by Sandra Weber, Partner, McLennan Ross LLP
In our March 23rd, 2009 update, we reported on a B.C. Court of Appeal decision which deducted a settlement amount from the trial damages. The Ontario Court of Appeal has now followed suit in Laudon v. Roberts [2009] O.J. No. 1824.
The plaintiff Laudon was injured in a boating accident and as a result sued both his driver, Sullivan, and the driver of the other boat, Roberts.
Prior to trial, Roberts settled with Laudon pursuant to a Mary Carter agreement and thereby paid the plaintiff $365,000.00. Laudon continued with the case and went to trial against Sullivan. At trial, the jury assessed Laudon's total damages at $312,021.00. The jury apportioned liability at 50% to Roberts and 39% to Sullivan with an assessment of 11% contributory negligence against the plaintiff.
At trial, the judge granted the plaintiff judgment against Sullivan for the sum of $121,688.00 based on Sullivan's liability of 39%. The judge had ruled earlier in the trial that the plaintiff did not have to deduct the undisclosed settlement amount from any damages that were ultimately awarded. The trial judge maintained that position after the judgment was granted and Sullivan appealed.
On appeal, the Court of Appeal found that based on the principle that plaintiffs are not entitled to double recovery, the plaintiff did have to deduct his settlement amount from the damage award. As a result, Sullivan did not owe anything to the plaintiff and in fact, the plaintiff was directed to pay Sullivan's costs. It has been suggested that those costs will be in the hundreds of thousands of dollars which may ultimately leave the plaintiff with nothing notwithstanding that a jury decided his claim was worth over $312,000.00.
The court stated that “The plaintiff's total damages have been assessed by a jury at $312,000.00 which is less than the amount he received from Roberts, the contracting defendant. To permit the plaintiff to recover any amount from Sullivan would result in double-recovery to the plaintiff. I am satisfied that the law in this country is well-settled. Double recovery, save in a few narrow exceptions which have no application to the facts here, is not permitted.”
In the end, the non-settling defendant got the benefit of what was in the result a very good settlement achieved by the plaintiff with the settling defendant.
Although there has been an indication by plaintiff counsel that they may be considering an appeal to the Supreme Court of Canada, we note that leave to appeal the B.C. Court of Appeal decision that we earlier reported on, was denied.
We will provide a further update in the event there is an application ultimately made to the Supreme Court.
This Alert is a general overview of the subject matter and cannot be regarded as legal advice. Please contact Alexis Moulton or Dave Risling, or any other member of our Insurance Practice Group for further advice on this or any other Insurance Law matter. |
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