Court File and Parties

COURT FILE NO.: CV-20-0137-00A1 DATE: 2023-07-21

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Jeremy Czarneski, Michelle Czarneski, Marissa Czarneski and Jerick Czarneski, Plaintiffs v. Floating Lodges of Sioux Narrows Inc., Defendant v. Eric Schwartz, Third Party

HEARD: July 20, 2023, via Zoom BEFORE: Pierce J.

COUNSEL: Mr. T. Kaczmarczyk for the defendant, Floating Lodges of Sioux Narrows Inc. No one appearing for the other parties

Endorsement on Motion for Default Judgment

[1] In July of 2018, the plaintiffs were vacationing as guests on a houseboat owned by Floating Lodges and chartered by Mr. Schwartz. While disembarking the houseboat via a wooden gang plank, the plank broke and Jeremy Czarneski fell into the water, injuring his knee and foot. He sustained a ruptured patellar tendon and was transported via ambulance to the Kenora Hospital where he was stabilized. He then returned home to the United States where the tendon was surgically repaired.

[2] He used a wheelchair, crutches and a cane before he was able to walk unaided near the end of 2018. He undertook physiotherapy and was off work for 3.5 months at his family’s construction company.

[3] In addition to his physical injuries and out-of-pocket expenses, his family life was affected. Accordingly, a claim under the Family Law Act was also advanced.

[4] The plaintiffs settled their personal injury action against the defendant, Floating Lodges of Sioux Narrows Inc., for a total of $175,000.00 inclusive of disbursements, taxes and costs. They did not claim against Mr. Schwartz.

[5] In the course of the litigation, the defendant issued a third party claim against Eric Schwartz, who was personally served at his American residence on October 3, 2020.

[6] The third party claim sought contribution and indemnity to the extent of the plaintiff’s injuries based on the charter contract.

[7] As well, the claim alleges that Mr. Schwartz, as the chartering individual, was in full possession and control of the vessel, received a safety briefing from the defendant that included procedures for boarding and re-boarding the houseboat and operation of all safety equipment.

[8] The third party claim also alleges that Mr. Schwartz was negligent in monitoring his passengers, inspecting the wooden gang plank, advising the passengers about alternate means of accessing the houseboat, and failing to dock it safely.

[9] The plaintiffs state that at the time of the injury, July 3, 2018, the gang planks were improperly placed against the side of the houseboat at a much higher angle than intended, leading to the breakage of one plank, and Mr. Czarneski falling into the water from a greater height. The plaintiffs claim that Mr. Schwartz did not give them a safety briefing about the vessel.

[10] The third party claim came to the attention of Mr. Schwartz’s insurer. On December 9, 2020, Mr. Schwartz’s insurer advised counsel for the defendant and Mr. Schwartz that it would not offer a defence or provide insurance coverage.

[11] Counsel for the defendant wrote to Mr. Schwartz directly on February 12, 2021 advising that he needed to file a defence to the third party claim and if he did not do so, he was at risk of a default judgment. Counsel also asked Mr. Schwartz to advise if he intended to retain counsel in Ontario.

[12] Mr. Schwartz took no steps to defend the third party claim. He was noted in default on April 10, 2021.

[13] Rule 19.02(1)(a) of the Rules of Civil Procedure provides that a defendant who has been noted in default is deemed to admit the truth of all allegations of fact made in the statement of claim.

[14] Rule 19.09 enlarges the scope of the rule, with necessary modifications, to include third party claims. Under the modifications to the rule, a defendant may move against a third party for default judgment pursuant to Rule 19.05. However, under Rule 19.06, the facts must entitle the moving party to judgment.

[15] In this case, the defendant moved for default judgment before Justice W.D. Newton on September 22, 2022. Justice Newton dismissed the defendant’s motion for judgment in the amount of $175,000.00 without prejudice to its right to bring another motion on better evidence. Justice Newton determined, in his endorsement dismissing the motion,

… The material filed is insufficient to allow the court to properly assess damages. The only material produced to justify the damages claimed are the settlement proposal from counsel for the plaintiff in the global amount of $246,161.99, the ambulance call report, a seven-sentence report from a[n] orthopedic surgeon and some particulars of special damages.

[16] The defendant renewed its motion with a more fulsome record that includes the following:

a. the transcripts of the examinations for discovery of Jeremy Czarneski and Michelle Czarneski which include a description of Mr. Czarneski’s knee injury, his course of treatment, time off work, interference with his recreation, out-of-pocket expenses, effect on his relationship with his family, and allegations of negligence leading to his injury; b. releases upon final settlement; c. booking confirmation for the houseboat rental; d. charter boat agreement; e. plaintiffs’ settlement proposal; f. ambulance report; g. surgeon’s note; h. list of subrogated health care costs; i. summary of out-of-pocket expenses with receipts; and j. family doctor’s note.

[17] A bill of costs was also filed claiming fees and disbursements of $11,407.05 for the action and the motion which counsel submits may be rounded down to $10,000.00.

[18] The plaintiffs’ examinations for discovery establish a basis for a negligence claim against Mr. Schwartz and the charter boat agreement establishes that he agreed to indemnify the defendant against any claims made.

[19] Mr. Czarneski was 40 at the time of the injury. He was employed as a landscape and construction contractor. In April 2021, almost three years after the accident, plaintiffs’ counsel described the changes to Mr. Czarneski’s life as a result of his knee injury as follows:

a. he cannot engage in bowling, his major hobby; b. he cannot do activities that require kneeling; c. he descends stairs slowly and one at a time; d. he has difficulty lifting his leg to get into the passenger’s side of a truck; e. he is limited to more sedentary work; f. he has lost competitive advantage in the work force.

[20] The adult plaintiffs also described disruptions to their relationship that prompted them to seek counselling.

[21] The subrogated health claims of Ms. Czarneski’s health plan amounted to CAD $12,606 for out-of-pocket medical and treatment costs. As well, Mr. Czerniski has no health coverage for ambulance and hospital care in Kenora. These totalled $3,342.44.

[22] In addition to the evidence filed on this motion, the defendant filed a factum containing several judgments assessing similar knee injuries, adjusted for inflation depending upon when they were decided. I am satisfied that the amount claimed, $175,000.00, represents a reasonable assessment of the plaintiffs’ damages when general and special damages and Family Law Act claims for loss of care, guidance and companionship of family members are considered, as well subrogated health care costs and the plaintiffs’ costs.

[23] As well, the costs claimed against Mr. Schwartz for the action and the motion are reasonable. Justice Newton did not award costs of his motion and so I do not consider them.

[24] The defendant, Floating Lodges of Sioux Narrows Inc. shall have judgment against the third party, Eric Schwartz, in the amount of $175,000.00 as well as costs fixed at $10,000.00. Post judgment interest at 6% per year commences July 20, 2023. In addition to service of the default judgment, the defendant is ordered to serve a copy of these reasons on the third party. Order to issue accordingly.

“original signed by” The Hon. Madam Justice H.M. Pierce

DATE: July 21, 2023