SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: CV-05-299520
MOTION HEARD: MARCH 20, 2013

RE: Peter Lalousis and Maria Lalousis v. Jopie Roberts and Adella Steele

BEFORE: MASTER R.A. MUIR

COUNSEL: Rita Gratsias for the plaintiffs

Ari C. Krajden for the proposed defendant, State Farm Mutual Automobile Insurance Company

REASONS FOR DECISION

[1] The plaintiffs bring this motion pursuant to Rules 5.04(2) and 26.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (the “Rules”) for an order granting them leave to amend their statement of claim to add claims on behalf of the plaintiffs’ minor children pursuant to the provisions of the Family Law Act, R.S.O. 1990, c. F.3 (the “FLA”). The plaintiffs also seek leave to add State Farm Mutual Automobile Insurance Company (“State Farm”) as a defendant. State Farm is the plaintiffs’ insurer and the plaintiffs seek to add State Farm due to the fact that the defendants may be underinsured. The defendants have not responded to this motion. The third party, Allstate Insurance Company (“Allstate”) is not opposed. State Farm opposes the granting of the relief sought by the plaintiffs insofar as it relates to State Farm.

BACKGROUND

[2] The plaintiff Maria Lalousis (“Maria”) was involved in two separate motor vehicle accidents. The first took place on March 24, 2004 and is the subject of this action. The second accident occurred on November 15, 2007 and is the subject of a separate action.

[3] This action was commenced on November 1, 2005. Maria seeks damages for pain and suffering, loss of income, childcare expenses, housekeeping expenses and other out of pocket expenses. The amount claimed in the statement of claim for these damages is $1,000,000.00. The plaintiff Peter Lalousis (“Peter”) claims damages in the amount of $500,000.00 pursuant to the FLA.

[4] On August 20, 2007, Master Birnbaum made an order adding Allstate to this action as a statutory third party pursuant to section 258(14) of the Insurance Act, R.S.O. 1990, c. I.8. Consequently, as of that date, the plaintiffs knew that the available insurance for their claims against the defendants in this action was limited to $200,000.00. However, the plaintiffs take the position that it was not until sometime in 2012 that Maria’s deteriorating condition led to the plaintiffs becoming aware that their claims may exceed $200,000.00. As well, the plaintiffs take the position that the claims of the proposed minor plaintiffs did not crystallize until around the same time, again due to Maria’s deteriorating condition.

[5] State Farm argues that it should have been clear to the plaintiffs several years ago that they had a reasonable chance of persuading a judge that their claims would exceed $200,000.00. It was at that time, according to State Farm, that this motion should have been brought. State Farm also takes the position that the minor plaintiffs’ claims against State Farm cannot proceed unless Maria’s claims can also proceed against State Farm. State Farm submits that the minor plaintiffs’ claims against State Farm are derivative in nature and cannot stand alone.

ANALYSIS

[6] Rule 5.04(2) provides as follows:

(2) At any stage of a proceeding the court may by order add, delete or substitute a party or correct the name of a party incorrectly named, on such terms as are just, unless prejudice would result that could not be compensated for by costs or an adjournment.

[7] Rule 26.01 provides as follows:

26.01 On motion at any stage of an action the court shall grant leave to amend a pleading on such terms as are just, unless prejudice would result that could not be compensated for by costs or an adjournment.

[8] Rule 26.01 is mandatory unless a responding party can demonstrate non-compensable prejudice. However, Rule 5.04 provides the court with some discretion when it comes to adding defendants. On such a motion, the court has the discretion to decline to allow the amendments where, for example, an applicable limitation period has expired. See Wong v. Adler, 2004 8228 (ON SC), [2004] O.J. No. 1575 (S.C.J. – Master) at paragraph 13; affirmed, 2004 73251 (ON SCDC), [2005] O.J. No. 1400 (Div. Ct.).

[9] The plaintiffs’ proposed claim against State Farm is based on Ontario Policy Change Form (“OPCF”) 44 (Family Protection Endorsement). Section 17 of OPCF 44 requires that an action against a person’s own insurer for recovery in an underinsured situation must be brought within 12 months of the date that the claimant knew, or ought to have known, that the quantum of his or her claim exceeded $200,000.00.

[10] The Court of Appeal has set out the test to be applied as follows:

The plaintiff’s case runs from when he has a body of evidence accumulated that would give him a “reasonable chance” of persuading a judge that his claims would exceed $200,000.00.[^1]

[11] In Roque, the Court of Appeal dismissed an appeal from a motion judge’s decision granting an insurer’s motion for summary judgment. The motion judge concluded that the plaintiff knew or ought to have known that his claim exceeded $200,000.00 when he received a certain economic loss report on September 14, 1999. The plaintiff in Roque did not commence an action against his insurer until March 2002, some 30 months after receiving the economic loss report. The motion judge concluded that the plaintiff had missed the 12 month limitation period set out in Section 17 of OPCF 44 and dismissed his action.[^2]

[12] I accept State Farm’s submission that the various diagnoses of the injuries Maria suffered in the 2004 accident would appear to confirm that her injuries were very serious indeed. She appears to have suffered significant physical and psychological impairment. Moreover, her condition seems to be getting worse. However, I am simply unable to conclude on the basis of the evidence before the court on this motion that the accumulated medical evidence to date would give Maria a “reasonable chance” of persuading a judge that her claims arising from the 2004 accident would exceed $200,000.00. In my view, any assessment of her damages at this stage is largely speculative in nature.

[13] First, I note that virtually all of the medical evidence filed on this motion comes from Maria’s treating physicians or medical/legal experts hired on her behalf. That evidence has not been tested in any way. Maria has not been examined for discovery. No defence medical examinations have taken place. State Farm, in its capacity as Maria’s accident benefits provider in connection with the 2007 accident, did not obtain an opinion that Maria was catastrophically impaired until November 19, 2012. It is also very difficult at this stage to determine what damages may flow from the 2004 accident and what damages resulted from the 2007 accident.

[14] Second, it is my view that the facts before me on this motion are very different from the facts in Roque. In Roque, the plaintiff had obtained an economic loss report setting out a loss of income claim that ranged between $495,000.00 and $581,000.00. The plaintiff in Roque had also prepared a mediation brief in which his counsel assessed his damages at $125,000.00 for general damages and $250,000.00 for lost income.[^3] In this action, no economic loss report had been prepared and Maria’s counsel has not prepared any form of an assessment or analysis of her damages.

[15] Finally, I do not see the Court of Appeal’s decision in Roque as a departure from Master Dash’s decision in McCook v. Subramaniam, 2008 59323 (ON SC), [2008] O.J. No. 4583 (S.C.J. – Master). In fact, the Court of Appeal expressly adopts his articulation of the applicable test. In my view, Master Dash’s observation in McCook at paragraph 5 that a plaintiff should be “given a degree of latitude” in making what is a very “complicated determination” remains applicable on a motion of this nature. It is true that the Court of Appeal did not reference this portion of Master Dash’s analysis in its decision in Roque. However, it was not necessary for it to do so in view of the facts of Roque, as outlined above. The findings of the motion judge made it clear that the plaintiff in Roque clearly knew his claims exceeded $200,000.00 long before he issued his statement of claim.

[16] I am, of course, aware that the plaintiffs have claimed damages of $1,500,000.00 in their statement of claim. However, I agree with Master Dash’s observation in McCook at paragraph 17 where he states that the amount claimed in the prayer for relief is only one factor to be considered on a motion of this nature and is not determinative.

[17] In my view, it is simply premature, in the circumstances of this case, for the court to carry out an assessment of Maria’s potential damages simply on the basis of medical reports, notes and assessments, without any detailed evidence setting out the basis for her loss of income claim and anticipated care and housekeeping costs. It may be that Maria knew or ought to have known many years ago that she had a “reasonable chance” of persuading a judge that her claims arising from the 2004 accident would exceed $200,000.00. However, I am unable to arrive at that conclusion on the basis of the evidence before me on this motion. That will have to be a matter for the trial judge to decide on a full evidentiary record.

[18] Given my conclusion with respect to Maria’s claims against State Farm, it is not strictly necessary for me to address the question of whether the FLA claims of the proposed minor plaintiffs can proceed against State Farm separately from Maria’s claims. However, if I am wrong regarding Maria’s claims, I would not have permitted the minor plaintiffs’ claims to proceed against State Farm. The proposed FLA claims are derivative of Maria’s principal action against State Farm. They do not stand alone. They are governed by the limitation period applicable to the main action. See Smith Estate v. College of Physicians and Surgeons of Ontario, 1998 1523 (ON CA) at paragraph 17 and Murphy v. Welsh, 1993 59 (SCC), [1993] S.C.J. No. 83 at paragraph 16.

[19] For the reasons set out above, I am granting leave to the plaintiffs to amend their statement of claim as requested in their notice of motion.

ORDER

[20] I therefore order as follows:

(a) the plaintiffs are hereby granted leave to amend their statement of claim in accordance with the draft amended statement of claim at Tab 2A of the plaintiffs’ motion record;

(b) State Farm shall have leave to plead a limitation defence if so advised;

(c) the registrar shall not dismiss this action for delay without further order of the court;

(d) if the parties are unable to reach an agreement on the issue of costs, they shall make brief submissions in writing by no later than April 2, 2013; and,

(e) the parties to this action, and the related action involving the 2007 accident, shall contact my assistant trial coordinator within 30 days in order to arrange for a telephone case conference.

Master R.A. Muir

DATE: March 22, 2013

[^1]: Roque v. Pilot Insurance Co., 2012 ONCA 311 at paragraph 8.

[^2]: Roque v. Pilot Insurance Co., [2010] O.J. No. 6251 (S.C.J.) at paragraph 8.

[^3]: See Roque (S.C.J.) at paragraph 7.