COURT FILE NO.: CV-20-642355-00
DATE: 20201201
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
EUTICE NELSON, a.k.a. JANET ROSS
Plaintiff
– and –
THE DOMINION OF CANADA GENERAL INSURANCE COMPANY
Defendant
Osborne G. Barnwell for the Plaintiff
Christopher I.R. Morrison, for the Defendant
HEARD: September 28, 2020
papageorgiou j.
Nature of the Case and Motion
[1] This is a motion for summary judgment brought by the plaintiff, Eutice Nelson, (hereinafter “the plaintiff”) who has a policy of insurance with the defendant, Dominion of Canada General Insurance Company, (hereinafter “the defendant”). The plaintiff seeks:
a. Damages for breach of her insurance contract in the amount of $465,000, representing the remaining construction costs to rebuild her home;
b. Aggravated damages for mental distress and breach of the contractual duty of good faith; and
c. Punitive damages.
[2] The plaintiff’s house burned down on October 13, 2017 and her sister passed away in the fire.
[3] As the parties were unable to agree on insurance amounts payable to the plaintiff, they referred the matter to the appraisal process pursuant to s. 128 of the Insurance Act, R.S.O. 1990, c. I.8. The parties disagree on the interpretation of the report delivered by the umpire at the appraisal. The plaintiff says she is entitled to the full amount of the building loss set out in the report: $465,000. The defendant says that she has taken too long to rebuild her home. At this stage, she is only entitled to the quantified building loss, after depreciation. Further, the defendant says it is entitled to deduct amounts which it has already paid for remediation, clean up and architectural drawings. The defendant’s position is that ultimately, the plaintiff is entitled to a payment of $170,000 in respect of the building loss.
[4] The defendant has not brought its own summary judgment motion, but in its factum and during oral argument, took the position that the claim should be dismissed. The defendant cites Meridian Credit Union Limited v. Baig, 2016 ONCA 150, 394 D.L.R. (4th) 601, at para. 17, which provides that the court may grant summary judgment in favour of a party responding to a motion for summary judgment.
[5] The defendant also brought a motion to strike out certain paragraphs of the plaintiff’s pleading pursuant to Rule 25.08, and a motion pursuant to Rule 39.02(2) for leave to admit an affidavit of Ms. Brake sworn after cross-examinations occurred.
[6] For the reasons that follow:
a. I am dismissing the plaintiff’s summary judgment motion and ordering that this matter proceed to trial in the manner set out at the conclusion of these reasons;
b. I am granting the defendant’s motion to strike out paragraphs of the plaintiff’s pleadings, in part;
c. I need not consider the defendant’s motion for leave to file additional evidence as it relates to an issue that, while relevant to the case, is not material to the reasons why I am unable to grant summary judgment, would not have made any difference, and is therefore moot.
What is the test on a summary judgment motion?
[7] The defendant’s position is that the plaintiff cannot succeed in her claim using the Rule 20 process. It says that the facts set out by the plaintiff are a mischaracterization of the evidence. Further, as I will discuss below, the defendant argues that as a matter of law, the plaintiff’s case cannot succeed.
[8] In accordance with Rule 20.04(2) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (the “Rules”), the court shall grant summary judgment if:
(a) the court is satisfied that there is no genuine issue requiring a trial with respect to a claim or defence; or
(b) the parties agree to have all or part of the claim determined by a summary judgment and the court is satisfied that it is appropriate to grant summary judgment.
[9] In determining whether there is a genuine issue requiring a trial, the court shall consider the evidence submitted by the parties and a judge may exercise any of the following powers under Rule 20.04(2.1): (1) weighing the evidence; (2) evaluating the credibility of a deponent; and (3) drawing any reasonable inference from the evidence.
[10] The Supreme Court of Canada in Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87, at para. 49, addressed when there will be no genuine issue for trial:
There will be no genuine issue requiring a trial when the judge is able to reach a fair and just determination on the merits on a motion for summary judgment. This will be the case when the process: (1) allows the judge to make the necessary findings of fact, (2) allows the judge to apply the law to the facts, and (3) is a proportionate, more expeditious and less expensive means to achieve a just result.
[11] In order to defeat a motion for summary judgment, the responding party must put forward some evidence to show that there is a genuine issue requiring a trial. A responding party on a summary judgment motion cannot rest solely on allegations in a pleading. Each side must “put their best foot forward” with respect to the existence or non-existence of material issues to be tried: Mazza v. Ornge Corporate Services Inc., 2016 ONCA 753, 62 B.L.R. (5th) 211, at para. 9.
[12] “The motion judge is entitled to presume that the evidentiary record is complete and there will be nothing further if the issue were to go to trial”: Tim Ludwig Professional Corporation v. BDO Canada LLP, 2017 ONCA 292, 137 O.R. (3d) 570, at para. 54. “A summary judgment motion cannot be defeated by vague references as to what may be adduced if the matter is allowed to proceed to trial”: Diao v. Zhao, 2017 ONSC 5511, at para. 18.
[13] Where a motion for summary judgment fails, Rule 20.05 allows the judge to attempt to mitigate the costs of the failed motion by crafting directions to resolve the trial of the matter in an efficient and cost-effective manner: Hryniak, at paras. 74-79.
The plaintiff’s building loss
[14] Some background is necessary to understand the dispute and what happened at the appraisal.
[15] The plaintiff had a policy of insurance with the defendant with a policy limit of $350,000 (the “Policy”). The Policy included a guaranteed replacement which would cover all reasonable repairs if the building was fixed, even if they exceeded the policy limits. The Policy covered building repairs (“Building Loss”) personal property losses (“Personal Property Loss”) and additional living expenses (“ALE”). With respect to the Building Loss and the Personal Property Loss, the Policy gave the plaintiff the option of either replacement on an actual cash value basis (“ACV”) or replacement cost basis (“RCV”).
[16] To explain, the RCV is the cost to repair or replace the loss or damage using materials of similar kind and quality without deduction for depreciation. The ACV is the actual cash value of the loss at the time of the loss, with an adjustment for depreciation. The defendant says that pursuant to the Policy, an insured is only entitled to the RCV if she rebuilds her home as soon as possible and the defendant takes the position that a reasonable time is 7 to 8 months. Although there was a point where the defendant offered to give the plaintiff an additional 6 months to do so, that time has passed and the defendant takes the position that at this point, the plaintiff is not entitled to the RCV.
[17] As noted above, the fire occurred on October 13, 2017. After the fire, the defendant initiated certain immediate remediation including asbestos removal, clean up and the preparation of architectural drawings. The plaintiff says that it was always her understanding that these amounts were separate and apart from amounts payable to her for her Building Loss.
[18] On April 4, 2018, the defendant issued the plaintiff a cheque in the amount of $194,800.56 which it says was for her to begin rebuilding her home. She says she did not cash the cheque because she considered it insufficient. The defendant says it did not learn that she had not cashed it until October 2018 at which point she told the defendant that she was having issues negotiating the cheque with one of her mortgage holders. The defendant says that at her request, it issued a further cheque to her on October 16, 2018, for $60,000, but again she did not cash it because she says it had too many payees noted on the cheque. Thereafter, in April 2019, the plaintiff filed a proof of loss claiming $485,100 in respect of her building loss and this was rejected by the defendant.
[19] As they could not agree, the plaintiff and defendant proceeded to the appraisal process pursuant to s. 128 of the Insurance Act (the “Appraisal”) which provides a process for resolving disputes between an insured and an insurer as follows:
Contracts providing for appraisals
128 (1) This section applies to a contract containing a condition, statutory or otherwise, providing for an appraisal to determine specified matters in the event of a disagreement between the insured and the insurer. R.S.O. 1990, c. I.8, s. 128 (1).
Appraisers, appointment
(2) The insured and the insurer shall each appoint an appraiser, and the two appraisers so appointed shall appoint an umpire. R.S.O. 1990, c. I.8, s. 128 (2).
Appraisers, duties
(3) The appraisers shall determine the matters in disagreement and, if they fail to agree, they shall submit their differences to the umpire, and the finding in writing of any two determines the matters. R.S.O. 1990, c. I.8, s. 128 (3).
Costs
(4) Each party to the appraisal shall pay the appraiser appointed by the party and shall bear equally the expense of the appraisal and the umpire. R.S.O. 1990, c. I.8, s. 128 (4).
[20] An appraisal is not an arbitration and the umpire is not an adjudicator. In Birmingham Business Centre v. Intact Insurance Company, 2018 ONSC 6174, at para. 5, the Ontario Divisional Court set out the following principles applicable to appraisals pursuant to s. 128 of the Insurance Act:
(1) The purpose of this appraisal process is to provide an expeditious and easy manner for the settlement of claims for indemnity under insurance policies. It is intended to be a final and binding determination of the loss.
(2) Courts have afforded substantial deference to an appraisal under the Insurance Act and the appraisal process. Unless there is proof of misconduct or that the appraisers or umpire exceeded their jurisdiction, courts have been reluctant to interfere.
(3) The appraisal process established by the Insurance Act is considered to be a valuation not an arbitration.
(4) The appraisal process is not adjudicative in nature. The process is based on discussion and on the sharing of expertise in valuation. Appraisers can arrive at a decision based on their own knowledge and expertise.
(5) An appraisal is not subject to the provisions of the Statutory Powers Procedure Act, R.S.O. 1990 c. S.22.
(6) An appraisal under s. 128 of the Insurance Act requires neither a hearing, a consideration of evidence nor reasons.
[21] The plaintiff appointed Susan Bettencourt as her appraiser (the “Plaintiff’s Appraiser”). The defendant appointed Scott Gibson (the “Defendant’s Appraiser”) and the two appraisers appointed Pete Volaric as the umpire (the “Umpire”).
[22] The Appraisal took place on March 2, 2020. Afterwards, both appraisers and the Umpire signed a report (“Assessment at Appraisal Report”) which provided as follows:
I, the undersigned, Umpire of the Appraisal Tribunal, concerning the insurance claim arising out of the above-captioned matter, having been advised by the Appraiser for the Insured and the Appraiser for the Insurer of the partial settlement of the above-referenced claim, hereby assess the quantum of the loss as follows:
(a) Dwelling Building
(i) Replacement Cost Value $465,000
(ii) Actual Cash Value $372,000
(b) Personal Property (Contents)
(i) Full and Final Settlement Value $152,569.20
(c) Additional Living Expenses $63,500
All amounts are subject to amounts previously paid to the Insured by the Insurer
[23] As set out above, there is no dispute as to the Personal Property Loss, or the ALE set out in the Assessment at Appraisal Report. The dispute is in respect of the quantum for the RCV and ACV of the Building Loss.
[24] The dispute is as follows:
a. First, the defendant says that the plaintiff is not entitled to the RCV because she has not attempted to rebuild her home as soon as possible as required under the Policy. The defendant says that she is only entitled to the ACV set out in the Assessment at Appraisal Report in the amount of $372,000.
b. The defendant also seeks to deduct $201,587.37 in respect of previous payments made by the defendant for asbestos remediation, clean up and the cost of architectural drawings. In accordance with the defendant’s interpretation of the Assessment at Appraisal Report, it issued the plaintiff a cheque in the amount of $170,412.63 which she has not cashed.
[25] The plaintiff has filed the affidavit of the Plaintiff’s Appraiser who says that the purpose of the Appraisal was not to address the overall RCV and ACV, but rather to address remaining issues in dispute. In this case, with respect to the Building Loss, the only issue in dispute was the remaining costs to restore the plaintiff’s home. The Plaintiff’s Appraisal Brief had noted a claim for $603,513.91 for the Building Loss and the Defendant’s Appraisal Brief had noted its position that the Building Loss was $207,307.08. During the Appraisal, the Plaintiff’s Appraiser submitted that the amount of $485,000 would be acceptable. The Defendant’s Appraiser moved to $234,000. She says that after further discussions, they agreed upon amount of $465,000 for remaining repairs. She says that she specifically recalls that she conceded only a deduction of $60,000 on the basis of a cheque submitted to the plaintiff for rebuilding purposes that the Defendant’s Appraiser was adamant the plaintiff had cashed (although it was later determined that she had not cashed that cheque.) The Plaintiff’s Appraiser indicates that the costs for asbestos removal, clean up and architectural drawings were not in dispute and they were not part of the outstanding rebuilding costs since they had already been paid.
[26] The defendant filed an affidavit of the Defendant’s Appraiser who says that the purpose of the Appraisal was to determine the overall RCV and ACV. He says that during the Appraisal, he highlighted prior payments made by the defendant on a video screen multiple times throughout the day and that the Plaintiff’s Appraiser never took issue with them. He says that during his opening statement, he specifically addressed the issue of prior payments. He says that he and the Plaintiff’s Appraiser ultimately settled on the amount of $465,000 for the RCV and that together, they worked out the wording of the Assessment at Appraisal Report. He says they specifically discussed the fact that the Assessment at Appraisal would be subject to prior payments and discussed the wording necessary to reflect that.
[27] There is a clear conflict in the evidence and the surrounding circumstances do not assist me.
[28] Based upon the record before me, the following surrounding circumstances support the plaintiff’s position:
a. The appraisal brief submitted by the defendant (the “Defendant’s Appraisal Brief”) set out its position in respect of the replacement cost of outstanding building repairs net of prior payments:
6.22. Our final position as supported by this brief is as follows:
Outstanding Building Repairs
Replacement Cost $207,307.08
Actual Cash Value $124,384.25
$207,307.08 is the estimate which the defendant had obtained for the remaining costs to rebuild the plaintiff’s home. The plaintiff argues that this demonstrates that the defendant was not including past payments into its RCV.
b. None of the estimates for building repairs presented at the Appraisal included the previous costs relating to asbestos removal or remediation. (The defendant has referred to one appraisal which included the cost of the architectural drawings.)
c. Significantly, even though the defendant’s position in respect of the Building Loss was net of prior payments, its position as stated in the Defendant’s Appraisal Brief in respect of Personal Property and ALE appeared to include prior payments.
d. Immediately after the appraisal, (4:44 pm on the day of the Appraisal) the Plaintiff’s Appraiser sent the Defendant’s Appraiser an email which stated as follows:
Good afternoon gentlemen. I’ve just spoken to Mr. Porter and for clarity I want to provide the following comments.
After emergency services and abatement costs, the only amount paid by the insurer for building repair was $60,000. Although 2 other cheques were issued for building repair, they could not be cashed. $5,731.50 for smoke sealing and $194,856 which was building ACV.
This $60,000 is the only amount to be deducted from the ACV settlement on the building. …
Please confirm that we are all on the same page with these numbers.
On March 3, 2020 by email sent at 8:49 am, the Defendant’s Appraiser responded:
I believe that is correct. My payment schedule which I understand to be accurate is attached.
The plaintiff argues that the Defendant’s Appraiser’s response demonstrates that prior payments for asbestos removal, emergency services and architectural drawings were not to be deducted. (I note that immediately after this May 3, 2020 email, the Defendant’s Appraiser resiled from this position and a lengthy email exchange on this issue ensued).
e. As noted above, on April 4, 2018, the defendant issued the plaintiff a cheque for $194,800.56 in respect of her building loss. The plaintiff asks whether it is reasonable that she would have agreed, through her appraiser, to an ultimate payment that was $24,000 less than the amount she had rejected a year prior.
f. Finally, as noted by the plaintiff, the Assessment at Appraisal Report indicates that it is partial. The plaintiff argues that this supports its position that the stated amounts for RCV and ACV were already net of the prior payments.
[29] Based upon the record before me, the following surrounding circumstances support the defendant’s position:
a. The Defendant’s Appraisal Brief specified that the purpose of the Appraisal was to determine the RCV and the ACV.
b. The Defendant’s Appraisal Brief noted the prior payments in respect of asbestos abatement, emergency repairs and architectural drawings under the heading “Building Costs”: at p. 4. It referred to these as “advance payments”: at p. 6.
c. The appraisal brief submitted by the plaintiff (the “Plaintiff’s Appraisal Brief”) also specifically made reference to the amounts paid by the defendant for asbestos abatement, emergency repairs and architectural drawings, although admittedly, it did not go so far as to say that they should be deducted from any amounts awarded, and these amounts were not part of the plaintiff’s submitted estimate;
d. The plaintiff does not take issue with the settled amounts in respect of Personal Property and ALE and the payments made by the defendant in respect of these have been made net of previous payments;
e. The plaintiff’s house comprises 815 square feet on the second floor, 548 feet on the main floor and 519 square feet in the basement. After asbestos remediation and clean up, some framing and sub-flooring had to be replaced, but the building was not destroyed. The defendant questions the reasonableness of $465,000 as the cost to repair the remaining damage to a house this size given the following estimates which formed part of the Appraisal Briefs:
| Date | Contractor/Estimator | Amount |
|---|---|---|
| March 2, 2020 | Ellis Don scope of work estimate | $207,307.08 |
| Undated | Leda Restoration agreed to do outstanding repairs for | $207,307.08 |
| Undated | Nu-Trend agreed to do outstanding repairs for | $207,307.08 |
| Undated | Ellis Don’s re-estimate using FINA’s scope of work. | $227,758.18 |
| June 26, 2018 | FINA estimate previously provided by plaintiff but ultimately withdrawn as she felt it was too low. | $367,391.25 |
| May 10, 2019 | Plaintiff’s proof of loss rejected by the insurer noted the following claim in respect of the building loss | $485,100 |
| Undated | MP Restoration Consulting—this is a new estimate provided by the plaintiff at the Appraisal. Mr. Porter is associated with MP and he was originally retained as the plaintiff’s appraiser. The defendant says that Mr. Porter is not independent as he has a direct pecuniary interest according to is retainer which entitles him to 10 % of the ultimate RCV. | $603,513.91 |
Contracts of insurance are to be interpreted in a manner that results in neither a windfall to the insurer nor an unanticipated recovery to the insured: Gore Mutual Insurance Company v. Carlin, 2018 ONCA 628, 428 D.L.R. (4th) 189, at paras. 21, 29.
[30] There is a clear dispute as to the purpose of the Appraisal, as well as what occurred at the Appraisal which I am unable to resolve on this record. I note that both parties filed evidence as to what occurred prior to and during the Appraisal, and neither party took the position that the Appraisers’ evidence as to what was discussed was inadmissible.
[31] The defendant did argue that the plaintiff’s claim is not justiciable because s. 128 of the Insurance Act says that if the two appraisers do not agree, then the agreement of one appraiser and the umpire determines the matter. Both the plaintiff and defendant made inquiries with the Umpire who wrote an email and a letter confirming his understanding and agreement with the Defendant’s Appraiser’s interpretation. He said:
…The Assessment at Appraisal document speaks for itself and represents the Tribunal’s quantification of the loss. As is clearly indicated in the wording of the Assessment at Appraisal, the amounts stipulated in the Award were “subject to amounts previously paid to the Insured by the insurer.” The aforementioned wording is standard in that, typically, the Appraisers representing the two parties are not aware of the specific amounts that had been paid by the Insurer to the Insured as at the time of the Hearing.
It is my view that the amounts stipulated in the Assessment at Appraisal document were not contemplated to mean additional amounts to be paid, in addition to what indemnity payments had already been paid.
If there is a dispute regarding what payments ought to be characterized as “indemnity” payments, that is a matter of “coverage” and it is not the proper matter for consideration by the Appraisal Tribunal.
[32] Apart from the fact that the plaintiff objected to the Umpire’s subsequent communications for a number of reasons, including the argument that he may have been functus, and was allegedly too friendly with the Defendant’s Appraiser, I do not find the Umpire’s communications determinative.
[33] It is not the case that the two appraisers disagreed and that one appraiser and the Umpire then trumped the other appraiser. Rather, on the record before me, the two appraisers agreed to certain amounts after negotiation and discussion, which then formed the basis for what is essentially a consent award made by the Umpire. The Umpire’s communications do not touch upon what the two appraisers have said were the different purposes of the Appraisal or what they say they discussed and agreed upon regarding particular amounts to be deducted from payments.
[34] The Umpire’s communications also do not touch upon whether the plaintiff is entitled to the RCV or the ACV. While the defendant claims that she may not claim the RCV because of her delay in rebuilding her home, she says that this delay was caused by the defendant’s unreasonable conduct, which she says is particularly egregious given the trauma of the fire and her subsequent diagnosis of PTSD and depression.
[35] In my view, on the record before me, what the plaintiff and defendant agreed was the purpose of the Appraisal, and what the two appraisers discussed at the Appraisal are relevant to the objective determination of what they agreed to, which then formed the basis for what is essentially a consent award made by the Umpire.
[36] It may also be relevant to the plaintiff’s claim for bad faith. As noted in Fernandes v. Penncop Life Insurance Company, 2014 ONCA 615, the duty of good faith requires the insurer to deal with its insured’s claim fairly. Part of the plaintiff’s case for bad faith is the defendant’s alleged delay and “hard-balling” throughout the claim. However, part of its claim is also that the Defendant’s Appraiser is dishonestly portraying the discussions and agreements at the Appraisal and/or that the Plaintiff’s Appraiser was misled by the Defendant’s Appraiser because of the way he presented the material during the Appraisal.
[37] The plaintiff also says that the Defendant’s Appraiser knew that she wanted to rebuild her home and he admitted when cross examined that he knew that she would be unable to do so with the amounts set out in the report if the prior payments were deducted. If the two appraisers in fact made an agreement which was incorrectly memorialized in the Assessment at Appraisal Report, and the Defendant’s Appraiser knew that, or knew that the Plaintiff’s Appraiser did not understand that these deductions would occur and did not tell her, in my view, that would be relevant to the plaintiff’s claim of bad faith.
[38] With respect to whether these issues can be determined by way of summary judgment, I note that in 3746292 Manitoba Ltd. v. Intact Insurance, 2016 MBQB 210, at paras. 47-48, the Court indicated that in some cases it may be difficult to evaluate claims of bad faith conduct without the benefit of seeing and hearing the witnesses:
Claims alleging bad faith are difficult claims to make. In settling a claim, the parties are in adversarial positions and each is entitled to negotiate a resolution with its best interests in mind. The bad faith element arises when an insurer fails to properly and objectively consider the claim, or uses inappropriate negotiating techniques which are designed to frustrate or delay the attempts of the honest insured to be paid.
Most cases in which allegations of bad faith are made will not be accompanied by acknowledgements on the part of the insurer that it intentionally attempted to grind an insured by delaying or confusing matters. In most cases, a court will be faced with the task of making proper inferences from the evidence placed before it. I am not convinced in this case that I can make a conclusive enough inference about the intentions of Intact without seeing and hearing representatives from Intact or its consultants. Further, it is difficult to assess the complaints of the plaintiffs without actually listening to them. Under the circumstances, I am convinced that there is a genuine issue for trial in the case against Intact.
[39] Finally, although the defendant argues that an appraisal is final and binding absent judicial review, the case he relies upon, Birmingham, at para. 5, states that courts defer to the outcome of an appraisal “absent misconduct.” The plaintiff has alleged misconduct. Further, the appraisal process cannot be used to determine legal questions such as whether the plaintiff is entitled to the RCV or ACV or whether there has been bad faith conduct.
[40] As such, I am dismissing the plaintiff’s summary judgment motion. I am unable to fairly and justly adjudicate this matter through the summary judgment process because there are genuine issues of credibility which I am unable to resolve on the record before me which relate to:
a. the discussions which took place before and during the Appraisal regarding the Appraiser’s understanding and/or agreement as to deductions to be made from the amounts reflected in the Assessment at Appraisal Report;
b. whether the delay in rebuilding her home has been caused by the plaintiff’s inaction or the defendant’s alleged unreasonable conduct and alleged “hard-balling” tactics; and
c. whether the plaintiff is entitled to the RCV or the ACV.
[41] The parties shall arrange a case conference with my assistant to establish a timetable for the hearing of the trial of this matter. Given the significant materials already filed, it may be that the trial can take place on a simplified basis with an agreed statement of facts and viva voce evidence limited to certain issues pursuant to Rule 20.05. However, I would like to hear from the parties first as to how best to address the process leading up to and the conduct of the trial in this case.
Motion to Strike
[42] The defendant has brought a motion in writing seeking to strike out paras. 23 and 52 of the Statement of Claim and paras. 4, 5, 6, 7, 9, 10, 11, 12, 13 and 14 of the Reply on the following bases. Note, I have set out my conclusions in this chart, but the discussion regarding my conclusions follows after this chart:
| Paras. | Allegation | Objection | Conclusion |
|---|---|---|---|
| SOC 23 | The payment of $170,000 by the defendant to the plaintiff was met with derision and shock by the plaintiff and her agents. The basis for the shock was that the amount agreed at Appraisal was the amount needed from that date to replace her home. That amount was $465,000 which was the replacement value which had been agreed upon. | Immaterial and irrelevant | Proper pleading – material and relevant |
| SOC 52 | As pled above, she became confused and was in intense panic as the mortgagees constantly intimidated her by taking steps to sell her home. As a result, she states that having no choice, she entered into a Purchase and sale agreement ( P & S) which was entered into with the anticipation that the insurance claim would be settled. Unfortunately, that has not occurred. | Immaterial and irrelevant | Proper pleading – material and relevant |
| Reply 4 | At paragraph 15 the defendants then provided what appears to be a verbatim response by the appraiser to a request for clarification made by the Plaintiffs agent of the Appraiser regarding the receipt of a cheque from the insurers agent in the amount of 170 000 as final payment to rebuild her home following the Appraisal. The Plaintiff notes that as she states at paragraph 23 of her statement of claim the receipt of the amount of 170 000 was met with derision and shock by her and her agents | Repetitious and improper reply 25.08(1) & (2) | Repeats SOC, at para. 23 and/or would not take defendant by surprise |
| Reply 5 | The Plaintiff further states that it was a result of that unexpected receipt of such rather very low amount which led her agent to ask the Umpire to reconvene to sort out this emerging issue. It was then that the Umpire purportedly gave an opinion which the defendant sees as creating an estoppel regarding any complaint about the amount received as payment Implicitly the defendant is relying on the Plaintiffs failure to challenge the Umpire’s interpretive comments by way of judicial review. As the defendant states to now criticize or raise any objections about the correctness or sufficiency of the 170 000 would be an impermissible collateral attack on the soundness of the Umpires interpretive comment. The assertion is that given the fact that no process by way of judicial review to challenge the determination by the Umpire was engaged then his interpretation stands | No material facts and improper reply 25.08(1) & (2) and is argumentative | Proper reply – responds to defendant’s pleadings at paras. 15-16. |
| Reply 6 | By way of Reply the plaintiff states that these defences further demonstrate the defendants mindset to play hard ball and to continue its unconscionable reprehensible and bad faith conduct. Surely the amounts paid to rebuild her home are exceedingly way below the amount which is necessary to indemnify her in the loss of her home. In particular she states that the Insurance contract provides that she will be indemnified even if the amount necessary to indemnify her might be in excess of the coverage stipulated in the insurance contract | Argument, Evidence, Repetition and improper reply under 25.08(1) & (2) | Repeats SOC, at paras. 31, 32, 34 & 50 and/or would not take defendant by surprise |
| Reply 7 | The plaintiff therefore states that this posture by the Insurer that she should at this vulnerable stage of her life 71 years old Black woman suffering from PTSD and as a Black woman and aged quite vulnerable to COVID 19 to secure a loan so that she could rebuild her home. This is a home for which she had secured insurance coverage and faithfully paid insurance premiums over so many years. She states that the conduct of the defendant is repugnant to any semblance of fairness and should be condemned by the Court | Immaterial and irrelevant facts, scandalous, frivolous and vexation and improper reply under Rule 25.08(1) & (2) | Some minor repetition from the SOC, but relates to her claim for bad faith. This pleading is proper and not scandalous. |
| Reply 9 | As for the claim that it was understood by all parties that prior payments would be deducted, she states that this statement is a falsehood as it is a fact that her agent was quite animated when she raised the issue of the amounts deducted from the award following the receipt of the meagre amount of 170 000 which could not rebuild her home at all. | Immaterial and irrelevant facts, scandalous, frivolous and vexation and improper reply under Rule 25.08(1) & (2) | Repeats SOC, at paras. 23, 25 & 35 and/or would not take defendant by surprise |
| Reply 10 | As for the issue of collateral attack mentioned by the defendant she states that hereto the defendant through its lawyers is creating significant barriers in her way to rebuild her home. In particular she states that the comment by the Umpire after the appraisal award was made was not at all within his jurisdiction. She states that she recognizes that her agent who is not a lawyer mistakenly believed that the Umpire was positioned to arbitrate on the correctness of the actual amount paid and so the agent felt that reaching out to the Umpire after the fact would resolve the issue. However, as the plaintiff discovered subsequently such comments by the Umpire were without precedent and were irrelevant to the issue which emerged following the appraisal. | Collateral attack and abuse of process and improper reply under Rule 25.08(1) & (2) | Proper reply – responds to defendant’s pleadings at paras. 15-16 |
| Reply 11 | She states that these very issues were addressed by her current legal counsel in an email dated July 2, 2020 to the defendants counsel thus….. | Abuse of process and improper reply under Rule 25.08(1) & (2) | Repeats SOC, at para. 35 and/or would not take defendant by surprise and/or pleads evidence |
| Reply 12 | The Plaintiff states that despite this full explanation which was never responded to by the defendants counsel and which was sent before the SOD was drafted the defendant continues to bury its head in the proverbial sand as it drills down in its hard ball posture which it knows is at the expense of the Plaintiffs fragile health | Scandalous, frivolous and vexation and improper reply pursuant to Rule 25.01(1) & (2) | Repeats SOC, at paras. 36, 43 & 44 and/or would not take defendant by surprise. |
| Reply 13 | Furthermore, the plaintiff states that this defence came after the defendants counsel was provided with a psychiatric letter dated June 19 2020 which confirmed that this ongoing issue with the Insurer defendant was exacerbating the Plaintiffs deterioration of her mental health | Evidence and argument and improper reply pursuant to Rule 25.08(1) & (2) | Repeats SOC, at paras. 24, 30, 42, 43, 48 & 50 and/or would not take the defendant by surprise and/or pleads evidence. |
| Reply 14 | The plaintiff therefore requests that the Court allows the claim and given the continued hard ball posture of the defendant increase the award for mental anguish aggravated and punitive damages as it deems fit | Abuse of process and improper reply pursuant to Rule 25.08(1) & (2) | Repeats SOC at paras. 50, 51-54 and/or would not take defendant by surprise |
[43] In my view, paras. 23 and 52 of the Statement of Claim are relevant and material as they speak to the impact which the events have had on the plaintiff. Given that she is claiming damages for mental distress as well as damages for bad faith performance by the defendant, these paragraphs are relevant.
[44] With respect to the Reply, part of the defendant’s complaint is that the impugned paragraphs of the Reply restate what is already in the Statement of Claim and do not set out any facts which would take the defendant by surprise.
[45] Rule 25.08 provides as follows with respect to Replies:
WHERE A REPLY IS NECESSARY
Different Version of Facts
25.08 (1) A party who intends to prove a version of the facts different from
that pleaded in the opposite party’s defence shall deliver a reply setting out
the different version, unless it has already been pleaded in the claim. R.R.O.
1990, Reg. 194, r. 25.08 (1).
Affirmative Reply
(2) A party who intends to reply in response to a defence on any matter that
might, if not specifically pleaded, take the opposite party by surprise or raise
an issue that has not been raised by a previous pleading shall deliver a reply
setting out that matter, subject to subrule 25.06 (5) (inconsistent claims or
new claims). R.R.O. 1990, Reg. 194, r. 25.08 (2).
Reply Only Where Required
(3) A party shall not deliver a reply except where required to do so by subrule
(1) or (2).
[46] The facts set out in paragraphs: 4, 6, 9, 11, 12, 13 & 14 of the Reply have already been set out in the Statement of Claim, contain some minor additional facts which would not take the defendant by surprise, and in some cases plead evidence. Those paragraphs are struck out and I need not consider the other grounds raised by the plaintiff: Fleming v. Yorkton Securities Inc., 2003 CanLII 36689 (Ont. S.C.), at paras. 15-16.
[47] Paragraphs 5 and 10 of the Reply respond to the defendant’s pleading in paras. 15 and 16 of the Defence regarding the Umpire’s clarification of the Assessment at Appraisal Report. I see no difficulty with these paragraphs.
[48] The facts set out in paragraph 7 of the Reply are not scandalous, frivolous or vexatious and relate to the plaintiff’s claim for bad faith damages.
Motion for leave to file Affidavit of Ramonda Brake
[49] During cross-examination, the plaintiff denied that she had authorized the defendant to pay certain amounts on her behalf and took issue with a cheque written by the defendant for $87,060.78 to Nu-Trend. In response, the defendant sought to file an authorization executed by the plaintiff directing the defendant to make payments to Nu-Trend on her behalf. While this evidence is relevant to the case, it is not material to the reasons why I am unable to resolve this matter on a summary judgment motion and is therefore moot. I need not consider this motion.
Conclusion
[50] This motion for summary judgment is therefore dismissed. In accordance with Skunk v. Ketash, 2016 ONCA 841, 135 O.R. (3d) 180, at para. 62, I have specifically considered to what extent I have made determinations of law that are intended to be binding on the parties at trial. I do not intend to make any such determinations. In particular, I have made no findings on whether the Umpire was functus. I therefore do not invoke subrule 20.04(4). In accordance with Hryniak, at para. 78, I seize myself of this matter subject to my availability on the civil list, which may be determined through the Toronto civil motion/trial office as needed.
[51] The motion to strike out certain paragraphs of the Statement of Claim and Reply is granted in part, as set out above.
[52] I have not considered the motion for leave to admit the affidavit of Ramona Brake as it is moot.
[53] The parties shall arrange a case conference before me on zoom to determine what directions might be appropriate pursuant to Rule 20.05 in order to allow this matter to proceed to trial.
[54] At the case conference the parties may address the issue of costs. Given that this matter will be proceeding to trial with the probability that the summary judgment materials will form part of the trial materials, I am inclined to reserve the issue of costs until the conclusion of the trial but the parties may address this issue at that time.
Papageorgiou J.
Released: December 1, 2020