CITATION: Future Health Inc. v. General Accident Assurance et. al., 2016 ONSC 2149
COURT FILE NO.: CV-00-1278
DATE: 2016-04-04
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Future Health Inc., operating as Trauma Services as continued by its Trustee in Bankruptcy, Scott, Pichelli & Graci Ltd.
Jane Poproski, for the Plaintiff
Plaintiff
- and -
General Accident Assurance Company of Canada, Dorothy Lambert, Madeline Grady, Selwyn Gundy, Greg Somerville, Joy Vint and Becky Ostrum
Elizabeth Bowker, for the Defendants
Defendants
HEARD: Sept. 29, 30 & Oct. 2, 2015
The Honourable Justice C.D. Braid
REASONS FOR JUDGMENT
I. INTRODUCTION
[1] The plaintiff, Future Health Inc. (“Future Health”), provided medical and rehabilitation services to patients with injuries caused by motor vehicle accidents. Future Health submitted billing requests and care plans to insurance companies for reimbursement under the Statutory Accident Benefits Schedule (“SABS”) pursuant to the Insurance Act, R.S.O. 1990, c. I.8.
[2] The corporate defendant, General Accident Assurance Company of Canada (“General Accident”), was an insurance company who received requests for payment from Future Health. The six individual defendants were employees of General Accident during the relevant time period. Future Health provided treatment and developed care plans for certain insured patients who were policyholders of General Accident, sixteen of whom are the subject of this litigation (the “Patients”).
[3] The plaintiff alleges a conspiracy to cause economic harm. The plaintiff states that claims and care plans were denied by the defendant General Accident, and that the defendants conspired to deny any claims presented on behalf of the Patients without due regard to the merits of the claims. The plaintiff claims $2.5 million in damages for conspiracy to cause economic harm and also seeks $2.5 million for punitive, aggravated and exemplary damages.
[4] The defendants have brought a motion for summary judgment, stating that there is no genuine issue for trial. In response, the plaintiff has brought a cross-motion also seeking summary judgment.
[5] For the reasons that follow, I find that there is no evidence to support the claim for conspiracy to cause economic harm and the action should be dismissed.
II. FACTS
[6] The plaintiff's claim is complex. At the heart of its claim is the allegation that an insurance company and its employees conspired with each other to cause financial harm to the plaintiff. The claim for damages is large and the conduct alleged is serious.
[7] The parties filed extensive motion records, factums and books of authorities on the motions. This matter was argued over three days, followed by further written submissions from the parties.
[8] Despite the complexity of the facts, both parties have invited the court to decide the action on a summary judgment motion and without the need for a trial. I therefore assume that all of the evidence that would be available at trial is currently before the court. The primary issue that must be determined by the court is whether the evidence demonstrates a conspiracy to cause economic harm to the plaintiff.
A. The Parties
[9] The plaintiff, Future Health (which carried on business as Trauma Services), was a medical and nursing practice consisting of Registered Nurses and Physician Specialists in Hamilton. Future Health provided health care services to the Patients and prepared comprehensive care plans which were tailored to deliver integrated health care services to persons suffering multi-factorial injuries from motor vehicle accidents.
[10] The defendant, General Accident, was an insurance company that insured the cost of health care for the Patients involved in motor vehicle accidents and issued insurance policies that contemplated a third party beneficiary care provider under the SABS pursuant to the Insurance Act. General Accident was required to pay for reasonable and necessary medical and rehabilitation care in respect of the Patients’ injuries.
[11] Six employees of General Accident were also named as defendants:
Dorothy Lambert (“Lambert”), who was the Claims Supervisor for the Accident Benefit Unit in Hamilton.
Madeline Grady (“Grady”), who was an Adjuster.
Selwyn Gundy (“Gundy”), who was the Claims Manager for the Hamilton Unit and was reported to by Lambert.
Greg Somerville (“Somerville”), who was a Senior Vice-President.
Joy Vint (“Vint”), who was an Adjuster.
Becky Ostrum (“Ostrum”), who was an Adjuster in London.
B. Background
[12] Future Health developed care plans for the Patients between January 1, 1994 and December 31, 1997. All of the Patients submitted claims to General Accident for the cost of the care plans developed by Future Health. The plaintiff submits that all of the services provided to the Patients under the care plans were reasonable, necessary, and supported by the Patients’ family doctors. Some of these claims and care plans were denied by General Accident.
[13] It was the standard practice of insurance adjusters in the mid-1990s to review invoices submitted by all treatment service providers to ensure that the treatment provided was reasonable and necessary. The role of the adjusters was to be fiscally responsible by scrutinizing bills to ensure that the insurer was paying for appropriate items.
C. The 1996 Meeting of the Insurance Crime Prevention Bureau
[14] General Accident was a member of the Insurance Crime Prevention Bureau (“ICPB”) along with many other insurance companies operating in Canada. On March 21, 1996, the ICPB sent a bulletin to all member companies in Ontario (“the ICPB bulletin”), requesting that the companies forward any files relating to the plaintiff to Special Agent Aubrey Dove, an investigator at the ICPB. Lambert forwarded three files.
[15] On May 6, 1996, the ICPB sent a letter to the plaintiff in which it apologized for the error in naming the plaintiff in the ICPB bulletin. General Accident received a copy of that letter.
[16] Lambert was asked by Gundy to attend an ICPB meeting on June 7, 1996, along with Grady. Other attendees included representatives from other insurance companies, investigative departments of insurance companies, ICPB representatives, and Special Agent Dove.
[17] The message conveyed at the ICPB meeting was that ICPB did not find any inaccuracies after reviewing the plaintiff’s billings. Lambert had the impression that there had been no wrongdoing on the part of the plaintiff; that General Accident would continue to deal with the plaintiff; and that General Accident would review any billings from the plaintiff in relation to the Patients and pay bills if they were appropriate. In a memo to her supervisor, Lambert wrote that the ICPB had been working with another insurance company, Economical Mutual Insurance Company (“Economical”), with respect to possible overbillings by Future Health.
[18] Grady stated that the ICPB bulletin was sent by the ICPB to all member companies. She was asked to look at the plaintiff’s files to determine if there was any fraud or questionable conduct, but she does not recall reviewing the files in a manner different from her usual practice or with a view to finding fraud or questionable activity.
[19] Grady believed that the ICPB meeting was an information-only meeting. She recalled that the ICPB discussed the investigation they undertook with respect to excessive billings by the plaintiff. She agreed with the memo that Lambert wrote to their supervisor with regards to the substance of the ICPB meeting. Grady left the meeting with the impression that there were a lot of questions about the plaintiff’s billings.
[20] The defendants have conceded that there was no evidence of fraud or dishonest conduct by the plaintiff.
[21] It is the evidence of Grady and Lambert that, after receiving the ICPB bulletin and attending the ICPB meeting, they continued to review the files of Future Health in accordance with their usual practice in adjusting any of their claim files. They stated that they always adjusted every file on its own merits to ensure that General Accident was paying for appropriate items. Both Lambert and Grady deny all allegations that there was an agreement or conspiracy by the defendants to cause economic harm to the plaintiff.
D. Plaintiff’s Position Regarding Evidence of a Conspiracy
[22] There is no direct evidence of a conspiracy to cause economic harm. Nowhere in the evidence is there an admission by the defendants that there was an agreement to do harm to the plaintiff. There is no direct evidence of any corporate policy, written agreement, or verbal agreement to deny Future Health claims. In fact, the only direct evidence consists of statements made by Lambert and Grady in their examinations for discovery and in their affidavits, stating that there was no policy or predisposition by General Accident’s adjusters to deny Future Health’s claims. The plaintiff did not cross-examine on the affidavits.
[23] In its submissions, the plaintiff relies on documentary evidence in twelve of the sixteen General Accident Patient files and asks the court to draw inferences from these documents to conclude that there was an agreement by the defendants to deny payment of Future Health’s accounts. These submissions are described in more detail below.
III. THE POSITIONS OF THE PARTIES
A. The Statement of Claim
1. Allegations of Conspiracy to Harm
[24] The plaintiff alleges conspiracy to cause economic harm and makes the following specific allegations in the Statement of Claim:
i. All the refusals of the claims were motivated by malice;
ii. The defendants acted in concert and unlawfully agreed amongst themselves that any claims for medical and rehabilitation expenses presented by any policyholder treated by the plaintiff would be routinely turned down by General Accident without due regard to the merits of the claim;
iii. The defendants knew or ought to have known the aforementioned agreement was unlawful and was designed to achieve an unlawful end, namely the infliction of economic harm on the plaintiff; and
iv. In furtherance of the agreement to harm the plaintiff, Dorothy Lambert, while acting under the supervision of and with concurrence of Selwyn Gundy and Greg Somerville, directed and guided the remaining co-conspirators in each case to perform specific acts in furtherance of the agreement to harm.
[25] The plaintiff alleges that the defendants owed the plaintiff a number of duties, as described in the Statement of Claim:
i. A common law and statutory duty of good faith based on two grounds:
a) The duty flows through each Patient by virtue of the plaintiff being the designated third party beneficiary of the accident benefits purchased by the Patient; and
b) The duty flows from the contract between the Patient and General Accident and is a natural extension of the duty of good faith owed to any policyholder at common law and in equity.
ii. A duty not to engage in any unlawful or unfair claims or business practice they knew or ought to have known would result in economic harm to the plaintiff.
iii. A duty owed by the defendants arising by virtue of the equitable nature of the relationship between the Patients, General Accident, and the plaintiff as a health care provider.
iv. A duty not to:
a) Act in combination and conspire to achieve an unlawful end by unlawful means;
b) Alternatively, act in combination and conspire to achieve a lawful end by unlawful means; and
c) Alternatively, act in combination and conspire to achieve an unlawful end by lawful means.
2. Allegations of Reprehensible Conduct
[26] In support of the claim for punitive, aggravated and exemplary damages, the plaintiff alleges that the defendants’ conduct showed a callous, cynical and reprehensible disregard of the plaintiff’s right to be designated as a third party beneficiary. The following specific allegations are made in the Statement of Claim:
i. Dishonestly holding beliefs of:
a) The Patients’ non-entitlement to benefits under the policy in relation to the plaintiff’s care plans;
b) The care plans not being reasonable under the circumstances;
c) The care plans not being necessary under the circumstances; and
d) The plaintiff having engaged in fraud and using that false belief as an adjusting tool to minimize General Accident’s exposure to pay benefits and to discredit the plaintiff in the market place in furtherance of the alleged acts of conspiracy.
ii. Engaging in wilful and deceitful conduct:
a) To exclude the plaintiff from the market place for care plans where the plaintiff’s care plans fulfilled all of the statutory requirements within SABS;
b) To exclude the plaintiff from the care of each Patient in contravention of the family physician’s request that the plaintiff be involved in the care of the Patient, which the defendants knew or ought to have known was critical to the success of the care plans;
c) That wilfully distorted, delayed, frustrated, and avoided payment of accounts so that the care plans were reduced in their effectiveness because of the wilful and premeditated conduct of the defendants in creating confusion, delay, frustration, anxiety, fear, and intimidation in the Patients’ mind;
d) To interfere with the nurse/patient and doctor/patient relationship that the plaintiff had with each Patient;
e) To deny the Patients’ right to choose and appoint the plaintiff; and
f) To restrict the Patients’ access to the plaintiff as their third party beneficiary for benefits available to them.
B. Position of the Defendants
[27] The defendants submit that General Accident refused to pay for the care plans on behalf of the Patients because the services provided for in the care plans were unreasonable or unnecessary. As General Accident did not hire or retain the plaintiff in respect of any of the Patients, there is no privity of contract between them.
[28] The defendants also submit that neither General Accident nor the individual defendants acted unlawfully against the plaintiff. They did not act in concert to achieve an unlawful purpose; rather, they acted lawfully and in accordance with the Patients’ insurance policies.
[29] The defendants state that, simply because a family doctor approved a treatment plan, it does not mean that General Accident adjusters were required to cease their usual practice of ensuring that the treatment was reasonable and necessary before approving the claim. A family doctor’s opinion does not preclude the normal adjusting process.
[30] The defendants state that the plaintiff has no cause of action against General Accident or its employees. If there were potential claims arising out of the actions of General Accident, it would be the Patients’ right to advance those claims. Disputes about payment of benefits ought to have been brought by the Patients themselves. There is no evidence that the Patients did not receive the treatment that they required.
IV. ANALYSIS
A. Summary Judgment
[31] The court shall only grant summary judgment if it is satisfied that there is no genuine issue requiring a trial. Pursuant to rules 20.04(2)(a) and (2.1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, the court shall consider the evidence submitted by the parties and may exercise any of the following powers for the purpose of determining whether there is a genuine issue requiring a trial, unless it is in the interest of justice for such powers to be exercised only at a trial:
Weighing the evidence.
Evaluating the credibility of a deponent.
Drawing any reasonable inference from the evidence.
[32] In Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87, the Supreme Court of Canada clarified the test to apply on a summary judgment motion. There will be no genuine issue requiring a trial if the evidence permits the court to make a fair and just determination on the merits. This will be the case when a motion for summary judgment (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.
[33] What is fair and just depends on the nature of the issues, and the nature and strength of the evidence. There is an obligation on each party to “put its best foot forward.”
B. Conspiracy
[34] In Sweda Farms Ltd. v. Egg Farmers of Ontario, 2014 ONSC 1200, [2014] O.J. No. 851, at para. 82 aff’d 2014 ONCA 878, [2014] O.J. No. 5815, the court articulated the criteria that a plaintiff must prove in order to establish the tort of conspiracy. In applying this test to the case before the court, the plaintiff must prove the following:
a) There was an agreement by two or more of the defendants; and
b) The defendants acted in furtherance of the agreement; and either
c) (i) the predominant purpose of the conduct in furtherance of the conspiracy (whether lawful or unlawful) was to cause injury to Future Health; or
(ii) if the conduct in furtherance of the conspiracy was illegal, that it was directed towards Future Health and the defendants knew or should have known in the circumstances that Future Health was likely to be injured; and
d) Future Health was injured as a result of the conspiracy.
[35] I have set out below the applicable analysis for each branch of the test, followed by an analysis of the facts in this case.
a) Was There An Agreement by Two or More Persons?
[36] The plaintiff must show more than that the defendants independently intended to injure the plaintiff or to commit an unlawful act. An agreement may be found if individuals had a joint plan or common design, without the need for a binding contract in the formal sense.
[37] The law recognizes that, since it may be difficult to obtain direct evidence of an agreement, one may be proven by circumstantial evidence and inferences drawn from the evidence. However, if an agreement is to be proven by circumstantial evidence or inferences, it must be plainly established (Nicholls v. Richmond et al., 1984 828 (BC SC), [1984] 3 W.W.R. 719 (B.C. S.C.), at para. 40):
It may, like other conclusions, be established as a matter of inference from proved facts, but the point is not whether you can draw that particular inference, but whether the facts are such that they cannot fairly admit of any other inference being drawn from them. [Emphasis added]
[38] The allegations cannot be proved on the basis of assumptions, speculation, or embellishment. The court will not draw adverse inferences from legitimate competitive behaviour where the parties are competitors in business: Sweda Farms Ltd., supra, at para. 84.
[39] In my view, even though Future Health and General Accident were not competitors in business, each organization had its own fiscal priorities which were sometimes at odds with the economic priorities of the other. The requirement for General Accident’s adjusters to scrutinize accounts and to be fiscally responsible would legitimately conflict, at times, with Future Health’s request to have all of its accounts paid by the insurer. Thus, although the parties in this case were not direct competitors, the court should not draw adverse inferences from legitimate behaviour of the parties seeking to protect their own interests.
[40] The plaintiff relies on numerous documents from the Patient files and asks the court to draw inferences from those documents. The plaintiff argues that the documents establish the following improper reasons for denial of funding:
a. Allegations, without basis, of fraudulent signatures (one Patient file);
b. Allegations that accounts (previously paid) were “outrageous” (one Patient file);
c. Questioning of amounts, which were refused once substantiated, and the funding was sent to a competitor (one Patient file);
d. No reasons given at all (seven Patient files);
e. Refusals to fund “direct billing” (two Patient files); and
f. Denial based on the “reasonable and necessary test” without any further explanation, even though an independent lawyer had commented that the care plan was impressive in quality (one Patient file)
[41] The plaintiff also argues that the documents establish the following improper conduct by the defendants:
a. Directing the fee to the “referral party” (two Patient files);
b. Directing the insured to the Insurance Crime Prevention Bureau (one Patient file); and
c. Failing to pay in the face of General Accident’s own assessors validating the treatment proposal and accounts (four Patient files).
[42] There is no evidence from any of the authors of the documents to explain what they meant when they created the documents. In some cases, handwritten notes are illegible. In other cases, it is unclear who authored the documents or what they meant. On the motion, the plaintiff did not point to any place in the examinations for discovery of Lambert and Grady where these documents were put to them. It appears that Lambert and Grady were not asked about the inferences that the plaintiff now asks the court to draw from these documents.
[43] In my view, the plaintiff’s arguments are replete with pure speculation and absent of any evidentiary foundation. It is helpful to set out a few examples of the inferences that the plaintiff seeks to have the court draw:
a) In the Taylor file, the plaintiff says that documents show a strategy to sway the family doctor against Future Health. In my view, this is pure speculation. It appears that General Accident’s adjusters discovered that a letter, written in the name of the Patient, may have been forged. It also appears that the family doctor told an adjuster that he did not make the referral to Future Health; and that the doctor stated that he was “aware of (the) place” and that his impression was “not good”. In those circumstances, it was appropriate for General Accident to ask questions about the validity of the family doctor’s referral to Future Health.
b) In the Bijons file, the plaintiff says that the documents show attempts to remove Future Health from the file. However, in my view, the adjuster simply pointed out that there should not be a duplication of treatment providers.
c) In the Jensen file, the plaintiff refers to a note stating that Lambert and another adjuster were trying to locate a closed file, and asks the court to infer from the note that General Accident had a “well-established corporate policy” to deny Future Health claims, and “Lambert was directly involved and had full knowledge of that policy.” In my view, this is complete speculation. In addition, this inference is contradicted by Lambert’s own direct evidence that there was no corporate policy.
d) In the Gordon file, the plaintiff refers to a note by an adjuster who had reviewed a claim that says that the plaintiff is “not going to be paid,” and suggests that this shows an intention to refuse payment at all costs. In my view, this is speculation.
e) In the Newcombe file, the plaintiff refers to a note that General Accident will deal with Future Health directly (rather than having an independent adjuster review the file), and asks the court to draw the inference that this shows an intention to keep all Future Health decision-making in-house. In my view, there is no basis to draw such an inference.
f) Also in the Newcombe file, there is an internal handwritten note at the bottom of a typed fax. The plaintiff submits that this note says “plan on chopping this off this afternoon.” Even though the phrase “chopping this off” does not make sense, the plaintiff argues that this note shows an intention to maintain unlawful refusals. In my view, the plaintiff has utterly mis-stated the content this note, which says “plan on dropping this off this afternoon.” The plaintiff’s interpretation makes no sense and is utter speculation.
[44] The documents reveal that General Accident was fairly aggressive in their treatment of Future Health care plans and billings. In some cases, General Accident refused to permit Future Health to directly bill the insurance company. However, there is no evidence that General Accident accepted direct billings from any other treatment provider, or that Future Health was treated differently from any other treatment provider.
[45] In the case before the court, there are other available inferences that can be drawn from the documents. For example, the defendants argue that the adjusters were obligated to scrutinize the care plans and billings, in order to be fiscally responsible. Even if the screening of the files is characterized as aggressive, and even if there were a basis for the Patients to argue that there was bad faith in the assessment of their claims, this does not rise to the standard of proof necessary to demonstrate that there was an agreement between the defendants.
[46] There is no evidence from the individual Patients complaining that they did not get reasonable and necessary treatment. The SABS dispute resolution process was available and was followed by both General Accident and the Patients.
[47] I find that the evidence in this case does not rise above creating a mere suspicion. The evidence falls far short of permitting an inference that there was an agreement by the defendants to harm the plaintiff.
[48] Further, even if there was an agreement, the plaintiff must establish that it was between two or more persons. However, the claim alleges that the corporate defendant, General Accident, conspired with six of its employees. This raises a significant issue.
[49] Where an employee acts within the scope of his or her authority in the best interests of the corporation, such that the actions complained of are the actions of the corporation itself, it is illogical to say that there can be a civil conspiracy between the employee and his or her employer. There can only be one party with the intent to conspire in such a situation, since the intent of the director or officer, the directing mind of the corporation, is the intent of the corporation: Craik v. Aetna Life Insurance Co. of Canada, [1995] O.J. No. 3286 (Ct. J.), at para. 23 aff’d [1996] O.J. No. 2377 (C.A.).
[50] Where employees act for the benefit of their employer within the scope of their authority, they are not proper parties to a conspiracy claim. Only where “the director or officer is acting outside the scope of his or her authority in being motivated by advancing a personal interest contrary to the interest of the corporation, or when the director or officer is committing a fraud or doing something with malice,” can the individual be subject to personal liability: Craik, supra, at para. 19.
[51] If the employee’s actions are tortious or unlawful, that would lead to the employee having a separate legal identity from the corporation: The Dominion of Canada General Insurance Company v. MD Consult Inc, 2013 ONSC 1347, [2013] O.J. No. 1087, at para. 25.
[52] Notably, the Statement of Claim does not say that the individual defendants acted outside the scope of their employment. The plaintiff previously made a formal admission that it did not have any evidence of the individual defendants having acted outside the scope of their employment.
[53] The plaintiff argues that the refusals by the defendants to fund the services of Future Health were unlawful. It is submitted that, in order for such refusals to be lawful, they must be in compliance with the SABS and the Insurance Act. The plaintiff therefore argues that the individual defendants were acting outside the scope of their employment.
[54] I reject this argument. Even if the defendants were aggressive in their treatment of Future Health claims, there is no evidence to demonstrate that the denials were unlawful.
[55] I find that the plaintiff has not established that the individual defendants were acting outside the scope of their employment. Since the employees acted for the benefit of the corporate defendant and within the scope of their authority, they could not have conspired with the corporate defendant. The plaintiff has not proven an agreement between two or more persons, and therefore has not proven a conspiracy.
b) Did the Defendants Act In Furtherance Of The Agreement?
[56] The plaintiff must also show that the defendants’ conduct was intentional and part of a plan in furtherance of a conspiracy: Sweda Farms Ltd., supra, at para 18.
[57] I have found that the plaintiff has not established a conspiracy. It therefore follows that they have not established that the actions of the defendants were in furtherance of a conspiracy. On the basis of the record, it would be fair to say that the defendants aggressively scrutinized Future Health’s files. This does not establish that the defendants’ actions were in furtherance of a conspiracy.
c) Predominant Purpose or Unlawful Means Conspiracy
[58] There are two types of conspiracy that could be established by a plaintiff: a conspiracy where the real or predominant purpose is to cause injury to Future Health (“predominant purpose conspiracy”); or, a conspiracy where the conduct directed toward Future Health is unlawful and the defendants knew or should have known that it was likely to injure Future Health (“unlawful means conspiracy”). I will briefly analyze the two types of conspiracy in the context of the case before the court:
i) Predominant Purpose Conspiracy
[59] Where lawful means are used in pursuit of the objects of an agreement, the defendants will not be liable if the predominant purpose is legitimate self-interest: Sweda Farms Ltd., supra, at paras. 82-83. In other words, “if the real purpose of the combination is not to injure another, but to serve the legitimate interests of those who so combine, the act is not tortious, even if damage results”: Daishowa Inc. v. Friends of the Lubicon et al., 1996 11767 (ON SC), [1996] O.J. No. 152 (Div. Ct.), at para. 54.
[60] As I stated above, although the parties in this case were not direct competitors, the court should not draw adverse inferences from legitimate behaviour of the parties seeking to protect their own interests. The actions of the defendants do not rise to the standard required to establish a basis for the tort of conspiracy.
ii) Unlawful Means Conspiracy
[61] With respect to unlawful means conspiracy, it is unnecessary to establish that the predominant purpose of the defendant’s unlawful conduct was to cause injury to the plaintiff. Rather, a constructive intent is derived from the fact that the defendants should have known that injury to the plaintiff would result from their conduct: Canada Cement LaFarge Ltd. v. British Columbia Lightweight Aggregate Ltd. 1983 23 (SCC), [1983] S.C.J. No. 33, at p. 16, Nicholls v. Richmond et al., supra, at para. 36.
[62] In order to prove the unlawful act to support the claim of conspiracy, the plaintiff must establish that the defendants engaged, in concert, in acts that are wrong in law, whether actionable at private law or not. In the commercial world, even highly competitive activity, provided it is otherwise lawful, does not qualify as "unlawful conduct" for the purposes of this tort: Agribands Purina Canada, Inc. v. Kasamekas, 2011 ONCA 460, 334 D.L.R. (4th) 714, at para. 38.
[63] As I have noted previously, the plaintiff argues that the refusals by the defendants to fund the services of Future Health were unlawful because they did not comply with the SABS and the Insurance Act. It is further submitted that, in order for the defendants to show that the refusals were lawful, the defendants must show either that the refusals to pay were genuinely made on the “reasonable and necessary test,” or there were reasonable grounds to believe that the plaintiff was engaged in dishonest or fraudulent conduct. I do not accept this submission. The onus is on the plaintiff to establish that the refusals were improper and unlawful. The plaintiff has not met this onus.
d) Has The Plaintiff Suffered Damages As A Result of the Agreement?
[64] In order for the plaintiff to succeed in this action, it is necessary for there to be actual damages suffered by the plaintiff as a result of the conspiracy. The plaintiff must establish that the defendants’ conduct caused harm to the plaintiff; show that the harm caused damages; and show what those damages were: Sweda Farms, supra, at para. 18.
[65] A brief history of Future Health is set out in the affidavit of Ellen Helden (“Helden”), who is the principal shareholder of the corporation. Helden’s affidavit contains allegations of improper actions taken by Economical and ICPB. Helden states that she started to notice “a sharp drop in payment of my company’s accounts” around June 1996; and that she was forced to declare bankruptcy as bills were beginning to grow and payments were not coming in.
[66] Helden suggests that the actions of Economical and ICPB, combined with the circumstances of the insurance industry, generally led to the collapse of Future Health's business. Importantly, Helden does not mention any specific action by the named defendants as having caused harm to the plaintiff.
[67] On December 21, 1998, Future Health declared bankruptcy. The plaintiff submits that, if it was driven from the marketplace by the defendants’ behaviour, it will have suffered loss. The plaintiff has not filed statements from any of the Patients to explain their responses to General Accident’s conduct. None of the Patients have provided evidence to say that they left Future Health because General Accident refused to approve its care plans or pay its accounts.
[68] The plaintiff proposes that the quantum of damages should be the total of certain unpaid accounts, which it says is $812,640.51. The plaintiff says that there are three other insurance companies that have merged with General Accident, and that the defendants should be responsible for the unpaid accounts of General Accident and these other insurance companies. However, there is no evidence before the court to prove the mergers of these insurance companies or when the mergers may have occurred. In addition, the evidence does not establish the basis for any of the denials of other insurance companies. There is no basis to hold the defendants accountable for unpaid accounts of other insurance companies.
[69] At its highest, the plaintiff’s evidence is that the unpaid accounts, for the sixteen General Accident Patient files, total $373,668.79. However, there is no evidence to explain how or why Future Health accumulated these unpaid accounts. The evidence in this case suggests that Future Health sought pre-approval of care plans from the insurer. Presumably, when the defendants denied those care plans, Future Health should not have continued to treat the Patients pursuant to those care plans. If Future Health continued treating the Patients despite the denials by the defendants, then it is the Patients who are liable to pay the outstanding accounts and not General Accident. As a result, even if the plaintiff had established a conspiracy to cause economic harm, it has not provided any proof of damages that it suffered as a result of the defendants’ actions.
[70] In my view, the plaintiff's evidence failed to show that it suffered any loss as a result of any misdeeds by the defendants. Causation has not been proven.
C. Claim for Punitive, Aggravated and/or Exemplary Damages
[71] Punitive damages should only be awarded in exceptional cases, for “malicious, oppressive and high-handed” misconduct that offends the court’s sense of decency: Whiten v. Pilot Insurance Co. 2002 SCC 18, [2002] 1 S.C.R. 595, at para. 36.
[72] Having found that the plaintiff has not proven that there was an agreement by the defendants to deny payment of the plaintiff’s accounts, there is no basis to grant punitive, aggravated and/or exemplary damages.
V. CONCLUSION
[73] The plaintiff must do more than show that the defendants aggressively scrutinized invoices and treatment plans. The plaintiff must demonstrate that there was an agreement by two or more of the defendants; that they acted in furtherance of the agreement; and that Future Health was injured as a result of the conspiracy. None of the elements of the conspiracy test have been met by the plaintiff.
[74] The comments made by the court in the case of Sweda Farms Ltd., supra, at para. 20 are apposite:
When I conclude that "there is no evidence" to support essential elements of Sweda's claims, I must register an important qualification. Sweda's claims are supported by speculation, argument presented as evidence, unparticularized assertions, and vague references to isolated pieces of evidence. What is absent is a rigorous analysis and presentation that places the isolated pieces of evidence into a coherent context. And the few pieces of hard evidence do not knit into a coherent claim.
[75] In the case before the court, the plaintiff's claims are supported by pure speculation, suspicion, circular argument, and references to isolated pieces of evidence. In her submissions, counsel for the plaintiff reviewed the documentary evidence and the inferences that the plaintiff suggested should be drawn from that evidence. At the request of the court, the parties prepared further written submissions consisting of a detailed chart outlining the evidence and the inferences that the plaintiff relied on to establish the alleged conspiracy. Even after this rigorous analysis, the plaintiff has provided insufficient evidence to establish a conspiracy to cause economic harm.
VI. DISPOSITION
[76] In the result, the defendants’ motion for summary judgment is granted and the plaintiff’s cross-motion for summary judgment is dismissed. The action is dismissed.
VII. COSTS
[77] In the event that the parties cannot agree as to costs, they are directed to provide written submissions as to costs. The submissions shall be no longer than two typed pages, double-spaced, in addition to any relevant offers or Bill of Costs. The defendants shall provide costs submissions by April 15, 2016 and the plaintiff shall provide any response by April 29, 2016.
Braid, J.
Released: April 4, 2016
CITATION: Future Health Inc., v. General Accident Assurance et. al., 2016 ONSC 2149
COURT FILE NO.: CV-00-1278
DATE: 2016-04-04
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Future Health Inc., operating as Trauma Services as continued by its Trustee in Bankruptcy, Scott, Pichelli & Graci Ltd.
Plaintiff
- and –
General Accident Assurance Company of Canada, Dorothy Lambert, Madeline Grady, Selwyn Gundy, Greg Somerville, Joy Vint and Becky Ostrum
Defendants
REASONS FOR JUDGMENT
CDB:vt
Released: April 4, 2016