Court File and Parties

Dafesh v. Amormino COURT FILE NO.: CV-15-22505

Pizzardi v. Amormino COURT FILE NO. : CV-15-22471

DATE: 20170320

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

John Dafesh Plaintiff – and – Sam Amormino, Her Majesty the Queen in Ontario as Represented by the Ministry of the Attorney General, Kevin McCann, Windsor Police Services Board, Steven Tunks and Jacques Beauchamp Defendants

Counsel: Rodney Godard, for the Plaintiffs Rocco Galati, for the Defendant Sam Amormino Erin Rizok and Eric Wagner, for the Defendant, Her Majesty the Queen in Right of Ontario Sheila C. Handler, for the Defendants Kevin McCann and Windsor Police Services Board No One appearing for the Defendant Steven Tunks Jacques Beauchamp, Acting in Person

AND BETWEEN:

Helen Pizzardi Plaintiff – and – Sam Amormino, Her Majesty the Queen in Ontario as Represented by the Ministry of the Attorney General, Kevin McCann, Windsor Police Services Board, Steven Tunks and Jacques Beauchamp Defendants

Counsel: Rodney Godard, for the Plaintiffs Rocco Galati, for the Defendant Sam Amormino Erin Rizok and Eric Wagner, for the Defendant, Her Majesty the Queen in Right of Ontario Sheila C. Handler, for the Defendants Kevin McCann and Windsor Police Services Board No One appearing for the Defendant Steven Tunks Jacques Beauchamp, Acting in Person

HEARD: March 13, 2017

Reasons on Motion to Strike

MUNROE J. :

[1] Do employees of a small business closed by a police investigation of their employer have the right to sue the police for negligent investigation? Do the police owe a private law duty of care to the employees of a suspect in a criminal investigation?

[2] Two employees of a small business seek damages against the police and others for the loss of their jobs and reputations as a result of a wrongful police investigation of the principal of the business that led to its failure. Four defendants, Sam Amormino (“Amormino”), Her Majesty the Queen in Ontario (“Ontario”), Kevin McCann (“McCann”), and the Windsor Police Services Board (“WPSB”) (hereinafter the “Police Defendants”) now move for an order striking out the plaintiffs’ Statements of Claim pursuant to r. 21.01(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, on the ground that they disclose no reasonable cause of action.

[3] For purposes of this ruling only, I have joined the titles of the proceedings in the separate actions: Pizzardi v. Amormino, et al: CV-15-22471 (“the Pizzardi action”) and Dafesh v. Amormino, et al: CV-15-22505 (“the Dafesh action”). Each plaintiff makes the same claims against the same defendants. Indeed, the Statements of Claim are identical with the only exceptions being gender pronouns and the plaintiffs’ different employment positions. Moreover, the motions were argued together with consent that the issues were identical.

Facts [1]

1. Parties

[4] The plaintiffs, Helen Pizzardi and John Dafesh, were employees of certain automobile dealerships owned by the same numbered corporation (“the Dealerships”) with the same principal, Jamal “Jay” Hazime (“Mr. Hazime”).

[5] The defendant Sam Amormino is a Detective Constable with the Ontario Provincial Police (”OPP”) and the Province of Ontario (“Ontario”). He participated in the criminal investigation of the Dealerships.

[6] The defendant Kevin McCann is a Detective with the WPSB. He assisted defendant Amormino in the investigation of the Dealerships.

[7] The defendant Steven Tunks is a professional bailiff who is or was a business partner of the defendant Amormino.

[8] The defendant Jacques Beauchamp is a private financier to the defendants Amormino and Tunks.

[9] The employers of the defendants Amormino and McCann, the defendants Ontario and WPSB, respectively, are vicariously liable for the actions of their respective employees and are responsible for their training and supervision.

2. Core Allegations

[10] The defendants Beauchamp, Amormino and Tunks conspired to destroy the Dealerships and their employees.

[11] The purpose of this design was either as retribution for a disputed vehicle transaction between the defendant Beauchamp and Jay or to destroy competition to the business interests of the defendants Amormino and Tunks, or both.

[12] The effort began when the defendant Beauchamp directed the defendants Amormino and Tunks to investigate the Dealerships and to “harass” Jay.

[13] The defendant Amormino commenced and pursued a vigorous police investigation of the Dealerships and their employees for fraud.

[14] In this investigation, the defendant Amormino abused his position as a police officer “to further his own personal and private financial interests.”

[15] Despite the lack of evidence, “except for evidence manufactured by the Defendants,” the investigation led to raids, seizures and ultimately the closure of the Dealerships. Criminal charges and regulatory action were commenced against certain employees of the Dealerships.

[16] The defendant Amormino was untruthful as a witness in a related regulatory hearing when he testified that he had no relationship with the defendant Tunks. Later, the defendant Amormino admitted he did have a business relationship with the defendant Tunks, providing loans for vehicle purchases and repairs. From this, the plaintiffs discovered the conspiracy to put the Dealerships out of business.

[17] There is no allegation that either plaintiff was a suspect in the investigation, was charged criminally, or was the subject of any regulatory action arising out of the investigation. There is no allegation that either plaintiff was searched personally or subject to a home search. There is no allegation that any property of either plaintiff was seized during the investigation.

[18] Both plaintiffs were employees of the Dealerships during the investigation. Both claim economic damages sustained as a result of their loss of employment due to the closing of the Dealerships. Both also seek damages for the injury to their reputations as a result of the investigation.

3. Pleaded Causes of Action

[19] Facially, the plaintiffs plead eight causes of action: negligent or fraudulent investigation; negligence; intentional or negligent interference with economic relations; civil conspiracy; abuse of process; misfeasance in public office; intentional infliction of mental distress; and breach of Charter rights. For purposes of my analysis below, I am concerned with only three of the pleaded courses of action: negligent investigation [2]; civil conspiracy; and misfeasance in public office. This limitation results from the following concessions by plaintiffs’ counsel: 1) the negligence action functionally is the same as the negligent investigation claim; and 2) the intentional tort claims, except the civil conspiracy and misfeasance in public office claims, should be struck without leave to amend.

a. Negligent Investigation

[20] This claim is brought against the “Police Defendants” – Amormino, McCann, Ontario, and the WPSB. The Police Defendants owed a duty of care to the plaintiffs, employees of the Dealerships, to fairly and properly investigate any claims made against the Dealerships or their principle, Mr. Hazlime. The Police Defendants breached this duty, causing the Dealerships to close. The plaintiffs lost their jobs and reputations. These damages were caused by the Police Defendants’ negligent acts.

b. Civil Conspiracy

[21] All the defendants agreed and conspired with each other to harm the Dealerships and their employees. The defendants wrongfully set out to destroy the Dealerships and their employees and the defendants did so, including by the unlawful means of “manufactured” evidence. These wrongful acts damaged the plaintiffs.

c. Misfeasance in Public Office

[22] As a police officer, the defendant Amormino is a public office holder. In the execution of his public duties, Amormino deliberately or recklessly conducted himself unlawfully, well-knowing that his conduct was likely to injure the plaintiffs. As a result of these unlawful acts, the plaintiffs were damaged.

Positions of the Parties

1. The Defendants

[23] The defendants submit that the Statements of Claim should be struck because all of the claims are insufficiently pled. In addition, the negligent investigation claim is premised on an unrecognized private law duty – an alleged duty of care owed by the police to an employee of a person subject to a criminal investigation. This asserted duty of care has never been recognized and should not be recognized here. An Anns test analysis (from Anns v. Merton London Borough Council, [1978] A.C. 728 (H.C.)) leads to the conclusion that this proposed extension fails to satisfy the proximity requirement and also should not be recognized on policy grounds.

[24] Because the duty of care element in the negligent investigation claim does not exist legally, that claim should be struck without leave to amend. On the issue of leave to amend for the balance of the claims, all defendants except the defendant Amormino take no position. The defendant Amormino argues no leave should be granted on any of the claims.

[25] The defendant Amormino also raises the expiry of the limitations period as a separate ground on his motion to strike the negligence claim.

2. The Plaintiffs

[26] The plaintiffs concede pleading insufficiency on all claims with the exception of the negligent investigation claim. With regard to that claim, the argument focuses on the recognition of a duty of care to an employee of the target of a criminal investigation. The plaintiffs argue that the Supreme Court has recognized that the breadth of a duty of care owed is not fixed but can and should be expanded when appropriate. According to the plaintiffs, the duty of care owed by the police in conducting its investigations should be extended to the employees of a small business where only the principal of the business is the subject of the investigation. On a proper application of the Anns test, employees of a small business closed by a police investigation are owed a duty of care by the police in conducting their investigation.

Governing Principles

1. Motions to Strike

[27] Rule 21.01(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, provides, in pertinent part, as follows:

A party may move before a judge,

(a) for the determination, before trial, of a question of law raised by a pleading in an action where the determination of the question may dispose of all or part of the action, substantially shorten the trial or result in a substantial saving of costs; or

(b) to strike out a pleading on the ground that it discloses no reasonable cause of action …

and the judge may make an order or grant judgment accordingly.

[28] The test applicable to a motion to strike is uncontroversial.

• A claim can be struck only if it is “plain and obvious” that the pleading discloses no reasonable cause of action. The claim must have no reasonable prospect of success.
• All facts pleaded are assumed to be true unless they are patently ridiculous or manifestly incapable of being proven.
• Claimants must plead all facts upon which they rely. The facts pleaded are the basis upon which the claim is evaluated.
• A motion to strike is a tool to be used with care. The law is not static or unchanging. Thus, the approach must be generous and err on the side of permitting novel but arguable claims.
• Statements of claim are to be read generously. Drafting deficiencies and a failure to plead with precision and clarity are not fatal if the necessary material facts are pleaded.

See R. v. Imperial Tobacco Canada Ltd., 2011 SCC 42, [2011] 3 S.C.R. 45, at paras. 17, 21-22; Paton Estate v. Ontario Lottery and Gaming Corporation, 2016 ONCA 458, 349 O.A.C. 106, at paras. 4-5, 11-14.

[29] Further, if the area of the law in question is “muddy” or not settled, a court should not dispose of the matter on a motion to strike: See Transamerica Life Canada Inc. v. ING Canada Inc., 2003 ONCA 9923, at para. 39.

[30] The purpose behind the motion to strike was set forth by McLachlin C.J. in Imperial Tobacco at paras. 19 and 20:

The power to strike out claims that have no reasonable prospect of success is a valuable housekeeping measure essential to effective and fair litigation. It unclutters the proceedings, weeding out the hopeless claims and ensuring that those that have some chance of success go on to trial.

This promotes two goods – efficiency in the conduct of the litigation and correct results. Striking out claims that have no reasonable prospect of success promotes litigation efficiency, reducing time and cost. The litigants can focus on serious claims, without devoting days and sometimes weeks of evidence and argument to claims that are in any event hopeless. The same applies to judges and juries, whose attention is focused where it should be – on claims that have a reasonable chance of success. The efficiency gained by weeding out unmeritorious claims in turn contributes to better justice. The more the evidence and arguments are trained on the real issues, the more likely it is that the trial process will successfully come to grips with the parties’ respective positions on those issues and the merits of the case.

[31] No evidence is admissible on a motion to strike: r. 21.01(2).

[32] When a litigant’s pleading is struck, it should be done without leave to amend only in the clearest of cases, “when it is plain and obvious that no tenable cause of action is possible on the facts as alleged”: See Conway v. Law Society of Upper Canada, 2016 ONCA 72, 395 D.L.R. (4th) 100, at para. 16 citing South Holly Holdings Ltd. v. Toronto-Dominion Bank, 2007 ONCA 456, at para. 6.

2. Negligent Investigation

[33] There are three elements for the tort of negligence:

1. the defendant owed the plaintiff a legal duty of care;
2. the defendant breached that duty of care; and
3. the plaintiff suffered damages as a result of the defendant’s breach.

See Odhavji Estate v. Woodhouse, 2003 SCC 69, [2003] 3 S.C.R. 263, at para. 44.

[34] If an alleged duty of care has not been recognized previously, that does not end the matter. Our courts acknowledge that the field of recognized duties of care is not fixed. When a party seeks an extension of the duty of care to a new situation, the Supreme Court of Canada has long adopted the framework set forth by the House of Lords in Anns: See Cooper v. Hobart, 2001 SCC 79, [2001] 3 S.C.R. 537, at para. 28. As stated by McLachlin C.J. in Hill v. Hamilton-Wentworth Regional Police Services Board, 2007 SCC 41, [2007] 3 S.C.R. 129, at para. 27:

If a new relationship is alleged to attract liability of the police in negligence in a future case, it will be necessary to engage in a fresh Anns analysis, sensitive to the different considerations …. Such an approach will also ensure that the law of tort is developed in a manner that is sensitive to the benefits of recognizing liability to novel situations where appropriate, but at the same time, sufficiently incremental and gradual to maintain a reasonable degree of certainty in the law.

[35] Although oft stated as a two-stage analysis, functionally the Anns test has the following three elements:

1. the harm is a reasonably foreseeable consequence of the alleged breach;
2. there is sufficient proximity between the parties that it would not be unjust or unfair to impose a duty of care on the defendants; and
3. there are no policy reasons to negate the duty.

See Odhavji, at para. 52. Each element will be reviewed.

1) Foreseeability

[36] The initial inquiry is whether the harm to the plaintiff was a reasonably foreseeable consequence of the defendant’s acts: See Cooper, at para. 30.

2) Proximity

[37] Foreseeability alone is not sufficient: See Hill, at para. 23. There also must be “a close and direct relationship of proximity”: See Cooper, at para. 22; Hill at para. 23. The Supreme Court in Hill, at para. 24, described the proximity analysis as follows:

Generally speaking, the proximity analysis involves examining the relationship at issue, considering factors such as expectations, representations, reliance and property or other interests involved: Cooper, at para. 34. Different relationships raise different considerations. “The factors which may satisfy the requirement of proximity are diverse and depend on the circumstances of the case. One searches in vain for a single unifying characteristic”: Cooper, at para. 35. No single rule, factor or definitive list of factors can be applied in every case. “Proximity may be usefully viewed, not so much as a test in itself, but as a broad concept which is capable of subsuming different categories of cases involving different factors” (Canadian National Railway Co. v. Norsk Pacific Steamship Co., 1992 SCC 105, [1992] 1 S.C.R. 1021, at p. 1151, cited in Cooper, at para. 35).

[38] The relationship factor is less concerned with physical proximity than with “whether the actions of the alleged wrongdoer have a close or direct effect on the victim, such that the wrongdoer ought to have had the victim in mind as a person potentially harmed”: See Hill, at para. 29. However, the presence or absence of a personal relationship, although not conclusive, is an important factor in the proximity analysis: See Hill, at para. 30.

[39] In Hill, the Supreme Court expanded the law and found the police owed a duty of care in negligence to suspects being investigated. In finding sufficient proximity in the relationship, the Supreme Court, at paras. 33-34, stated the following:

The relationship between the police and a suspect identified for investigation is personal, and is close and direct. We are not concerned with the universe of potential suspects. The police had identified Hill as a particularized suspect at the relevant time and begun to investigate him. This created a close and direct relationship between the police and Hill. He was no longer merely one person in a pool of potential suspects. He had been singled out. The relationship is thus closer than in Cooper and Edwards [v. Law Society of Upper Canada, 2001 SCC 80, [2001] 3 S.C.R. 562]. In those cases, the public officials were not acting in relation to the claimant (as the police did here) but in relation to a third party (i.e. persons being regulated) who, at a further remove, interacted with the claimants.

A final consideration bearing on the relationship is the interests it engages. In this case, personal representations and consequent reliance are absent. However, the targeted suspect has a critical personal interest in the conduct of the investigation. At stake are his freedom, his reputation and how he may spend a good portion of his life. These high interests support a finding of a proximate relationship giving rise to a duty of care.

3) Policy Reasons

[40] This element is “not concerned with the relationship between the parties, but with the effect of recognizing a duty of care on other legal obligations, the legal system and society more generally”: See Cooper, at para. 37. “[T]he question to be asked is whether there exist broad policy considerations that would make the imposition of a duty of care unwise”: See Odhavji, at para. 51.

[41] One expressed policy concern is “the spectre of indeterminate liability”, which was found in Cooper, at para. 54, but not in Hill, at para. 60. The Supreme Court cited two factors mitigating the concern in Hill: the limited category by the particularization of suspects; and the requirement of compensable injury: See Hill, at para. 60.

3. Civil Conspiracy

[42] Epstein J. (as she was then) in Aristocrat Restaurants Ltd. v. Ontario, [2003] O.J. No. 5331 (S.C.), at para. 39, identified the elements of tortious conspiracy as follows:

• an agreement between two or more persons to injure the plaintiff by specific acts;
• the defendants acted in furtherance of the agreement;
• the predominant purpose of the agreement was to injure the plaintiff (or the defendant’s conduct was unlawful, directed toward the plaintiff, and the defendant knew or should have known that injury to the plaintiff was likely); and
• the plaintiff was injured as a result of the conspiracy.

4. Misfeasance in Public Office

[43] The purpose of this tort was stated as follows by the Supreme Court in Odhavji, at para. 30:

[T]he underlying purpose of the tort is to protect each citizen’s reasonable expectation that a public officer will not intentionally injure a member of the public through deliberate and unlawful conduct in the exercise of public functions.

[44] The essential elements of the tort of misfeasance in public office are as follows:

• The defendant was a public officer;
• In the exercise of public functions, the defendant’s conduct was deliberate and unlawful;
• The defendant knew the conduct was unlawful and likely to injure the plaintiff; and
• The conduct caused compensable injury to the plaintiff.

See Odhavji, at para. 32.

Principles Applied

1. Limitations

[45] The defendant Amormino raises the expiry of the limitation period as a ground for the motion to strike. I reject this position. The Statement of Claim specifically avers a discovery date within the limitation period, thereby raising a factual issue. Thus, it is inappropriate to end the claim on that ground at the pleading stage.

2. Intentional Torts

[46] I agree with the plaintiffs’ concession that their pleadings of the intentional tort claims are insufficient. Accordingly, those claims are struck.

[47] The plaintiffs seek leave to amend only with regard to the civil conspiracy and misfeasance in public office claims. The defendant Amormino opposes leave. The balance of the arguing defendants take no position.

[48] Because I am unable to conclude that it is plain and obvious that no tenable cause of action is possible on the facts alleged with regard to the civil conspiracy and misfeasance in public office claims, leave to amend is granted for those two claims.

3. Negligent Investigation

[49] The focus of the motion to strike is on the first element: the plaintiffs owed the defendants a legal duty of care. Obviously, if there is no such duty in law, the claim must fail. Thus, the pivotal issue here is whether the Police Defendants owed the plaintiffs, employees of the suspect of their criminal investigation, a private law duty of care.

[50] This is a motion to strike. Thus, I approach the question reading the claims generously and asking is it “plain and obvious” that no duty can arise from this particular situation? Does the claimed duty have any reasonable prospect of success?

[51] It is conceded there that is no such duty of care recognized to date. But that does not end the matter. To determine whether a new duty should be recognized, or more accurately at this stage, whether the claimed new duty has any reasonable prospect of recognition, it is necessary to engage in an Anns analysis. Each element of the Anns test will be reviewed.

1) Foreseeability

[52] The plaintiffs were employees of the suspect of the criminal investigation by the Police Defendants. The employer was a small business that operated automobile dealerships. As a result of the criminal investigation, the business closed, putting the plaintiffs out of work and causing damage to their reputations. Given these alleged facts, it is impossible to conclude that the economic harm to the employees was not a reasonably foreseeable consequence of the criminal investigation of the employer. Thus, this element is satisfied for purposes of this motion.

2) Proximity

[53] This element concerns the relationship between the wrongdoer, here the Police Defendants, and the wronged, here the employees of the suspect of the investigation.

[54] There is no allegation of any relationship between the investigating police and the suspect’s employees. Although not conclusive, the absence of a personal relationship is an important factor in a proximity analysis: See Hill, at para. 30.

[55] There was an economic and reputational effect on the employees by the actions of the police against their employer. But this too has to be categorized as indirect. The police were acting against another, their employer. They were not acting against these employees.

[56] The interests of the employees in the conduct of the investigation were economic and reputational. Their interests were not as direct as those found in Hill. The interest of an employee when the employer is being investigated is, quite starkly, the loss of a job. That interest is purely economic.

[57] Moreover, the claimed reputational harm cannot be viewed as the same as the reputational impact on the suspect. Working for the target and being the target are not the same thing. The impact is not the same. The reputational loss for an employee is one of association more akin to that of a family member or close friend. Again, the interests here are not close to the high interests found in Hill.

[58] The relationship between the employees of a suspect and the police does not give rise to a private law duty of care. I find there is no reasonable prospect of satisfying the proximity element of the Anns test.

3) Policy Reasons

[59] At this stage my concern is not with the relationship but rather with the effect of a recognition of this extension of the duty of care. In this regard, two concerns loom large: the effect of a multiplicity of duties and the growth of indeterminate liability.

[60] The duty of the police to investigate criminal acts is a duty owed to the general public and not to any specific person. In addition, the Supreme Court in Hill recognized a duty of care owed by the police to suspects being investigated. Now the plaintiffs seek an expansion of the duty of care owed by the police to the employees of the suspect of an investigation. If accepted, the police would now owe three duties of care: the general duty to the public; the duty owed to the suspect of the investigation; and now the duty of care to the employees of the suspect.

[61] I am concerned about the impact this additional duty would have on how the police execute their duties. Because of this added liability risk, will the police resile from investigating suspects with employees? One would like to think not, but one cannot ignore that certain people and institutions are risk-adverse. Such an impact would conflict with and be detrimental to the duty of the police to investigate crimes, and thus to the public interest.

[62] Moreover, such an extension would be a dramatic expansion of the duty of care owed by the police. This claim is economically driven. Counsel for the plaintiffs understandably wants to frame the issue as involving only a limited category of people, employees of a small business. But conceptually, such a limited class cannot withstand scrutiny. The employees are damaged economically by the loss of their jobs. Broken down, the claim simply is about the severance of an economic relationship. Thus logically, if this extension is allowed, anyone in an economic relationship with the suspect that is damaged by a police investigation can assert the same duty of care. The breadth of that class of persons included by the proposed expansion is numbing. This proposed class is in stark contrast with the very limited and well-defined class recognized in Hill.

[63] I find there is no reasonable prospect of satisfying the policy element of the Anns test. As reviewed above, there are serious policy considerations that make the recognition of such an extension unwise.

[64] The negligent investigation claim must be struck because it discloses no reasonable cause of action. Leave is not warranted because the defect cannot be cured by amendment.

Conclusion

[65] For the above reasons, the Statements of Claim are struck. Leave to amend is granted with regard to the claims of civil conspiracy and misfeasance in public office only. The plaintiffs shall have 60 days from the date of this decision to serve and file amended statements of claim.

Costs

[66] If the parties are unable to resolve the issue of costs, the defendants shall provide me with their outline of costs and submissions (no longer than three pages) within 30 days of the date of the release of these reasons. The plaintiffs shall respond in 30 days of service of the costs submissions with the same page limit.

“original signed and released by Munroe J. ” Kirk W. Munroe Justice

Released: March 20, 2017

Footnotes

[1] These are the facts as pled in the Statements of Claim. On a motion to strike, I must assume they are true.

[2] Although titled “negligent/fraudulent investigation,” this consolidation of an intentional tort and a negligence claim is both confusing and inappropriate. The fraudulent part of this claim is encompassed elsewhere in the plaintiffs’ intentional tort causes of action. It is unnecessary here. As a consequence, I review this cause of action as one of negligent investigation only.