Ontario Court of Appeal upholds estate's right to full range of damages in a vehicle accident case

The decedent was pressured into accepting less favourable settlements concerning his tort claim

Ontario Court of Appeal upholds estate's right to full range of damages in a vehicle accident case

The Ontario Court of Appeal has vindicated the estate of the late Ivo Lepan, asserting the estate's right to pursue both pecuniary and non-pecuniary damages against the respondents.

In Lepan Estate v. Lofranco Chagpar Barristers, 2024 ONCA 110, the late Ivo Lepan was injured in a 2008 motor vehicle accident. He brought an action against the respondents, who had represented him in the ensuing motor vehicle litigation. He claimed they had improperly pressured him into accepting improvident settlements of his claim for statutory accident benefits and his claim for long-term disability benefits.

Lepan also alleged that these improvident settlements adversely affected the settlement of his tort claim and that the respondents improperly pressured him to accept an improvident settlement of the tort claim. Lepan’s lawyer, Karl Arvai, eventually settled the tort action for nearly twice the offer obtained by the respondents that Lepan rejected. Lepan died in 2017, and his estate continued the action.

The respondents attempted to disqualify Arvai as the estate's solicitor, arguing his direct involvement in the tort settlement made him a key witness. This motion was initially dismissed as premature, a stance upheld by the Divisional Court. Subsequent efforts by the estate to amend its statement of claim were not contested by the respondents, leading to an updated filing that preserved the estate's right to seek pecuniary and non-pecuniary damages.

The turning point came during the discovery process, with the respondents asserting that an earlier agreement confined the estate's damage claims solely to the long-term disability settlement. A motion judge initially supported this interpretation, but the Court of Appeal ultimately overturned that determination. The appellate judges clarified that the estate never waived its right to claim non-pecuniary damages for the alleged mishandling of both the accident benefits and tort claims.

The appellate decision was grounded in five key considerations. It underscored the estate's right to a wide array of damages, as clearly stated in the amended claim. It also pointed out the lack of a mutual understanding regarding the limitation of claims to the long-term disability settlement. The court criticized both parties for vague communications about the claims being pursued or dropped.

Additionally, the court indicated that the respondents' motion to remove Arvai misunderstood the essence of the estate's claims and their amendments. Furthermore, the court found no evidence of estoppel, noting the estate's absence of a definitive gesture to waive certain damages and the lack of consequential action by the respondents based on such a belief.

The court emphasized the principles of justice, affirming a plaintiff's right to proceed with claims as filed and to select their legal counsel freely. Ultimately, the court allowed the estate’s appeal, finding that the estate did not give up its non-pecuniary claims for the improvident settlement of the statutory accident benefits claims or for the respondents’ conduct concerning the proposed settlement of the tort action.

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