Geico Gen. Ins. Co. v Class 1 Transp. (2015 NY Slip Op 50679(U))

Appeal from an order of the Civil Court of the City of New York, Queens County (James E. d’Auguste, J.), entered March 22, 2013, deemed from a judgment of the same court entered August 22, 2013 (see CPLR 5501 [c]). The judgment, entered pursuant to the March 22, 2013 order granting defendants’ motion for summary judgment, dismissed the complaint.

ORDERED that the judgment is reversed, without costs, the order entered March 22, 2013 is vacated, and defendants’ motion for summary judgment is denied.

Plaintiff Geico General Insurance Company (Geico) commenced this subrogation action against defendants Class 1 Transport and Laurel E. Stone to recover the sum of $6,330.60, representing the amount paid for property damage to, and loss of use of, the subrogors’ vehicle as a result of an accident involving that vehicle and defendants’ vehicle. The complaint alleged that the accident was due to the negligence of defendants in the ownership, operation, maintenance, management and control of their vehicle. Prior to the commencement of this action, Geico had paid first-party no-fault benefits to its insured, and had sought to recoup those benefits from Daily Underwriters of America (DUOA), defendants’ insurer, pursuant to Insurance Law § 5105, through mandatory loss-transfer arbitration conducted by Arbitration Forums, Inc. (AFI). The AFI arbitrator determined that Geico was not entitled to recover from DUOA because Geico had not demonstrated any negligence on the part of DUOA’s insureds. As Geico had not proven liability, no damages were awarded.

After issue was joined in this action, defendants moved for summary judgment dismissing the complaint on the ground that the AFI arbitrator’s decision precluded plaintiff, based on collateral estoppel, from litigating this action. Plaintiff opposed the motion, referring to section (d) (5) of AFI’s NY Personal Injury Protection Rule Revisions, which provides: “A decision of an arbitrator on the liability issue is conclusive only of the controversy in the claim submitted to the arbitrator by the same parties and has no legal effect on any other claim or suit arising out of the same accident or occurrence between different parties.” Plaintiff appeals from an order entered March 22, 2013, in which the Civil Court granted defendants’ motion, upon a finding that the AFI arbitrator’s decision on liability barred plaintiff from bringing this action. A judgment was subsequently entered, from which plaintiff’s appeal is deemed to have been taken [*2](see CPLR 5501 [c]).

“[I]n general the doctrines of claim preclusion and issue preclusion between the same parties (more familiarly referred to as res judicata or direct estoppel) apply as well to awards in arbitration as they do to adjudications in judicial proceedings” (Matter of American Ins. Co. [Messinger—Aetna Cas. & Sur. Co.], 43 NY2d 184, 189-190 [1977]). Explicit restrictions in the arbitration rules, however, may limit the carry-over effect of the arbitration ruling (see id. at 193; see also Feinberg v Boros, 17 AD3d 275, 276 [2005]; Matter of State Farm Ins. Co. v Smith, 277 AD2d 390, 390-391 [2000]). The AFI rule limiting the preclusive effect of its arbitrator’s decision was clear and unambiguous, and should be given effect (see also Government Empls. Ins. Co. v Town of Oyster Bay, 26 Misc 3d 34 [App Term, 9th & 10th Jud Dists 2009] [AFI rule then in effect operated to preclude the application of the doctrine of collateral estoppel respecting the arbitrator’s decision in a separate judicial proceeding]). Consequently, defendants’ motion for summary judgment dismissing the complaint on collateral estoppel grounds should have been denied.

Accordingly, the judgment is reversed, the order entered March 22, 2013 is vacated, and defendants’ motion for summary judgment is denied.

Pesce, P.J., Weston and Aliotta, JJ., concur.