Court File and Parties

COURT FILE NO.: CV-19-615741

DATE: 2020-09-15

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: LTI TRANSPORTATION INC., AND 2014628 ONTARIO INC., Plaintiffs

AND:

METRO COLLISION SERVICES INC., METRO TRUCK GROUP, BAILIFF ASSET RECOVERY INC., RICK SCHWARZER, DAIMLER TRUCK FINANCIAL, MERCEDES-BENZ FINANCIAL SERVICES CANADA CORPORATION, Defendants

BEFORE: Paul B. Schabas J.

COUNSEL: William Sharpe, Counsel for the Plaintiffs

Deepshikha Dutt, Counsel for the Defendants Daimler Truck Financial and Mercedes-Benz Financial Services Corporation

Rebecca Locksley, Counsel for the Defendant Metro Collision Services

Kim Stoll, Counsel for Old Republic Insurance Company of Canada

HEARD: September 11, 2020

Endorsement

[1] On May 29, 2020 I released an Endorsement approving a "Pierringer Agreement" between the plaintiffs and the defendant Daimler Truck Financial, which is a business unit of the defendant Mercedes-Benz Financial Corporation. As my Endorsement noted, the defendants who are defending the action consented to the Order, and the remaining defendants had been noted in default, but were advised of the motion and the court was informed that they did not oppose it.

[2] Although the motion, brought by the plaintiff, had first been brought as a consent motion before Nishikawa J. on December 30, 2019, she directed an oral hearing with the delivery of factums. Materials were then forwarded to me on May 25, 2020, including a factum from the plaintiffs that contained confirmation that the motion was, effectively, on consent, with only the defaulting defendants not consenting, but also not opposing, the Order. As a result of my review of the material, I decided to address the matter in writing, and my endorsement approving the Pierringer Agreement and draft Order was released on May 29, 2020.

[3] While the matter was under consideration by me, counsel for Old Republic Insurance Company, which is the insurer of the plaintiff 2014628 Ontario Inc., advised counsel for the plaintiffs that Old Republic was not consenting to the order. Although not a party to this action, 2014628 Ontario Inc. had previously commenced an action against Old Republic Insurance for coverage of the loss in the Superior Court of Justice in Hamilton, Court file number 18-64612, and Old Republic had been advised of the Pierringer Agreement and had been served with the motion materials.

[4] Although counsel advised the motions office of Old Republic's lack of consent, I was not made aware of it until recently, when counsel sought a chambers appointment to settle the Order.

[5] I convened a conference call with counsel on September 11, 2020. Mr. Sharpe explained that he was concerned that he may have inadvertently caused the Court to think that Old Republic had consented to the Order in the materials I reviewed in May; nevertheless, he submitted that the Order should issue as approved in my endorsement.

[6] Counsel for Old Republic complained that it did not consent and that its rights would be affected by the Order, objecting in particular to the italicized words in paragraph 2 of the draft order below, which states:

THIS COURT ORDERS that all claims for contribution and/or indemnity or any other relief over by Metro Collision Services Inc., Metro Truck Group, Bailiff Asset Recovery Inc., Rick Schwarzer (collectively "the Non-Settling Defendants") or by any other person, whether ascertained or as yet unascertained, as against Daimler Truck Financial and Mercedes-Benz Financial Services Canada Corporation in relation to the claims made in the main Action are hereby barred, prohibited and enjoined forever.

[7] Counsel for the settling defendants, Daimler and Mercedes, objects to any change to the Order, which is in the standard form for a Pierringer Agreement, noting that Old Republic is not a party to this action, has no standing to object, and that its objection would defeat the policy reasons for courts approving Pierringer Agreements: Ontario New Home Warranty Program v. Chevron Chemical Company et al., 1999 CanLII 15098 (ON SC), [1999] OJ. No. 2245 at paras. 70-77; Endean v. St. Joseph's General Hospital, 2019 ONCA 181.

[8] I agree with counsel for Daimler and Mercedes. The plaintiffs and two defendants in this action, represented by counsel, have agreed to a Pierringer Agreement. The remaining defendants either consent to the order or are in default and do not oppose the Order. Old Republic is a defendant in a separate action brought by one of the plaintiffs. If Old Republic believes it is prejudiced by the Pierringer Order agreed to by the plaintiffs, one of whom is its insured, that is something that may be pursued by it in the Hamilton action or as it may determine. But it is not a party to this action and has no standing to object to the Order. Furthermore, having reviewed the motion material again, there was no representation to me that Old Republic was in fact consenting, simply that it had been put on notice of the Agreement.

[9] I have signed the draft Order and it shall be issued in accordance with court procedures. I make no order for costs.

Paul B. Schabas J.

Date: September 15, 2020