



COURT OF APPEAL FOR ONTARIO

CITATION: Maio v. Kapp Contracting Inc., 2022
    ONCA 196

DATE: 20220309

DOCKET: C69098

Fairburn A.C.J.O., Thorburn and
    Favreau JJ.A.

BETWEEN

Joe Maio and Lidia Maio

Plaintiffs (Respondents)

and

Kapp Contracting Inc.
, Mer Mechanical
    Inc. and

The Corporation of the City of
    Vaughan

Defendants

and

Lori Morris Design Inc., B.K. Consulting Inc.,

Amati Plumbing Supply Ltd. and
Horus S.A.S.

Third Parties (
Appellant
)

and

Ross H.
    Barber & Associates

Fourth Party

Dana Eichler and Erin L. Crochetiere,
    for the appellant

Michael R. Kestenberg, for the
    respondents

Heard: March 3, 2022 by video
    conference

On appeal from the order of Justice Sean
    F. Dunphy of the Superior Court of Justice, dated January 13, 2021, with
    reasons reported at 2021 ONSC 304.

REASONS FOR DECISION

[1]

In 2010, the respondents, Joe and Lidia Maio, brought
    an action against three defendants arising from damage caused by a flood. The
    defendants in the action crossclaimed against one another and issued third-party
    claims, including against the appellant, Horus S.A.S. In turn, the third
    parties issued a fourth-party claim.

[2]

In 2017, the respondents settled the action against
    one of the defendants, the City of Vaughan (the City). As part of the
    settlement, the respondents and the City entered into a
Pierringer
Agreement. The
Pierringer
Agreement included the following term:

THE PLAINTIFFS AND THE SETTLING DEFENDANT
    AGREE AND CONSENT to the dismissal of the action commenced in the Superior
    Court of Justice at Toronto under Court File No.: CV-10-410508 (the Action)
    on a without costs basis as against the Settling Defendant.
It is understood
    and agreed that, should the Plaintiffs so choose, the Plaintiffs may continue
    to pursue their claims against the Remaining Defendants, but that such claim
    will only be pursued solely with respect to the several liability of the
    Remaining Defendants
. [Emphasis added.]

[3]

Following the settlement, the respondents
    obtained an order from Myers J. that dismissed both their claim against the
    City and the remaining defendants crossclaims against the City (the Order). The
    Order included a term that the respondents were to amend their statement of
    claim to restrict their claims against the remaining defendants to each
    defendants several liability.

[4]

The respondents subsequently agreed to a
    dismissal of the claim against one of the two remaining defendants, Kapp
    Contracting Inc. (Kapp). The only remaining defendant to the action is Mer
    Mechanical Inc. (Mer).

[5]

At the direction of the pre-trial judge, the
    motion judge heard a motion under r. 21 of the
Rules of Civil Procedure
,
    R.R.O. 1990, Reg. 194, to determine the effect of the
Pierringer
Agreement and the Order on the third- and fourth-party claims.

[6]

In his decision, the motion judge rejected the
    appellants argument that the
Pierringer
Agreement and the Order precluded
    Mer from pursuing its third-party claims. In doing so, the motion judge
    reasoned that the Order has no bearing on Mers ability to seek contribution
    from third parties for any damages Mer is required to pay:

The plaintiffs did not sue those third or fourth
    parties and will never receive a judgment in its favour naming them. The main
    action  the one that the plaintiffs are a party to  is not concerned with
    determining the degree of responsibility of any of those third and subsequent
    parties for the damages allegedly suffered by the plaintiffs. That is the
    object of the third and fourth party claims which are quite unaffected by the
    order of Myers J.

If Mer is found liable for any amount in the
    main action, it may succeed in pinning all -or - none of that liability on
    those behind it in the chain in the third party claims. The questions are quite
    distinct from each other.

[7]

We see no error in the motion judges reasoning
    and conclusion. While the
Pierringer
Agreement and the Order prevent
    the respondents from recovering damages against Mer that may be attributable to
    the City or to Kapp, this in no way affects Mers ability to seek contribution
    from the appellant. This conclusion is well supported by the wording of the Order,
    which only addresses the limits on the respondents ability to recover against
    Mer; it does not circumscribe or limit Mers ability to recover from the
    appellant or any other third or fourth parties.

[8]

While the motion judge did not specifically
    refer to any case law dealing with this issue, nor was he required to, his
    decision is consistent with this courts decision in
Endean v. St. Joseph's
    General Hospital
, 2019 ONCA 181, where the court dealt with a similar
Pierringer
Agreement. In
Endean
, the court explained the general rule that plaintiffs
    are entitled to recover one hundred percent of their damages from any
    tortfeasor who is found liable for damages, even if other tortfeasors are also
    responsible for the same damages. A tortfeasor can then avoid paying all damages
    by making crossclaims or third-party claims. The court explained that the
    effect of a
Pierringer
Agreement must be understood in the context of
    these principles. As the court held, at para. 52, the purpose of a Pierringer
    Order is to facilitate a settlement between a plaintiff and a defendant who
    wishes to settle (a settling defendant), while maintaining a level playing
    field for the remaining (non-settling) defendant against whom the plaintiff
    wishes to proceed to trial.

[9]

Accordingly, a
Pierringer
Agreement that
    limits a plaintiffs ability to recover for the several liability of remaining
    defendants does not limit a plaintiffs recovery to only those damages directly
    attributable to the remaining defendants. Rather, unless the agreement is
    specifically worded otherwise, the effect of such an agreement is to ensure
    that the plaintiff does not recover any damages attributable to the defendant
    released in the
Pierringer
Agreement.

[10]

In this case, at the time the respondents and
    the City entered into the
Pierringer
Agreement, everyone was aware
    that there were third- and fourth-party claims. As is typical when parties
    enter into
Pierringer
Agreements, and as discussed in
Endean
,
    the concern was to ensure that the plaintiff could not recover damages
    attributable to the City from other parties. Otherwise, the settlement would be
    prejudicial to the remaining defendants  and, by extension, to the third and
    fourth parties  because they would be unable to recover any damages
    attributable to the City from the City through crossclaims. However, there is
    no basis for finding that the parties to the
Pierringer
Agreement
    intended to reduce the respondents damages to those that could only
    specifically be attributed to the remaining defendants, which by now is only
    Mer. The appellant was not a party to the agreement and there is no basis for
    finding that the
Pierringer
Agreement and the Order were meant to
    benefit the appellant, nor any other third or fourth parties, in this way.

[11]

The appellant argues that the motion judge erred
    in failing to follow this courts decision in
Taylor v. Canada (Health)
,
    2009 ONCA 487
.
It is worth noting that
Taylor
did not involve a
Pierringer
Agreement. As the court explained in
Endean
, at
    para. 66,
Taylor
involved a unique situation where the plaintiff
    intended to avoid any third-party claims by only seeking damages attributable
    to the defendant. This is not the case here. By entering into the
Pierringer
Agreement, the respondents sought to settle their claim against the City and to
    pursue their claims against the remaining defendants. There is no evidence that,
    by doing so, they intended to recover only those damages specifically
    attributable to the remaining defendants, thereby releasing all third and
    fourth parties from any potential liability.

[12]

The appellant further argues that the motion
    judges reasons are insufficient. We disagree. The motion judge was asked to address
    a discrete issue, namely the effect of the
Pierringer
Agreement and the
    Order on the third- and fourth-party claims. The motion judge rejected the appellants
    argument in clear and succinct reasons. The basis for his decision is readily
    understandable. He was not required to address every argument made by the
    appellant.

[13]

Accordingly, we dismiss the appeal.


[14]

Pursuant to the agreement between the parties,
    the respondents are entitled to costs of $25,000, all inclusive.

Fairburn
    A.C.J.O.

J.A.
    Thorburn J.A.

L.
    Favreau J.A.


