In Fragomeni v. Ontario Corporation 1080486, Madam Justice Deena F. Baltman had to contend with a practical problem relating to Rule 49 offers to settle. Where there are several plaintiffs, can a defendant make an effective offer to settle to the group as a whole and leave it to the members of the group to decide how to share the amount offered? The answer in this case was, “Yes”.
The action was a slip and fall claim. The injured party and six of his family members were plaintiffs. The family members sued for damages under the Family Law Act.
The defendants offered to settle before trial, for $250,000 plus prejudgment interest and costs on a partial indemnity scale. At trial, the plaintiffs were awarded damages of only $112,316.79, so the offer was more than twice the recovery.
The defendants argued that Rule 49 should be applied and they should receive their costs from the date of the offer. The plaintiffs responded by saying that the offer was ambiguous because it did not specify how the money was to be allocated. But Justice Baltman rejected this contention:
There is no suggestion that a certain portion was specifically earmarked for Giuseppe Fragomeni [the injured plaintiff]. It is clear that the sum offered is intended to include all the plaintiffs. There is no ambiguity in the wording of this offer, nor was it misleading. The only rational conclusion from its wording is that it was a package offer for the plaintiffs to divide amongst themselves any way they saw fit. They rejected it not because it was confusing, but because they thought they could do better at trial. This is exactly what Rule 49.10 is intended to address.
It was apparent that the margin by which the defendants had beaten their offer was a factor in the court’s conclusion.
So, the plaintiffs were awarded their partial indemnity costs to the date of the offer and the defendanst were entitled to partial indemnity costs thereafter.