Vincent v. Economical Insurance Group, 2018 ONSC 4217

Court File and Parties

COURT FILE NO.: CV-11-17109

DATE: 20180705

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Brian Vincent Plaintiff

– and –

Economical Insurance Group Defendant

COUNSEL:

C. Michael J. Kealy, agent for Jason D. Singer, for the Plaintiff

Charles Dobson, for the Defendant

HEARD: June 25, 2018

REASONS ON MOTION

carey j.:

1Following argument on this matter, I allowed the plaintiff’s motion to amend his pleadings with reasons to follow. These are those reasons.

2Over a period of about five months in 2010, the plaintiff’s house was visited by three separate calamitous occurrences. They were generally referred to as a pipe burst, a sewer back-up and the vibration damage. An adjustor from the defendant insurer opened three files, advance payment of approximately $42,000 was made to the plaintiff, Vincent.

3A letter was sent in February of 2011 to Mr. Vincent outlining a proposal for settling the vibration claim. That letter references repairs being done concurrently with other repairs to the house necessitated by a previous incident.

4Unbeknownst to the plaintiff, his insurance company had issued a subrogated claim against a construction company that was apparently responsible for the vibration damage. When they heard nothing further from the plaintiff, the defendant company settled that claim and closed their file relating to the vibration damage. As of today, the litigation remains unsettled almost eight years after the last incident that led to a claim on the policy. A major hold up appears to be around quantum of damages relating to a property loss claim as opposed to any structural damage claim.

5The plaintiff has issued a claim alleging breach of contract in relation to the policy of insurance. Previous counsel issued the claim with particulars relating to the first two incidents set out in the claim. The amount of $42,000 is particularized in the claim at para. 17 where the plaintiff asserts that “despite being provided with confirmation of the damages and despite having the insurance in place to cover such losses the Defendant had only advanced the Plaintiff the sum of $42,000.00” This sum is approximately the same as an amount referenced in the defendant’s letter to the plaintiff of February 22, 2011, with respect to the vibration claim. The letter set out that once a contractor had been hired by the plaintiff, a further amount up to $73,645.79 would be paid. The defendant indicated its understanding that this repair work could be done “at the same time as the water pipe claim.”

6Since that letter was written, no further payments have been made by the insurer and the anticipated work has not been done.

7The defendant insurer fully investigated the vibration claim and determined that a construction company performing road work near the plaintiff’s house was liable for the damage. The defendant issued its subrogated claim against the construction company in the plaintiff’s name without advising the plaintiff and settled the claim with the construction company. The defendant has refused to provide the particulars of this settlement to the plaintiff. The plaintiff states it does not know whether the defendant settled for the $43,448.84 (less $1,000 deductible) paid out to the plaintiff, the $73,645.79 mentioned in the February 2011 letter, or some other amount.

8Since the claim was initiated, the plaintiff’s original counsel has been suspended from the practice of law pending a disciplinary hearing. Current counsel was retained on or about March 19, 2015. Counsel for the plaintiff on this motion was retained by LawPro. Subsequently, the plaintiff attended a second examination for discovery and delivered further estimates on all three claims. Leave to bring this motion to amend the statement of claim was granted on March 20, 2017, by Munroe J.

Law and Analysis

9Rule 26 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, provides that at any stage of an action, a court shall grant leave to amend a pleading unless the amendment would cause non-compensable prejudice.

10The plaintiff’s position is that the proposed amendments do not plead a new cause of action. The defendant says they do. I agree with the plaintiff’s position. The plaintiff’s claim pleads the policy which gives rise to his claim, that he provided a proof of loss to the defendant, and that the defendant has failed to pay him the amounts required pursuant to his policy. I agree with the plaintiff that the $42,000 advance payment referenced in the plaintiff’s claim can only be taken to refer to a sum including the $25,000 advanced for vibration claim. That claim is still at issue in this action.

11I have dealt with the potential Limitations Act, 2002, S.O. 2002, c. 24, Sched. B., issue raised by the defendant by making an order that is without prejudice to the defendant raising a Limitations Act argument at trial.

12The defendant alleges it will be prejudiced if the pleading is amended. They allege that prejudice arises because they have settled with the construction company that caused the vibration damage to the plaintiff’s house. I agree with the plaintiff that if there is any prejudice, it was due to the defendant’s own actions and cannot be attributed to the plaintiff. The defendant had an opportunity to fully assess the vibration damage and negotiated with the construction company without any input from the plaintiff. I do not accept that the plaintiff and the defendant were at any time agreed as to the settlement of the plaintiff’s claim for the vibration damage. The record before me supports that the claim has not been finalized and the work has not been authorized. The decision to settle with the construction company and provide a full and final release to that subrogated claim was Economical’s alone. It did not seek nor get any agreement from the plaintiff. While the terms of the subrogation may not have required such agreement, they cannot now say that they were misled and prejudiced by the plaintiff’s actions.

13In conclusion, I was not persuaded by the defendant that the amendments requested resulted in a new cause of action. I have allowed the amendment as one that will not cause prejudice to the defendant as it will still be allowed to argue the Limitations Act, 2002, in reference to the vibration claim at trial.

14I received submissions as to costs from both parties and a Bill of Costs from the plaintiff. In my view, the plaintiff’s Bill of Costs is reasonable and justified. Costs to the plaintiff are fixed at $8,000, inclusive of HST.