NEWMARKET COURT FILE NO.: CV-11-104114-00A1

DATE: 20150703

ONTARIO
SUPERIOR COURT OF JUSTICE

BETWEEN:

Henry Seidel
Plaintiff

– and –

Town of Markham
Defendant

-and-

V.T.A. Construction Ltd. and Intact Insurance (formerly ING Insurance Company of Canada)
Third Parties

Not Represented on the Motion

Shaneka Taylor, for the Defendant Markham
Sean Chambers, for Defendant Third Parties

HEARD: July 2, 2015

justice B. glass

Motion to Enforce Terms of Settlement

[1] The Defendant Markham and the Third Parties dispute the meaning of a settlement between them with respect to legal representation and coverage. In the main action, the Town of Markham and V.T.A. Construction Ltd. have the same insurance company, i.e. Intact Insurance insofar as liability might apply to the actions or lack of actions by V.T.A. Construction Ltd. The winter maintenance contract requires V.T.A. to maintain liability insurance and Markham is to be indemnified if there is a claim against V.T.A.

[2] Throughout these reasons I shall refer to the Town of Markham as Markham, V.T.A. Construction as V.T.A. and Intact Insurance as Intact.

[3] The Plaintiff is not involved with this motion because it only involves Markham, V.T.A. Construction and Intact only.

The Dispute

[4] If negligence were to be found against the Town of Markham aside from any action or lack of action of V.T.A., Markham self-insures.

[5] The action involves allegations of the Plaintiff slipping, falling and being injured on municipal property with respect to proper winter maintenance. A third party claim was issued by Markham against V.T.A. in January 2012. The Plaintiff’s statement of claim, issued in May 2011, initially alleges the accident occurred on March 6, 2011. Later, in May 2012 the Plaintiff amended the statement of claim to allege that the fall happened on March 5, 2011.

[6] Rather than have two law firms representing Markham and the Third Party V.T.A., an agreement was negotiated for one firm to act for both. The issue at play now is whether or not the alleged settlement applies to all forms of potential liability for Markham or just to the extent that liability relates to the actions of V.T.A. If the settlement is interpreted to cover all forms of liability for Markham aside from the negligence of V.T.A., one law firm could not represent both Markham and V.T.A. because there would be a conflict of interest whereby the firm might demonstrate preference for one client over the other.

[7] The concern is raised by Intact Insurance because it does not intend to be liable for unrelated claims for Markham. Rather, Intact Insurance says that the e-mail correspondence clearly means that its liability is restricted to liability flowing to Markham insofar as it is connected to the conduct of V.T.A. only. Although there was not a complete written agreement setting out all details, there were several e-mail messages indicating the Intact position.

Who Is Correct?

[8] Ms. Taylor for Markham maintains that it was up to Intact to be specific. An issue arose after the settlement agreement was purportedly reached. That issue relates to the date of liability because the dates of March 5th or 6th of the year in question might mean that V.T.A. did not have a responsibility to do winter maintenance work on March 5th but did on March 6th. If the date of the slip and fall accident of the Plaintiff were to have been a day when no work was expected to be done by V.T.A., then the claim by the Plaintiff would likely be dismissed as it relates to V.T.A., but it might still relate to liability for Markham for actions by the municipality for which it self-insures.

[9] Ms. Taylor submits that this type of issue should have been addressed long ago. Mr. Chambers notes that the date became one of interest at an examination for discovery. The Third Party Intact maintains that the settlement agreement can only apply to V.T.A. Construction. The Intact position is saying that no one in their plain thinking mind would open a can of worms to pay for unrelated matters. In effect, Mr. Chambers appears to be saying that Intact is not in the business of being a philanthropist.

[10] When this situation arose, one law firm representing Markham and V.T.A. withdrew because of the potential for the development of a conflict of interest. It is not uncommon for a party to an action being represented by two law firms if there are conflicting positions involved.

[11] My inquiry to Ms. Taylor was whether Markham was trying to have its cake and eat it by having the benefit of legal services for the extra actions of negligence of Markham separate and apart from the action between the Plaintiff and V.T.A.. She did not wish to accept such a suggestion arguing that the e-mail messages are clear and should be taken at face value as a complete settlement.

[12] The common sense application of the alleged agreement is that Intact would provide legal services for Markham and V.T.A. for liability flowing from the conduct of V.T.A. and without any reference to independent acts of Markham.

[13] I might point out that in Consumers’ Gas v. Peterborough, 1979 77 from the Ontario Court of Appeal there was an issue about one party seeking indemnification for its own negligence in the absence of a contractual right. On page 11 of the decision, the Court of Appeal, in the fifth full paragraph of the page, very lucidly stated that if one is to be protected against and indemnified for one’s own negligence there would have to be an indemnity clause spelling out this obligation on the other party in the clearest of terms. I do not find such a clear indemnification clause to exist between V.T.A. and Markham in the motion before me.

[14] Intact has made its position clear that it is prepared to have independent counsel for Markham but only with respect to the V.T.A. actions and the potential for indemnification by Markham within its contract with V.T.A.

[15] In Dick v. Marek, 2009 27821 at paragraph 65, Hoy J. (as she then was) noted that a Rule 49.09 application first considers whether or not there is an agreement to settle so that if there are issues of fact or genuine issues of credibility in dispute, the court looks at whether the parties intended to create a legally binding contract or whether there was an agreement on all essential terms of a settlement barring which a court must refuse to grant judgment.

There Is No Agreement

[16] With the case before me, there is no agreement with all needed terms for a settlement. There are two positions advanced and they do not coincide. There is a difference of opinion about what happened as indicated by two lawyers involved in trying to reach agreement for legal representation. There might very well be a need for credibility findings regarding the lawyers who were Eli Lipetz and Sachin Persaud.

[17] There will be an order that there is no settlement agreement as Markham claims. The parties did not have a meeting of the minds as Ms. Taylor submits. Therefore, barring reaching an agreement, there is no settlement agreement to enforce pursuant to Rule 49.09 of the Rules of Civil Procedure.

[18] Markham now must make a decision whether to retain separate counsel or go back to the drawing board with Intact.

Costs

[19] This motion has been one with some complexity. It is obvious that the two sides have had important issues to analyze and argue. One might expect that if this type of application is brought, it will not be without expense.

[20] The draft bill of costs for Intact demonstrates many hours of work. I find that they are not excessive. A client of reasonable means would not be surprised with such costs.

[21] Costs to Intact in the sum of $12,000 on a partial indemnity scale. This includes disbursements of $671.05.

Conclusion

[22] There is no settlement between Markham and Intact.

[23] Costs are fixed as above noted in the sum of $12,000 plus HST.

Justice B. Glass

Released: July 3, 2015