Goshulak v. Nguyen, 2011 ABQB 346

Court of Queen ’ s Bench of Alberta Citation: Goshulak v. Nguyen, 2011 ABQB 346 Date: 20110527 Docket: 0501 02882 Registry: Calgary Between: Shaun Goshulak, Crystal Gail Girletz, Jessie Girletz, an infant by his next friend, Crystal Gail Girletz Plaintiffs - and - Thao Van Nguyen and Thuan Van Nguyen Defendants _______________________________________________________ Memorandum of Decision of Jodi L.

Mason, Master in Chambers _______________________________________________________ Introduction [ 1 ] Shaun Goshulak, Crystal Girletz and Jessie Girletz commenced an action against Thao Van Nguyen and Thuan Van Nguyen relating to a motor vehicle accident that occurred on March 1, 2003. The Statement of Claim was filed and served in early 2005. In April, 2005, the defendants’ insurer requested updated medical information and settlement proposals from the plaintiffs’ counsel.

The plaintiffs’ counsel did not make contact with the defendants’ insurer until August, 2010, although in the intervening period plaintiffs’ counsel had obtained some medical information. Once contact was made, the defendants’ insurer referenced dismissal for long delay. The plaintiffs’ counsel responded by noting the defendants in default. The defendants apply to dismiss the action for long delay. [ 2 ] For the reasons that follow, the action is dismissed for long delay.

Rules 4.33 and 15.4 [ 3 ] Rule 4.33 directs the court to dismiss an action where two or more years have passed since the last thing that significantly advanced the action. This time period is a reduction from the five year period referenced in former Rule 244.1. [ 4 ] There is a specific bridging provision for the shorter time period contained in Rule 4.33. Rule 15.4 provides that dismissal for long delay will be triggered either by the balance of time left under the five year time period or two years from the coming into force of the rules, whichever comes first.

The parties agree that Rule 15.4 governs this application. It states: 15.4(1) Unless subrule (2) applies, the Court, on application, must dismiss the action against the applicant if (

a) after the coming into force of this rule, 2 years has elapsed since the last thing done to significantly advance the action, or (b) 5 years has elapsed since the last thing done to significantly advance the action, whichever comes first. 15.4(2) The Court must not dismiss the action if (

a) the parties to the application agreed to the delay, (

b) the action has been stayed or adjourned by order or an order has extended the time for doing the next thing in the action, or (

c) an application has been filed or proceedings have been taken since the delay and the applicant has participated in them to the extent that, in the opinion of the Court, warrants the action continuing.

Chronology of action [ 5 ] The accident occurred on March 1, 2003. [ 6 ] On April 22, 2003, the plaintiffs’ counsel (not counsel on this application) advised the defendants’ insurer that he had been retained to handle the plaintiffs’ claims regarding the accident. [ 7 ] On January 10, 2005, the plaintiffs’ counsel provided medical information to the defendants’ insurer. [ 8 ] The statement of claim was filed on February 23, 2005 and served on March 17, 2005. The defendants did not advise their

insurer that they had been served with a claim. [ 9 ] On April 26, 2005, the defendants’ insurer wrote to counsel for the plaintiffs and requested updated medical information and settlement proposals. No response was received. The defendants’ insurer conducted a courthouse search in July 2005 that apparently did not disclose the statement of claim filed earlier that year.

The insurer erroneously assumed that the plaintiffs were not pursuing an action for their alleged injuries and closed the file. [ 10 ] On May 18, 2006, a legal assistant employed by the plaintiffs’ counsel contacted the plaintiffs to request receipts to substantiate portions of their claims, made contact with settlement lenders to ascertain the outstanding value of any loans, and contacted a doctor to determine whether the plaintiffs had any outstanding accounts. [ 11 ] On September 25, 2006, the plaintiffs’ counsel wrote to the plaintiff, Crystal Gerlitz to request an update of her condition and treatment and that of her son, in order to commence settlement negotiations.

No response was received. Counsel wrote to Ms. Gerlitz again on February 27, 2007, but the correspondence was returned. [ 12 ] Over two years later, on August 25, 2009, the plaintiffs’ counsel instructed an articling student to assess the file so that a settlement offer could be prepared. The student and his assistant attempted to call Ms. Girletz on August 25, 2009 and September 11, 2009, to no avail. He made a note that if he could not reach her, he would go ahead and do the assessment without her information. [ 13 ] The student also prepared letters to Ms.

Girletz dated August 26, 2009 and October 13, 2009, requesting an update as to her condition and treatment. Again, the evidence before the court does not indicate any response was obtained from Ms.

Girletz. [ 14 ] The plaintiffs’ counsel went ahead and completed preliminary damage assessments on February 14, 2010, presumably based on the existing information in his possession or that he was otherwise able to obtain without updated contact with the plaintiffs. [ 15 ] Later in February 2010, an assistant began to take steps to identify the insurance adjuster for the defendants so that a settlement meeting could be scheduled. [ 16 ] On February 26, 2010 a legal assistant was instructed to “find out who the defence adjuster is and

schedule a settlement meeting week of March 1”. The assistant called the “old adjuster’s number” and left a message to call. She made a note that she was “trying to find out who the adjuster is on the file”. It is not clear whether the legal assistant received a call back, but in any event, there is a record of a further call made on March 19, 2010 by another assistant.

She spoke to“Linda @ Allstate” who advised that no adjuster was assigned to the file, but she was able to supply a claim number. [ 17 ] Upon receiving this information, the plaintiffs’ counsel did not further pursue a settlement meeting with the insurers, by requesting that an adjuster be assigned, or otherwise. [ 18 ] On April 19, 2010, counsel received an list of chiropractic attendances by the plaintiff, Ms. Gerlitz, indicating two visits in August, 2008. Counsel also received a treatment chart relating to Ms. Gerlitz on April 22, 2010. Counsel met with Ms.

Gerlitz on April 28, 2010 to discuss pursuing settlement. [ 19 ] He made a note to the file on July 21, 2010 indicating that it was still necessary to make further attempts to reach the Plaintiffs and that it was his intention to have a student contact the defence adjuster to attempt to solicit a settlement offer. [ 20 ] On July 26, 2010, an employee at his office contacted Ms. Gerlitz to obtain an update as to her status so that settlement could be attempted. According to the notes of that discussion, Ms.

Girletz indicated that all her medical information had been supplied and her doctor had “signed off” long ago. She had expected a settlement “ a long time ago” and provided instructions to “settle with what we have on the file”.

[ 21 ] On August 5, 2010, an articling student called the defendants’ insurer and left a message inquiring into the name of the assigned adjuster. A representative of the insurer returned the call that day and indicated that he would assign an adjuster and then call back. [ 22 ] On August 13, 2010, Steve Harrison, an employee of the defendants’ insurer, called the student. He requested a copy of the statement of claim and confirmation it had been served, and referenced the “5 year drop dead rule”. [ 23 ] By August 17, 2010, Mr. Harrison had not yet received the statement of claim and affidavit of service.

He wrote to plaintiffs’ counsel and confirmed his request. [ 24 ] On August 20, 2010, counsel for the plaintiffs left Mr. Harrison a voice mail message indicating that the statement of claim and affidavit of service were coming, and further that there was a standstill agreement in place. Counsel did not mention, however, that he intended to or had noted the defendants in default. [ 25 ] Mr. Harrison reviewed the file materials but did not locate any standstill agreement.

His review also disclosed that no settlement discussions had taken place, no affidavits of records had been filed and no discoveries had taken place or were scheduled. [ 26 ] Upon receiving the statement of claim and affidavit of service, Mr. Harrison forwarded the file to counsel on August 23, 2010 with instructions to apply for a dismissal of the action. That counsel conducted a court house search on September 3, 2010 and discovered that the defendants had been noted in default on August 20, 2010.

The affidavit of the plaintiffs’ counsel is silent as to any standstill agreement. [ 27 ] Counsel for the defendants filed this application a few days later, on September 7, 2010.

Summary of position of the parties [ 28 ] The defendants submit that the last thing done that significantly advanced the action was the service of the statement of claim on the defendants on March 17, 2005 and that therefore the action must be dismissed pursuant to Rule 15.4. [ 29 ] The plaintiffs submit that the action has been significantly advanced since the service of the statement of claim in two ways: first, by the gathering of medical records and preparation of damage assessments by plaintiffs’ counsel; and second, by noting the defendants in default. Further, the plaintiffs argue that their efforts to identify the assigned adjuster falls within Rule 4.33(1)(

c) and therefore their claims are not subject to dismissal for long delay. Gathering of medical records and preparation of damage assessments [ 30 ] The plaintiffs submit that because a statement of defence was not filed, they were led to believe that the only “live” issue in this action was the quantum of damages suffered. Therefore, they argue that the gathering of medical records and the preparation of assessments of the claims were “things” which significantly advanced the action. [ 31 ] The plaintiffs rely on Phillips v.

Sowan , 2006 ABQB 579 , 31 C.P.C. (6 th ) 112, aff’d 2007 ABCA 101 , 40 C.P.C. (6 th ) 378. There, the plaintiff had noted the defendant in default and was in the process of gathering evidence to prove its damages claim, which included obtaining medical reports and an economic report. The Administrator of the Motor Vehicle Accident Claims Fund, who had conduct of the action, had requested this information and was aware by way of correspondence during the five year period that such material was being gathered.

The Queen’s Bench and the Court of Appeal confirmed that the gathering of this information materially advanced the action in the circumstances and declined to dismiss the action for long delay.

[ 32 ] Eidsvik J. considered Phillips v. Sowan in her decision in Top Grade Solutions Inc. v. Flying Pizza 73 Inc ., 2009 ABQB 492 , 480 A.R. 181. She distinguished Phillips v. Sowan on the basis that the defendants in the case before her did not know at the time that the information was being gathered. [ 33 ] On the facts before her, Eidsvik J. found Brooker J.’s decision in Howard v. Calgary Police Service , 2001 ABQB 904 , 302 A.R. 266 to be applicable. In that case, the plaintiff gathered medical evidence and compiled a voluminous diary and overview of his housekeeping and recreational abilities.

However, there was no evidence that the defendants had any awareness or input into this project. Brooker J. found that the gathering of this information did not materially advance the action. [ 34 ] In Schulze v. Whitby Business Development Corp ., 2009 ABQB 163 , Hanebury (M.C.) held that from a functional perspective, the material advancement of an action involves both parties to the action.

She reasoned that while only one party may be doing the “behind the scenes” collection of information, the other party must have at least some knowledge that this is occurring for the action to be materially advanced (at paragraph 30). [ 35 ] Similarly here, while the plaintiffs’ counsel took steps to gather special damages information in May 2006 and prepared at least preliminary damage assessments in February 2010, the plaintiffs do not suggest, and in any event, there is no evidence that the defendants or their insurer were aware that this was being done. Further, unlike in Phillips v.

Sowan , the noting in default that occurred in this case did not precede the steps taken by the plaintiffs toward damages. There is no evidence that the plaintiffs ever demanded a defence. There is no admission of liability. The plaintiffs acknowledge there is no standstill agreement. [ 36 ] In these circumstances, just as in Top Grade Solutions Inc . v. Flying Pizza 73 Inc. , Howard v. Calgary Police Service , and Schulze v. Whitby Business Development Corp , this gathering of information and preparation of damage assessments did not significantly advance this action toward trial.

There is a five year period from March 17, 2005 to March 17, 2010 where no thing was done to significantly advance the action. Noting the defendants in default [ 37 ] In Nelson v. Emsland , 2008 ABCA 387 , 440 A.R. 297 at paragraph 9 , the Court of Appeal of Alberta confirmed its adoption of the approach to applications for long delay in its reserved decision in Trout Lake Store Inc. v. Canadian Imperial Bank of Commerce , 2003 ABCA 259 , 330 A.R. 379 at paragraph 33 , as follows: 1. The proceedings should be examined as at the date of the application to dismiss for want of prosecution pursuant to Rule 244.1. 2.

If at any time in the action there has been a gap of five years or more where no “thing” has been done to materially advance the action, the judge shall examine what has occurred since that five-year gap. 3. If the delaying party has not done a thing to materially advance the action since the five-year gap, the action shall be dismissed, absent agreement to the delay. 4. If the delaying party has done a thing to materially advance the action after the five year gap, and the other party objected and applied for a dismissal, the action shall be dismissed, absent any agreement to the delay. 5.

If the delaying party has done a thing to materially advance the action after the five-year gap, and the applicant has participated in that thing, continued to participate in the action, or otherwise acquiesced in the delay, the action shall continue, and the application for dismissal refused.

[ 38 ] The parties made additional submissions following the hearing to address the treatment by Alberta courts of things done by the delaying party after a five year period of inactivity. [ 39 ] Alberta decisions have consistently followed the approach of Trout Lake Store Inc. v. Canadian Imperial Bank of Commerce in this regard: see for example: D.S. v. Alberta , 2005 ABQB 677 , 385 A.R. 165 at paragraph 13 ; K. v. Casely , 2006 ABQB 396 , 400 A.R. 73 at paragraph 10 ; Kapicki v.

Kapicki , 2010 ABQB 615 at paragraph 18 . [ 40 ] In contrast, counsel for the plaintiffs was not able to supply any Alberta decision subsequent to Trout Lake Store Inc. v. Canadian Imperial Bank of Commerce that denied an application to dismiss for long delay on the basis of a thing done by the delaying party after a five year gap, that the defendant did not participate or acquiesce in. [ 41 ] I would further note that the Court of Appeal’s approach to a thing done by the delaying party following a five year period of inactivity is now reflected in Rule 15.4(2)(

c) and Rule 4.33(1)(d). [ 42 ] Here, the thing done after the five year period of inactivity was noting the defendants in default. There is no evidence that a defence was ever required, and the plaintiffs’ counsel took this step without notifying the defendants’ insurer, after having advised that there was a standstill agreement in place. The plaintiffs have brought forward no evidence of any standstill agreement. Upon discovering the defendants were noted in default, the defendants’ insurer promptly filed this application for dismissal for long delay.

Even if the noting in default could be viewed as significantly advancing the action under the circumstances in which it was done, the defendants and their insurer did not participate or acquiesce in the noting in default. There was no agreement to the delay. According to Rule 15.4 and the approach set out by the Court of Appeal in Trout Lake Store Inc. v. Canadian Imperial Bank of Commerce , the action must be dismissed.

Inquiring into the matter with the defendants’ insurer [ 43 ] The plaintiffs submit that their attempts to contact the defendants’ adjuster in February and March, 2010 fall within Rule 4.33(1)( c ), which states: 4.33(1) If 2 or more years has passed after the last thing done that significantly advanced an action, the Court, on application, must dismiss the action against the applicant, unless ... (

c) the applicant did not respond to a written proposal by the respondent that the next thing in the action not occur until more than 2 years after the last thing done that significantly advanced the action... [ 44 ] Rule 4.33(1)(

c) does not apply to this application. Rule 15.4 governs and it does not include the equivalent provision. I would also note that at any time following the service of the statement of claim, the plaintiffs could have pursued a standstill agreement under former Rule 243.1, or made a proposal affecting the pace or timing of the action under former Rule 243.2. Neither option was pursued. [ 45 ] The plaintiffs’ further argue in their subsequent submissions that the defendants could not rely on their own delay in making this application.

They assert that the defendants’ insurer did not respond to telephone calls, which resulted in the five year period running out. [ 46 ] As noted, following the service of the statement of claim on March 17, 2005, no attempt was made by the plaintiffs’ counsel to communicate with the defendants or their insurer until February 26, 2010, when a legal assistant called the old adjuster’s number and left a message. That attempt apparently did not elicit a response, which is not surprising given the long standing dormancy of the matter.

Another legal assistant made a second call to the insurer on March 19, 2010 and was advised that no adjuster was currently assigned to the file, again not surprising under the circumstances. The insurer did, however, supply a claim number. No further efforts were made by

the plaintiffs’ counsel to reach an adjuster until August 5, 2010, nearly five months later, which call ultimately led to this application. The delay in this matter cannot be visited on the defendants under the circumstances. Conclusion [ 47 ] There is a five year period in which nothing was done to significantly advance this action, from March 17, 2005 to March 17, 2010. When the defendants learned they had been noted in default, they objected and brought this application on a timely basis. The action is dismissed for long delay pursuant to Rule 15.4. Heard on the 11 th day of April, 2011.

Dated at the City of Calgary, Alberta this 27 th day of May, 2011. Jodi L. Mason M.C.C.Q.B.A. Appearances: Allstate Legal Services Rodney Wareham for the Defendants Field LLP Stacey L. Lee-Szott for the Plaintiffs