Chiarella v. Klymok, 2011 ABQB 814

Court of Queen ’ s Bench of Alberta Citation: Chiarella v. Klymok, 2011 ABQB 814 Date: 20111222 Docket: 0503 13563 Registry: Edmonton Between: Angelo Chiarella Plaintiff - and - Kevin Klymok, Sally Tymcayszyn, Alberta Treasury Branches, and Alberta Treasury Branches Operating As ATB Financial, Andrew P. Geisterfer, River City Law Group, Noralta Real Estate Inc. and Noralta Real Estate Inc. Acting as Royal LePage Noralta Real Estate, Ward Fleming and Ryan Pearson Defendants _______________________________________________________ Memorandum of Decision of the Honourable Mr.

Justice Peter Michalyshyn _______________________________________________________ [ 1 ] On May 5, 2011 the Plaintiff Angelo Chiarella entered into an agreement with the Defendant Andrew P. Geisterfer, River City Law Group, and Andrew P. Geisterfer acting as River City Law Group (“Geisterfer”) settling Geisterfer’s alleged liability to the Plaintiff. The settlement is conditional on the Plaintiff applying successfully for an order: (

a) allowing amendments to the Statement of Claim removing Geisterfer and all but one of the remaining defendants; (

b) dismissing certain notices of contribution and indemnity; and (

c) discontinuing the action against all but one of the remaining defendants on a without costs basis. For reasons which follow the Plaintiff’s application is dismissed.

[ 2 ] The application was opposed by the defendant Alberta Treasury Branches operating as ATB Financial ( “ ATB ” ). ATB argues that I should consider the Plaintiff ’ s application only if the May 5, 2011 agreement is a Pierringer agreement. ATB argues further that if a Pierringer agreement, it is only between the Plaintiff and Geisterfer. As such, I should consider no relief on behalf of those defendants not party to the purported agreement. ATB argues further that the Plaintiff ’ s proposed amendments to the Statement of Claim are deficient.

Finally, ATB argues that owing to the loss of procedural rights around disclosure and questioning I should refuse to grant the application or at least should make an order restoring those procedural rights. [ 3 ] ATB is entirely correct that the May 5, 2011 agreement is not a Pierringer agreement. The May 5, 2011 agreement lacks the essential ingredient of an indemnity clause or covenant by the Plaintiff, as required by Amoco v. Propak Systems Ltd., 2001 ABCA 110 at paragraph 16 . Either the indemnity clause or the covenant must be in the agreement the Plaintiff wishes to characterize as a Pierringer agreement.

The covenant cannot be implied by the fact the proposed amended Statement of Claim leaves only allegations against ATB. [ 4 ] ATB is also correct that I cannot make an order regarding the remaining defendants if only because they are not party to the alleged Pierringer agreement. As with the defendant Geisterfer, there is some evidence before me that these remaining defendants have settled with the Plaintiff.

There is no evidence however that those settlements are Pierringer agreements in form or substance. [ 5 ] The Plaintiff argues that whatever the alleged shortcomings with the May 5, 2011 agreement, as a ‘ practical matter ’ I should recognize the settlements with Geisterfer and with the remaining defendants and allow them to be extracted entirely from the action. The Plaintiff cites the strong policy considerations in favour of settlement as cited in Amoco and in the new Rules of Court . Amoco however does not dictate settlement at all costs.

It sets out a clear and complete code for settlement of some but not all parties to an action based on a proportionate share settlement agreement. It balances the interests of settling and non-settling parties. An essential part of that balance is the clear and unequivocal indemnity or covenant that “ ...limit[s] the liability of the non-settling party to its several liability ” . [ 6 ] The Plaintiff argues that at trial the court may take into account the proposed settlements and will have the opportunity to award damages against ATB only for its own liability.

That argument misses the point that a Pierringer agreement gives ATB certainty in that regard. Nothing is left to the imagination at trial. [ 7 ] As to ATB ’ s notices of contribution and indemnity, the Plaintiff argues the court should not hesitate to dismiss them on the basis they are ineffective in any event because there is no right of contribution and indemnity as between ATB and Geisterfer or any of the remaining defendants. [ 8 ] ATB objects that this argument was raised for the first time in Chambers and does not appear in the Plaintiff ’ s brief.

And on the merits, ATB says its notices of contribution and indemnity are perfectly valid. Negligence having been alleged against it, ATB argues that other defendant tortfeasors can be called on to answer for their own alleged liability to the Plaintiff. The Plaintiff responds in part by arguing the other defendants are not tortfeasors. The parties do not agree on that point, however.

No evidence was before me characterizing the various causes of action alleged against the numerous defendants. [ 9 ] The application before me is not the time or place and lacks the necessary evidence and materials to adjudicate the validity of ATB ’ s notices of contribution and indemnity. Those notices are valid until set aside on the appropriate application by the proper parties. [ 10 ] Given my findings, it is unnecessary to deal with ATB ’ s objections to the form of proposed amended Statement of Claim.

Likewise, it is unnecessary to address whether in the face of a valid Pierringer agreement I am entitled to make an order protecting some or all of ATB ’ s procedural rights in the action going forward. [ 11 ] The Plaintiff ’ s application is dismissed. Success on the application is entirely with ATB. If the parties are unable to agree, costs may be spoken to.

Heard on the 20 th day of December, 2011. Dated at the City of Edmonton, Alberta this 21 st day of December, 2011. Peter Michalyshyn J.C.Q.B.A. Appearances: Brian S. Sussman, Q.C. Biamonte Cairo & Shortreed LLP for the Plaintiff Douglas N. Tkachuk Reynolds, Mirth, Richards & Farmer LLP for the Defendant, Alberta Treasury Branches