Withdrawing Deemed Admissions

When will a party be permitted to withdraw deemed admissions arising from the failure to respond to a Request to Admit?

In Epstein Equestrian Enterprises Inc. v. Cyro Canada Inc., 2012 ONSC 4653 (S.C.J.), the plaintiff served a Request to Admit eleven days before trial was scheduled to begin in 2010.  Trial was adjourned initially for one week and then again until 2012.  One of the defendants, Jonkman, failed to respond to the Request to Admit.  Rule 51.02(1) provides that a party is deemed to admit the contents of a Request to Admit if it does not respond to it within 20 days after it is served.  Jonkman sought to either set aside the Request to Admit or to withdraw the admissions.

Justice Morgan held that even though the Request to Admit was not served 20 days before trial, once the trial was adjourned and did not start for 20 days, the deeming provision applied. The main issue therefore centred on whether Jonkman was entitled to withdraw its admissions. The court may grant leave to withdraw the admissions if the following conditions are met:

1. The proposed change raises a triable issue;
2. There is a reasonable explanation for the change of position; and
3. The withdrawal will not result in any prejudice that cannot be compensated for in costs. (citing Antipas v. Coroneos, 1988 CarswellOnt 358)

Justice Morgan permitted the admissions to be withdrawn. At the time the Request was served, Jonkman was basically without legal representation as its counsel was in the process of being removed from the record. It had instructed counsel not to respond to the Request to Admit.  It subsequently brought a coverage application and was now being defended by an insurer.  The plaintiff supported the coverage application and must have understood that if coverage was achieved, a defence would be pursued. Jonkman's new counsel and insurer were unaware of the Request Admit and it would be unable to defend itself if the admissions stood.  The coverage application had been settled, and Justice Morgan speculated that the insurer's position may have been different had it known that Jonkman had effectively deprived itself of a defence by failing to respond to a wide ranging Request to Admit.

Justice Morgan was of the view that any prejudice to the plaintiff would not be inordinate as a trial would have been needed to canvas issues with the co-defendant in any event. The plaintiff further argued it was prejudiced as it had entered into a Pierringer Agreement with the remaining defendants and was concerned Jonkman would attempt to pin liability on those parties at trial. Justice Morgan held that the plaintiff had previously assumed Jonkman was insolvent when it entered the settlement and so this factor was to the plaintiff's benefit not prejudice.  The admissions were withdrawn.

Action Dismissed for Failing to Comply with Municipal Act Notice Requirement

Argue v. Tay (Township), 2012 ONSC 4622 (CanLii)

A municipality was recently successful in having a case dismissed based on the failure of the plaintiff to comply with s. 44(10) of the Municipal Act.  The section requires written notice be given to the clerk within ten days of the incident.  Section 44(12) provides that the failure to give notice can be excused if the plaintiff has a reasonable excuse and the defendant is not prejudiced by the lack of notice.

In Argue v. Tay (Township), the plaintiff alleged she sustained soft tissue injuries in a motor vehicle accident caused by potholes in the defendant municipality's road.  She provided written notice through her lawyer almost two years after the incident.  By that time, the surface of the road had changed materially.  The plaintiff argued the municipality had either actual or constructive knowledge of the accident as the municipal volunteer fire department attended the scene and would have received a copy of the police report.  The municipality brought a summary judgment motion seeking to have the action dismissed for failing to comply with the Municipal Act notice requirement.

DiTomaso J. held the plaintiff did not comply with the notice requirements.  Section 44(10) requires written notice be given to the clerk and the fact that the fire department attended or may have received a copy of the police report was insufficient to comply with the section.  There is no support in the jurisprudence that actual or construction notice pre-empts the requirement to give written notice to the clerk, and the section cannot be dispensed with in favour of notice to a different municipal department.

The plaintiff had no reasonable excuse for the failure to give notice.  She was discharged from hospital the same day as the accident, had no broken bones and was able to return to work two to three weeks after the accident.  She was aware people could bring lawsuits and believed the state of the road contributed to the accident, yet took no steps to inform herself about the law.  She was physically and mentally able to instruct counsel. 

The municipality had been prejudiced by the lack of notice.  There is a presumption of prejudice where notice has not been provided and the plaintiff bears the onus of showing there was no prejudice.  She failed to do so.  Neither she nor the municipality had photos or measurements of the road, the condition of the road had changed materially since the accident and the municipality had lost the opportunity to interview witnesses.  As a result, summary judgment was granted.

Argue is a useful summary of the relevant authorities relating to s. 44(12). Those defending municipal claims with notice issues should consider whether it would be useful to bring a summary judgment motion in the circumstances.

Labor Secretary Solis appoints new permanent Member to ECAB

Hopefully boding well for OWCP claimants, on July 2, 2012 Patricia Howard Fitzgerald was appointed as one of the three permanent Members of the Employees’ Compensation Appeals Board by Secretary of Labor Hilda L. Solis. Prior to her appointment she was a staff attorney for the American Postal Workers Union where, since 2004, she advised the Director of Industrial Relations on matters concerning the negotiation and enforcement of the APWU/USPS national collective bargaining agreement. She also handled matters pertaining to the National Labor Relations Act, Family and Medical Leave Act, Privacy Act, and USERRA.

Earlier in her career, she was an associate attorney at Zwerdling, Paul, Kahn & Wolly, P.C., where she litigated cases on behalf of employees, labor organizations, and professional associations in various labor and employment law matters. She was also awarded a law fellowship at the Service Employees International Union where she assisted with litigation, legislative initiatives, and union organizing campaigns.

Judge Fitzgerald holds a Bachelor of Science degree in Industrial and Labor Relations from Cornell University and a Juris Doctor degree from The Catholic University of America, Columbus School of Law. She is a member of the Maryland and District of Columbia Bars.

This appointment is a step toward creating some balance to a Board still dominated by Bush appointees selected for their management / employer orientation and political fundraising prowess.

Appeals Court holds that threats by landlord on premises is not invasion of the right of private occupancy of the premises

James Freedman leased property to Encarnacion and her husband. Encarnacion used the property for an auto body shop.  When she fell behind on her rent Freedman made threatening and harassing phone calls to Encarnacion, including "threatening to have his wife come to the premises and beat her up."  He also harassed and threatened her on the premises.

Encarnacion feared for her safety and began to suffer from anxiety attacks for which she received medical treatment. 

Encarnacion filed suit against Freedman, seeking a restraining order and alleging negligent and intentional infliction of emotional distress and interference with business relations.

Freedman sought coverage from his commercial liability insurer, USL, asserting that the claim came within the policy's coverage for personal and advertising injury because it alleged invasion of the right of private occupancy of the premises.  USL denied coverage.

In Freedman v. U.S. Liab. Ins. Co., 82 Mass App. Ct. 331 (2012), the court noted that in the underlying complaint Encarnacion did not complain of Freedman's appearance on her premises as landlord, or deny his right to be there.  Therefore, the complaint was not for an invasion of the right of private occupancy.

Rather, the complaint was based on Freedman's harassing and threatening behavior while on the premises.  Without going into details, the court held that the complaint came within the exclusion for actions made by or at the direction of the insured "with the knowledge that the act would violate the rights of another and would inflict 'personal and advertising injury.'"

Interested in another perspective . . .

. . . on insurance coverage issues?

Dennis Wall, a solo practitioner in Florida, has an excellent blog called Insurance Claims and Issues.  He discusses both liability and medical insurance issues, and recent case law from around the country.