Lynne Boulanger sued The Great West Life Assurance Company for disability benefits, damages for mental distress, and punitive and aggravated damages.  The case was settled at the conclusion of a one-day mediation conducted February 21, 2008, and both parties signed a written settlement agreement.

Notwithstanding the settlement agreement, Ms. Boulanger refused to sign a release or to consent to the dismissal of the action.  Since the settlement agreement did not specifically refer to her claims for mental distress and punitive and aggravated damages, she alleged that she had not agreed to settle those claims, and sought to continue her action with respect to the claims for mental distress and punitive damages.

On a motion by Great West Life to enforce the settlement agreement, Mr. Justice Maranger granted an order dismissing Ms. Boulanger’s action, and this order was upheld in a recent decision of the Ontario Court of Appeal.

The Court of Appeal took note of the fact that Ms. Boulanger was represented by counsel throughout the mediation, and that she personally signed the settlement agreement at the conclusion of the mediation.  After that agreement was executed, Ms. Boulanger accepted benefit payments provided to her by Great West Life under the terms of settlement.  Those benefits were never returned to Great West.

The settlement agreement expressly provided that Ms. Boulanger was to deliver “a release of all claims under this Policy up to today’s date”.  The settlement agreement did not exempt any of Ms. Boulanger’s claims for mental distress or for punitive damages.  According to the motions judge, the language of the settlement agreement was clear and left no room for doubt.  He stated that references to the release of “all claims” and to the “dismissal of the action” were unequivocal, and the Court of Appeal agreed.

In a second ground of appeal, Ms. Boulanger argued that counsel representing her at the mediation did not have her authority to agree to the terms of settlement.  Since there was no evidence that any limitation of authority regarding Ms. Boulanger’s lawyer was ever communicated to Great West Life or its representatives, and in fact there was no evidence that any such limitation existed, the Court of Appeal did not accept this ground of appeal.

On a motion to enforce the terms of a settlement agreement, the judge can refuse to enforce the agreement if he concludes that the circumstances of the case or the interests of justice demand it.  The motions judge declined to exercise his discretion in favour of the plaintiff, however, and the Court of Appeal refused to interfere with that decision.  The appeal was therefore dismissed.

Under the terms of the settlement agreement, Ms. Boulanger was called upon to execute a release of all claims under the insurance policy in a form “reasonably satisfactory to counsel for both sides”.  Counsel agreed on a form of release, but Ms. Boulanger repeatedly declined to sign it.  Mr. Justice Maranger refused the defendant’s request for an order enforcing the parts of the settlement agreement requiring a release from the plaintiff, and Great West submitted a cross-appeal from this portion of the motion judge’s decision.

The motion judge did not provide any reasons for his decision to refuse enforcement of the release provisions of the settlement agreement.  Given his conclusions regarding the enforceability of the settlement agreement, the Court of Appeal concluded that Great West was entitled to relief concerning the release.

The Court of Appeal did not order Ms. Boulanger to sign a release, however.  Instead, it varied the motion judge’s order by adding a paragraph stating that the dismissal of the action was an absolute bar to any subsequent proceedings by the plaintiff against the defendant, or by the plaintiff against any entity that could claim contribution or indemnity from Great West with respect to the claims raised in the action.

Richard Hayles, B.A., J.D.

Link: Boulanger v. Great West Life Assurance Company, 2011 ONCA 20

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