Court File and Parties
COURT FILE NO.: CV-15-530202
DATE: 20210726
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: NEGAR IRIVANI-FARD, ROSALYN ERENA MAGPILE, personally and as Litigation Guardian for ARIS SEAN FOROUTAN and SHAGHYEGH FOROUTAN Plaintiffs
AND:
SOON YEAR LEE and CHUNG SUK LEE Defendants
BEFORE: Mr. Justice Chalmers
COUNSEL: T. Radimiss for the Plaintiffs
R. Sugar, for the Defendants
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.
[2] This action arises out of a motor vehicle accident that occurred on August 15, 2013. Sean Foroutan was operating his motorcycle northbound on Willowdale Ave. in Toronto. The Defendant, Soon Year Lee made a left hand turn in front of Mr. Foroutan and struck the motorcycle. Mr. Foroutan died as a result of the accident. It is alleged by the Defendants that Mr. Foroutan was exceeding the speed limit at the time of the accident.
[3] The Plaintiff, Rosalyn Erena Magpile was the longtime girlfriend/fiancé of Mr. Foroutan. At the time of the accident she was seven months pregnant. The minor Plaintiff, Aris Sean Foroutan was born on October 18, 2014. Although he did not know his father, it is reported that he has suffered from sadness and frustration as a result of the passing of his father. He has not required any counselling or treatment.
[4] His mother, Ms. Magpile consented to act as Litigation Guardian on his behalf. On January 16, 2017 Ms. Magpile entered into a Contingency Fee Agreement with Jewell Radimisis Jorge LLP. The agreement provides that the firm will charge 33% of the settlement award exclusive of any taxes on legal fees and disbursements and applicable taxes on the disbursements. The firm later agreed to reduce the contingency fee with respect to the minor Plaintiff’s claim from 33% to 30%.
[5] Ms. Magpile and the minor Plaintiff, Aris Foroutan brought this action seeking damages for the loss of care, guidance and companionship pursuant to section 61 of the Family Law Act, R.S.O. 1990, c. F.4, arising out of the death of Mr. Foroutan. The Plaintiffs also sought damages for the loss of dependency that they would have reasonably expected to receive if his death had not occurred. The deceased’s sister, Shaghayegh Foroutan and mother, Negar Irivani-Fard also sought damages for the loss of care, guidance and companionship. Ms. Foroutan and Ms. Irivani-Fard are represented by separate legal counsel.
[6] At mediation, the parties agreed to settle the action, subject to the approval of the Court, in the amount of $440,000 inclusive of claims, including the subrogated interest of the Ministry of Community and Social Services, interest, costs, disbursements and HST. The settlement is set out in Minutes of Settlement executed on May 5, 2021. The breakdown of the settlement is as follows:
(a) The minor Plaintiff is to receive the net sum of $69,492.07 for damages for loss of care guidance and companionship and out of pocket expenses and pre-judgment interest. This is calculated:
$89,993.90 gross for his claim inclusive of pre-judgment interest;
Less 30% plus HST for the contingency fee in the amount of $30,507.93;
Plus the legal costs from the settlement in the amount of $10,006.10.
(b) Ms. Magpile is to receive the net sum of $175,904.49 for damages for loss of care, guidance and companionship and out of pocket expenses and pre-judgment interest. This is calculated:
$250,092.37 gross for the claims including pre-judgment interest;
Less 33% plus HST for the contingency fee in the amount of $93,259.44;
Plus legal costs recovered from the settlement in the amount of $34,073.65,
Less the outstanding account of Promed Rehabilitation Clinic in the amount of $500;
Less the subrogated interest of the Ministry of Community and Social Services, in the amount of $14,502.09.
(c) Disbursements in the amount of $55,833.98.
[8] Counsel for the Plaintiffs approves of the settlement. She states that there were significant liability issues, given the allegations the deceased was speeding at the time of the accident. The damages for loss of care guidance and companionship are reduced by the contributory negligence attributed to Mr. Fortouna. Ms. Magpile also swore an affidavit in which she states that she believes the settlement is reasonable and is in the best interests of the minor Plaintiff. She approves the settlement.
Analysis
[9] I do not have sufficient information to allow me to approve the proposed settlement at this time.
[10] The Plaintiffs are seeking damages for loss of dependency. I suspect the Plaintiffs obtained an expert report with respect to this issue. This report was not included with the motion materials. I direct the Plaintiffs to provide a copy of all expert reports prepared with respect to this action.
[11] The settlement of the minor Plaintiff’s claim involves the payment to counsel pursuant to a contingency fee agreement.
[12] A contingency fee agreement is not binding on a party under disability until the agreement receives approval by the court. The fee agreement was not approved by the court before it was finalized and therefore the agreement must now be reviewed as part of the court approval process: Solicitors Act, R.S.O. 1990, c. S.15, s. 5(1). The agreement may be enforced only if it is in all respects fair and reasonable between the parties: Solicitors Act, s. 24.
[13] In determining whether the agreement is fair and reasonable, the court is to follow a two-step process. First, the fairness of the agreement is assessed as of the date it was entered into. The second step is to determine the reasonableness of the agreement as of the date of the hearing: Henricks-Hunter v. 81488 Ontario Inc. (Phoenix Concert Theatre), 2012 ONCA 496 at para. 20.
[14] Ms. Magpile entered into the contingency fee agreement on January 16, 2017. The agreement provides that Ms. Magpile confirms that she understood the terms of the agreement. The agreement conforms with the provisions of the Solicitors Act. I am satisfied that the agreement was fair as of the date it was entered into.
[15] The total fees to be paid to Jewell Radimisis Jorge LLP is $123,767.37. With respect to the reasonableness of the fee at the time of the hearing, counsel advises that 230.2 hours were docketed with respect to the prosecution of this action. Based on the hourly rates of the persons who worked on the file, the value of the docketed time is $57,085. Although the dockets were not provided with the motion, counsel states that her firm expended a great deal of time and resources on the file including bringing the motion for court approval, multiple Examination for Discoveries preparation and attendance on a mediation, witness interviews, telephone conferences with outside parties and experts. The docketed time spent by the professional staff is a relevant factor to determine the reasonableness of the agreement. I am of the view that the contingency fee agreement of 30% for the minor Plaintiff was reasonable as of the date of the hearing.
[16] The amount claimed for disbursements is $55,833.98, inclusive of HST. The Plaintiffs attached a list of disbursements to the motion material. The list is incomplete. The total disbursements on the list provided is $1,775.50. I direct that the Plaintiffs provide the complete disbursement list.
Disposition
[17] I adjourn this matter for 14 days to allow the Plaintiffs to file the expert reports and the complete disbursement list.
[18] I remain seized.
DATE: JULY 26, 2021