CITATION: Monico v. State Farm Mutual Automobile Insurance, 2015 ONSC 2697
COURT FILE NO.: CV-12-450455
DATE: 20140429
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N :
MARIA MONICO
Plaintiff
– and –
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY
Defendant
Rebecca Nelson
for the Plaintiff
Mouna Hanna
for the Defendant (Moving Party)
HEARD: April 10, 2015
CHAPNIK J.:
[1] The defendant, State Farm Mutual Automobile Insurance Company (State Farm) seeks summary judgment dismissing the claim against it on the grounds that the plaintiff’s claim for unidentified motorist coverage is statute-barred for failure to comply with statutory conditions pursuant to s. 258.3 of the Insurance Act, R.S.O. 1990, c. I.8 (the Act), and to s. 8 of the Uninsured Automobile Coverage, R.R.O. 1990, Reg. 676, the schedule to the Act (the Schedule).
the facts
[2] The within action arises from an alleged motor vehicle accident involving an unidentified driver which is said to have occurred on April 10, 2010. According to the plaintiff, she was stopped on Highway 7 at a red light when an unidentified vehicle in front of her reversed, struck her vehicle and then fled the scene.
[3] State Farm was named a defendant in this action for damages pursuant to the unidentified motorist coverage in the plaintiff’s insurance policy.
[4] The plaintiff has been involved in two other motor vehicle accidents. The first, on February 20, 2009, in which she suffered injuries to her neck and back. She commenced a claim for damages on May 3, 2012 and has been receiving benefits for the February 20, 2009 accident. The second accident occurred on April 12, 2013 and is the subject of a claim for damages issued March 3, 2014.
[5] In regard to the alleged accident on April 10, 2010, it is the plaintiff’s evidence that she was stopped at a red light on Highway 7 waiting to turn left onto Ainsley Grove Road. When the light turned green, the car in front of her reversed, striking the front of her vehicle. It then made a quick left turn and left the scene. As a result, the plaintiff claims to have exacerbated the neck and back injuries she had sustained in the prior accident of February 20, 2009.
[6] She claims that the Monday following the accident, she called her broker John Mitchell and reported the accident to Maria Freitas at his office, telling Ms. Freitas there was no damage to her car but her neck and back hurt. Apparently, Ms. Freitas advised her that the treatment she was receiving from the 2009 accident would continue and advised the plaintiff that she need not do anything further with respect to the 2010 accident.
[7] Based on the advice of Ms. Freitas (with whom she had previously dealt with respect to the 2009 accident), the plaintiff did not pursue this claim further.
[8] The plaintiff issued a statement of claim on April 3, 2012, with respect to the April 2010 accident. In mediation for the 2009 accident, held April 30, 2013, the plaintiff was made aware that State Farm had no knowledge of the April 2010 accident.
[9] The parties agree that there is no documentary proof the April 2010 accident took place. The plaintiff did not make a report to the police or the vehicle collision centre, nor did she make any notes of her alleged conversation with Ms. Freitas or her call to Mr. Mitchell’s office.
[10] It was not until April 2013 that the she applied for accident benefits, which she later withdrew as she continued to receive benefits from the 2009 accident.
[11] No mention was made of a motor vehicle accident having occurred on April 10, 2010 in detailed medical records of her injuries related to the other two accidents and no comments were made about this in the examinations held pursuant to the other accidents. The plaintiff attended her family doctor on May 13, 2010, yet there is no mention in the doctor’s clinical notes and records regarding the accident of April 10, 2010. The only reference to the alleged incident was found in the therapy notes dated May 11, 2010 that “April 2010, a car back [sic] into her at a red light which did not help any of these unresolved issues.”
[12] The plaintiff explained that she relied on the advice of Ms. Freitas not to be concerned about taking any further steps as a result of the 2010 accident because she was obtaining benefits from the 2009 accident and since there was no property damage, it was unnecessary to call the police or take her vehicle to the Collision Centre. Moreover, she had no recall of the details surrounding the accident that would have assisted the defendant in an investigation.
[13] The following exchanges from the plaintiff’s cross-examination held on December 8, 2014 are telling.
[14] Questions 44-49 (pp.8-9) read:
Q. Did he bring his car behind the white line?
A. I don't recall.
Q. So if I'm understanding this correctly, the light turns red. He reverses out of the intersection. Doesn't hit you.
A. Correct.
Q. How far was he from your vehicle?
A. I don't recall. I think he was too close to my car, but not ...
MS. NELSON: I don't want you to guess, if you don't know.
THE DEPONENT: I don't recall.
Q. Do you recall how long he had been stopped for before the light turned green?
A. No.
Q. I keep saying he, but it could have been a female. Did you notice whether it was a female or a male?
A. I did not notice.
Q. Did you notice if there were passengers in the vehicle?
A. I don’t remember. I do remember sitting in my car and honking because I could see his reverse lights were on and honking to get the attention of the driver, but --
and at Q.54-57:
Q. What happened when you honked?
A. Nothing.
Q. How long were you honking for?
A. I may have honked once or twice. That was
Q. Did you notice the driver look in his rearview mirror?
A. I don’t recall.
57 Q. Do you recall you and your passengers having a conversation while you were honking about the vehicle?
A. I don't recall.
58 Q. So you honked, and you don't recall if somebody said, Why are you honking?
A. I don’t remember, so I'm not going to guess.
59 Q. So as he was driving away, did you notice any damage to his vehicle?
A. I don't recall.
60 Q. And after impact, did you and your passengers have any discussions in the vehicle about what had happened?
A. I don’t recall.
statutory requirements
[15] Sections 258.3(1) and (9) of the Act deal with the notice and disclosure requirements prior to commencing an action:
Notice and disclosure before action
258.3(1) An action for loss or damage from bodily injury or death arising directly or indirectly from the use or operation of an automobile shall not be commenced unless,
(a) the plaintiff has applied for statutory accident benefits;
(b) the plaintiff served written notice of the intention to commence the action on the defendant within 120 days after the incident or within such longer period as a court in which the action may be commenced may authorize, on motion made before or after the expiry of the 120-day period;
(c) the plaintiff provided the defendant with the information prescribed by the regulations within the time period prescribed by the regulations;
(d) the plaintiff has, at the defendant’s expense, undergone examinations by one or more persons selected by the defendant who are members of Colleges as defined in the Regulated Health Professions Act, 1991, if the defendant requests the examinations within 90 days after receiving the notice under clause (b);
(e) the plaintiff has provided the defendant with a statutory declaration describing the circumstances surrounding the incident and the nature of the claim being made, if the statutory declaration is requested by the defendant; and
(f) the plaintiff has provided the defendant with evidence of the plaintiff’s identity, if evidence of the plaintiff’s identity is requested by the defendant.
Failure to comply
258.3(9) Despite subsection (1), a person may commence an action without complying with subsection (1), but the court shall consider the non-compliance in awarding costs.
[16] The Schedule to the Act deals specifically with Uninsured Automobile Coverage, that is, accidents involving unidentified automobiles. Sections 3 and 8 are as follows:
Accidents Involving Unidentified Automobiles
3.(1) This section applies if an unidentified automobile has caused bodily injury or death to a person insured under the contract.
(2) The person, or his or her representative, shall report the accident to a police officer, peace officer or judicial officer within twenty-four hours after it occurs or as soon as is practicable after that time.
(3) The person, or his or her representative, shall give the insurer a written statement within thirty days after the accident occurs or as soon as is practicable after that date setting out the details of the accident.
(4) The statement shall state whether the accident was caused by a person whose identity cannot be ascertained and whether the person insured under the contract was injured or killed and property was damaged in the accident.
(5) The person, or his or her representative, shall make available for inspection by the insurer upon request the automobile in which the person was an occupant when the accident occurred.
Limitations
8.(1) No person is entitled to bring an action to recover an amount provided for under the contract, as required by subsection 265 (1) of the Act, unless the requirements of this Schedule with respect to the claim have been complied with.
[17] Section 129 of the Insurance Act deals with relief from forfeiture:
- Where there has been imperfect compliance with a statutory condition as to the proof of loss to be given by the insured or other matter or thing required to be done or omitted by the insured with respect to the loss and a consequent forfeiture or avoidance of the insurance in whole or in part and the court considers it inequitable that the insurance should be forfeited or avoided on that ground, the court may relieve against the forfeiture or avoidance on such terms as it considers just.
[18] As well, s. 98 of the Courts of Justice Act, R.S.O. 1990, c. C. 43 provides:
Relief against penalties
- A court may grant relief against penalties and forfeitures, on such terms as to compensation or otherwise as are considered just.
analysis
[19] In the circumstances of this case, it is clear that the plaintiff failed to comply with the statutory reporting requirements of the Insurance Act and the Schedule. She did not report the accident to a police officer, peace officer or judicial officer as required by s. 3(2) of the Schedule. She did not give the insurer a written statement setting out the details of the accident either within the time frame set out in s. 3(3) of the Act, or at all. She did not make the vehicle available for inspection and, given there was no reported incident, State Farm could not have requested that she do so.
[20] As well, she did not comply with the notice requirements in s. 258.3(1) of the Act necessary for a claim for loss or damages.
[21] The real issue appears to be whether the plaintiff is entitled to relief from forfeiture, as provided by the above provisions. In making this inquiry, the court will assume, for these purposes, that the accident did occur roughly in the manner suggested by the plaintiff.
[22] Relief from forfeiture is an equitable and discretionary remedy. Its purpose is to prevent hardship where there has been a failure to comply with a condition precedent and where leniency with respect to strict compliance would not result in prejudice to the other party.
[23] The most recent statement of law with respect to relief from forfeiture emanates from the Court of Appeal in the case of Kozel v. Personal Insurance Co., 2014 ONCA 130, 119 O.R. (3d) 55 [Kozel]. The court, in Kozel, rejected a strict approach and clearly stated the court is to interpret relief from forfeiture provisions broadly. The court looks at the nature of the breach and whether it is substantial or serious. Each case focuses on its particular fact situation.
[24] In making a determination whether relief ought to be granted, the court in Kozel set out the following principles, at para. 31:
In exercising its discretion to grant relief from forfeiture, a court must consider three factors: (i) the conduct of the applicant, (ii) the gravity of the breach, and (iii) the disparity between the value of the property forfeited and the damage caused by the breach.
[25] The first factor focuses on the reasonableness of the breaching party’s conduct. As Doherty J.A explained in Darlington Crescent, 2011 ONCA 363, 333 D.L.R. (4th) 326 at para. 89:
[this factor] requires an examination of the reasonableness of the breaching party’s conduct as it relates to all facets of the contractual relationship, including the breach in issue and the aftermath of the breach.
[26] At the time of the accident and following, were the plaintiff’s actions in relation to her claim reasonable? It is the plaintiff’s submission that she was told by Ms. Freitas to take no action as she was already receiving accident benefits pursuant to the 2009 accident. The plaintiff also submits that she made no police report since there was no damage to her vehicle and no information to report to them. Was her conduct reasonable in the circumstances? I think not.
[27] First, this was not her first motor vehicle accident – she must have been familiar with the procedural aspects and generalized reporting requirements when asserting an insurance claim. She failed to follow the minimal requirements related to the reporting of an accident. Indeed, she only applied for accident benefits (which she later withdrew) in April 2013, over three years after the date of the alleged accident and over one year after delivering the Statement of Claim. Second, although she had some dealings with Ms. Freitas regarding the 2009 accident, she was unaware of Ms. Freitas’ role or position in the company (according to her, “she could have been a receptionist”). Moreover, she took no notes of the alleged conversation with her.
[28] In my view, where an alleged hit-and-run accident occurred, it was not reasonable for the plaintiff to sit back and do nothing even in light of what she says she was told by Ms. Freitas. The plaintiff admits that she never spoke to Mr. Mitchell, the insurance broker, about this matter nor did she request any documents or send the broker any correspondence regarding the accident. Indeed, the archived master records from the insurance broker do not reference any calls from the plaintiff reporting the accident of April 2010. It appears to me that the plaintiff wilfully ignored her reporting obligations under her contract with the defendant. I find that the plaintiff failed to act reasonably in this matter.
[29] The second factor, the question of gravity of the breach lies also in the defendant’s favour. Being an uninsured motor vehicle claim, it was important that the insurer act quickly to ascertain whether the perpetrator could be located. State Farm was deprived of that opportunity in these circumstances.
[30] The plaintiff claims she advised Ms. Freitas that someone hit her and she had neck and back pain. There is no evidence that she told Ms. Freitas she was involved in an accident with a hit-and-run driver. The reporting requirements in the Schedule are particularly stringent and unequivocal. Since the plaintiff did not report the accident in timely fashion, the defendant effectively lost the opportunity to potentially make a claim against another person. Also, given that no written notice of the claim was provided to the defendant prior to the issuance of the action (although it was issued within the limitation period) the usual investigative opportunities afforded to the defendant were negated. In my view, the plaintiff’s breaches were substantial.
[31] This impacts on the third factor, the matter of prejudice. As noted in Kozel at para. 69, in an insurance case, this inquiry involves “comparison of the disparity between the loss of coverage and the extent of the damage caused by the insured’s breach.” The onus is on the insurer to demonstrate with positive evidence, actual or potential prejudice: Coombs v. Royal Insurance Co. of Canada, [1985] O.J. No. 1780 (Dist. Ct.), aff’d [1988] O.J. No. 2227.
[32] It is the plaintiff’s position that her only recourse for damages arising out of the accident is this claim and the defendant is not seriously prejudiced by any of the plaintiff’s actions or omissions. Thus, a dismissal of the action would be out of proportion to any damage caused by the breach. Again I disagree.
[33] The relative prejudice to the plaintiff given that she continued to receive accident benefits for the 2009 accident and sustained no property damage to her vehicle, pales in comparison to the actual and potential prejudice to the defendant in not having the opportunity to investigate the circumstances of the incident in question, interview witnesses, obtain defence medical reports if required and so on. It is germane that the plaintiff purports to have no recall of many of the details surrounding the accident – whether there were passengers in the other vehicles, the gender of the driver, the colour or make of the vehicle, where exactly the other car was situated as things unfolded, and even if she discussed the accident with her two passengers after it occurred. I agree with the defendant that memories would likely have been sharper at a time period closer to the time of the accident.
[34] The Court of Appeal of Ontario discussed the importance of the reporting requirements of s. 3 of the Schedule in July et al. v. Neal (1986), 1986 CanLII 149 (ON CA), 57 O.R. (2d) 129 at para. 18:
The insurer is then given an early opportunity to investigate in a meaningful way the circumstances of the accident. It also, it seems to me, takes the “sting” out of the possibility (and though it is only a possibility it does not require an over-stimulated imagination to envisage such a scenario) of the insurer being sued a number of years after the accident, without otherwise any prior knowledge of the accident.
[35] Now, the defendant faces a lawsuit in which the plaintiff claims $200,000 plus costs, interest and HST. In my view, after considering the three factors from Kozel, the balance and proportionality principle favours the defendant. The defendant has satisfied its onus to demonstrate both actual and potential prejudice flowing from the plaintiff’s breaches.
rule 20
[36] Rule 20.04(2)(a) provides that a court shall grant summary judgment if the court is satisfied there is no genuine issue requiring a trial with respect to a claim of defence.
[37] In Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87 at para. 49, the Supreme Court of Canada outlined the approach a court should apply in determining whether there is a genuine issue requiring a trial:
There will be no genuine issue requiring a trial when the judge is able to reach a fair and just determination on the merits on a motion for summary judgment. This will be the case when the process (1) allows the judge to make the necessary findings of fact, (2) allows the judge to apply the law to the facts, and (3) is a proportionate, more expeditious and less expensive means to achieve a just result.
[38] In responding to a motion for summary judgment, Rule 20 still requires a responding party to put its best foot forward. See, for example, Theiventhirampillai v. Balakrishnan, 2012 ONSC 215, 95 M.P.L.R. (4th) 74 at para. 20.
conclusion
[39] On the evidence before me in this case, I have been able to decide this issue within the context of the applicable law and with a full appreciation of the facts and issues involved.
[40] The plaintiff has failed to comply with the statutory requirements for motor vehicle accidents involving unidentified motorists. Even giving the relief from forfeiture provisions a broad and liberal interpretation, they do not apply to this situation. In my view, this is not a case of “imperfect compliance” or otherwise where the plaintiff should be awarded equitable relief by way of relief from forfeiture. The case of Thomas v. Hickey, 1995 CarswellOnt 448 (G.D.) appeal to C.A. dismissed 1998 CarswellOnt 97 (C.A.) where the court did grant relief from forfeiture rests on a very different fact situation in which there was “an error in judgment”, settlement negotiations and where just before trial, the insurer took the position it was denying coverage.
[41] There is no genuine issue requiring a trial for its resolution in the factual nexus before me. Granting the defendant summary judgment in these particular circumstances is a more proportionate, expeditious and less expensive means to achieve a just result in this matter. Accordingly, the defendant’s motion is allowed and the plaintiff’s action is dismissed.
[42] The fixing of costs is a discretionary decision under s.131 of the Courts of Justice Act to be exercised in accordance with the factors listed in rule 57.01 of the Rules of Civil Procedure and the applicable case law. Overall, the court is required to consider what is fair and reasonable within the context of the parties’ reasonable expectations. Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 CanLII 14579 (ON CA), 71 O.R. (3d) 291.
[43] The defendant claims the approximate sum of $15,000 for the motion and the action and a similar amount of costs is asserted by the plaintiff. Considering the above factors, this is a fair and reasonable assessment of costs in this matter. Costs in the amount of $15,000 including disbursements and HST are awarded to the defendant as against the plaintiff payable forthwith.
CHAPNIK J.
RELEASED: April 29, 2015
CITATION: Monico v. State Farm Mutual Automobile Insurance, 2015 ONSC 2697
COURT FILE NO.: CV-12-450455
DATE: 20140429
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N :
MARIA MONICO
Plaintiff
– and –
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY
Defendant
REASONS FOR JUDGMENT
CHAPNIK J.
RELEASED: April 29, 2015