COURT FILE NO.: E-9224-2018
DATE: 2021-01-15
ONTARIO
SUPERIOR COURT OF JUSTICE
IN THE MATTER OF The Estate of Ottilie Mayer, Deceased
BETWEEN:
Cheryl Doris Florentine Daehn
Moving Party
– and –
Roger Lalonde as estate trustee, Roger Lalonde, Jo-Anne Gauvin-Lalonde, Franca Squarzolo and Valerie Truscott
Respondents
Counsel:
L. Roslyn and A. Kashikar, counsel for the Moving Party
L. Poratto-Mason and A. Mason, counsel for Roger Lalonde and Jo-Anne Gauvin-Lalonde
Ms. F. Squarzolo, representing herself
Heard at Sudbury: January 23, 2020; December 17, 2020
REASONS ON MOTION TO ENFORCE SETTLEMENT
A.D. KURKE J.
Overview
[1] The moving party seeks to enforce a settlement purportedly arrived at between the parties in the context of a dispute over the validity of competing wills. The terms of the settlement are stated to be in unsigned minutes of settlement that form part of the record.
[2] The deceased, Ms. Mayer, died September 12, 2018 at the age of 91 at Health Sciences North (“HSN”) in Sudbury. Her estate is estimated to be worth close to $1.7 million in personal and real property. The moving party is the sole residuary beneficiary under a 2011 will of Ms. Mayer. She is the daughter of the common-law spouse of Ms. Mayer, who predeceased Ms. Mayer. Mr. Lalonde (“Lalonde”) and Ms. Gauvin-Lalonde (“Gauvin-Lalonde”) (collectively, the “responding parties”) were long-time neighbours and friends of Ms. Mayer who would take the bulk of her estate under an August 8, 2018 holograph will and a further August 24, 2018 will. It is not my place at this time to opine on the validity of any of these wills.
[3] After the death of Ms. Mayer, Lalonde was initially made estate trustee pursuant to the August 24, 2018 will, though the moving party had filed an objection to that designation, which was unfortunately overlooked by the court. Lalonde remained estate trustee up until January 23, 2020, the first date of this hearing, at which point a trustee during litigation was agreed upon by the parties.
[4] Negotiations between the parties began in January 2019. On June 26, 2019 counsel for the responding parties asked for draft minutes of settlement, which were produced, altered, and exchanged between the moving and responding parties up to July 5, 2019, as changes were proposed and responded to. In mid-July 2019 the responding parties retracted all prior offers to settle and retained new counsel. They refused to sign the minutes. The moving party seeks to enforce the terms in the minutes as representing the agreement among the parties.
[5] The delay in providing these reasons is regrettable, but necessary. After the hearing of this matter on January 23, 2020, I realized that a beneficiary in the August 24, 2018 will, Ms. Franca Squarzolo (“Squarzolo”), who had been provided with notice of the proceeding and had filed no materials but was present in court, was not given an opportunity to make submissions. Ms. Valerie Truscott (“Truscott”), another beneficiary in that will, chose to make no submissions. While arrangements were being made to facilitate an opportunity for Squarzolo to make oral submissions, proceedings of the court were suspended as a result of the COVID-19 pandemic. Squarzolo’s submissions were heard by videoconference on December 17, 2020.
[6] For the following reasons the motion to enforce settlement is dismissed.
Facts
[7] Herbert Kallweit (“Kallweit”) and Ms. Mayer (“the deceased”) were common-law spouses for over 46 years. They lived together in a small apartment building that they owned in Sudbury. Kallweit died February 10, 2018, leaving everything to the deceased. According to responding party Lalonde, the moving party, who is not a biological relation of the deceased, had been disinherited by Kallweit in 1989, and they rarely spoke.
[8] In 2011, Kallweit and the deceased had executed wills at the Sudbury Credit Union that left everything to each other, or to the moving party if both were dead. The moving party was also an alternate estate trustee.
[9] The responding parties cared for Kallweit and the deceased over the course of the last decade of their lives. Gauvin-Lalonde had known the deceased for many years. The deceased made Lalonde her Attorney for Property and Gauvin-Lalonde her Attorney for Personal Care on June 26, 2018.
[10] While a patient at HSN, the deceased executed a holograph will on August 8, and then a typed will on August 24, 2018 (the “August 2018 will”), naming Lalonde estate trustee, and leaving the bulk of her estate, including her apartment building, to the responding parties. She also made individual bequests of $125,000 each to Squarzolo and Truscott, and of $25,000 to the moving party. The deceased passed away at HSN on September 12, 2018 from congestive heart failure.
[11] Lalonde applied for a Certificate of Appointment of Estate Trustee pursuant to the August 2018 will, and the moving party filed an objection challenging the validity of that will. Nevertheless, a Certificate issued on October 30, 2018. Counsel for the moving party notified the deceased’s banks causing the deceased’s accounts to be frozen. Lalonde remained estate trustee and those accounts remained frozen until the January 23, 2020 hearing date when a trustee during litigation was chosen by the parties.
[12] Through counsel, the moving party and the responding parties engaged in settlement negotiations between January 2019 and July 2019. The following are some of the salient details of those negotiations:
a. On January 17, 2019, counsel for the moving party explained to counsel for the responding parties why she believed that the August 2018 will was invalid. An offer was made giving the apartment building to Lalonde, maintaining the specific bequests to Squarzolo and Truscott, and giving the residue of the estate to the moving party, who would herself become estate trustee.
b. On March 21, 2019, counsel for the responding parties proposed that the specific bequests under the August 2018 will be paid to Squarzolo and Truscott, and that the moving and responding parties each would receive half the estate. There would be a neutral estate trustee.
c. On May 9, 2019, counsel for the moving party made another offer to settle after offering an expert handwriting opinion that called into question the signature on the August 2018 will and setting out reasons to doubt the deceased’s testamentary capacity. She proposed $110,000 bequests each to Squarzolo and Truscott, and $225,000 to the responding parties, $25,000 for probate fee, and $48,000 for the fees of the neutral estate trustee, taxes, and miscellaneous expenses. The moving party would receive the bulk of the estate.
d. On June 7, 2019, counsel for the responding parties sought an extension of time to consider the matter and indicated that the responding parties wanted reimbursement of expenses paid out on behalf of the estate, somewhere between $5,000 and $10,000. That same day it appears that Squarzolo accepted the latest offer made by the moving party. Truscott followed suit on June 11, 2019.
e. On June 10, 2019, counsel for the moving party stated that the responding parties should find their expenses in the $48,000 set aside in their offer to cover various expenses. She also required an “informal accounting” with receipts, in particular of any rent monies collected from the apartment building. Counsel for the moving party had spoken with Linda Laakso about serving as a neutral estate trustee.
f. On June 11, 2019, counsel for the responding parties responded to the offer of the moving party. The responding parties wanted $300,000, but not the apartment building, and reimbursement for monies expended on the estate. Gauvin-Lalonde also wanted a rocking chair that the deceased had promised her, and Lalonde wanted to go collect his tools which he had left over the deceased’s garage. Counsel for the responding parties concluded with an expression of hope that the matter could be wrapped up without further litigation but added that “my clients will hire their own handwriting expert if we cannot get this matter resolved.”
g. On June 18, 2019, counsel for the moving party responded to the letter of June 11. She agreed to the $300,000 sought by the responding parties but was seeking an informal accounting from Lalonde from the point in time when he took over as the deceased’s attorney for property: “this offer is contingent on our client receiving an up to date accounting of the estate.” The moving party also wanted Lalonde to produce bank statements based on which he had assigned a value to the estate of $1,693,000. This production was to precede the signing of formal minutes. The $48,000 figure from the May 9, 2019 offer was bumped up to $74,000 but was now also to cover probate fees. Any shortfall was to be borne 75% by the moving party and 25% by the responding parties.
h. On June 24, 2019, counsel for the moving party reiterated her requests for a list of Lalonde’s tools that were at the apartment building, the informal accounting, bank statements, and “confirmation that [the responding parties] will share the shortfall in the final distribution…on a 75%-25% basis….” Counsel for the moving party indicated that she would work on minutes of settlement but was willing to proceed with a “court action should a settlement not be around the corner.”
i. On June 26, 2019, after some requests concerning an ongoing discussion about making sure that the apartment building was properly insured, counsel for the responding parties asked that the moving party provide “Minutes of Settlement to be signed by all parties so that it is clear as to the final agreement.” His clients wanted to be clear on what was being agreed upon “because there have been a number of changes going back and forth.”
j. On June 28, 2019, counsel for the moving party provided minutes of settlement, “to be executed by all parties.” These minutes provided in paragraph 4(g) that “[t]his agreement shall become effective when the last of the parties hereto signs it.” Signing lines confirm that the term “parties” included the moving party, the responding parties, Squarzolo, and Truscott.
k. On July 4, 2019, counsel for the responding parties suggested changes. Those changes included significant amounts for property tax paid, probate fees already paid, and legal services for which Lalonde requested reimbursement as they related to the application. Lalonde had already retrieved his tools, so that condition could be removed from the minutes. There was also a request for the immediate transfer of the rocking chair. An appraisal of the apartment building and bank statements were provided, and there was an indication that additional estate funds were in a joint account held by the deceased and Gauvin-Lalonde.
l. On July 5, 2019, counsel for the moving party produced new draft minutes incorporating some changes proposed by counsel for the responding parties, but refusing other changes relating to their out-of-pocket legal expenses, as “the parties are to bear their own legal costs.”
m. On July 15, 2019, counsel for the moving party asked that the responding parties either execute the minutes or place insurance coverage on the apartment building, as it had expired.
That same day, counsel for the responding parties indicated to the moving party that he would no longer be acting for the responding parties and retracted all offers to settle made on their behalf. New counsel could be anticipated.
n. On July 17, 2019, counsel for the moving party wrote directly to the responding parties and addressed concerns about insurance on the apartment building. She decried delays in concluding the matter and told the responding parties: “[i]n case of further delays, we have instructions to bring a motion to enforce the Settlement, since the material terms of Settlement in this matter have already been agreed upon.” There followed a comment that “[t]here too, a costs award will be an important factor.”
o. On August 20, 2019, the moving party applied to revoke the Certificate appointing Lalonde as estate trustee and brought a motion to enforce the minutes.
p. In the succeeding months, counsel for the moving and responding parties and for the bank worked fruitlessly on negotiating a distribution of funds from the deceased’s accounts to reimburse Lalonde for expenses he had personally paid on behalf of the estate.
The law
[13] Rule 49.09 of the Rules of Civil Procedure (R.R.O. 1990, Reg. 194) provides:
49.09 Where a party to an accepted offer to settle fails to comply with the terms of the offer, the other party may,
(a) make a motion to a judge for judgment in the terms of the accepted offer, and the judge may grant judgment accordingly; or
(b) continue the proceeding as if there had been no accepted offer to settle.
[14] Finality is important, and “parties who reach a settlement should usually be held to their bargains”: Bogue v. Bogue (1999), 1999 CanLII 3284 (ON CA), 46 O.R. (3d) 1 (C.A.), at para. 15. A settlement agreement will be enforced where there is a binding settlement agreement and there is no reason for a court not to enforce the settlement: Lumsden et al. v. The Toronto Police Services Board et al., 2019 ONSC 5052, at para. 17.
[15] A settlement does not need to be in writing to be valid: Langley Lo-Cost Builders Ltd. v. 474835 B.C. Ltd., 2000 BCCA 365, at para. 24. Sometimes, however, a written agreement is to be the vehicle for agreement. Whether the execution of a written agreement is part of the settlement or a mere expression of a desire by the parties as to how the agreed-to transaction will proceed is a matter of construction: Calvan Consolidated Oil & Gas Co. v. Manning, 1959 CanLII 56 (SCC), [1959] S.C.R. 253, at 261. Where parties contemplate the execution of a written agreement before their legal obligations become enforceable, then the failure to execute the written agreement is fatal to its enforceability: Bawitko Investments Limited v. Kernels Popcorn Limited, 1991 CanLII 2734 (ON CA.), at 12-13.
[16] A settlement agreement is a contract and subject to the general rules regarding offer and acceptance. Thus, a concluded settlement requires both a mutual intention to create a legally binding contract, and agreement on all “essential terms” of the settlement: Olivieri v. Sherman, 2007 ONCA 491, at para. 41. Even where there is no ambiguity in the terms of an agreement, interpretation of the agreement can involve assessment of surrounding circumstances or the “factual matrix” known to the parties at the time of the negotiation: Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, at para. 47; Primo Poloniato Grandchildren’s Trust (Trustee of) v. Browne, 2012 ONCA 862, at paras. 67, 71; Atkinson v. Whaley Estate Litigation, 2019 ONSC 3708, at paras. 58-59.
[17] A court has discretion not to enforce an otherwise binding settlement, but that discretion is to be exercised rarely: Srebot v. Srebot Farms Ltd., 2013 ONCA 84, at para. 6; Lumsden, at para. 23. Factors to consider in deciding whether to enforce a settlement can include such things as: whether an order giving effect to the settlement has been taken out or not, thus affecting the pre-settlement position of parties; whether the party seeking to enforce would be prejudiced if the settlement was not enforced; the degree to which a party would be prejudiced by enforcement compared to the prejudice to the other party of non-enforcement; and the effect of enforcement on third parties: Milios v. Zagas (1998), 1998 CanLII 7119 (ON CA), 38 O.R. (3d) 218 (C.A.), at para. 21.
Discussion
[18] The moving party submits that a settlement was in place as of June 18, 2019, when counsel for the moving party accepted the responding parties’ offer that the responding parties receive $300,000. In the moving party’s submission, this aspect was all that was “essential.” The rest was simply fine tuning and dealt with implementation issues.
[19] The fact remains that the responding parties put forward additional terms and conditions that formed counteroffers.
[20] Throughout the negotiations between the parties, the responding parties remained concerned about Lalonde’s ability to recover his expenses and outlays for administering the estate as its trustee. Although the moving party had early on convinced the banks to freeze the deceased’s accounts based on the moving party’s intention to rescind the Certificate appointing Lalonde as estate trustee, little was done in that regard, and Lalonde continued as estate trustee but without estate funds to do his work. There were also efforts made by the responding parties aimed at ensuring that Squarzolo and Truscott receive what the August 2018 will had promised them, or at least some of it. There were five parties to this proposed settlement, and counsel to the responding parties repeatedly asked about the positions being taken by Squarzolo and Truscott.
[21] Offers and counteroffers had been made, causing counsel to the responding parties to request minutes of settlement, “to be signed by all parties so that it is clear as to the final agreement.” This was nothing new, as on June 18, 2019, counsel to the moving party had already indicated that bank statements for the estate accounts from Lalonde were required before “formal minutes” could be signed. What was intended by that comment was that there would be no agreement or payout until the moving party received the bank statements.
[22] In answer to the responding parties’ request, on June 24, 2019, counsel for the moving party indicated that she would work up minutes of settlement but warned about her willingness to proceed with a “court action should a settlement not be around the corner.” Counsel for the moving party submits that what this meant was that she would bring this r. 49.09 motion to enforce the settlement if the matter was not completed in short order.
[23] I disagree with that interpretation. Less than a month later, on July 17, 2019, counsel for the moving party knew to call this motion a “motion to enforce the Settlement” and not a “court action.” I find that the reference to a “court action” simply meant litigation over the validity of the August 2018 will, such as that anticipated in the June 11, 2019 letter sent by counsel for the responding parties. I also find the wording used by counsel for the moving party on June 24, 2019 to be a plain indication by her that as of that date there was not yet an agreement. Although there were proposals and counterproposals, there had yet to be a meeting of the minds on all essential terms.
[24] On July 4, 2019, counsel for the responding parties proposed changes to the minutes of settlement, some of which were placed in the July 5 draft minutes and at least one which was not, involving payment of the invoice of Peter Best, counsel at one point to the deceased and to the responding parties. In his affidavit on this motion, Lalonde expressed concern at this refusal among other things, as it put into question what amounts were to be costs borne by each beneficiary personally as opposed to being cast as estate expenses. At this point, it is clear that negotiations were still continuing.
[25] The responding parties never indicated acceptance of the terms in the minutes and did not sign the minutes. On July 15, 2019, counsel for the moving party demanded that the minutes be executed, or that the responding parties put insurance on the apartment building. The responding parties indicated a change in counsel and retracted all offers.
[26] The moving party argues that conduct by counsel for the responding parties should be taken as akin to acceptance of terms in the minutes of settlement: on correspondence, counsel copied Ms. Laakso, the moving party’s proposed estate trustee; the responding parties provided copies of bank statements that had been requested as a condition of settlement; and they proposed changes to some terms in the minutes without complaint about others. It is further argued that counsel’s failure to note one letter as “without prejudice,” in the context of so many others that were so marked, implies acceptance. I am unable to see such submissions as anything other than an effort to manufacture acceptance after the fact. I cannot find acceptance of the proposed agreement by words or conduct of the responding parties.
[27] On July 17, 2019, the moving party sought to convince the responding parties personally of the need to execute the minutes or face a motion to enforce and cost sanctions, but nothing had changed from July 15.
[28] I find that the responding parties never agreed to the terms in the minutes of settlement. In this respect, it cannot be the case that the moving party alone can dictate what terms of the settlement were essential. The designation of a $300,000 portion of the estate as the only “essential” term leaves the responding parties with no recourse for negotiating other terms that would satisfy their interests. The minutes of settlement were intended to set out all terms, in order to allow the parties to assess the individual terms in the context of all the circumstances of the estate and permit a comprehensive resolution. The responding parties had legitimate concerns that prompted counteroffers. A settlement cannot be imposed where no agreement was reached.
[29] The moving party argues that failure to enforce the settlement creates prejudice to her in that Lalonde went ahead and removed his tools from the apartment building, which had been a condition of settlement in its earliest incarnation. In my view that conduct may be litigated as the matter proceeds but, in and of itself, cannot form the basis for imposing a settlement.
Conclusion
[30] For the above reasons, the motion to enforce settlement is dismissed.
[31] If the parties cannot agree on costs, they may file with the court written submissions of no more than three double-spaced pages, with attachments, within thirty days.
A.D. KURKE J.
Released: January 15, 2021
COURT FILE NO.: E-9224-2018
DATE: 2021-01-15
ONTARIO
SUPERIOR COURT OF JUSTICE
IN THE MATTER OF The Estate of Ottilie Mayer, Deceased
BETWEEN:
Cheryl Doris Florentine Daehn
Moving Party
– and –
Roger Lalonde as estate trustee, Roger Lalonde, Jo-Anne Gauvin-Lalonde, Franca Squarzolo and Valerie Truscott
Responding Parties
REASONS ON MOTION TO ENFORCE SETTLEMENT
A. D. KURKE J.
Released: 2021-01-15