HYATT v. BRIHANTE, 2011 ONSC 4480

CITATION: HYATT v. BRIHANTE, 2011 ONSC 4480 COURT FILE NO.: CV-06-311619 MOTION HEARD: July 21, 2011 SUPERIOR COURT OF JUSTICE - ONTARIO RE: Jamal Hyatt and Isabel Lutchman v. Stephanie Brihante BEFORE: MASTER R.A. MUIR COUNSEL: William G. Scott for the plaintiffs Michael J. T. Best for Coachman Insurance Company REASONS FOR DECISION [ 1 ] The plaintiffs bring this motion pursuant to Rule 5.04 of the Rules of Civil Procedure , R.R.O. 1990, Reg. 194 (the “Rules”) for an order granting them leave to amend their statement of claim to add Coachman Insurance Company (“Coachman”) as a party defendant.

BACKGROUND [ 2 ] This action arises out of a motor vehicle accident which took place on August 27, 2004. [1] It appears that the plaintiffs were travelling eastbound on Steeles Avenue in the City of Brampton when they were struck from behind by a vehicle owned and operated by the defendant. The police report from the accident indicates that the defendant was uninsured at the time. The plaintiff Jamal Hyatt was insured by Coachman.

The plaintiffs now wish to claim against Coachman pursuant to the uninsured motorist provisions of Jamal Hyatt’s policy of insurance. [ 3 ] The plaintiffs initially retained the law firm of Girones & Associates (“Girones”) to represent them in connection with this claim. On August 15, 2005 Girones wrote to Coachman seeking information from Coachman with respect to certain accident benefits paid to the plaintiff Isabel Lutchman.

On October 5, 2005, Girones wrote to Coachman again, this time placing Coachman on notice of the fact that the defendant was uninsured at the time of the accident and that the plaintiffs intended to make a claim under Jamal Hyatt’s policy of insurance with Coachman. In response to this letter, Coachman wrote to Girones on October 12, 2005 and stated as follows: We are in receipt of yours dated October 5, 2005 in which you advise the Third Party vehicle driven by Stephanie Brihante had no insurance. Our company did confirm the vehicle had a valid policy with Traders General Insurance under policy #20037245.

Their insured’s name on the policy is Luis Brihante. We made a Third party report to Traders General. The broker is D.A. Kurt Insurance Brokers at 1-800-339-9935 and we understand an adjuster at their office was assigned the claim. [ 4 ] After receiving this information, Girones wrote to Traders General Insurance (“Traders”) on December 8, 2005, referencing the policy information provided by Coachman, and placed Traders on notice of the accident and the plaintiffs’ potential claims.

Traders did not respond to this letter. [ 5 ] The statement of claim in this action was issued on May 18, 2006 and named only Stephanie Brihante as a defendant. Coachman

was not named as a defendant presumably because of the advice received from Coachman to the effect that Stephanie Brihante was insured at the time of the accident and the lack of any information to the contrary from Traders. The statement of claim was then served on the defendant sometime thereafter. [ 6 ] In October, 2006 the plaintiffs retained the firm of Gillis Zago P.C. (“Gillis”) to act on their behalf in connection with this claim. Gillis immediately requested the plaintiffs’ file from Girones but the file was not received by Gillis until May 8, 2007.

For reasons which are not explained in the evidence before the court on this motion, Gillis did nothing to move this matter forward between May, 2007 and July, 2008. On July 9, 2008, Gillis wrote to Girones and advised that the accident report indicated that the defendant had no insurance and questioned why no action was commenced against Coachman.

Girones responded to this letter on July 14, 2008 and apprised Gillis of the defendant’s insurance information that had been provided by Coachman in October, 2005. [ 7 ] The court’s Case History Report applicable to this action indicates that Gillis delivered a notice of change of lawyers on August 1, 2008. On the same day Gillis had the defendant noted in default and filed a trial record. [2] [ 8 ] Again, very little appears to have been done between August, 2008 and the spring of 2010.

Trial dates were fixed for October 19, 2009 and March 8, 2010, but both were adjourned. [ 9 ] On April 1, 2010, Gillis wrote to Traders enclosing copies of the statement of claim and Girones letter to Traders dated December 8, 2005.

This letter advised Traders that a further trial date had been set for September 20, 2010 to assess the plaintiffs’ damages and that the plaintiffs would be looking to Traders for payment of any judgment that may be granted. [ 10 ] Traders responded to Gillis’ April 1, 2010 letter on April 14, 2010 and advised Gillis that Traders did not insure Stephanie Brihante, or the motor vehicle in question, at the time of the accident. They had previously insured Stephanie Brihante but that policy was cancelled on December 14, 1998.

This letter also acknowledged that Traders had neglected to advise Girones of this information when he first notified Traders of the potential claim in December, 2005. This motion was then brought to add Coachman with an initial return date of October 19, 2010 and was subsequently adjourned to July 21, 2011. THE POSITIONS OF THE PARTIES [ 11 ] The plaintiffs take the position that they did not discover their claim against Coachman until April 14, 2010 when Traders advised Gillis that Stephanie Brihante was, in fact, uninsured at the time of the accident.

Until that date they had been proceeding on the assumption that Traders was her insurer in accordance with the advice their lawyer had received from Coachman and the fact that no contrary information had been received from Traders. Only upon being advised of the defendant’s lack of insurance in April, 2010 did the plaintiffs discover that they had an uninsured motorist claim against Coachman. Consequently, the two year limitation period set out in the Limitations Act, 2002 , S.O. 2002, c. 24, Sch.

B (the “ Limitations Act ”) has not yet expired and will not do so until April, 2012. [ 12 ] Coachman argues that the plaintiffs were aware of the fact that the defendant was uninsured as early as October, 2005 when Girones wrote to Coachman placing it on notice of a potential uninsured motorist claim. Coachman takes the position that despite its own advice to the plaintiffs that the defendant was in fact insured, the plaintiffs should have done more to confirm this information and done so in a timely manner.

As a result, Coachman argues that the plaintiffs have failed to add Coachman as a party defendant within the time limits allowed by the Limitations Act . Coachman argues that the plaintiffs’ delay has resulted in prejudice to Coachman. ANALYSIS [ 13 ] The relevant provisions of the Limitations Act provide as follows: 1. In this Act, “claim” means a claim to remedy an injury, loss or damage that occurred as a result of

an act or omission; . . . Basic limitation period 4. Unless this Act provides otherwise, a proceeding shall not be commenced in respect of a claim after the second anniversary of the day on which the claim was discovered. . . . Discovery 5.

(1) A claim is discovered on the earlier of, (

a) the day on which the person with the claim first knew, (

i) that the injury, loss or damage had occurred,

(ii) that the injury, loss or damage was caused by or contributed to by

an act or omission, (iii) that the act or omission was that of the person against whom the claim is made, and (iv) that, having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it; and (

b) the day on which a reasonable person with the abilities and in the circumstances of the person with the claim first ought to haveknown of the matters referred to in clause (a). [14] Rule 5.04(2) provides as follows:

(2) Adding, Deleting or Substituting Parties - At any stage of a proceeding the court may by order add, delete or substitute a party orcorrect the name of a party incorrectly named, on such terms as are just, unless prejudice would result that could not be compensated forby costs or an adjournment. [15] The principles applicable to motions to add parties in circumstances such as this are set out in the decisions of Master Dash inWong v. Adler, (ON SC), [2004] O.J. No. 1575 (S.C.J. – Master); affirmed, (ON SCDC), [2005]O.J. No. 1400 (Div. Ct.) and Wakelin v. Gourley, (ON SC), [2005] O.J.

No. 2746 (S.C.J. – Master); affirmed, [2006]O.J. No. 1442 (Div. Ct.). [16] At paragraph 45 of Wong, Master Dash states as follows: 45 What is the approach a judge or master should take on a motion to add a defendant where the plaintiff wishes to plead that thelimitation period has not yet expired because she did not know of and could not with due diligence have discovered the existence of thatdefendant?

In my view, as is clearly implied in Zapfe, the motions court must examine the evidentiary record before it to determine ifthere is an issue of fact or of credibility on the discoverability allegation, which is a constituent element of the claim. If the courtdetermines that there is such issue, the defendant should be added with leave to plead a limitations defence.

If there is no such issue, asfor example where the evidence before the motions court clearly indicates that the name of the tortfeasor and the essential facts thatmake up the cause of action against such tortfeasor, were actually known to the plaintiff or her solicitor more than two years before themotion to amend, the motion should be refused. If the issue is due diligence rather than actual knowledge, this is much more likely toinvolve issues of credibility requiring a trial or

summary judgment motion, provided of course that the plaintiff gives a reasonableexplanation on proper evidence as to why such information was not obtainable with due diligence.

That is not to say that such motioncould never be denied if the evidence is clear and uncontradicted that the plaintiff could have obtained the requisite information with duediligence such that there is no issue of fact or credibility. [17] In Wakelin, at paragraphs 14 and 15, Master Dash discusses the nature of the evidence required on motions such as this: 14 The question is how much evidence must the plaintiff put in at the pleadings amendment stage to establish that the proposeddefendants could not have been identified with due diligence within the limitation period? The short answer is: not very much.

As statedby the Court of Appeal in Zapfe: "In most cases one would expect to find, as part of a solicitor's affidavit, a list of the attempts made bythe solicitor to obtain information to substantiate the assertion that the party was reasonably diligent" and provide "an explanation forwhy she was unable to determine the facts." 15 Therefore, as long as the plaintiff puts in evidence as to steps taken to ascertain the identity of the tortfeasors and gives a reasonableexplanation on proper evidence as to why such information was not obtainable with due diligence then that will be the end of the enquiryand the defendants will normally be added with leave to plead a limitations defence.

This is not a high threshold. If the plaintiff fails toprovide any reasonable explanation that could on a generous reading amount to due diligence the motion will be denied. If the plaintiffputs in evidence of steps taken but the proposed defendant also provides evidence of further reasonable steps that the plaintiff could havetaken to ascertain the information within the limitation period then the court will have to consider whether the plaintiff's explanationclearly does not amount to due diligence.

If there is any doubt whether the steps taken by the plaintiff could not amount to due diligencethen this is an issue that must be resolved on a full evidentiary record at trial or on

summary judgment. The strength of the plaintiff'scase on due diligence and the opinion of the master or judge hearing the motion whether the plaintiff will succeed at trial on thelimitations issue is of little or no concern on the motion to add the defendants. The only concern is whether a reasonable explanation as todue diligence has been provided such as to raise a triable issue. [18] I have considered and applied these principles to the evidence before me on this motion and have come to the conclusion that thisis an appropriate case in which to grant leave to the plaintiff to add Coachman as a party defendant.

I agree with counsel for Coachmanthat the passing of a limitation period is fatal to a motion under Rule 5.04(2). See Joseph v. Paramount Canada’s Wonderland, 2008ONCA 469 at paragraphs 23 and 25. However, it is my view that it is far from clear that any applicable limitation period has expired. [19] It is clear from the evidence that the plaintiffs, through their counsel, were aware of the possibility that they may have to claimagainst their own insurer as early as October, 2005. Indeed, they specifically put Coachman on notice of this potential claim.

Theplaintiffs chose not to pursue such a claim only when they were advised by Coachman itself, erroneously as it turns out, that thedefendant was insured at the time of the accident. Moreover, the notice letter the plaintiffs’ lawyer sent to Traders in December, 2005was never responded to by Traders. In my view it was perfectly reasonable for the plaintiffs to assume that the information on theaccident report regarding the defendant’s lack of insurance was inaccurate.

This is especially so given the very specific and definitiveinformation in Coachman’s October 12, 2005 letter and the fact that Traders did not deny the existence of such coverage. When theGillis firm took over the file, and after having reviewed its contents, they too were concerned about the defendant’s possible lack of

insurance coverage. However, those concerns were assuaged when the Girones firm advised Gillis of what they had been told by Coachman. In my view, there is sufficient evidence, for the purposes of this motion, to support the plaintiffs’ position that it was not until their lawyer received Traders’ letter of April 14, 2010, definitively stating that it did not insure the defendant, that the plaintiffs discovered that they had a potential claim against Coachman.

In my view, the plaintiffs have more than satisfied the relatively low evidentiary burden placed upon them on this motion. [ 20 ] The question of whether the plaintiffs should have done more to confirm the information received from Coachman, or whether they should have pursued Traders with greater diligence, are not issues of concern on this motion. I only need to be concerned with whether a reasonable explanation as to due diligence has been provided, such as to raise a triable issue. I am satisfied that it has.

CONCLUSION [ 21 ] The plaintiffs are therefore granted leave to add Coachman as a party defendant and to amend their statement of claim accordingly. Coachman shall have leave to plead a limitation defence, if so advised. The materials filed by the plaintiffs do not appear to contain a draft amended statement of claim. The plaintiffs shall prepare a draft amended statement of claim which shall be appended to the formal order arising from these reasons and which draft order shall be approved as to form and content by counsel for Coachman. The formal order shall be submitted to me for signing.

COSTS [ 22 ] At the conclusion of the argument of this motion, the parties agreed that the successful party or parties would be entitled to the costs of this motion on a partial indemnity basis. The costs outline filed by Coachman seeks costs of $5,186.31 had it been successful. The plaintiffs’ costs outline seeks costs of $4,024.50. Under the circumstances, it is fair and reasonable that Coachman pay the plaintiffs’ costs of this motion on a partial indemnity basis, fixed in the amount of $4,000.00, inclusive of HST and disbursements, payable within 30 days. __________________________ Master R.A.

Muir DATE: July 21, 2011