Letting Sleeping Dogs Lie: A Risky Strategy

July 3, 2018 | Stephanie Massé

Background

In Nolin v. Résidence Sainte-Claire inc.[1], Ms. Nolin (“Plaintiff”) filed an action in the amount of $100,000.00 as against Residence Sainte-Claire (“Residence”) which arose out of a slip and fall, on its premises. A default judgment was rendered against Residence following its failure to respond to the summons to appear in Court within the fifteen days set out in the Quebec Code of Civil Procedure.

Shortly thereafter, Residence brought a Motion seeking to set aside the default judgment.

Residence argued that the Plaintiff’s attorney had lacked professional courtesy by not having warned the claims adjuster retained by Residence’s insurer that the Plaintiff was seeking to obtain a default judgment against it.

Superior Court Judgment

The claims adjuster had been in regular contact with Plaintiff’s attorney prior to the proceedings being filed into Court. She had asked the Plaintiff’s attorney for an extension to complete her investigation and to determine Residence’s insurer’s position on liability. The adjuster never followed through.

To justify her lack of response to the Plaintiff’s attorney, the adjuster explained that she had adopted the “let sleeping dogs lie” approach, to avoid encouraging the claim to move forward.

The Court held that the adjuster had intentionally refrained from making any progress regarding the Plaintiff’s claim even though the adjuster was well aware that Plaintiff’s counsel’s was impatiently awaiting Residence’s position on liability, and was seriously contemplating filing an action against Residence.  The Court added that in light of her actions, the adjuster was in no position to allege a lack of professional courtesy.

In these circumstances, the Court dismissed Residence’s motion to set aside the default judgment. The Court, through Justice Moore, went so far as to deem the adjuster’s behaviour as abusive, and ordered that legal costs be paid to the Plaintiff.

Conclusion

This case emphasizes the risks associated with refraining from action in the hopes that a claim will not move forward. If a court deadline is missed in this type of situation, a Quebec judge will likely consider that the insured or its insurer has failed to act reasonably, and will refuse to set aside a default judgment. While it may at times be tempting to neglect dormant claims, insurers and adjusters should avoid adopting a “let sleeping dogs lie” approach.  This strategy may prove to be very risky, and ultimately cost the client its rights, especially once an action has been issued.  Conversely, this risky strategy may very well pay off, however, only in particular circumstances where adequate precautions are taken in order to be kept abreast on the service of proceedings in light of the strict timing requirements of the Quebec Code of Civil Procedure.


[1] 2018 QCCS 1931 (CanLII)

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