COURT FILE NO.: CV-15-533593 DATE: 20160413 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Dr. Brenda Steinnagel, Plaintiff AND: Workplace Health & Cost Solutions (WHCS) and The Workplace Safety Insurace Board (WSIB), Defendants

BEFORE: Stewart J.

COUNSEL: Jessica Prince and Emma Carver, for the Plaintiff Eric Kupka, for the Defendant WSIB Greg McGinnis for the Defendant WHCS

HEARD: October 26, 2015

Endorsement

Nature of the Motions

[1] The Defendant, The Workplace Safety and Insurance Board (“the WSIB”) moves to have the pleading of the Plaintiff, Dr. Brenda Steinnagel (“Dr. Steinnagel”) struck and the action dismissed against it pursuant to Rule 21 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, on the ground that it discloses no reasonable cause of action. In the alternative, the WSIB moves to strike certain parts of the Amended Statement of Claim for being scandalous, incapable of proof or immaterial to the action.

[2] The Defendant, Workplace Health & Cost Solutions (“WHCS”) also moves to strike portions of Dr. Steinnagel’s pleading for the same reasons. In the alternative, WHCS requests that particulars of certain portions of the pleading be ordered to be provided.

[3] Dr. Steinnagel resists both motions.

[4] These motions were heard together. The background and issues raised by the parties therefore will be dealt with together to the extent that is appropriate.

Background

[5] Dr. Steinnagel has claimed wrongful termination of her contract of employment with WHCS. According to her Statement of Claim, Dr. Steinnagel was employed by WHCS from September 2012 to April 2015 as a medical physician consultant.

[6] WHCS is a corporation which delivers corporate health and claims management programs to clients. During the period of Dr. Steinnagel’s employment, WHCS had a contract with the WSIB to provide external medical consultants to assist the WSIB’s case managers in their adjudication of claims filed by workers to determine eligibility for benefits. Dr. Steinnagel’s primary function at WHCS was to provide external medical opinions to the WSIB.

[7] On July 31, 2015, Dr. Steinnagel delivered a Statement of Claim in which she not only alleges wrongful dismissal and breach of contract as against WHCS, she also alleges economic torts, conspiracy and fraudulent conduct as against both defendants and claims damages from them. In essence, she claims that the defendants orchestrated the termination of her contract for an unlawful purpose in furtherance of their pattern of conduct of pressuring physicians to alter their medical opinions in order to deny claimants’ benefits.

[8] The WSIB and WHCS have each served demands for particulars to which Dr. Steinnagel has responded.

[9] After WHCS served her with its Notice of Motion with respect to this motion, Dr. Steinnagel has proceeded to serve an Amended Statement of Claim.

[10] Among the complaints of the defendants about the Statement of Claim is a submission that the allegations of “fraud on the public” in it are incapable of being proven, are scandalous and ought to be struck. They also argue that Dr. Steinnagel’s pleading does not contain the elements necessary to prove fraud or the economic torts claimed.

[11] The moving parties further submit that the claim of conspiracy is not supported by adequate particulars. As it presently stands, they argue that the claim for conspiracy does not assert the necessary facts to make out the elements of that cause of action.

[12] It is argued on Dr. Steinnagel’s behalf that the Statement of Claim pleads facts that adequately support all of the causes of action pleaded and its contents conform with the rules of pleading.

Issue and Discussion

[13] Is it plain and obvious that the Statement of Claim discloses no reasonable cause of action and therefore the action cannot succeed? Alternatively, should further particulars be ordered to be provided?

[14] It is now trite law that the contents of a pleading are to be considered as true for the purposes of motions of this nature. The pleading is to be read very generously with allowance for inadequacies due to drafting deficiencies. To strike a claim for failing to disclose a cause of action, it must be plain and obvious that the impugned portions of the Statement of Claim disclose no reasonable cause of action and the action is therefore doomed to fail (see: Odhavi Estate v. Woodhouse, 2003 SCC 69, [2003] 3 S.C.R. 263).

[15] The specific elements of a particular cause of action need not be explicitly alleged provided the facts supporting such elements are pleaded. Further, the court should not at the pleadings stage dispose of matters of law that are novel or not fully settled in the jurisprudence.

[16] Although a pleading may be struck if it may prejudice or delay the fair trial of the action, is scandalous, frivolous or vexatious, or is an abuse of the process of the court, such relief should be granted only in the clearest of cases (see: Kang v. Sun Life Assurance Co. of Canada, 2011 ONSC 6335).

[17] Reading the Statement of Claim generously as the law requires, I consider that it is not plain and obvious that the causes of action advanced have not been reasonably disclosed.

[18] The elements of unlawful interference with economic relations are not in dispute. Conduct is unlawful if it would be actionable by the third party or would have been actionable if the third party had suffered loss as a result of it. A court need not inquire into whether the third party suffered loss as a result of this unlawful conduct. Threatening to breach a contract with a third party can satisfy the unlawful means element of the tort. So long as the pleadings or the particulars set out conduct that would constitute unlawful means, it is not necessary to state which unlawful conduct is relied on for the purpose of the tort.

[19] The Statement of Claim describes the parties and their relationship to each other and pleads, both explicitly and implicitly, that there was an agreement between WSIB and WHCS to unlawfully terminate Dr Steinnagel. It pleads that WHCS and WSIB conspired to terminate Dr. Steinnagel from her employment as a reprisal and punishment for her refusal to participate in their fraud on the public. The intention of this agreement was to injure Dr. Steinnagel.

[20] Contrary to WSIB’s submission that Dr. Steinnagel has not pleaded a link between her termination and WSIB’s threat to stop using WHCS if Dr. Steinnagel continued to do assessments, the pleadings allege the following facts, (all presumed to be true for the purposes of this motion):

• WSIB threatened to stop sending work to WHCS if Dr. Steinnagel continued to do assessments;
• WSIB deliberately manufactured criticisms in order to punish Dr. Steinnagel and/or to drive her out of employment;
• WSIB and WHCS had meetings that were of a punitive nature, following which (i) changes were made to Dr. Steinnagel’s working conditions and (ii) manufactured criticisms about the quality of Dr. Steinnagel’s work became commonplace;
• WSIB attempted to drive Dr. Steinnagel out of her job;
• WSIB made an illegal and improper request to WHCS to terminate Dr. Steinnagel as punishment for refusing to adjust her opinion.

[21] The Statement of Claim also alleges that the wrongful termination of Dr. Steinnagel’s employment contract was caused by WSIB’s conduct, in that:

• WHCS was feeling pressure being applied by WSIB;
• WHCS told Dr. Steinnagel that she was at risk of jeopardizing the WSIB contract;
• The president of WHCS told Dr. Steinnagel via email that WHCS had no choice but to abide by WSIB’s request to terminate her.

[22] The Statement of Claim alleges that the defendants acted in concert and with a common purpose. It alleges that WSIB communicated the policy of denying claims to injured workers to WHCS, both WSIB and WHCS asked Dr. Steinnagel to reconsider her opinion, WSIB and WHCS began a coordinated campaign to try to force her to quit her job as a result of her refusal to do so, and WHCS finally terminated Dr. Steinnagel at the request of WSIB.

[23] The Statement of Claim and Dr. Steinnagel’s Response to Demand for Particulars allege the following in furtherance of the defendants’ agreement to unlawfully terminate Dr. Steinnagel:

• WSIB and WHCS repeatedly pressured Dr. Steinnagel to reconsider her opinion;
• WHCS had its medical director rewrite Dr. Steinnagel’s report and attempted to coerce her into signing the false opinion under her own name;
• The Project Manager of WHCS made an implicit threat to Dr. Steinnagel, asking if she “valued the WSIB contract” and warning her that there could be further “punitive discussions;”
• WSIB and WHCS began a campaign to try to force Dr. Steinnagel to quit her job as a result of her refusal to change her medical opinion. WSIB began making unwarranted criticisms of her work on unrelated files. Following a meeting with WSIB, WHCS began altering Dr. Steinnagel’s work arrangements;
• WSIB told WHCS to terminate Dr. Steinnagel;
• Following the improper and illegal request by WSIB, the president of WHCS terminated Dr. Steinnagel by phone;
• WSIB’s medical manager was aware that Dr. Steinnagel’s competence was of the highest level and that the only reason for demanding her termination was to promote WSIB’s financial interests.

[24] The Statement of Claim further alleges that the defendants knew or ought to have known that their actions, directed at Dr. Steinnagel in furtherance of their unlawful agreement to procure false medical reports and wrongfully deny benefits, would cause harm to Dr. Steinnagel.

[25] In my view, the torts of unlawful interference with economic relations and inducing breach of contract are thereby sufficiently pleaded. The Statement of Claim alleges that WHCS breached its contract with Dr. Steinnagel in furtherance of its agreement with WSIB. The pleadings allege conduct that was unlawful by virtue of its allegedly fraudulent nature: the procurement of false medical reports to be relied on to deny claims. WHCS is also alleged to have encouraged Dr. Steinnagel to breach her duty of impartiality and her professional obligations in that same regard to maintain the standards of the medical profession expected of her, all of which is said to be unlawful conduct. I therefore consider that Dr. Steinnagel has sufficiently pleaded the elements of unlawful act conspiracy. It is not plain and obvious that the causes of action pleaded have no chance of success such that they should be struck.

[26] The pleadings allege that WSIB and WHCS knowingly procured false reports which claimants, WSIB decision makers, and appellate decision makers relied on to the potential detriment of injured workers. As mentioned, the truth of all of these allegations must be accepted for the purpose of these motions at the preliminary pleadings stage.

[27] The allegations of fraudulent conduct are relevant to the context of Dr. Steinnagel’s dismissal. This conduct may justify an award of or increase the quantum of punitive damages, and the fraud may constitute unlawful conduct for the purposes of unlawful act conspiracy and unlawful interference with economic relations. The assertion of these allegations will not impair a fair trial (see: Alleslev-Krofchak v. Valcom Ltd., 2010 ONCA 557).

[28] I agree with the moving parties that there is no stand-alone tort of “fraud on the public”. However, this language is used in support of the other claims as pleaded and not in an effort to set up a claim for damages on any separate basis. I do not consider the assertions to be scandalous, such that they should be struck.

[29] For these reasons, the motions are dismissed.

[30] An Amended Statement of Claim has been delivered. Therefore, I consider it is appropriate to defer any issue of the need for further particulars. This disposition is without prejudice to the bringing of any motions in that regard by any party that may be deemed advisable.

[31] This disposition is likewise without prejudice to the ability of any of the parties to seek to determine the action on a motion for summary judgment at an appropriate stage.

Costs

[32] If the subject of costs cannot be agreed upon, written submissions may be delivered on behalf of Dr. Steinnagel within 30 days of today’s date, and by the defendants within 20 days thereafter.

Stewart J. Date: April 13, 2016

COURT FILE NO.: CV-15-533593 DATE: 201600413 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

DR. Brenda Steinnagel Plaintiff

• and - Workplace Health & Cost Solutions (WHCS) and the Workplace Safety and Insurance Board (WSIB) Defendants

ENDORSEMENT

STEWART J. Released: April 13, 2016