COURT FILE NO.: 15-65139
DATE: 2018/06/15
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Ryan Howard and Nate Douglas Howard by his Litigation Guardian, Ryan Howard, Plaintiffs
AND
Ryan Miller, Allstate Insurance Company of Canada, John Doe, and Her Majesty the Queen in the Right of Ontario, as Represented by the Ontario Provincial Police, Defendants
BEFORE: Justice S. Corthorn
COUNSEL: Sean Van Leeuwen, for the Plaintiffs (by right of assignment) and the Defendant, Allstate Insurance
No one appearing for any of the Defendants other than Allstate Insurance
HEARD: In writing
ENDORSEMENT
corthorn j.
Introduction
[1] The plaintiffs’ claims arise from a snowmobile-pedestrian accident that occurred in the Town of Almonte, in the early morning hours on December 27, 2013. The injured plaintiff is Ryan Howard (“Howard”). Howard was crossing Bridge Street when he was struck by a snowmobile driven by the defendant, Ryan Miller (“Miller”). Nate Howard is Howard’s son. Nate was born on December 16, 2013 (11 days prior to the date of the accident).
[2] Miller operated the snowmobile as an uninsured driver. For that reason, Howard’s motor vehicle insurer, Allstate Insurance Company (“Allstate”) is included as a defendant in the action. The plaintiffs advanced a first party claim against Allstate for compensation pursuant to the uninsured motorist provision of the subject policy.
[3] In 2016, the plaintiffs reached a settlement of their respective claims against Allstate. The settlement was (a) for an all-inclusive payment of $105,310.79, and (b) subject to court approval with respect to the settlement of Nate’s claim. In September 2016, Ray J. approved the infant portion of the settlement (on a motion made pursuant to rule 7.08 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194).
[4] As part of the settlement, Allstate obtained an assignment from the plaintiffs (“the Assignment”). Pursuant to the Assignment, Allstate is in a position to pursue the plaintiffs’ claims against the other defendants.
[5] Miller did not defend the action and was noted in default on March 8, 2017. It does not appear that The Queen defended the action. In the statement of claim, John Doe is described as “a police officer employed by the Ontario Provincial Police.” Allstate is satisfied that there is no merit to the claims made against The Queen and John Doe.
[6] On this motion, the plaintiffs and Allstate seek the following relief:
a) Default judgment against Miller. I note that the draft judgment calls for payment by Miller to Allstate;
b) An order dispensing with the requirements of rule 7.08 (including with respect to service of documents) in relation to approval of the disposition of Nate’s claims as against the defendants other than Allstate;
c) In the alternative, an order granting the plaintiffs leave to discontinue, without costs, their claims against The Queen and John Doe; and
d) An order dispensing with the requirements for service of the motion record on the Children’s Lawyer.
The 2016 Approval Order
[7] The order taken out in 2016 with respect to the approval of the settlement of Nate’s claims against Allstate reads as follows:
THIS COURT ORDERS AND ADJUDGES that the minor Plaintiff recover from the Defendant the sum of $7,500.00 inclusive of all claims and interest;
THIS COURT ORDERS AND ADJUDGES that there will be no fees or disbursements payable to the Plaintiffs’ lawyer in connection with the claim of the infant Plaintiff;
THIS COURT ORDERS AND ADJUDGES that service of the motion record upon the Office of the Children’s Lawyer and the Defendant is not required; and
THIS COURT ORDERS AND ADJUDGES that in consideration of the payments of the amounts set out in paragraph 1, any and all liability of the Defendant Allstate Insurance Company, shall be forever released and discharged in full in all respects with respect to the claim of the minor Plaintiff.
[8] In my view, the order of Justice Ray needs to be varied to reflect the fact that “the Defendant” ordered to pay $7,500 pursuant to paragraph 1 is Allstate.
[9] A copy of the motion record filed in 2016 is included as an exhibit to the sole affidavit filed on the present motion. The relief sought in 2016 did not include an order dispensing with service of the motion record on any of the defendants. It is not possible to tell which, if any, of the defendants were served with the 2016 motion record.
[10] Paragraph 3 of the order also needs to be varied—to identify the defendants on whom service of the motion record was not required. It is not clear from the order as it currently reads whether service of the motion record was dispensed with on Allstate alone or on all of the defendants.
[11] As a matter of form, the order could also be varied so that the preface to each numbered paragraph is “THIS COURT ORDERS”. The inclusion of “AND ADJUDGES” is not appropriate for an order and is now less frequently included in judgments in any event.
Claims Against The Queen and John Doe
[12] The statement of defence and crossclaim of Allstate is dated October 2015. It is addressed to The Queen and not to a lawyer of record on behalf of The Queen. In the August 2016 affidavit sworn by counsel for the plaintiffs in support of the approval motion, counsel said that “[a] Statement of Defence has not been delivered by the co-defendants.” Miller had not yet been noted in default. It therefore appears that as of August 2016, only Allstate had delivered a pleading in response to service of the originating process.
[13] In support of the relief sought at this time, the plaintiffs/Allstate rely on the evidence of the Senior Claims Advisor with Allstate with carriage of the file throughout (“Fahmy”). At paragraph 19 of his affidavit, Fahmy says that after a copy of the Ontario Provincial Police file for the investigation of the accident was produced to the plaintiffs, the latter discontinued their action as against The Queen. In addition, Allstate amended its pleading to remove its crossclaims against The Queen. There is, however, no evidence of communication between former counsel for the plaintiffs and a representative of The Queen with respect to discontinuance of the claims against The Queen.
[14] With Miller noted in default in 2017 and the plaintiffs’ claims against The Queen said to have been discontinued, it is not clear why alternative relief is sought at this time, including an order granting the plaintiffs leave to discontinue their claims against The Queen and John Doe.
[15] It would be helpful to have, as part of the record, evidence as to how the plaintiffs discontinued their claims against The Queen—assuming the plaintiffs took pro-active steps to do so. That evidence would assist the court in determining (a) whether leave to discontinue is required and, if so, with respect to which of the defendants (i.e. including John Doe), (b) which, if any, of the defendants are entitled to service of the motion record, and (c) whether the plaintiffs require an order dispensing with service of the motion record on any of the defendants.
[16] Consideration must also be given to the requirements of sub-rules 23.01(2) and 7.07.1 of the Rules. Sub-rule 23.01(2) provides that, “[i]f a party to an action is under disability, the action may be discontinued by or against the party only with leave of a judge obtained on motion under rule 7.07.1.” The latter rule provides:
(1) If any party to an action is under a disability, the action may be discontinued by or against the party under rule 23.01 only with leave of a judge.
(2) Notice of a motion for leave under subrule (1) shall be served on the party’s litigation guardian and, if the litigation guardian is not the Children’s Lawyer or the Public Guardian and Trustee,
(a) on the Children’s Lawyer, if the party is a minor; or
(b) on the Public Guardian and Trustee in any other case.
[17] Once again, the particulars as to the steps taken, if any, to formally discontinue the plaintiffs’ claims against The Queen (and/or John Doe) will assist the court in determining the steps to be taken at this time. If the plaintiffs require leave to discontinue their claims against The Queen (and/or John Doe), then pursuant to rule 7.07.1, the motion record in support of that relief shall be served on the Children’s Lawyer. If the plaintiffs pursue their request for an order dispensing with that requirement, then the notice of motion must identify the grounds and the supporting affidavits must address the evidence in support of that relief.
[18] In any event, the Rules mandate that a copy of the motion record be served on the litigation guardian (sub-rule 7.07.1 (2)). There is no evidence that the motion record was served on Ryan Howard.
Nature of the Claim Against Miller
[19] It is important that the claims addressed on the motion be properly characterized. At present, the motion is identified as being brought on behalf of the plaintiffs and Allstate. Yet, the relief sought is for a judgment requiring Miller to pay Allstate the amount for which the latter settled the plaintiffs’ claims, plus interest, and costs incurred to obtain the judgment against Miller.
[20] The introductory paragraph in the draft judgment included in the motion record reads as follows, “THIS MOTION for Judgment and an Assessment of Damages made in writing was heard this day at Ottawa.” The plaintiffs do not appear to be advancing a claim for damages in excess of the amounts paid to them by Allstate. If that is correct, then:
a) The claim is properly characterized as one for indemnity on the basis of Allstate’s crossclaim against Miller; it is not “an Assessment of Damages”;
b) Evidence is required as to whether the plaintiffs intend that Miller be pursued for damages in excess of the damages paid to the plaintiffs pursuant to the settlement reached with Allstate; and
c) The relief, if any, to which the plaintiffs may be entitled on the motion, depends on whether or not the claims for additional damages are being pursued as against Miller.
[21] The Assignment is of the plaintiffs’ rights as against the other defendants named in the action. The plaintiffs assigned and transferred to Allstate, “all actions or rights of action arising from [the subject accident] … which we now have or may in the future have against any and all persons or corporations”. Allstate is given the power and authority to “sue for, recover and receive the proceeds of the action or actions” assigned.
[22] I am satisfied that the settlement of the plaintiffs’ claim as against Allstate is reasonable (see the discussion below); that settlement does not necessarily preclude the plaintiffs from pursuing Miller for damages in excess of the amounts paid pursuant to the settlement. Has that aspect of the matter been addressed by Allstate with the plaintiffs?
[23] Has Allstate considered whether it is required, pursuant to the terms of the Assignment, to address with the plaintiffs whether they wish to advance a claim against Miller for further damages? There is nothing in the notice of motion or in the affidavit evidence that addresses Allstate’s opinion with respect to its obligations pursuant to the Assignment. Nor is there anything in the record to address the relief requested with respect to the plaintiffs’ claims against Miller.
[24] The second paragraph of the draft judgment makes reference only to the statement of claim and the Fahmy affidavit. I pause to note that there is no affidavit from the litigation guardian. If the relief sought includes approval of the infant plaintiff’s claim against Miller, then an affidavit from the litigation guardian is required.
[25] Simply because Allstate secured the Assignment from the plaintiffs of their rights against Miller (and the other defendants in the action) does not mean that exercising those rights is the only basis upon which Allstate is entitled to relief. At paragraph 11 of the fresh, as amended, statement of defence served on behalf of Allstate, a claim is made against Miller for “[c]ontribution and indemnity in the amount of $105,000 for funds paid out to the plaintiffs pursuant to [uninsured motorist coverage in the subject policy]”. That claim is the only claim reflected in the draft judgment included with the motion record.
[26] In summary, Allstate needs (and possibly the plaintiffs need) to consider the nature of the claims being advanced against Miller—Allstate’s claim for indemnity and/or the plaintiffs’ claim for damages (including but not restricted to the amount of the settlement reached with Allstate).
Quantum of the Claim Against Miller
a) The Settlement with Allstate
[27] The amount paid by Allstate to the plaintiffs in settlement of their respective first party claims totals $105,310.79. That figure is broken down as follows:
General damages for Ryan Howard (Net of the statutory deductible - $36,540) $ 60,000.00
General damages for Nate Howard (Net of the statutory deductible - $18,270) $ 7,500.00
Pre-judgment interest (On total of $67,500 for general damages) $ 1,743.75
Damages for loss of competitive advantage $ 13,500.00
Damages for loss of housekeeping etc. $ 5,000.00
Sub-total $ 87,743.75
Costs
Fees (including HST) $ 14,872.57
Disbursements (including HST) $ 2,694.47
Total $ 105,310.79
[28] If the claim advanced is on behalf of Allstate pursuant to its crossclaim, then it is for contribution and indemnity in the amount of $105,310.79.
[29] The amount for which Nate’s claim against Allstate was settled has already received court approval. There is no reason to question the merits of that settlement.
[30] I am satisfied on the basis of the record that the settlement of Howard’s claim was reasonable. There is no need for additional evidence in support of the reasonableness of the amount of the settlement reached between Howard and Allstate.
[31] In summary, in the context of a claim for contribution and indemnity, the reasonableness of the settlement reached by Allstate with the plaintiffs is not in issue.
[32] The motion record includes a copy of the release executed by Howard with respect to the settlement reached with Allstate. That document is evidence that a settlement was reached. It is not, however, evidence that Allstate actually paid the plaintiffs the full amount of the settlement.
[33] The settlement amount reflected in the release executed by Ryan Howard is $105,000 (and not the $105,310.79 now claimed). An explanation with respect to the additional $310.79 paid is required.
[34] In summary, for the claim based in contribution and indemnity, evidence is required to support a finding that Allstate paid to the plaintiffs the amount it now seeks to recover from Miller.
b) Pre-judgment Interest
[35] The claim advanced against Miller includes pre-judgment interest. There is no affidavit evidence and nothing in the notice of motion with respect to the rate at which pre-judgment interest is claimed or the date from which it is calculated. Is pre-judgment interest calculated from the date on which the settlement was reached, the date of the order of Ray J., or the date on which the settlement funds were paid to the plaintiffs? What is the basis for the particular starting date chosen by Allstate in that regard? On what does Allstate rely in support of the interest rate at which pre-judgment interest is calculated?
c) Costs
[36] The relief sought also includes costs incurred from November 2016 forward. The only evidence provided in that regard is a copy of a pre-bill from the office of counsel for the plaintiffs/Allstate. Better evidence is required in support of an award of costs against Miller as an opposing party. For example:
a) On what scale are party and party costs claimed: substantial or partial indemnity?
b) If party and party costs are claimed on a substantial indemnity scale, what is the basis for costs to be awarded on that scale?
c) Who are the timekeepers whose dockets are included in the pre-bill? Are those individuals lawyers, clerks, or support staff? What is their respective level of experience? What are their respective hourly rates?
[37] The evidence required is akin to that on an assessment of costs on a party and party basis, not to that on an assessment of a solicitor-client account.
Summary
[38] Additional materials are required to address the concerns set out in this endorsement. The additional materials, when filed in the usual manner, shall be directed to my attention. I remain seized of the matter.
[39] If counsel for the plaintiffs/Allstate wish to do so, they may, after filing the additional materials, make arrangements to appear on the return of the motion before me (as opposed to in writing only). Those arrangements shall be made in the usual manner through the office of the Civil Trial Co-ordinators.
Madam Justice Sylvia Corthorn
Released: June 15, 2018
COURT FILE NO.: 15-65139
DATE: 2018/06/15
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Ryan Howard and Nate Douglas Howard by his Litigation Guardian, Ryan Howard, Plaintiffs
AND
Ryan Miller, Allstate Insurance Company of Canada, John Doe, and Her Majesty the Queen in the Right of Ontario, as Represented by the Ontario Provincial Police, Defendants
BEFORE: Justice S. Corthorn
COUNSEL: Sean Van Leeuwen, for the Plaintiffs (by right of assignment) and the Defendant, Allstate Insurance
No one appearing for any of the Defendants other than Allstate Insurance
HEARD: In writing
endorsement
Madam Justice Sylvia Corthorn
Released: June 15, 2018