CITATION: Waldman v. Waldman, 2016 ONSC 7910
COURT FILE NO.:05-11/13
DATE: 20161215
SUPERIOR COURT OF JUSTICE - ONTARIO
In the matter of the Estate of, Gerald Waldman, Deceased
RE: LORRAINE WALDMAN, Plaintiff
and
DOROTHY GORDON AS ESTATE TRUSTEE FOR THE ESTATE OF GERALD WALDMAN, DOROTHY GORDON, DAVID PRUSSKY, JEFFERY GELGOOT, RICHARD BLACKMAN, RBC LIFE INSURANCE COMPANY, PAUL SLAN, DANIEL WALDMAN, HAYLEY WALDMAN, and THE CHILDREN’S LAWYER on behalf of the minors ABIGAIL WALDMAN and JACK RINGWALD, Defendants,
and
ESTHER LENKINSKI, FASKEN MARTINEAU DUMOULIN LLP, DAVID DOWNS, MARK ANTHONY GREENSTEIN and HENRY CHARLES KROL and MARILYN KROL c.o.b. AS KROL & KROL, Third Parties
COUNSEL: Sean Lawlor and Rachel Migicovsky for the Defendant Paul Slan, moving party
J.D. Baker for the Plaintiffs
Antonios T. Antoniou for the Third Parties Esther Lenkinski and Fasken Martineau
HEARD: December 14, 2016
ENDORSEMENT:
The motion:
[1] The defendant Paul Slan moves for summary judgment, dismissing the claim against him. He takes the position there is no genuine issue requiring a trial. He relies on rule 20.04(2) of the Rules of Civil Procedure to support his position.
The facts:
[2] The facts are not really in dispute. The case arises in the context of matrimonial proceedings. Gerald Waldman and Lorraine Waldman were husband and wife. They separated February 4, 1997.
[3] Mr. Slan is a divorce lawyer. When she separated, Mrs. Waldman retained Mr. Slan in relation to her matrimonial issues. Mr. Slan acted for Mrs. Waldman from February to June, 1997. During the period of his retainer, Mr. Slan negotiated an Interim Separation Agreement on her behalf. The Interim Separation Agreement was executed on March 6, 1997. The main issue in the claim against Mr. Slan arises out of the life insurance provision in the Interim Separation Agreement. Paragraph 7 of the Interim Separation Agreement deals with the issue. It provides:
The Husband shall maintain his existing life insurance policy, naming the children as irrevocable beneficiaries and the Wife as trustee.
[4] The negotiations resulting in the insurance clause included the following:[^1]
a) Mr. Slan proposed a clause “which requires Mr. Waldman to maintain his existing life insurance with Mrs. Waldman as the beneficiary;
b) Mr. Waldman’s lawyer responded “our client is prepared to retain his existing life insurance policy, naming the children as irrevocable beneficiaries, with your client as trustee.”
[5] As can be seen, Mr. Waldman’s lawyer’s proposal found its way into the Interim Separation Agreement.
[6] Mr. Waldman had maintained a policy of insurance on his life for some years prior to the separation. In October of 1992 (prior to the separation) the policy provided a death benefit of $1.75 million. By October 7 of 1996 the death benefit had increased to $1,837,436, but Mr. Waldman reduced it to $1.25 million the following day. Thus, during the time before the Waldmans separated, Mr. Waldman unilaterally reduced the death benefit of his life insurance policy by $500,000.
[7] It is common ground Mr. Waldman never named the children as irrevocable beneficiaries of his existing life insurance policy, as he was required to do under the provisions of the Interim Separation Agreement. Not only that, on April 9, 1997 Mr. Waldman executed a change of beneficiary form for his life insurance, naming his estate as beneficiary. This was in direct contravention of the terms of the Interim Separation Agreement Mr. Waldman had signed only a month earlier.
[8] The Interim Separation Agreement states, in its preamble, among other things:
AND WHEREAS the parties have agreed to enter into the herein Interim Separation Agreement to have effect until a further Court Order or final Separation Agreement.
[9] The Interim Separation Agreement recites the parties are settling “on an interim without prejudice basis the issues of custody, visitation and sale of the matrimonial home only.” It goes on to recite that “this Interim Separation Agreement is without prejudice to the rights of the parties, yet may be referred to in any Court proceeding.[^2]
[10] Shortly after finalizing the Interim Separation Agreement, Mrs. Waldman dismissed Mr. Slan and retained new counsel, Esther Lenkinski, then of the law firm Fasken Martineau. Ms. Lenkinski continued to act for Mrs. Waldman in divorce proceedings Mr. Waldman had initiated. Ms. Lenkinski ultimately negotiated a final Separation Agreement for Mrs. Waldman. That agreement was made in July of 1999. It resolved all claims between the Waldmans, including the outstanding divorce proceedings.
[11] Before the final Separation Agreement was executed, however, life insurance continued to be a live issue in the divorce proceedings.
[12] On March 11, 1999 Lack J made an order providing:
The Petitioner [Mr. Waldman] shall forthwith provide confirmation of his life insurance coverage, pursuant to paragraph 7 of the parties’ Interim Separation Agreement dated March 6, 1997 which provides that he shall maintain his existing life insurance policy naming the children as irrevocable beneficiaries and the wife and Trustee.
[13] Mr. Waldman did not comply with that provision of the order.
[14] In April of 1999 Mr. Waldman did provide a copy of an updated beneficiary designation. It had only been updated on March 29, 1999 to change the designation from “the Estate of the Insured” to “Lorraine Waldman in trust for [the children]”. Around the same time, however, Mrs. Waldman discovered the reduction in the face value of the policy from $1.75 million to $1.25 million[^3] and raised her concerns with Ms. Lenkinski.
[15] Mr. Waldman was then questioned in the divorce proceedings. In the context of the questioning, he undertook to provide a copy of the actual life insurance policy in existence at the date of separation and a copy of the actual policy in existence at the date of the examination. He undertook to enquire as to the cash surrender value at the date of separation. He failed to comply with either undertaking.
[16] At his questioning[^4] Mr. Waldman went on to say that “as per our consent” Lorraine [Mrs. Waldman] was the trustee and the children were the beneficiaries. He undertook to provide a document confirming this. He did produce a document to that effect, confirming the change he had made on March 29, 1999.
[17] Ultimately, the Waldmans settled all matters between them. They entered into a final Separation Agreement on July 22, 1999.
[18] The Separation Agreement is stated to be “in full and final satisfaction of any and all matters relating to their separation and divorce including, without limitation, any and all claims arising out of the Superior Court of Justice (formerly Ontario Court (General Division) ) proceeding (Court File No. 3550-13623/97).
[19] Paragraph 16.1 of the Separation Agreement deals with life insurance. It says:
So long as the Children remain children of the marriage within the meaning of the Divorce Act, the Husband shall maintain in force and effect a life insurance policy with a face value of $1 million with the Wife, in trust for the Children, as beneficiary of the policy. So long as the Children remain children of the marriage within the meaning of the Divorce Act, the Wife shall maintain in force and effect a life insurance policy with a face value of $200,000 with the Husband, in trust for the Children, as beneficiary of the policy.
[20] By the terms of the Interim Separation Agreement, the Interim Separation Agreement was no longer in effect once the Separation Agreement was signed in July of 1999.
[21] After the Waldmans’ separation, (and indeed for more than 2 years following the execution of the Separation Agreement) Mr. Waldman’s life insurance provided a death benefit of $1.25 million. It remained so until October of 2001. At that time, it was reduced to only about $200,000. Mr. Waldman died September 28, 2012. By that time, the death benefit was virtually nothing.
[22] Mrs. Waldman then launched this suit. Since Mrs. Waldman has also died, the suit has been continued by her estate. The lawsuit has now been settled against all the defendants but Mr. Slan. The claim asserts Mr. Slan should have made sure the life insurance named Mrs. Waldman as irrevocable beneficiary in trust for the children. It says his failure to do so was negligent and has caused the loss claimed.
Discussion:
[23] As I have said, the facts are not materially in dispute. There is no quarrel with the facts as I have set them out. There is no quarrel with the meaning of terms set out in both the Interim Separation Agreement and the Separation Agreement.
[24] On a motion for summary judgment under rule 20.04(2) the court shall grant summary judgment if there is no genuine issue requiring a trial with respect to a claim or defence.
[25] Here, Mr. Slan takes the position there is no need for a trial regarding the claim against him or his defence, since on these facts, the claim cannot succeed against him. I agree.
[26] Mrs. Waldman’s loss occurred when Mr. Waldman died in 2012 without the agreed insurance in place. He was in breach of his obligations under the Separation Agreement. The issue is whether anything Mr. Slan did or failed to do was negligent and caused her damages. Generally, in assessing liability for negligence, the court uses the “but for” test; that is, the plaintiff must show she would not have suffered damages “but for” the negligent act of the defendant.[^5] In Clements the Supreme Court of Canada put it this way:
As a general rule, a plaintiff cannot succeed unless she shows as a matter of fact that she would not have suffered the loss “but for” the negligent act or acts of the defendant. A trial judge is take a robust and pragmatic approach to determining if a plaintiff has established that the defendant’s negligence caused her loss. Scientific proof of causation is not required.[^6]
[27] As I see it, Mr. Slan’s work for Mrs. Waldman was confined to negotiating the Interim Separation Agreement on her behalf. The Interim Separation Agreement was of no further effect once the Separation Agreement was signed. The Separation Agreement had materially different insurance provisions than the Interim Separation Agreement.
[28] First, it required Mr. Waldman to maintain a specific death benefit of $1 million. The Interim Separation Agreement required him to maintain his “existing life insurance policy”. At the date of the Interim Separation Agreement, that policy provided a death benefit of $1.25 million.
[29] Second, it did not require Mr. Waldman to make an irrevocable designation under the insurance policy. The Interim Separation Agreement had required him to do so, but its provisions were only in effect until the Separation Agreement was signed. After that, Mr. Waldman had no obligation to make an irrevocable beneficiary designation.
[30] Third, the Separation Agreement also required Mrs. Waldman to maintain some life insurance with Mr. Waldman as beneficiary in trust for the children. The Interim Separation Agreement had no such requirement.
[31] Counsel for Mrs. Waldman’s estate seems to suggest that Mr. Slan had some sort of obligation to tell Ms. Lenkinski he had not checked the beneficiary designation before he transferred the file to her.
[32] He argued that if Mr. Slan had checked the beneficiary designation and made sure it was properly in place, Mrs. Waldman would have had notice of any further changes to the policy, and would have had a chance to “react”, as he put it. That might be so, but in the Separation Agreement, Mr. Waldman no longer had any obligation to maintain an irrevocable designation, so after that date, Mrs. Waldman would have had no entitlement to be informed of any changes to the policy. In this regard, it is important to note that the death benefit of the policy remained unchanged from before the Waldmans separated, through the period covered by the Interim Separation Agreement, and again, for some years after the Separation Agreement. From that date, there was no requirement to maintain an irrevocable designation.
[33] Counsel for Mrs. Waldman’s estate went further, and argued that Mrs. Waldman and her new lawyer would have assumed the terms of the Interim Separation Agreement were being met and would have relied on Mr. Slan having checked on it being so, and remedied it if it were not. He suggested that Mr. Slan had an onus, a fundamental duty, to tell Ms. Lenkinski she should follow up on the insurance. He suggests if Mr. Slan had done so, it “would have made a difference”. He suggests these are genuine issues requiring a trial.
[34] Counsel for Mrs. Waldman’s estate was not able to provide me with any case law concerning a lawyer’s duty, if any, to a lawyer who takes over the file after the client has dismissed the first lawyer. In any case, Ms. Lenkinski confirmed on examination that she did not consult in any way with Mr. Slan. She did not rely on any work he did. She drafted or agreed to entirely new insurance provisions and language in the Separation Agreement. As I have set out above, the insurance obligation changed fundamentally in the Separation Agreement from what it had been in the Interim Separation Agreement.
[35] Mr. Slan acted on the Interim Separation Agreement. The main quarrel seems to be that he did not check to make sure Mr. Waldman had made an irrevocable beneficiary designation. The Interim Separation Agreement was of no further effect once the Separation Agreement was executed. The Separation Agreement has no requirement for an irrevocable beneficiary designation. I can only assume Mrs. Waldman was content with this change, since she signed the Separation Agreement confirming:
a) She had had independent legal advice;
b) She understood her rights and obligations under the agreement, the nature of the agreement and the consequences of the agreement;
c) She had made financial disclosure;
d) She acknowledged the terms of the agreement were fair and reasonable;
e) She entered into the agreement without undue influence or coercion; and
f) She signed the agreement voluntarily. [^7]
[36] The Separation Agreement governed all Mrs. Waldman’s rights and obligations after it was signed. Taking a “robust and pragmatic approach”, I therefore fail to see any basis on which Mr. Slan could be liable for work he did in relation to the Interim Separation Agreement. There is no genuine issue requiring a trial. The action must be dismissed against Mr. Slan.
Conclusion:
[37] The motion for summary judgment is therefore granted, and the claim is dismissed against the defendant Paul Slan. The plaintiff will pay the defendant Slan’s costs of the action, fixed, as agreed, at $77,515 all inclusive.
MESBUR J.
Released: 20161215
[^1]: Affidavit of Paul Slan, paras 12-14
[^2]: Recitals in the Interim Separation Agreement, at page 2
[^3]: This reduction, of course, had occurred long before the Waldmans even separated and long before any lawyers were involved.
[^4]: Question 1136 and following
[^5]: See, for example, Clements v. Clements 2012 SCC 32, [2012] 2 R.C.S. 181
[^6]: Ibid., paragraph 46
[^7]: Separation Agreement article 36