Reasons for Decision

[1] LEDERER J.: -- This is a motion to determine whether this court has jurisdiction to hear this matter and, if it does, whether the action should be dismissed or, in the alternative, stayed on [page233] the basis that Ontario is not the appropriate forum (forum non conveniens) (see rules 17.02 , 17.06 and 21.01(3) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 ).

[2] This personal injury action arose from a motor vehicle accident which occurred in the Village of East Hampton, New York on August 28, 2009. At that time, a vehicle owned and operated by the plaintiff Alan Paraie was struck from behind by a vehicle owned and operated by the defendant Cynthia Cangemi. Alan Paraie resides in Ontario. After the accident, Alan Paraie did not seek immediate medical attention. Instead, he returned to Ontario in the same vehicle that was involved in the collision. Cynthia Cangemi resides in East Hampton, New York.

[3] On September 11, 2009, approximately two weeks after the subject accident, Alan Paraie attended Toronto East General Hospital, where he complained of pain in his neck, mid and low back, and legs. Since then, Alan Paraie has reported to various treatment providers and assessing medical professionals. His apparent injuries include (1) multiple tears to the meniscus of the right knee; (2) a radiculopathy (nerve root injury) at C7 (a disc in the cervical region of the back); (3) a diagnosis of chronic pain; and (4) a fracture of his metatarsal (bones of the foot).

[4] As a result, on March 16, 2011, a Statement of Claim was issued and this action commenced in the Superior Court of Ontario.

[5] By this motion, the defendant Cynthia Cangemi seeks the dismissal of the action on the basis that the court is without jurisdiction or, in the alternative, to stay the action on the basis that Ontario is not the appropriate forum in which it should be heard (forum non conveniens).

[6] In Club Resorts Ltd. v. Van Breda, [2012] 1 S.C.R. 572, [2012] S.C.J. No. 17, 2012 SCC 17 , the Supreme Court has provided fresh guidance as to the circumstances which identify a connection to Ontario sufficient that the court should assume jurisdiction. The case outlines four [at para. 90] "presumptive connecting factors that, prima facie, entitle a court to assume jurisdiction": (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. [page234]

[7] In this case, the first three of these factors have no application. The defendant does not live in Ontario, does not carry on business here and the accident did not take place here.

[8] The defendant Cynthia Cangemi is covered by a policy of automobile insurance with limits of US$300,000. The plaintiff Alan Paraie is concerned that this is not sufficient to cover the damages he has suffered. As a result, the plaintiff has claimed against the second-named defendant, The Dominion of Canada General Insurance Company, an insurance company offering automobile insurance in the Province of Ontario. The claim is made relying on the uninsured and underinsured motorist coverage provisions in a contract of insurance issued to the plaintiff. It was submitted, on behalf of the plaintiff, that this contract satisfies the fourth of the "presumptive connecting factors". On this view, it is "a contract connected with the dispute . . . made in the province".

[9] Counsel for the defendant Cynthia Cangemi is at pains to argue that this contract is not connected to the dispute. It was submitted on her behalf that there is evidence demonstrating that the complaints of Alan Paraie were pre-existing and that it is not reasonably possible that any award that may be made in his favour will exceed the policy limits of US$300,000.

[10] In this situation, it may be useful to step back for a moment and consider the logical implications of what is being proposed. On the one hand, I am asked to examine medical records from both before and after the accident and, without the benefit of any viva voce evidence, make a determination that any award made could not exceed a given value, in this case US$300,000. Presumably, I would also have to make some determination as to what the policy held by the defendant covers. For example, is it possible that any contribution to the cost of defending the action, made by the insurer, would erode the policy limits? In this case, the spouse of Alan Pariae is also a plaintiff. She brings her claim pursuant to the provisions of the Family Law Act, R.S.O. 1990, c. F.3 . Are such claims covered by the policy?

[11] On the other hand, if the court in Ontario accepts jurisdiction, would it not imply that the reverse circumstance was equally appropriate? Would we accept that our citizens could be involved in a car accident just beyond their front door and find themselves having to defend their actions in California, New Mexico or any other of the 50 states of the United States or some other country because the other party, who lives there, expresses a concern that there is insufficient Canadian insurance to cover their claim? "Comity" refers to the respect shown by one country [page235] for the laws and institutions of another. If we are going to compel people to come here to defend actions they took where they live, where the circumstances are similar, we should be prepared to accept the same from them. This underlying policy consideration has been noted by the Court of Appeal [in] Gajraj v. DeBernardo (2002), 60 O.R. (3d) 68, [2002] O.J. No. 2130, 2002 44959 (C.A.) , at para. 22 :

. . . Ontario courts should hesitate to adopt the jurisdictional rule requiring Ontario motorists to defend themselves in foreign courts against suits for damages arising from accidents in Ontario or face enforcement of a default judgment against them. I do not think that by engaging the everyday act of driving a motor vehicle in Ontario, a driver should be taken to have assumed the risk of defending his or her contact in a foreign court.

[12] I begin by observing that Club Resorts Ltd. v. Van Breda, supra, "concerns the elaboration of the 'real and substantial connection' test as an appropriate common law conflicts rule for the assumption of jurisdiction" (see Club Resorts Ltd. v. Van Breda, supra, at para. 34 ). The traditional test does not speak to "any" connection, but to a "real and substantial" one. "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" (see Club Resorts Ltd. v. Van Breda, supra, at para. 99 ).

[13] In this case, any possible connection is both speculative (see Gajraj v. DeBernardo, supra, at para. 20 ) and contingent. The contract will be called on only if the damages awarded exceed the limits of the policy available in New York. For the court to be asked, at this stage, to examine the damages and to draw a conclusion as to the likely magnitude of the award only underscores the speculative nature of the investigation the court is being asked to undertake and the contingent character of any possible liability that would extend to the Canadian insurer.

[14] It is true that Doiron v. Bugge, [2005] O.J. No. 4285, 2005 36252 (C.A.) distinguished Gajraj v. DeBernardo, supra. An employee of the YMCA in St. Thomas, Ontario, while in New York assisting with relief work following the September 11, 2001 attack on the World Trade Center, was in a motor vehicle accident. The car in which she was riding was being driven by her New York supervisor. A lawsuit was commenced against the supervisor. The limit of the policy of insurance carried by the supervisor was $100,000, inclusive of costs. Evidence was led as to "a long list of medical treatment particulars from hospitals, physicians, physiotherapists, a physiatrist, and a psychologist" to whom the plaintiff had gone for treatment. The plaintiff alleged "that she still suffer[ed] from the injuries she sustained [page236] in the accident and that she ha[d] been unable to return to work". There was an allegation that any award would exceed the policy limits. The plaintiff added her own insurer as a party. The Court of Appeal found that "[t]hese damages represent[ed] a significant connection with Ontario" (see Dorion v. Bugge, supra, at para. 10). In the case I am asked to decide, counsel on behalf of the defendant Cynthia Cangemi pointed out that the injuries Alan Paraie alleged he had suffered were, for the most part, pre-existing and that it was unlikely that the limit of $300,000 provided by the policy held by Cynthia Cangemi would be reached. On the other hand, counsel for Alan Paraie, while conceding that general damages are unlikely to exceed $300,000, suggested that, when loss of income is accounted for, there is a substantial possibility that any award made will be higher. It is on this basis that I have said that I am being asked to speculate as to the value of any damage award that may be made.

[15] As it transpires, this difference between Gajraj v. DeBernardo and Dorion v. Bugge does not matter. The latter case makes clear that, while the damages represent a significant connection with Ontario, proof of damages sustained here is not, on its own, sufficient to establish the real and substantial connection necessary for this court to assume jurisdiction. This is only one of the factors to be considered (see Dorion v. Bugge, supra, at para. 10, where reference is also made in this regard to Lemmex v. Bernard (2002), 2002 44962 (ON CA) , 60 O.R. (3d) 54, [2002] O.J. No. 2131 (C.A.); Leufkens v. Alba Tours International Inc. (2002), 2002 44958 (ON CA) , 60 O.R. (3d) 84, [2002] O.J. No. 2129 (C.A.); and Sinclair v. Cracker Barrel Old Country Store, Inc. (2002), 2002 44955 (ON CA) , 60 O.R. (3d) 76, [2002] O.J. No. 2127 (C.A.)). Among the factors accounted for in Dorion v. Bugge, supra, was a prior relationship that existed between the plaintiff and the supervisor. In this case, there is no suggestion of any prior relationship between Alan Paraie and Cynthia Cangemi. It appears that, as in Gajraj v. DeBernardo, supra, they were strangers.

[16] I acknowledge that, if a finding is made that this court is without jurisdiction, it may still be that the court in New York could make an award in excess of the limits of the insurance policy held by the defendant Cynthia Cangemi. It may be that to protect against this, the insurer of the plaintiff will seek to play a role, or have its interest represented, in the proceedings in New York. It is also possible that the insurance company may not respond, take a risk and be surprised at a result that exceeds the policy limits of the primary policy, leaving it with a liability it had not anticipated. If it refuses to pay, the plaintiff would have recourse to the courts in Ontario. There would be no [page237] need for Cynthia Cangemi to be a party to such a proceeding (see Gajraj v. DeBernardo, supra, at para. 10 ). There is no connection between an alleged tortfeasor and the plaintiff's right of action against his or her own insurer for underinsured motorist coverage. A plaintiff's right to this insurance coverage is not contingent upon maintaining an action against a tortfeasor (see Pavacic v. Nicely Estate (2008), 2008 24228 (ON SC) , 91 O.R. (3d) 49, [2008] O.J. No. 2043 (S.C.J.), at paras. 57 , 58 and 71).

[17] Ultimately, it seems to me that these concerns should be dealt with by the mature consideration of the parties, including the insurers, as they enter the process. It would not be right to allow the plaintiff to use this speculative proposition to require that the trial be held here. The plaintiff should not be able to bootstrap defendants into an action in Ontario by relying on a secondary and contingent claim against its own insurer which happens to be present in the province (see Gajraj v. DeBernardo, supra, at paras. 19 and 20 ). It would raise the spectre that defendants, when involved in accidents at home, with those who reside elsewhere and where the limits of their insurance policy are alleged to be insufficient, would have to travel to other countries to defend themselves.

[18] Interestingly, the Court of Appeal has observed that it is unlikely the courts in New York would accept such a result (Gajraj v. DeBernardo, supra, at para. 24 ):

It is virtually certain that New York courts would not recognize or enforce an Ontario judgment against a New York defendant for damages sustained in Ontario as a result of a motor vehicle accident in New York unless the defendant voluntarily attorned to Ontario's jurisdiction: World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286 (1980).

[19] I find that the court is without jurisdiction in this matter. The contract of insurance held by the plaintiff is not a contract connected with the dispute. The real and substantial connection test, as elaborated in Club Resorts Ltd. v. Van Breda, supra, has not been satisfied.

[20] If I am wrong, it would not end the matter. As is made clear in Club Resorts Ltd. v. Van Breda, supra, the presumption of jurisdiction is "not irrebuttable . . . [w]here the presumptive connecting factor is a contract made in the province, the presumption can be rebutted by showing that the contract had little or nothing to do with the subject matter of the litigation . . . [I]t is arguable that the presumptive connecting factor points to a weak relationship between the forum and the subject matter of the litigation and that it would accordingly not be reasonable to expect that the defendant would be called to answer proceedings in that jurisdiction. In such circumstances the real and [page238] substantial connection test would not be satisfied and the court would lack jurisdiction to hear the dispute" (see Club Resorts Ltd. v. Van Breda, supra, at paras. 95, 96 and 97 ).

[21] If, despite the speculative and contingent nature of the allegation that the award of damages could exceed the policy limits, there is sufficient connection to satisfy the fourth presumptive factor, that same speculative and contingent character would serve to rebut the presumption. The same analysis would show that the contract had little or nothing to do with the subject matter of the litigation or, alternatively, that the connection was so weak the defendant would not be called upon to answer the proceedings in the jurisdiction. In this case, the defendant Cynthia Cangemi is not a party to the contract. Ultimately, if an issue arises as to whether The Dominion of Canada General Insurance Company is to bear any liability, it will be an issue between the company and the plaintiff. Those parties entered the contract in Ontario and live here.

[22] If necessary, I would find that the presumption has been rebutted.

[23] If I am wrong, this, too, would not end the matter. In such circumstances, the court is left to determine whether or not the forum, in this case Ontario, is a forum non conveniens. This was discussed in Club Resorts Ltd. v. Van Breda, supra, as follows [at para. 103]:

If a defendant raises an issue of forum non conveniens, the burden is on him or her to show why the court should decline to exercise its jurisdiction and displace the forum chosen by the plaintiff. The plaintiff must identify another forum that has an appropriate connection under the conflicts rules and that should be allowed to dispose of the action. The defendant must show, using the same analytical approach the court followed to establish the existence of a real and substantial connection with the local forum, what connections this alternative forum has with the subject matter of the litigation. Finally, the party asking for a stay on the basis of forum non conveniens must demonstrate why the proposed alternative forum should be preferred and considered to be more appropriate.

[24] It seems obvious that the courts in New York offer an alternative forum with a real and substantial connection to the dispute. Certainly, three of the four presumptive connecting factors identified in Club Resorts Ltd. v. Van Breda, supra, are present. The defendant lives and works in New York. The tort, that is, the accident, occurred there. As for the fourth factor, it appears the insurance contract held by the defendant Cynthia Cangemi was entered into there. It is the primary policy applicable to the case. If the defendant is liable, it will have to respond. [page239]

[25] Is New York the preferred forum? Nothing was said in the record or the submissions of counsel as to the witnesses present at the time of the accident. In the circumstances, I can do no better than act on the assumption that evidence would or could come from residents of both New York and Ontario. It remains the case that the accident occurred in New York and that, in all likelihood, the applicable law would be New York law. In Gajraj v. DeBernardo, supra, a similar analysis contributed to a determination that, where an accident involving Ontario residents had taken place in New York, the latter was the preferred forum (see Gajraj v. DeBernardo, supra, at para. 9 ). In this case, the only reference to possible witnesses referred to in the affidavits is the medical personnel, resident in Ontario, who treated the plaintiff. Plainly, this arises from the fact that the plaintiff resides here. In Gajraj v. DeBernardo, supra, the court observed that "[t]he reasonable expectations of the parties are relevant to some degree" and agreed with the motion judge who found that "where a party travels to another country and is involved in a motor vehicle accident there, it is reasonable to expect that the dispute with a local driver will be litigated in the foreign jurisdiction" (see Gajraj v. DeBernardo, supra, at para. 18 ). There is no evidence of the sort referred to in Dorion v. Bugge, supra. In that case, there was evidence that the plaintiff would suffer considerable hardship if she was forced to litigate her claim in New York. Her injuries made travelling difficult and she did not have the assets necessary to travel there or prosecute the claim there.

[26] If necessary, I would find that New York is the preferable forum.

[27] Finally, in Luk v. Pottery Barn, [2010] O.J. No. 5239, 2010 ONSC 5540 (S.C.J.) , consideration was given as to whether, in circumstances where the parties agreed the court in Ontario had no jurisdiction, there was any point in staying the matter. The judge found there was not. In this case, it could be different. Maybe there will be an award in excess of the limits of the policy held by Cynthia Cangemi. Despite the observation made earlier that any action against the Canadian insurer would not require Cynthia Cangemi to be a party, in such circumstances, it would not be appropriate to deny the plaintiff whatever vehicle it may wish to utilize to obtain payment from an insurer that is unwilling or unprepared to pay.

[28] For the reasons referred to herein, the motion is granted. The action is stayed. [page240]

[29] Pursuant to the agreement between the parties, costs are ordered against the plaintiffs in favour of the defendant Cynthia Cangemi in the amount of $2,000.

Motion granted.