COURT FILE NO.: CV-18-596155
DATE: 20210614
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: KENZIE ALICE BUNCH, a minor by her Litigation Guardian, KIMBERLY MARIE BUNCH, KIMBERLY MARIE BUNCH, personally, and JEFFREY BUNCH Plaintiffs
AND:
MIDWIFE AMY JACKSON, MIDWIFE ALEXIS SIESWERDA, MIDWIFE NATHALIE QUEVILLON-DUSSAULT, DR. RAGA BADR ELMAARIF SIRROR, DENNIS MICHAEL POULIN, ALEXANDRA BRAZEAU, NURSE BRITTANY LOWEY, NURSE MILDRED M. WESELAK, NURSE EMMA SURINS, NURSE DONALDA L. SEGGEWESS, NURSE BARBARA MARY MCFARLANE, NURSE ANNE SCOTT, NURSE HEATHER LYNN MARIN, NURSE KATHRYN KIRCHENR, NURSDE CHELSEY KEYES, NURSE J. DOE, THUNDER BAY REGIONAL HEALTH SCIENCES CENTRE, COMMUNITY MIDWIVES OF THUNDER BAY, DR. RUDOLF NOVAK, and THIUNDER BAY ULTRASOUND INC. Defendants
BEFORE: Mr. Justice Chalmers
COUNSEL: R. Bogoroch and H. Brown for the Plaintiffs
HEARD: In writing
ENDORSEMENT
Overview
[1] The Plaintiffs bring this Motion pursuant to R. 7.08 for an order approving the settlement of the claim, in the amount of $10,000,000 all-inclusive of claims, interest, costs, H.S.T. and disbursements. The Plaintiffs’ lawyers, Bogoroch & Associates proposes to render a solicitor and client account in the amount of $3,136,500, the breakdown of which is as follows; $2,550,000 for the counsel fee for Kenzie Alice Bunch, $331,500 for H.S.T. and $145,000 for assessable disbursements and expert reports, and $109,500 for the claims of Kenzie’s parents, Kimberly and Jeffrey Bunch.
[2] By endorsement dated May 4, 2021, I adjourned the matter for 14 days to allow Plaintiffs’ counsel to provide additional material to support the claim for the proposed fees. On May 14, 2021, I received the supplementary motion record and the moving party’s factum. On May 20, 2021, I forwarded the material to the Office of the Children’s Lawyer (OCL) and requested their comments with respect to the proposed settlement, and in particular, the proposed fees. I have not yet received the response from the OCL.
[3] On June 10, 2021, the Plaintiffs’ solicitor forwarded the affidavit of Kimberley Bunch, sworn June 8, 2021. Ms. Bunch states that as a result of the injuries sustained by her daughter, their current home is not suitable for Kenzie. There is a property for sale by David Shannon and Darlene Bruzzese located at 1009 Ridgeway St. E., Thunder Bay, ON, P7E 6W3 with a sale price of $559,000 (the “Property”). Mr. Shannon previously advised Mr. and Mrs. Bunch that he is holding the Property for purchase by their family. On May 17, 2021, Mr. Shannon advised that he is now considering other offers on the Property. Mr. and Mrs. Bunch are concerned that the opportunity to purchase the Property will be lost.
[4] Ms. Bunch states in her affidavit that the Property is ideal for Kenzie. It has already been modified to be wheelchair accessible. It has a roll-in shower and a wheelchair accessible garage. The backyard is accessible. There is a therapy room. The only modification required is to install a track lift system between Kenzie’s bedroom and the bathroom. Ms. Bunch states that based on their research, they believe that any other house in Thunder Bay will require more substantial renovation to make it appropriate for Kenzie. Ms. Bunch is concerned that if the Property is not purchased it could be many months and likely years before they can find any other suitable home.
[5] The Plaintiffs obtained a home accessibility report from Jeffrey Baum of the Adapt-Able Design Group dated February 24, 2020. He provided the opinion that it is not practical to undertake the necessary modifications of the current home. He recommended that the Bunch family purchase a home and modify it or construct a new home. Mr. Baum also stated that based on his research there were very few resale homes that could be modified. It was his opinion that a suitable resale home that may meet Kenzie’s criteria would cost $669,260–833,160 for a bungalow and $791,560-859,360 for a two-storey home. The cost of constructing a new home would be $778,000-805,000.
[6] Ms. Bunch states that she and her husband are prepared to use the settlement funds payable to them in the proposed settlement towards to down payment on the home while they await the approval of the settlement and the Application for guardianship. The proposed settlement attributes $182,500 to each of Mr. and Ms. Bunch.
[7] For the reasons set out below, I approve the amounts allocated to Kenzie, Mr. and Ms. Bunch and OHIP in the proposed settlement, and I authorize the purchase of the Property. I reserve on the issue of the proposed counsel fees.
Background Facts
[8] Kenzie Alice Bunch was born on June 7, 2015. She has cerebral palsy, which is manifested by spastic quadriplegia epilepsy and global decay. She is unable to feed, dress or otherwise care for herself. She is unable to walk independently or communicate. She currently requires 24-hour care and it is expected that this will always be the case. She is unemployable.
[9] Kimberly Bunch became pregnant in approximately September 2014. On September 30, 2014 she came under the care of the Community of Midwives of Thunder Bay. The Defendants Amy Jackson and Nathalie Quevillon-Dusasault were her primary obstetrical caregivers. Kimberley’s pregnancy was complicated by gestational diabetes mellitus, which was controlled by diet. On June 7, 2015, Kimberley went into labour. The midwives were notified, and she went to the Thunder Bay Regional Health Sciences Centre. Kimberley delivered Kenzie via spontaneous vaginal delivery. The delivery was complicated. Kenzie was limp and pale at birth. There was a need for resuscitation.
[10] The Plaintiffs obtained expert reports with respect to the issue of liability from Dr. Jon Barrett, obstetrician and gynecologist, Dr. Decarlo, pediatric neuroradiologist and Mr. Marrin maternal fetal medicine specialist. No reports with respect to the standard of care or causation were delivered by the Defendants. The medical reports prepared on behalf of the Plaintiffs conclude that Kenzie sustained neurological injury due to intra partum hypoxia-ischema. Dr. Barrett provided the opinion that Kimberley Bunch received substandard care during her pregnancy and delivery. Dr. Marrin concluded that it was more likely than not that Kenzie’s neurological problems are due to intrapartum hypoxia-iscehmia.
[11] The injuries sustained by Kenzie are permanent. Dr. Berbrayer, a specialist in physical medicine and rehabilitation provided an opinion with respect to Kenzie’s life expectancy. It is his opinion that her life expectancy is 65-70 years. The Defendants’ obtained a report prepared by Dr. Cohen, who provided the opinion that the life expectancy was between 35 – 60 years and that her epilepsy was a major prognostic factor. Colleen A. Weber of McKellar Structured Settlements advised that the actual assessment of a medical underwriter of Kenzie’s impairment rating is +43. Sun Life Assurance Company of Canada offered an impairment rating of +40 years for a structure.
[12] Kenzie turned 6 years old on June 7, 2021. She requires 24-hour care. At the present time her parents are providing most of the care. A Future Care Needs and Cost Analysis report was prepared on behalf of the Plaintiff; by Carol Beirbrier & Associates. She recommended a wheelchair accessible home. She also recommended that Kenzie have a personal support worker at 3 hours weekly until the age of 13 and then increasing incrementally until care is provided at 24 hours a day when she reaches 21.
[13] The Plaintiffs’ retained Professor Carr to prepare a report setting out the present value of the future care costs and economic losses. For the purpose of his report, he assumed a life expectancy of 65-70 years. He provided the opinion that the present value of the future care costs is in the range of $12,705,478.80–$12,784,215.02, which amount includes $746,579.33 for housing. The Defendants obtained a report from Douglas Hyatt. He assessed the future care needs as recommended by Angela Fleming who had been retained by the Defendants to assess Kenzie’s future care needs. His opinion was that the present value of the care costs was in the range of $1,067,252,16–4,928,545.56, based on life expectancy scenarios assuming a life expectancy to age 35, age 60 or age 47.5.
[14] Professor Carr also provided an opinion with respect to Kenzie’s loss of income. It was his opinion that the present value of the future loss of income was in the range of $1,922,117–2,749,028. He also concluded that the loss of an interdependent relationship is in the range of $438,722 to 702,349. He also calculated an annual guardianship expense with a present value of between $2,869.,021–3,091,611, and management fees in the amount of $753,316–811,780. Mr. Hyatt calculated the present value of the future income loss at $776,575-1,432,478. He did not provide an opinion with respect to the guardianship fees. He disputed an award for the loss of an interdependent relationship and commented that a management fee is not required if the future losses are structured.
[15] Kenzie’s parents, Kimberly and Jeffrey Bunch claim damages pursuant to the Family Law Act, R.S.O., c. F.3 for the loss of care guidance and companionship. They will be required to provide care and treatment to their daughter for the rest of her life.
[16] OHIP is pursuing a subrogated claim in the amount of $43,649.44 as of December 31, 2020. OHIP is also asserting a future subrogated claim in the amount of $1,003.60 annually.
[17] On January 7, 2021, the parties attended a private mediation. The parties agreed to settle the action, subject to court-approval, in the amount of $10,000,000 inclusive of claims interest and costs. The proposed allocation of the settlement is as follows:
a. $8,500,000 for the claims for Kenzie;
b. $182,500 for the FLA claim of Kimberley
c. $182,500 for the FLA claim of Jeffrey Bunch
d. $85,000 for the Ministry of Health’s subrogated interest
e. $905,000 for partial indemnity costs; and
f. $145,000 for disbursements.
[18] Bogoroch & Associates proposes to render an account to the Plaintiffs, in the amount of $3,136,500 inclusive of counsel fee, H.S.T. and disbursements. The breakdown of the fee is as follows:
a. $2,550,000 for Kenzie’s claim;
b. $331,500 for H.S.T.;
c. $145,000 disbursements; and
d. $109,500 for Kimberley and Jeffrey’s claims
[19] It is proposed that Kenzie’s net recovery will be as follows:
a. $5,550,000 to be placed in a structure with McKellar Structured Settlements Inc. which provides monthly payments from April 15, 2021 to April 15, 2031 in the amount of $13,341.41. On April 15, 2031, the monthly benefit increases at 1% compounded each year to life. The structure also provides for lump sum payments in the amount of $50,000 on March 15, 2028, March 15, 2042 and March 15, 2056;
b. $920,000 to be paid to the Accountant of the Ontario Superior Court of Ontario to the credit of Kenzie, subject to any further Order of the court;
c. $30,000 to be held in trust by Bogoroch & Associates LLP pending the determination of the amounts, if any, to be repaid to the Ministry of Finance/Ministry of Children. If any amounts are reimbursed, they will be paid by Bogoroch & Associates. If the amounts paid are less than $30,000, the remaining amount will be paid to the Accountant of the Superior Court of Justice for the benefit of Kenzie.
Analysis
[20] As a result of the acts or omissions of one or all of the Defendants, Kenzie sustained serious and permanent injuries. She is unable to walk or talk. She requires 24-hour care and will continue to require this level of care for the rest of her life. She has epilepsy which results in a reduction of her life expectancy.
[21] The proposed settlement allocates $6,500,000 to Kenzie. Of this amount, $5,550,000 will be structured. The structure will pay out, on a tax-free basis, the sum of $13,341.41 each month to April 15, 2031 at which point the monthly payment will increase at 1% compound each year to life. The structure will also pay out $50,000 on March 15, 2028, March 15, 2042 and March 15, 2056. The settlement also allocates a lump sum of $920,000 plus any amounts remaining after the Ministry of Finance/Children is reimbursed.
[22] I am satisfied that the allocation to Kenzie in the proposed settlement is fair and reasonable in all of the circumstances. I accept the submission of counsel for the Plaintiffs that this case involves a significant litigation risk. The Plaintiffs will be required to establish a breach of the standard of care and causation. Although the Defendants do not, to date, have expert reports on the issue of standard of care and causation, it is likely that if this matter does not settle that defence liability reports will be delivered. The proposed settlement provides certainty of a result. The settlement also allows Kenzie and her family to access the funds at the present time rather than wait for the uncertain outcome at a trial in 2-3 years’ time. As a result of the proposed structure, Kenzie and her family will have funds available to provide the care she needs now for her physical and cognitive development.
[23] I am also of the view that the proposed settlement is reasonable compensation based on the expert reports on damages. Kenzie’s life expectancy is a significant issue in this action. A wide range of life expectancy has been provided by the experts, from a low of 35 years by Dr. Cohen to a high of 70 years by Dr. Berbrayer. The proposed settlement takes into account the risk to the Plaintiffs that a lower life expectancy figure may be accepted by the court, which would result in a lower assessment for future claims. As noted by counsel for the Plaintiffs, if Kenzie lives to age 44, the structure will have paid out $7,475,611.00, which is $1,925,611.00 more than the principal amount. If she lives to age 65, the structure will have paid out $12,540,460 which is $6,990,460 more than the principal amount.
[24] Kenzie’s parents intend to bring a guardian application under the Children’s Law Reform Act. A draft management plan has been prepared on behalf of the parents by Goddard, Gamage LLP. The draft management plan provides for the purchase of a wheelchair accessible home along with the medical devise Kenzie will require for the rest of her life. Mr. and Mrs. Bunch intend to bring a guardianship application as the earliest possible opportunity to ensure the continuity of Kenzie’s care.
[25] I am of the view that the Property currently for sale appropriately provides for Kenzie’s needs. It is a wheelchair accessible home. The only renovation required is a lift between Kenzie’s bedroom and the bathroom. The Property is a home accessibility solution at a lower price than estimated by Mr. Baum in his Adapt-Able Home Accessibility report. It is in the interests of Kenzie and her family that the Property be purchased before it is sold to someone else. I approve the Plaintiffs’ purchase of the Property. I order that the amount necessary for the down payment for the purchase of the Property along with any ancillary fees and expenses, up to a maximum of $365,000, be paid out of the settlement amount allocated to Mr. and Ms. Bunch. Mr. and Mrs. Bunch will be entitled to seek reimbursement of the amount paid for the purchase of the Property from Kenzie following the determination of the motion for the Application for guardianship of property.
Disposition
[26] I make the following order:
a. The Plaintiffs’ motion for court approval of the proposed settlement in the amount of $10,000,000 inclusive, is allowed in part;
b. I approve the proposed settlement with respect to the amounts allocated to Kenzie, Mr. and Mrs. Bunch and OHIP;
c. I reserve with respect to the approval of the proposed counsel fee in the amount of $3,136,500; and
d. I approve of the purchase of the Property. Mr. and Mrs. Bunch shall pay the down payment for the purchase of the Property along with any ancillary fees and expenses from the amount of the settlement allocated to them. Mr. and Mrs. Bunch may seek reimbursement of the amount paid for the purchase of the Property from Kenzie, following the disposition of the Application for guardianship of property.
[27] I remain seized.
DATE: JUNE 14, 2021