Court File and Parties

COURT FILE NO.: CV-2699-17

DATE: 2024/02/09

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: JOE HESCH, HAILEY CHRISTINA MARIE HESCH, by her Litigation Guardian, Joe Hesch, TRISTEN MATTHEW ALFRED KERR, by his Litigation Guardian, Mary Evans, ROBERT LAWRENCE EVANS, MARY EVANS and CURTIS WANT, Plaintiffs

AND:

GREGORY LANGFORD, PAFCO INSURANCE COMPANY and KENT AND ESSEX MUTUAL INSURANCE COMPANY

BEFORE: Heeney J.

COUNSEL: Sandi J. Smith, counsel, for the defendant Pafco Insurance Company (“Pafco”)

HEARD: February 8, 2024, in writing

ENDORSEMENT

[1] On January 31, 2024 I released Reasons for Judgment, in which I dismissed Pafco’s motion for contribution from Kent and Essex Mutual Insurance Company (“Kent”) toward the $950,000 all-inclusive settlement that Pafco negotiated and paid to the plaintiffs in full satisfaction of their claims. Pafco paid this amount because it was the insurer of Ashley Kerr, who died in a car accident on January 3, 2017. The defendant, Gregory Langford, was solely at fault for the accident and was uninsured. He did not defend the action personally and was noted in default.

[2] In these circumstances, Pafco was liable to pay the first $200,000 of the plaintiffs’ claims pursuant to the uninsured motorist coverage in their policy, and the remaining $750,000 pursuant to the OPCF 44R Family Protection Coverage in their policy, which included underinsured coverage.

[3] Pafco is subrogated to the plaintiffs’ rights, and accordingly I granted default judgment in Pafco’s favour against the defendant Langford for the full amount of the settlement, i.e., $950,000.

[4] Pafco now seeks a further judgment against the defendant Langford for its costs in defending the action on his behalf. I agreed to accept written submissions from counsel in that regard. The defendant Langford has no right to participate, since he has been noted in default, and no other parties have any interest in this issue. Accordingly, this endorsement is based upon the submissions of Pafco alone.

[5] In her written submissions, Ms. Smith, counsel for Pafco, has included a series of invoices which provide details of the costs that were incurred to defend the action. The first is dated February 15, 2019, in the amount of $3,441.98. It covers legal services from their first work on the file, January 8, 2018, to February 7, 2019. This account is reasonable and will be allowed in full.

[6] The next invoice is dated June 7, 2020, in the amount of $10,689.76, and covers services from February 22, 2019 to June 1, 2020. This included conducting discoveries, production, and extensive settlement negotiations. This account is also reasonable and will be allowed in full. That brings the costs, which Pafco is entitled to recover from the defendant Langford, to $14,131.74 to this point.

[7] The next invoice is dated December 22, 2021, in the amount of $9,032.30. This covers services from January 4, 2021 to December 21, 2021. Although the first few entries relate to finalizing the settlement and advancing settlement funds, the bulk of this account relates to the motion that Pafco chose to bring against Kent, seeking contribution toward the settlement.

[8] I arrive at this conclusion from reviewing the docket entries, but also because Pafco’s submissions included the Bill of Costs that they filed, outlining the costs they would be seeking if successful on their motion against Kent. The first item in that Bill relates to legal work done from January 4, 2021 to September 16, 2021. The rest of the Bill details work done up to the conclusion of the motion, December 12, 2023.

[9] The costs that Pafco would have been claiming against Kent, had they won the motion, amounted to $12,506 all inclusive. However, following submissions on the motion before me, counsel agreed that costs be payable to the winner, fixed at $10,000.

[10] Pafco lost the motion and was ordered to pay Kent its costs of $10,000. Pafco claims entitlement against the defendant Langford for that amount. In addition, Pafco claims the further sum of $10,000 from the defendant Langford, representing its own costs of the motion of $10,000. Adding these two amounts to the amount of the December 22, 2021 invoice, which they also claim reimbursement for, brings the total costs claimed by Pafco against the defendant Langford to $43,164.04.

[11] There are two problems with this. First of all, the invoice of December 22, 2021 mostly involves legal work on the motion, so it would be double recovery to allow recovery of that invoice as well as the additional sum of $10,000 representing Pafco’s costs of the motion.

[12] Secondly, these costs arose from Pafco’s decision to pursue contribution from Kent toward the settlement, alleging that Kent was liable to pay pursuant to the OPCF 44R Coverage in Kent’s insurance policy with the plaintiff Joe Hesch. In my Reasons for Judgment, I concluded that Pafco was wrong in their position, and Kent was not liable to contribute to the settlement.

[13] Bringing this motion was not a usual and necessary step in the course of defending the plaintiffs’ claims against the defendant Langford. It was, instead, purely an effort on the part of Pafco to have Kent share the cost of settling the plaintiffs’ claims. It was, as I characterized it in my Reasons for Judgment, a dispute between two insurers. This effort, I have found, was misguided and wrong in law.

[14] There is no basis to saddle the defendant Langford with responsibility for the costs wasted on Pafco’s unsuccessful motion against Kent. That includes both the costs incurred by Pafco itself, as well as the costs that Pafco was ordered to pay to Kent.

[15] The motion did include a request for default judgment against the defendant Langford, so a portion of the costs of the motion is recoverable. But that portion will be exceedingly small, because that part of the motion was uncontested, and submissions on the point probably took no more than a minute or two.

[16] It is also apparent that some of the time docketed in the December 22, 2021 invoice, specifically work done during the month of January, 2022, related to finalizing the judgment arising out of the settlement and advancing the funds.

[17] I am prepared to allow the sum of $2,000 in total for that work, which includes an allowance for the motion for default judgment against the defendant Langford. I otherwise deny any recovery for work reflected in the December 22, 2021 invoice, and all other costs associated with Pafco’s unsuccessful motion against Kent.

[18] Accordingly, Pafco shall have judgment against the defendant Langford for its costs of this action, fixed at $16,131.74.

Mr. Justice T. A. Heeney

Date: February 9, 2024