Interboro Ins. Co. v Tahir (2015 NY Slip Op 05378)

Reported in New York Official Reports at Interboro Ins. Co. v Tahir (2015 NY Slip Op 05378)

Interboro Ins. Co. v Tahir (2015 NY Slip Op 05378)
Interboro Ins. Co. v Tahir
2015 NY Slip Op 05378 [129 AD3d 1687]
June 19, 2015
Appellate Division, Fourth Department
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
As corrected through Wednesday, August 5, 2015

[*1]

  Interboro Insurance Company, Appellant, v Fatima Tahir et al., Defendants, and Bushra Naz et al., Respondents.

Law Office of Jason Tenenbaum, P.C., Garden City (Jason Tenenbaum of counsel), for plaintiff-appellant.

Appeal from an order and judgment (one paper) of the Supreme Court, Onondaga County (Deborah H. Karalunas, J.), entered April 24, 2014. The order and judgment, among other things, denied that part of plaintiff’s motion for leave to enter a default judgment against defendants Bushra Naz, Cliffside Park Imaging & Diagnostic Center and Kimba Medical Supply, LLC.

It is hereby ordered that the order and judgment so appealed from is unanimously modified on the law by granting that part of the motion for leave to enter a default judgment against defendant Cliffside Park Imaging & Diagnostic Center and as modified the order and judgment is affirmed without costs.

Memorandum: Plaintiff appeals from an order and judgment that, inter alia, denied its motion pursuant to CPLR 3215 for leave to enter a default judgment against defendants Bushra Naz, Cliffside Park Imaging & Diagnostic Center (Cliffside), and Kimba Medical Supply, LLC (Kimba). Defendants Naz and Fatima Tahir made claims for no-fault benefits arising from injuries they allegedly sustained in an automobile accident covered by an insurance policy issued to plaintiff’s policyholder. Naz and Tahir assigned their rights to collect no-fault benefits to certain medical providers, including Cliffside and Kimba, each of which made claims for services rendered to Naz and Tahir as a result of the alleged accident. Plaintiff disclaimed coverage based on the failure of Naz and Tahir to provide timely written notice of the accident pursuant to the insurance policy, and thereafter commenced this action seeking a declaration that there is no coverage. Plaintiff subsequently moved for leave to enter a default judgment against each defendant on the ground that the summons and verified complaint had been properly served and defendants did not timely serve an answer or otherwise appear in the action. Supreme Court denied the motion with respect to Naz, Cliffside, and Kimba, and otherwise granted the motion.

“On a motion for leave to enter a default judgment pursuant to CPLR 3215, the movant is required to submit proof of service of the summons and complaint, proof of the facts constituting its claim, and proof of the defaulting party’s default in answering or appearing” (Atlantic Cas. Ins. Co. v RJNJ Servs., Inc., 89 AD3d 649, 651 [2011]; see CPLR 3215 [f]). Here, plaintiff submitted sufficient proof of the facts constituting its claim through the affidavit of a claims representative establishing that Tahir and Naz failed to satisfy the notice requirement of the insurance policy, which constitutes a failure to comply with a condition precedent and vitiates the contract as a matter of law (see generally New York & Presbyt. Hosp. v Country-Wide Ins. Co., 17 NY3d 586, 592-593 [2011]; Great Canal Realty Corp. v Seneca Ins. Co., Inc., 5 NY3d 742, 743 [2005]; Matter of Progressive Northeastern Ins. Co. [Heath], 41 AD3d 1321, 1322 [2007]). Plaintiff also submitted proof of default in the form of “an affirmation from its attorney regarding . . . defendant[s’] default in appearing and answering” (599 Ralph Ave. Dev., LLC v 799 Sterling Inc., 34 AD3d 726, 726 [2006]).

[*2] We further conclude, however, that plaintiff submitted sufficient proof of service of process, the remaining required element of proof, only with respect to Cliffside, a corporation, and thus the court erred in denying plaintiff’s motion to that extent. We therefore modify the order and judgment accordingly. Pursuant to CPLR 311 (a), “personal service on a corporation may be accomplished by, inter alia, delivering the summons ‘to an officer, director, managing or general agent, or cashier or assistant cashier or to any other agent authorized by appointment or by law to receive service’ ” (Rosario v NES Med. Servs. of N.Y., P.C., 105 AD3d 831, 832 [2013]). Here, “[t]he process server’s affidavit, which stated that the corporate defendant was personally served by delivering a copy of the summons and complaint to its ‘[authorized] agent’ and provided a description of that person, constituted prima facie evidence of proper service pursuant to CPLR 311 (a) (1)” (McIntyre v Emanuel Church of God In Christ, Inc., 37 AD3d 562, 562 [2007]; see Miterko v Peaslee, 80 AD3d 736, 737 [2011]; see generally Halas v Dick’s Sporting Goods, 105 AD3d 1411, 1413-1414 [2013]).

Contrary to plaintiff’s contention, the court properly denied its motion with respect to Naz, who was allegedly served by the “nail and mail” method of service. CPLR 308 (4) allows that method of service only “when service pursuant to CPLR 308 (1) and (2) cannot be made with due diligence” (Austin v Tri-County Mem. Hosp., 39 AD3d 1223, 1224 [2007]) and, although a process server’s affidavit of service ordinarily constitutes prima facie evidence of proper service, here the process server’s affidavit submitted by plaintiff fails to demonstrate the requisite due diligence (see D’Alesandro v Many, 137 AD2d 484, 484 [1988]; see generally Matter of El Greco Socy. of Visual Arts, Inc. v Diamantidis, 47 AD3d 929, 929-930 [2008]). The affidavit failed to indicate whether there was an attempt to effectuate service at Naz’s actual “dwelling place or usual place of abode” (CPLR 308 [4]), and there is no indication that the process server made genuine inquiries to ascertain Naz’s actual residence or place of employment (see Prudence v Wright, 94 AD3d 1073, 1074 [2012]; Earle v Valente, 302 AD2d 353, 353-354 [2003]).

We also reject plaintiff’s contention that the court erred in denying its motion with respect to Kimba, a limited liability company. Plaintiff alleged that Kimba was served pursuant to Limited Liability Company Law § 304. That statute is substantively identical to Business Corporation Law § 307, and both statutes apply to foreign business entities not authorized to do business in New York. We conclude that, just as strict compliance with the procedures set forth in Business Corporation Law § 307 is required pursuant to Flick v Stewart-Warner Corp. (76 NY2d 50, 54-55, 57 [1990], rearg denied 76 NY2d 846 [1990]), strict compliance is likewise required for the procedures set forth in Limited Liability Company Law § 304 (see Elzofri v American Express Co., 29 Misc 3d 898, 901 [2010]). Here, plaintiff failed to establish that it strictly complied with the filing requirements of Limited Liability Company Law § 304 (e). Present—Smith, J.P., Peradotto, Carni, Valentino and Whalen, JJ.

Matter of Gee (State Farm Mut. Auto. Ins. Co.) (2013 NY Slip Op 04482)

Reported in New York Official Reports at Matter of Gee (State Farm Mut. Auto. Ins. Co.) (2013 NY Slip Op 04482)

Matter of Gee (State Farm Mut. Auto. Ins. Co.) (2013 NY Slip Op 04482)
Matter of Gee (State Farm Mut. Auto. Ins. Co.)
2013 NY Slip Op 04482 [107 AD3d 1559]
June 14, 2013
Appellate Division, Fourth Department
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
As corrected through Wednesday, July 31, 2013
In the Matter of the Arbitration between Jeffrey Gee et al., Appellants, and State Farm Mutual Automobile Insurance Company, Respondent.

[*1] The Golden Law Firm, Utica (B. Brooks Benson of counsel), for petitioners-appellants.

Barth Sullivan Behr, Buffalo (Laurence D. Behr of counsel), for respondent-respondent.

Appeal from an order of the Supreme Court, Oneida County (Norman I. Siegel, A.J.), entered May 2, 2012 in a proceeding pursuant to CPLR article 75. The order granted the motion of respondent to dismiss the petition to vacate the arbitration awards.

It is hereby ordered that the order so appealed from is unanimously modified on the law by confirming the awards and as modified the order is affirmed without costs.

Memorandum: Petitioners sustained injuries in an automobile accident in June 1996, and thereafter submitted their no-fault claims for loss of earnings and medical expenses to respondent. Following respondent’s denial of most of those claims in April 1997, petitioners timely commenced a civil action in June 2002, i.e., within the six-year statute of limitations, rather than pursuing arbitration under the Insurance Law. In December 2005, shortly before the scheduled trial date, the parties agreed to submit the matter to arbitration. Petitioners’ counsel notified Supreme Court (Daley, J.), in January 2006 that the case would proceed to arbitration and requested removal of the case from the trial calendar. In December 2009, petitioners filed their request for arbitration and thereafter, in the context of the arbitration, respondent moved to dismiss petitioners’ claims on the ground that they were barred by the statute of limitations because more than 12 years had passed from accrual of the claims. The arbitrator agreed and dismissed the claims as time-barred, and a master arbitrator subsequently affirmed those awards. Petitioners thereafter commenced this proceeding in Supreme Court (Siegel, A.J.) pursuant to CPLR article 75 seeking to vacate the awards, and they now appeal from an order that, inter alia, granted respondent’s motion to dismiss the petition. Although we agree with respondent that petitioners were not entitled to vacatur of the awards, we note that the court erred in failing to confirm the awards pursuant to CPLR 7511 (e). We therefore modify the order accordingly.

Inasmuch as petitioners voluntarily pursued arbitration after they commenced a civil action, we conclude that our review is limited by the terms of CPLR 7511 (b) (1) and, “in the absence of proof of fraud, corruption, or other misconduct, the arbitrator’s determination on [the] [*2]issue[ ] of . . . the application of the [s]tatute of [l]imitations . . . is conclusive” (Matter of Motor Veh. Acc. Indem. Corp. v Aetna Cas. & Sur. Co., 89 NY2d 214, 223 [1996]). Here, petitioners offered no such proof. Contrary to petitioners’ contention, “the arbitrator had the discretion to consider whether to apply . . . the bar [of the statute of limitations]” (Siegel v Landy, 95 AD3d 989, 992 [2012]). Furthermore, we reject petitioners’ contention that the master arbitrator exceeded his power by making a de novo finding that the agreement to arbitrate lacked a waiver of the statute of limitations by respondent (see generally CPLR 7511 [b] [1] [iii]). “To exclude a substantive issue from arbitration” (Matter of Silverman [Benmor Coats], 61 NY2d 299, 308 [1984]), the limitation upon the arbitrator’s power “must be set forth as part of the arbitration clause” (id. at 307). Because no express limitation regarding the master arbitrator’s power was specified in the parties’ agreement to arbitrate, we conclude that the master arbitrator’s finding was not in excess of his power (see id. at 307-308). Present—Centra, J.P., Fahey, Lindley, Sconiers and Valentino, JJ.

Matter of Philadelphia Ins. Co. (Utica Natl. Ins. Group) (2012 NY Slip Op 05470)

Reported in New York Official Reports at Matter of Philadelphia Ins. Co. (Utica Natl. Ins. Group) (2012 NY Slip Op 05470)

Matter of Philadelphia Ins. Co. (Utica Natl. Ins. Group) (2012 NY Slip Op 05470)
Matter of Philadelphia Ins. Co. (Utica Natl. Ins. Group)
2012 NY Slip Op 05470 [97 AD3d 1153]
July 6, 2012
Appellate Division, Fourth Department
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
As corrected through Wednesday, August 22, 2012
In the Matter of the Arbitration between Philadelphia Insurance Company, Respondent, and Utica National Insurance Group, Doing Business as Utica Mutual Ins. Co., Appellant.

[*1] Brown & Kelly, LLP, Buffalo (Joseph M. Schnitter of counsel), for respondent-appellant.

Damon Morey LLP, Buffalo (Michael J. Willett of counsel), for petitioner-respondent.

Appeal from an order of the Supreme Court, Erie County (Patrick H. NeMoyer, J.), entered March 7, 2011 in a proceeding pursuant to CPLR article 75. The order, among other things, granted the petition to vacate an arbitration award.

It is hereby ordered that the order so appealed from is reversed on the law without costs, the petition is denied, the cross motion is granted and the arbitration award is confirmed.

Memorandum: Petitioner commenced this proceeding pursuant to CPLR 7511 (b) seeking vacatur of the arbitration award on the ground that arbitration was not available because under Insurance Law § 5105 (a) neither of the vehicles involved in the collision was “used principally for the transportation of persons or property for hire.” We conclude that Supreme Court erred in granting the petition to vacate the arbitration award and in denying the cross motion to confirm the award. Inasmuch as petitioner failed to apply for a stay of arbitration before arbitration, petitioner waived its contention that respondent’s claim for reimbursement of first-party benefits is not arbitrable under Insurance Law § 5105 (see Matter of Liberty Mut. Ins. Co. [Allstate Ins. Co.], 234 AD2d 901 [1996]). In view of that waiver, petitioner may not thereafter seek to vacate the arbitration award on the ground that the arbitration panel exceeded its power (see id.; Matter of Utica Mut. Ins. Co. v Incorporated Vil. of Floral Park, 262 AD2d 565, 566 [1999]; see also Rochester City School Dist. v Rochester Teachers Assn., 41 NY2d 578, 583 [1977]).

Were we to reach the issue whether respondent’s vehicle was used principally for the transportation of persons or property for hire under Insurance Law § 5105, we would agree with our dissenting colleagues that the appropriate standard of review is whether the award was arbitrary and capricious (see Matter of Motor Veh. Acc. Indem. Corp. v Aetna Cas. & Sur. Co., 89 NY2d 214, 223 [1996]). However, despite acknowledging that we must apply a deferential standard of review, the dissent proceeds to conduct, with laser-like precision, a comprehensive legal analysis of the statutory phrase “vehicle used principally for the transportation of persons or [*2]property for hire” (§ 5105). In reaching a legal conclusion as to the appropriate definition to be assigned to the subject phrase, the dissent relies upon eight different definitions of or references to the phrase “vehicle for hire,” which the dissent concedes arise in “other [statutory or legal] contexts.” Notably, none of those definitions or references relied upon by the dissent was raised during arbitration or on appeal.

As the court recognized, petitioner has “contended from the outset that there is no legal or factual basis here for loss transfer pursuant to [Insurance Law § ] 5105,” and we disagree with the dissent’s conclusion that “at no point during the course of the proceedings in this matter did petitioner take the position that the claim was not arbitrable.” Indeed, in addition to labeling its defense as one for “lack of jurisdiction,” petitioner twice asserted in the arbitration that it was “not subject to the loss transfer procedure.” Thus, we have no difficulty concluding that petitioner took the position that the claim was not arbitrable. In concluding that the phrase assigned to petitioner’s defense (lack of jurisdiction) is not dispositive, our dissenting colleagues fail to offer any explanation of what was otherwise meant thereby. Moreover, the dissent’s reliance on Matter of Progressive Cas. Ins. Co. v New York State Ins. Fund (47 AD3d 633 [2008]) is misplaced because, unlike here, the petitioner in Progressive “at no point during the course of the proceedings . . . [took] the position that the arbitration panel lacked jurisdiction or that the . . . claim was not arbitrable” (id. at 634 [emphasis added]). Thus, that case does not support the dissent’s position that petitioner, despite labeling its defense as one for “lack of jurisdiction,” did not assert that the claim was not arbitrable.

Both the dissent and the court disregard controlling precedent of this Court in determining that petitioner’s contention was not waived (see Liberty Mut. Ins. Co., 234 AD2d 901). The doctrine of stare decisis “recognizes that legal questions, once resolved, should not be reexamined every time they are presented” (Dufel v Green, 198 AD2d 640, 640 [1993], affd 84 NY2d 795 [1995]). ” ‘The doctrine . . . rests upon the principle that a court is an institution, not merely a collection of individuals, and that governing rules of law do not change merely because the personnel of the court changes’ ” (People v Taylor, 9 NY3d 129, 148 [2007], quoting People v Bing, 76 NY2d 331, 338 [1990], rearg denied 76 NY2d 890 [1990]). Stare decisis ” ‘is the preferred course because it promotes the evenhanded, predictable, and consistent development of legal principles, fosters reliance on judicial decisions, and contributes to the actual and perceived integrity of the judicial process’ ” (id.; see People v Damiano, 87 NY2d 477, 488-489 [1996] [Simons, J., concurring]; Baden v Staples, 45 NY2d 889, 892 [1978]).

Here, this Court has previously held that, by failing to apply for a stay before arbitration, an insurer waives the contention that the claim is not arbitrable under Insurance Law § 5105 (Liberty Mut. Ins. Co., 234 AD2d 901). In the instant matter, the court acknowledged our decision in Liberty Mut. Ins. Co., but concluded that it was overruled by Motor Veh. Acc. Indem. Corp. (89 NY2d 214). That was error. Indeed, the Court of Appeals in Motor Veh. Acc. Indem. Corp. did not hold that insurers are precluded from obtaining judicial review of the threshold question of whether a claim was subject to loss-transfer arbitration under section 5105. Rather, the courts of this State have long recognized that a court has the power to resolve the threshold question whether a loss-transfer arbitration should be stayed under CPLR article 75 (see Matter of State Farm Mut. Auto Ins. Co. v Aetna Cas. & Sur. Co.132 AD2d 930, 931 [1987], affd 71 NY2d 1013 [1988]; City of Syracuse v Utica Mut. Ins. Co., 90 AD2d 979 [1982], affd 61 NY2d 691 [1984]; Utica Mut. Ins. Co., 262 AD2d 565; Liberty Mut. Ins. Co., 234 AD2d 901).

Motor Veh. Acc. Indem. Corp. (89 NY2d 214), also relied upon by the dissent as a basis for concluding that the award is arbitrary and capricious, involved an “erroneous application of the Statute of Limitations” by the arbitrator (id. at 224). In concluding that such an error of law was not arbitrary and capricious as a matter of law, the Court in Motor Veh. Acc. Indem. Corp. [*3]noted the varying interpretations of the limitations rule by the courts. Here, there is a paucity of decisions interpreting the phrase “for hire” in the Insurance Law § 5105 context, and our own decision on this point noted that the statute is “inartfully drafted” and does not limit the universe of vehicles embraced thereby to “taxis and buses, and livery vehicles” (State Farm Mut. Auto. Ins. Co., 132 AD2d at 931). Therefore, even assuming, arguendo, that we could reach the issue, we would conclude that, under the circumstances presented, it cannot be said that the arbitration panel’s award was arbitrary and capricious or was unsupported by any reasonable hypothesis (see Motor Veh. Acc. Indem. Corp., 89 NY2d at 224).

All concur except Peradotto and Sconiers, JJ., who dissent and vote to affirm in the following memorandum.

Peradotto and Sconiers, JJ. (dissenting).We respectfully dissent. Unlike the majority, we conclude that petitioner did not waive its contention that the vehicle owned by its insured and involved in the subject accident was not “used principally for the transportation of persons or property for hire” within the meaning of Insurance Law § 5105 (a). We further conclude that there is no evidentiary support or rational basis for the arbitration panel’s determination that the at-issue vehicle—a minivan owned by a nonprofit community residence for developmentally disabled individuals and used by its employees to transport the six residents of the group home—is a vehicle “for hire” under that section.

Petitioner’s insured, Rivershore, Inc. (Rivershore), is a private, nonprofit organization that provides residential and community support services to individuals with developmental disabilities. Rivershore operates several state-funded community residences for people with disabilities, including a residence on 17th Street in Niagara Falls. On May 11, 2009, Rivershore employee Thomas Beckhorn, a night program manager at the 17th Street residence, was on his way to pick up one of the residents from her mother’s home when he was involved in a motor vehicle accident with a vehicle owned by Mary D. Farmel and operated by Cheryl K. French. French sustained injuries in the accident. At the time of the accident, Beckhorn was operating a minivan owned by Rivershore and insured by petitioner. The Farmel vehicle was insured by respondent. After paying first-party personal injury protection (first-party) benefits to and on behalf of French, respondent filed an application for inter-company arbitration, seeking reimbursement of those benefits from petitioner pursuant to the loss-transfer provisions of Insurance Law § 5105. In a contentions sheet submitted to the arbitration panel, petitioner contended that it was “not subject to the loss[-]transfer procedure because not one of the vehicles in the accident weighed more than 6,500 lbs. and/or neither vehicle was used principally for transportation of persons or property for hire.” In an amended contentions sheet, petitioner specifically contended that the minivan operated by Beckhorn weighed between 5,001 and 6,000 pounds, and that it was not used for the transportation of persons or property for hire. Rather, petitioner asserted that the minivan “was used in the course of providing general services to a disabled person, services that are regularly provided by Rivershore[ ] . . . to its developmentally disabled residents.”

The arbitration panel determined that the Rivershore minivan “meet[s] the definition of a livery for this loss” and awarded respondent the full amount of the first-party benefits respondent had paid to French. Petitioner then commenced this proceeding seeking to vacate the arbitration award pursuant to CPLR 7511 (b) on the ground that the award was without evidentiary support or rational basis and thus was arbitrary and capricious insofar as the arbitration panel determined that the minivan was a vehicle for hire within the meaning of Insurance Law § 5105. Respondent cross-moved to confirm the award. Supreme Court granted the petition, denied the cross motion, and vacated the arbitration award on the ground that the arbitrators “acted irrationally and without an evidentiary basis” in concluding that the minivan was “used principally for the transportation of persons or property for hire” (§ 5105). We would affirm. [*4]

As relevant here, Insurance Law § 5105 (a) provides that “[a]ny insurer liable for the payment of first[-]party benefits . . . which another insurer would otherwise be obligated to pay . . . but for the provisions of th[e No Fault Statute]” has a “right to recover [those benefits] . . . only if at least one of the motor vehicles involved . . . [weighs] more than [6,500] pounds unloaded or is . . . used principally for the transportation of persons or property for hire” (emphasis added). Thus, the right to recovery under that statute’s loss-transfer provision is limited to accidents in which one of the involved vehicles (1) exceeds 6,500 pounds, or (2) transports persons or property “for hire.” The Legislature amended section 5105 (a) in 1977 to add those alternative conditions with the intention of “limit[ing] the right of insurance carriers to recover first-party payments” (Matter of State Farm Mut. Auto. Ins. Co. v Aetna Cas. & Sur. Co., 132 AD2d 930, 931 [1987], affd 71 NY2d 1013 [1988]; see Matter of Progressive Northeastern Ins. Co. [New York State Ins. Fund], 56 AD3d 1111, 1112 [2008], lv denied 12 NY3d 713 [2009]). Pursuant to section 5105 (b), “mandatory arbitration is the sole remedy regarding disputes between insurers over responsibility for payment of first-party benefits” (State Farm Mut. Auto. Ins. Co. v Nationwide Mut. Ins. Co., 150 AD2d 976, 977 [1989]; see also NY St Ins Dept 2005 Circular Letter No. 10, RE: PIP [No-fault] inter-company loss transfer procedures [“If there is a dispute with respect to a claim arising pursuant to [s]ection 5105, the sole remedy of any insurer or compensation provider is via the submission of the controversy to a mandatory arbitration program”]).

Contrary to the contention of respondent and the conclusion of the majority, we conclude that at no point during the course of the proceedings in this matter did petitioner assert that the claim was not arbitrable, i.e., that the arbitrators lacked the authority to adjudicate the claim (see Matter of Progressive Cas. Ins. Co. v New York State Ins. Fund, 47 AD3d 633, 634 [2008]; cf. Matter of Liberty Mut. Ins. Co. [Allstate Ins. Co.], 234 AD2d 901 [1996]). During arbitration, petitioner did not object to proceeding in the arbitral forum or contend that the claim was not subject to arbitration, and does not so contend on appeal. Rather, petitioner asserted on the merits that respondent could not recover pursuant to the loss-transfer provisions of Insurance Law § 5105 because neither vehicle involved in the accident weighed more than 6,500 pounds or was used principally for the transportation of persons or property for hire. Thus, petitioner’s “participation in the arbitration proceeding without first moving for a stay of arbitration did not constitute a waiver of its contention that the [minivan] was not . . . [a vehicle for hire] within the meaning of . . . [section] 5105” (Progressive Cas. Ins. Co., 47 AD3d at 634). The fact that petitioner’s contentions sheet labeled its defense as one for “lack of jurisdiction” is not dispositive of the issue whether petitioner asserted that the claim was not arbitrable. The substance of petitioner’s contention, i.e., that the minivan did not qualify as a vehicle for hire, “is a condition precedent to ultimate recovery [under section 5105], not a condition precedent to ‘access to the arbitral forum‘ ” (id., quoting Matter of County of Rockland [Primiano Constr. Co.], 51 NY2d 1, 7 [1980] [emphasis added]; see Progressive Northeastern Ins. Co., 56 AD3d at 1112). In light of the broad scope of the mandatory arbitration provision in Insurance Law § 5105 (b), we conclude that petitioner properly submitted the issue whether the minivan was a “vehicle . . . for hire” to the arbitration panel for determination (§ 5105 [a]; see Progressive Cas. Ins. Co., 47 AD3d at 634) and, arguably, had no choice but to do so (see § 5105 [b]; Paxton Natl. Ins. Co. v Merchants Mut. Ins. Co., 74 AD2d 715, 716 [1980], affd 53 NY2d 646 [1981] [“Arbitration provides the sole remedy in loss transfer between insurers and the arbitration panel is the proper forum . . . for the determination of all questions of law and fact which may arise in connection with the remedy that respondent seeks”]).

With respect to the merits, “[w]here, as here, the parties are obligated by statutory mandate to submit their dispute to arbitration (see Insurance Law § 5105 [b]), the arbitrator’s determination is subject to ‘closer judicial scrutiny’ than with voluntary arbitration” (Progressive Northeastern Ins. Co., 56 AD3d at 1113, quoting Matter of Motor Veh. Acc. Indem. Corp. v Aetna Cas. & Sur. Co., 89 NY2d 214, 223 [1996]; see Matter of Furstenberg [Aetna Cas. & Sur. Co.—Allstate Ins. Co.], 49 NY2d 757, 758 [1980]). “To be upheld, an award in a compulsory arbitration proceeding must have evidentiary support and cannot be arbitrary and capricious” (Motor Veh. Acc. Indemn. Corp., 89 NY2d at 223). Further, “article 75 review questions whether the decision was rational or had a plausible basis” (Matter of Petrofsky [Allstate Ins. Co.], 54 NY2d 207, 211 [1981]; see Progressive Cas. Ins. Co., 47 AD3d at 634).

It was respondent’s burden, as the party seeking reimbursement, to establish its right to recovery under Insurance Law § 5105 (a) (see Progressive Northeastern Ins. Co., 56 AD3d at 1112; see also Matter of Hanover Ins. Co. v State Farm Mut. Auto. Ins. Co., 226 AD2d 533, 534 [1996]). Here, we conclude not only that respondent failed to meet its burden, but we also conclude that there is no evidentiary support or rational basis for the arbitrators’ determination that the minivan was principally used to transport persons “for hire,” a condition precedent to respondent’s entitlement to reimbursement under section 5105 (a) (see Progressive Northeastern Ins. Co., 56 AD3d at 1113). As this Court held in State Farm Mut. Auto Ins. Co. (132 AD2d at 931), “the words ‘for hire’ modify the word ‘vehicle’ and . . . the statute covers only those vehicles hired to transport people, such as taxis and buses, and livery vehicles hired to transport property” (emphasis added). We agree with the court that, under the circumstances of this case, “the Rivershore minivan cannot be categorized as or even likened to a taxi or bus.”

The term “vehicle for hire” is commonly understood and defined in other contexts as a vehicle held out to the public for the provision of transportation services in exchange for a fee (see generally Penal Law § 60.07 [2] [b] [defining ” ‘for-hire vehicle’ ” as “a vehicle designed to carry not more than five passengers for compensation and such vehicle is a taxicab, . . . a livery, . . . or a ‘black car’ “]; Vehicle and Traffic Law § 121-e [defining “livery” as “(e)very motor vehicle, other than a taxicab or a bus, used in the business of transporting passengers for compensation”]; Vehicle and Traffic Law § 401 [5-a] [a] [ii] [defining “motor vehicle operated for hire” as “mean(ing) and includ(ing) a taxicab, livery, coach, limousine or tow truck”]; Ops Gen Counsel NY Ins Dept No. 01-01-11 [Jan. 2001] [“The phrase ‘a motor vehicle used principally for the transportation of persons or property for hire’ refers to vehicles hired to transport people and livery vehicles hired to transport property”]). Such vehicles are typically operated by drivers who are required to have a particular certification or license, and are subject to specialized licensing, insurance, safety, and other requirements (see e.g. Vehicle and Traffic Law § 148-a [defining a “taxicab” as “[e]very motor vehicle, other than a bus, used in the business of transporting passengers for compensation, and operated in such business under a license or permit issued by a local authority”]; Vehicle and Traffic Law § 370 [1] [requiring filing of indemnity bond or insurance policy by every person or entity “engaged in the business of carrying or transporting passengers for hire in any motor vehicle”]; Vehicle and Traffic Law § 375 [23] [“Every motor vehicle operated for hire upon the public highways of this state shall be equipped with handles or other devices which shall permit the door or doors to the passenger compartment to be readily opened from the interior of the vehicle”]; see generally Vehicle and Traffic Law § 498 [governing interjurisdictional pre-arranged for-hire vehicle operations]).

The evidence before the arbitration panel in this case consisted of the deposition testimony of Beckhorn, the driver of the minivan, and material from Rivershore’s website. Such evidence establishes that Rivershore is not in the business of transporting members of the public for compensation, and that the Rivershore minivan was not used for that purpose. Rivershore’s website states that it supports 12 state-funded community residences for individuals with developmental disabilities, and “serves many more people in their private homes throughout Niagara County.” In addition to its residential services, Rivershore “provides life planning services, clinical services, and support with employment and volunteer pursuits.” Beckhorn testified that he worked at the 17th Street community residence as a nighttime program manager, and that, at the time of the accident, he was driving to pick up one of the residents from [*5]her mother’s house. Beckhorn testified that he was not specifically hired to pick up the resident; rather, transporting residents of the group home was only one of his many duties as a program manager. Beckhorn did not charge a fare, and he was not paid per trip. Further, the record establishes that Beckhorn possessed a “regular” driver’s license and that the minivan bore passenger plates rather than livery or commercial license plates.

In determining that the minivan constituted a vehicle for hire under Insurance Law § 5105 (a), the arbitrators relied upon Beckhorn’s testimony that he “was going to pick up one of Rivershore’s customers,” as well as materials from Rivershore’s website, which, according to the arbitrators, “proves that [Rivershore] offers a series of services for their customers . . . [including] transportation to appointments.” Beckhorn’s testimony, however, establishes that he was on his way to pick up not simply a “customer[ ]” of Rivershore; rather, he was picking up a resident of the 17th Street community residence in a minivan used by Rivershore staff for group home purposes. With respect to Rivershore’s website, none of the materials submitted to the arbitration panel refer to Rivershore’s provision of transportation services, let alone the transportation of customers “for hire.” The portion of the website relied upon by the arbitrators applies to Rivershore’s individualized service environment program, which is “designed for people who live in their own apartment or house, or in a family dwelling” (emphasis added), not for individuals who live in a community residence. In any event, even if that program was involved here, the website does not state that Rivershore provides transportation services to program participants. Rather, it states that “[h]ighly trained staff will visit [participants’] home[s] and provide supports to help [them] achieve [their] goals, which are specific and individualized to [each participant]. These supports include assisting [participants] in completing all necessary daily activities, assisting [them] with attending any needed medical appointments, and gaining further independence, productivity and inclusion in [their] community” (emphasis added).

In sum, the record establishes that the Rivershore minivan was not held out to the community as a vehicle transporting people “for hire.” To the contrary, the minivan was assigned to the 17th Street community residence for the exclusive purpose of assisting the six individuals who live there with activities of daily living, i.e., shopping, attending events, family visits, etc. The driver of the minivan was not hired for the purpose of providing transportation and did not possess a specialized license to provide transportation services; rather, he was hired to provide residential services to the residents of the group home that, from time to time, included driving them to various activities. We therefore conclude that the arbitration panel’s determination that the at-issue minivan was “used principally for the transportation of persons . . . for hire” lacks evidentiary support or a rational basis, and thus that the court properly vacated the arbitration award on that ground (Insurance Law § 5105 [a]; see generally Progressive Northeastern Ins. Co., 56 AD3d at 1113-1114; Progressive Cas. Ins. Co., 47 AD3d at 634). Present—Centra, J.P., Peradotto, Carni, Lindley and Sconiers, JJ.

Matter of New York Schools Ins. Reciprocal v Armitage (2011 NY Slip Op 02191)

Reported in New York Official Reports at Matter of New York Schools Ins. Reciprocal v Armitage (2011 NY Slip Op 02191)

Matter of New York Schools Ins. Reciprocal v Armitage (2011 NY Slip Op 02191)
Matter of New York Schools Ins. Reciprocal v Armitage
2011 NY Slip Op 02191 [82 AD3d 1628]
March 25, 2011
Appellate Division, Fourth Department
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
As corrected through Wednesday, May 11, 2011
In the Matter of New York Schools Insurance Reciprocal, Appellant, v Patricia Armitage, Respondent. Alex Celniker et al., Proposed Additional Respondents.

[*1] Baxter Smith & Shapiro, P.C., West Seneca (Lauren E. Dillon of counsel), for petitioner-appellant.

Louden Law Firm, P.C., Malta (Michelle Murphy-Louden of counsel), for respondent-respondent Patricia Armitage.

Appeal from an order of the Supreme Court, Erie County (Rose H. Sconiers, J.), entered February 10, 2010. The order denied the petition for a stay of arbitration.

It is hereby ordered that the order so appealed from is unanimously affirmed without costs.

Memorandum: Petitioner appeals from an order denying its petition seeking a permanent stay of arbitration. Respondent sought arbitration following petitioner’s denial of her claim for no-fault insurance benefits. The propriety of the denial of benefits is a “dispute involving the insurer’s liability to pay first party benefits” (Insurance Law § 5106 [b]), and we therefore conclude that Supreme Court properly refused to grant a permanent stay of arbitration (see generally Ryder Truck Lines v Maiorano, 44 NY2d 364, 368-369 [1978]). Petitioner further contends that the issue whether the offset for workers’ compensation benefits exceeds the monthly limit of first party benefits is not a matter for arbitration. We reject that contention (see Insurance Law § 5102 [a] [2]; see generally § 5106 [b]; Matter of Johnson v Buffalo & Erie County Private Indus. Council, 84 NY2d 13, 18-19 [1994]; Matter of Cady [Aetna Life & Cas. Co.], 96 AD2d 967 [1983], affd 61 NY2d 594 [1984]). Finally, we reject petitioner’s contention that, by refusing to grant a permanent stay of arbitration, the court denied petitioner its right to seek a loss-transfer claim from additional proposed respondents (see generally Matter of Liberty Mut. Ins. Co. [Hanover Ins. Co.], 307 AD2d 40, 42-43 [2003]). Present—Scudder, P.J., Fahey, Carni, Green and Gorski, JJ.

Sunshine Imaging Assn./WNY MRI v Government Empls. Ins. Co. (2009 NY Slip Op 06984)

Reported in New York Official Reports at Sunshine Imaging Assn./WNY MRI v Government Empls. Ins. Co. (2009 NY Slip Op 06984)

Sunshine Imaging Assn./WNY MRI v Government Empls. Ins. Co. (2009 NY Slip Op 06984)
Sunshine Imaging Assn./WNY MRI v Government Empls. Ins. Co.
2009 NY Slip Op 06984 [66 AD3d 1419]
October 2, 2009
Appellate Division, Fourth Department
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
As corrected through Wednesday, December 9, 2009
Sunshine Imaging Association/WNY MRI, as Assignee of Carol L. Vancheri and Others, Appellant, v Government Employees Insurance Company, Also Known as “GEICO,” Respondent.

[*1] Law Office of J. Michael Hayes, Buffalo (J. Michael Hayes of counsel), for plaintiff-appellant.

Law Office of Daniel R. Archilla, Buffalo (David H. Frech of counsel), for defendant-respondent.

Appeal from an order of the Supreme Court, Erie County (John A. Michalek, J.), entered July 25, 2008. The order denied plaintiff’s motion for summary judgment and granted defendant’s motion to sever the causes of action.

It is hereby ordered that the order so appealed from is unanimously affirmed without costs.

Memorandum: Plaintiff, as assignee of 14 patients to whom it provided radiological services, commenced this action seeking to recover no-fault benefits pursuant to the contract between each patient and defendant insurer. We conclude that Supreme Court properly denied plaintiff’s motion for summary judgment on the amended complaint. Although plaintiff made a prima facie showing of entitlement to judgment as a matter of law by submitting evidence that the prescribed statutory billing forms were received by defendant and that defendant’s payment of no-fault benefits to plaintiff was overdue (see A.B. Med. Servs., PLLC v Liberty Mut. Ins. Co., 39 AD3d 779, 780 [2007]; LMK Psychological Servs., P.C. v Liberty Mut. Ins. Co., 30 AD3d 727, 728 [2006]), defendant raised a triable issue of fact by submitting its denial of claim forms setting forth that the services for which plaintiff sought to recover no-fault benefits were not medically necessary (see Countrywide Ins. Co. v 563 Grand Med., P.C., 50 AD3d 313, 314 [2008]; A.B. Med. Servs., PLLC, 39 AD3d at 780-781). Contrary to plaintiff’s contention, defendant is not precluded from denying the claims after the services were rendered on the ground of lack of medical necessity. Plaintiff’s assignors were entitled only to reimbursement for medically “necessary” expenses (Insurance Law § 5102 [a] [1]; see 11 NYCRR 65-1.1 [d]), and plaintiff assignee is subject to that lack of medical necessity defense (see Long Is. Radiology v Allstate Ins. Co., 36 AD3d 763, 765 [2007]).

Contrary to plaintiff’s further contention, the court did not abuse its discretion in granting defendant’s motion to sever the 14 causes of action. “The decision whether to grant severance ‘rests soundly in the discretion of the trial court and, on appeal, will be affirmed absent a demonstration of abuse of discretion or prejudice to a substantial right’ ” (Rapini v New Plan Excel Realty Trust, Inc., 8 AD3d 1013, 1014 [2004]; see Soule v Norton, 299 AD2d 827, 828 [2002]). [*2]Although this action was commenced “by a single assignee against a single insurer and all [causes of action] allege the erroneous nonpayment of no-fault benefits . . . , they arise from [14] different automobile accidents on various dates in which the [14] unrelated assignors suffered diverse injuries and required different medical treatment” (Poole v Allstate Ins. Co., 20 AD3d 518, 519 [2005]). Present—Scudder, P.J., Hurlbutt, Martoche, Smith and Centra, JJ.

Matter of Falzone (New York Cent. Mut. Fire Ins. Co.) (2009 NY Slip Op 05423)

Reported in New York Official Reports at Matter of Falzone (New York Cent. Mut. Fire Ins. Co.) (2009 NY Slip Op 05423)

Matter of Falzone (New York Cent. Mut. Fire Ins. Co.) (2009 NY Slip Op 05423)
Matter of Falzone (New York Cent. Mut. Fire Ins. Co.)
2009 NY Slip Op 05423 [64 AD3d 1149]
July 2, 2009
Appellate Division, Fourth Department
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
As corrected through Wednesday, September 2, 2009
In the Matter of the Arbitration between Carmen I. Falzone, Now Known as Carmen I. Cordero, Respondent, and New York Central Mutual Fire Insurance Company, Appellant.

[*1] Brown & Kelly, LLP, Buffalo (H. Ward Hamlin, Jr., of counsel), for respondent-appellant.

Gross, Shuman, Brizdle & Gilfillan, P.C., Buffalo (David H. Elibol of counsel), for claimant-respondent.

Appeal from an order of the Supreme Court, Erie County (Christopher J. Burns, J.), entered November 20, 2008 in a proceeding pursuant to CPLR article 75. The order granted claimant’s motion and vacated an arbitration award.

It is hereby ordered that the order so appealed from is reversed on the law without costs, the motion is denied, and the arbitration award is confirmed.

Memorandum: Claimant was allegedly injured in an automobile accident and, following a hearing based on the denial by respondent, her insurer, of her request for no-fault benefits, the arbitrator awarded claimant the sum of $4,354.56. Claimant also sought supplementary uninsured motorists (SUM) benefits and, following a second hearing before a different arbitrator, the arbitrator denied her request for such benefits on the ground that her injuries were not caused by the accident. Claimant moved pursuant to CPLR article 75 to vacate or modify the SUM arbitration award contending, inter alia, that respondent was collaterally estopped from relitigating the issue of causation with respect to her injuries. Respondent, on the other hand, sought confirmation of the SUM arbitrator’s award. We agree with respondent that Supreme Court erred in granting claimant’s motion. The fact that a prior arbitration award is inconsistent with a subsequent award is not an enumerated ground in either subdivision (b) or (c) of CPLR 7511 for vacating or modifying the subsequent award (see Matter of City School Dist. of City of Tonawanda v Tonawanda Educ. Assn., 63 NY2d 846, 848 [1984]). As the court properly recognized, “[i]t was within the [SUM] arbitrator’s authority to determine the preclusive effect of the prior arbitration on the instant arbitration” (Matter of Progressive N. Ins. Co. v Sentry Ins. A Mut. Co., 51 AD3d 800, 801 [2008]). The court erred in noting, however, that it was unable to determine whether the SUM arbitrator even considered claimant’s contention with respect to collateral estoppel. Arbitrators are not required to provide reasons for their decisions (see Matter of Solow Bldg. Co. v Morgan Guar. Trust Co. of N.Y., 6 AD3d 356, 356-357 [2004], lv denied 3 NY3d 605 [2004], cert denied 543 US 1148 [2005]; Matter of Guetta [Raxon Fabrics Corp.], 123 AD2d 40, 41 [1987]), and thus the SUM arbitrator was not required to state that he had considered that contention. [*2]

All concur except Peradotto and Gorski, JJ., who dissent and vote to affirm in the following memorandum.

Peradotto and Gorski, JJ. (dissenting). We respectfully dissent and would affirm. Although collateral estoppel “is not a basis on which [Supreme C]ourt may, under CPLR 7511, vacate an arbitration award” (Matter of Globus Coffee, LLC v SJN, Inc., 47 AD3d 713, 714 [2008]; see Matter of City School Dist. of City of Tonawanda v Tonawanda Educ. Assn., 63 NY2d 846, 848 [1984]), vacatur is permitted where the award ” ‘violates a strong public policy, is irrational or clearly exceeds a specifically enumerated limitation on the arbitrator’s power’ ” (Matter of Mays-Carr [State Farm Ins. Co.], 43 AD3d 1439, 1439 [2007], quoting Matter of New York City Tr. Auth. v Transport Workers’ Union of Am., Local 100, AFL-CIO, 6 NY3d 332, 336 [2005]; see generally CPLR 7511 [b] [1] [iii]). In our view, the arbitrator who issued the award with respect to supplementary uninsured motorists (SUM) benefits exceeded his power by disregarding the preclusive effect of a prior arbitration award and instead issuing a different determination with respect to causation, involving the same parties and based upon the same facts (see Matter of American Honda Motor Co. v Dennis, 259 AD2d 613 [1999]; Motor Veh. Acc. Indem. Corp. v Travelers Ins. Co., 246 AD2d 420, 422 [1998]).

We agree with the majority that it generally is within the arbitrator’s discretion to determine the preclusive effect of a prior arbitration award on the instant arbitration (see City School Dist. of City of Tonawanda, 63 NY2d at 848). In a number of the cases setting forth that general proposition, however, there are factual issues whether the prior award should be given preclusive effect, either because the parties are not identical (see e.g. id., 63 NY2d at 847-848; Board of Educ. of Patchogue-Medford Union Free School Dist. v Patchogue-Medford Congress of Teachers, 48 NY2d 812, 813 [1979]), or it is not clear whether the disputed issue was resolved in the prior proceeding (see e.g. Globus Coffee, LLC, 47 AD3d at 714; Matter of Town of Newburgh v Civil Serv. Empls. Assn., 272 AD2d 405 [2000]; Matter of Medina Power Co. [Small Power Producers], 241 AD2d 915 [1997]). Here, there are no such factual issues. The SUM arbitrator was thus barred from relitigating the issue of causation between the identical parties, inasmuch as it was ” ‘actually contested and therefore determined by the [prior] award’ ” (Medina Power Co., 241 AD2d 915 [1997]).

Further, we note that “strong public policy considerations favor finality in the resolution of disputes of all kinds to assure that parties will not be vexed by further litigation” (Merrill Lynch, Pierce, Fenner & Smith v Benjamin, 1 AD3d 39, 40 [2003]), and that “[t]he object of arbitration is to achieve a final disposition of differences between parties in an easier, more expeditious and less expensive manner” (Matter of Maye [Bluestein], 40 NY2d 113, 117-118 [1976]). Just as a court may not redetermine an issue conclusively decided in a prior arbitration proceeding between the same parties (see Clemens v Apple, 65 NY2d 746, 748-749 [1985]), despite having the same discretion as an arbitrator with respect to collateral estoppel determinations (see Rembrandt Indus. v Hodges Intl., 38 NY2d 502, 504 [1976]), an arbitrator is similarly precluded from redetermining an issue previously settled between the parties pursuant to an arbitration award (see American Honda Motor Co., 259 AD2d 613 [1999]). To conclude otherwise would “defeat[ ] . . . two of arbitration’s primary virtues, speed and finality” (Matter of Weinrott [Carp], 32 NY2d 190, 198 [1973]), and would instead encourage parties to seek that finality by way of the court system. Present—Smith, J.P., Centra, Peradotto, Green and Gorski, JJ.

Bhatt v Nationwide Mut. Ins. Co. (2009 NY Slip Op 03301)

Reported in New York Official Reports at Bhatt v Nationwide Mut. Ins. Co. (2009 NY Slip Op 03301)

Bhatt v Nationwide Mut. Ins. Co. (2009 NY Slip Op 03301)
Bhatt v Nationwide Mut. Ins. Co.
2009 NY Slip Op 03301 [61 AD3d 1406]
April 24, 2009
Appellate Division, Fourth Department
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
As corrected through Wednesday, June 10, 2009
Sukeerti Bhatt, Respondent, v Nationwide Mutual Insurance Company, Appellant.

[*1] Mura & Storm, PLLC, Buffalo (Roy A. Mura of counsel), for defendant-appellant.

Longstreet & Berry, LLP, Syracuse (Martha Berry of counsel), for plaintiff-respondent.

Appeal from an order of the Supreme Court, Oneida County (Samuel D. Hester, J.), entered January 11, 2008. The order, insofar as appealed from, denied the motion of defendant for summary judgment.

It is hereby ordered that the order so appealed from is unanimously affirmed without costs.

Memorandum: Plaintiff commenced this action seeking to recover supplemental uninsured/underinsured motorist (SUM) benefits under an automobile insurance policy issued to her by defendant. Under the SUM endorsement, plaintiff was required to give defendant notice of a claim “[a]s soon as practicable.” Plaintiff promptly notified defendant of the motor vehicle accident, which occurred on May 22, 2000, and she filed a claim for no-fault benefits on July 20, 2000. On April 7, 2003, plaintiff gave defendant notice of her claim under the SUM endorsement. Defendant disclaimed coverage on the ground that plaintiff failed to provide timely notice of the SUM claim.

We conclude that Supreme Court properly denied defendant’s motion for summary judgment dismissing the complaint. “[W]here an insured previously gives timely notice of the accident, the carrier must establish that it is prejudiced by a late notice of SUM claim before it may properly disclaim coverage” (Rekemeyer v State Farm Mut. Auto. Ins. Co., 4 NY3d 468, 476 [2005]). Here, it is undisputed that plaintiff timely notified defendant of the accident and, shortly thereafter, filed a claim for no-fault benefits. Defendant failed to establish that it was prejudiced by plaintiff’s delay in providing notice of the SUM claim (see id. at 475-476). Present—Hurlbutt, J.P., Peradotto, Carni, Green and Pine, JJ.

Matter of Lowe (Erie Ins. Co.) (2008 NY Slip Op 07735)

Reported in New York Official Reports at Matter of Lowe (Erie Ins. Co.) (2008 NY Slip Op 07735)

Matter of Lowe (Erie Ins. Co.) (2008 NY Slip Op 07735)
Matter of Lowe (Erie Ins. Co.)
2008 NY Slip Op 07735 [56 AD3d 130]
October 10, 2008
Centra, J.
Appellate Division, Fourth Department
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
As corrected through Wednesday, December 24, 2008

[*1]

In the Matter of the Arbitration between Brenda Lowe, Appellant, and Erie Insurance Company, Respondent.

Fourth Department, October 10, 2008

APPEARANCES OF COUNSEL

Fessenden, Laumer & DeAngelo, Jamestown (Mary B. Schiller of counsel), for petitioner-appellant.

Mura & Storm, PLLC, Buffalo (Brian C. Clark of counsel), for respondent-respondent.

{**56 AD3d at 131} OPINION OF THE COURT

Centra, J.

I.

The straightforward but apparent issue of first impression in an appellate court in New York is whether the 90-day statute of limitations set forth in CPLR 7511 (a) begins to run on the date on which the arbitrator’s decision was mailed to petitioner or the date on which it was received by petitioner or his or her agent. We conclude that the operative measuring date is the date on which the decision was received by the petitioner or his or her agent, and we therefore conclude that this proceeding was timely commenced.

II.

The undisputed facts establish that petitioner pursued no-fault arbitration to recover personal injury protection benefits for injuries she sustained in a motor vehicle accident on September 26, 2001. The arbitrator issued a decision denying the claim and, upon petitioner’s appeal from that decision, a no-fault master arbitrator affirmed the arbitrator’s decision. The master arbitration award was mailed to the parties on June 13, 2007, and it is undisputed that petitioner’s attorney received the decision on June 18, 2007. Ninety-one days after the award was mailed and 86 days after it was received by petitioner’s attorney, petitioner commenced this CPLR article 75 proceeding seeking to vacate the master arbitration award. In lieu of an answer, respondent moved to dismiss the petition and for costs, contending, inter alia, that the proceeding [*2]was time-barred. Supreme Court granted the motion in part and dismissed the petition, holding that delivery under CPLR 7511 (a) must be construed as the date of mailing rather than the date of receipt of the award. For the reasons that follow, we conclude that the order should be reversed insofar as appealed from.{**56 AD3d at 132}

III.

Article 75 of the CPLR governs review of arbitration proceedings and provides that an application to vacate or modify an arbitration award “may be made by a party within ninety days after its delivery to him [or her]” (CPLR 7511 [a]). The statute does not define “delivery,” but CPLR 7507 provides that the arbitrator “shall deliver a copy of the award to each party in the manner provided in the agreement, or, if no provision is so made, personally or by registered or certified mail, return receipt requested.” An Insurance Department regulation concerning master arbitration procedures provides that “[t]he parties shall accept as delivery of the award the placing of the award or a true copy thereof in the mail, addressed to the parties or their designated representatives at their last known addresses, or by any other form of service permitted by law” (11 NYCRR 65-4.10 [e] [3]).

Petitioner contends that “delivery” under CPLR 7511 (a) must be construed as the actual receipt of the award and that the Insurance Department Regulations governing master arbitration proceedings do not apply to CPLR article 75 proceedings. Respondent, however, contends that Insurance Department Regulations (11 NYCRR) § 65-4.10 (e) (3) specifies that delivery of the master arbitration award is the date on which the award is mailed to the parties, and that the regulation does not conflict with CPLR article 75. We agree with petitioner.

Were we to determine that “delivery” means the actual receipt of the award, then this proceeding must be deemed timely because petitioner’s attorney commenced it 86 days after receiving the award. On the other hand, were we to determine that “delivery” must be deemed the date on which the award was mailed to petitioner’s attorney, then we would agree with the court that this proceeding is time-barred because petitioner’s attorney commenced it 91 days after the award was mailed to him.

IV.

Although, as noted, this appears to be an issue of first impression, we conclude that case law supports the interpretation that delivery must be construed as the date on which the award was received. For example, in Matter of Case v Monroe Community Coll. (89 NY2d 438, 439-440 [1997], rearg denied 89 NY2d 1087 [1997]), the issue before the Court of Appeals was whether service of an arbitration award upon the petitioner’s union representative{**56 AD3d at 133} constituted service upon the petitioner for purposes of measuring the timeliness of an appeal from the award. In determining that the petitioner was indeed in effect thereby served, the Court explained that ” ‘once counsel has appeared in a matter a Statute of Limitations or time requirement cannot begin to run unless that counsel is served with the determination or the order or judgment sought to be reviewed’ ” (id. at 441, quoting Matter of Bianca v Frank, 43 NY2d 168, 173 [1977]). The Court noted that there was no dispute that the arbitrator served the award in accordance with applicable rules, i.e., those of the American Arbitration Association, and the Court concluded that, because the union representative was the designated agent for the petitioner to accept service of the award, the petitioner was deemed to have been served with the award regardless of whether the union representative was an attorney (Case, 89 NY2d at 442). Although not expressly discussing the issue before us, the Court took note of both the date of mailing and the date of receipt, but thereafter relied upon the date of receipt in determining that the petition was not filed within 90 days after service of the award (id. at 443). [*3]

In further support of our decision, we note that several cases have explicitly used the terms “receipt” and “received” in discussing the 90-day period set forth in CPLR 7511 (a) (Matter of McRae v New York City Tr. Auth., 39 AD3d 861, 861 [2007], lv dismissed 9 NY3d 945 [2007] [“A proceeding to vacate an arbitration award must be commenced within 90 days of receipt of the arbitrators’ determination”]; Matter of Pender v New York State Off. of Mental Retardation & Dev. Disabilities, 27 AD3d 756, 756 [2006], lv denied 9 NY3d 805 [2007], rearg denied 9 NY3d 977 [2007] [“(T)he petitioner’s counsel received a copy of the arbitrator’s determination, at the latest, on September 30, 2002, the operative date from which to measure the 90-day statute of limitations”]; Matter of Lumbermens Mut. Cas. Co. v City of New York, 5 AD3d 684, 685 [2004] [“(T)he documentary evidence . . . established that the petitioner received the arbitrator’s decision no later than November 9, 2001 (and, because) this proceeding was commenced more than 90 days thereafter, the Supreme Court properly dismissed it as untimely”]; Werner Enters. Co. v New York City Law Dept., 281 AD2d 253 [2001], lv denied 97 NY2d 601 [2001] [“Vacatur of the subject awards was properly denied, since the proceeding was commenced more than 90 days after the awards were delivered to petitioner, as evidenced by the letter of petitioner’s{**56 AD3d at 134} counsel to the arbitration forum acknowledging receipt of the award”]).

Less recent cases have used language that essentially is analogous to the terms “receipt” or “received” (Lopez v Coughlin, 220 AD2d 349, 350 [1995] [“Petitioner’s application challenging the arbitration award was properly dismissed for failure to bring it within 90 days after service of the award on petitioner’s attorneys”]; Matter of Malatestinic v Board of Educ. of City of N.Y., 132 AD2d 661, 662 [1987] [“(The) statute began to run on . . . the date upon which the petitioner was originally notified of the denial of her request”]; Matter of Levy [Allstate Ins. Co.], 63 AD2d 982, 983 [1978] [“(The operative date was date on which the arbitration) award . . . was transmitted to the parties”]). We acknowledge that, in Robinson v City of New York (237 AD2d 127, 128 [1997], lv denied 90 NY2d 801 [1997]), the First Department held that the “[p]etitioner was properly deemed served with the arbitration award upon its mailing to the attorney who represented her at the arbitration hearing.” The issue in that case, however, was whether the attorney’s delay in forwarding the award to the petitioner served to extend the petitioner’s 90 days under CPLR 7511 (a) to move to vacate the award, not whether delivery of the award was the date on which it was mailed to the attorney.

In attempting to distinguish the cases that use the word “received,” respondent contends that those cases involved labor arbitration awards rather than no-fault master arbitration awards and thus are not governed by Insurance Department Regulations (11 NYCRR) § 65-4.10. We reject that contention, for two reasons. First, 11 NYCRR 65-4.10 (e) (3) simply sets forth the method of the delivery of the award to the parties. It does not define “delivery” as it is used in CPLR 7511 (a). Second, we agree with petitioner that, once a party commences a proceeding pursuant to CPLR article 75, the procedures set forth in that article control over those set forth in the Insurance Department Regulations. Thus, even if 11 NYCRR 65-4.10 (e) (3) constitutes an attempt to define “delivery” under CPLR 7511 (a), such an attempt would be improper. Were we to accept respondent’s contention, the 90-day statute of limitations under CPLR 7511 (a) would have different measuring dates, depending on what type of arbitration was sought to be reviewed, and that would be an untenable distinction.{**56 AD3d at 135}

V.

Accordingly, we conclude that the order insofar as appealed from should be reversed, respondent’s motion denied in its entirety and the petition reinstated.

Hurlbutt, J.P., Smith, Green and Pine, JJ., concur.

It is hereby ordered that the order insofar as appealed from is unanimously reversed on the law without costs, the motion is denied in its entirety and the petition is reinstated.

Progressive Ins. Co. v Strough (2008 NY Slip Op 07463)

Reported in New York Official Reports at Progressive Ins. Co. v Strough (2008 NY Slip Op 07463)

Progressive Ins. Co. v Strough (2008 NY Slip Op 07463)
Progressive Ins. Co. v Strough
2008 NY Slip Op 07463 [55 AD3d 1402]
October 3, 2008
Appellate Division, Fourth Department
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
As corrected through Wednesday, December 10, 2008
Progressive Insurance Company, Appellant-Respondent, v Michelle Strough, Respondent-Appellant.

[*1] Hurwitz & Fine, P.C., Buffalo (Steven E. Peiper of counsel), for plaintiff-appellant-respondent.

Hogan Willig, PLLC, Amherst (John B. Licata of counsel), for defendant-respondent-appellant.

Appeal and cross appeal from a judgment (denominated order) of the Supreme Court, Erie County (Penny M. Wolfgang, J.), entered December 19, 2006 in a declaratory judgment action. The judgment, among other things, denied defendant’s motion for summary judgment.

It is hereby ordered that the judgment so appealed from is unanimously affirmed without costs.

Memorandum: Plaintiff commenced this action alleging that defendant failed to cooperate with plaintiff, as required by her insurance policy, when she was injured in a motor vehicle accident and that, based on that failure, plaintiff is entitled to a declaration that it has no duty to indemnify defendant or to pay her no-fault insurance benefits with respect to those injuries.

We conclude that Supreme Court properly denied defendant’s motion seeking summary judgment dismissing the complaint and confirming the award of the master arbitrator and properly granted that part of the cross motion of plaintiff seeking a de novo determination of its claim that it has no duty to indemnify defendant for claims arising from the motor vehicle accident, including claims for no-fault benefits. Contrary to the contention of defendant, the action is not barred by the doctrine of res judicata. Although the doctrine of res judicata generally applies with respect to a final arbitration award (see Rembrandt Indus. v Hodges Intl., 46 AD2d 623, 623-624 [1974], affd 38 NY2d 502 [1976]), Insurance Law § 5106 (c) and 11 NYCRR 65-4.10 (h) (1) (ii) expressly provide that either party to a matter submitted to arbitration has the right to a de novo determination of the dispute in the event that the master arbitrator’s award is $5,000 or greater, exclusive of interest and attorney’s fees, and that is the case here (see Matter of Greenberg [Ryder Truck Rental], 70 NY2d 573, 576-577 [1987]; Matter of Capuano v Allstate Ins. Co., 122 AD2d 138, 139 [1986]).

We further conclude that the court properly denied that part of plaintiff’s cross motion for [*2]summary judgment declaring that plaintiff has no duty to indemnify defendant for claims arising from the motor vehicle accident in question, including claims for no-fault benefits. Plaintiff failed to support its motion with evidence provided by an individual with personal knowledge of the facts (see Chiarini v County of Ulster, 9 AD3d 769, 769-770 [2004]), and the documents provided by plaintiff in support of the cross motion do not establish that defendant failed to cooperate with plaintiff, as alleged in the complaint. Thus, plaintiff failed to meet its burden of establishing its entitlement to judgment as a matter of law (see generally Zuckerman v City of New York, 49 NY2d 557, 562 [1980]; New York Cas. Ins. Co. v Kushner, 309 AD2d 1235 [2003]). Present—Scudder, P.J., Martoche, Fahey, Peradotto and Gorski, JJ.

State Farm Mut. Auto. Ins. Co. v Clouden (2008 NY Slip Op 03823)

Reported in New York Official Reports at State Farm Mut. Auto. Ins. Co. v Clouden (2008 NY Slip Op 03823)

State Farm Mut. Auto. Ins. Co. v Clouden (2008 NY Slip Op 03823)
State Farm Mut. Auto. Ins. Co. v Clouden
2008 NY Slip Op 03823 [50 AD3d 1552]
April 25, 2008
Appellate Division, Fourth Department
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
As corrected through Wednesday, June 18, 2008
State Farm Mutual Automobile Insurance Company, as Subrogee of Danita M. Nicholls, Respondent, v Michael J. Clouden, Defendant, and James W. Celotto, Appellant.

[*1] Lipsitz Green Scime Cambria LLP, Buffalo (John A. Collins of counsel), for defendant-appellant.

Barth Sullivan Behr, Buffalo (Pierre A. Vincent of counsel), for plaintiff-respondent.

Appeal from an order of the Supreme Court, Erie County (Joseph R. Glownia, J.), entered March 6, 2007. The order, insofar as appealed from, denied the cross motion of defendant James W. Celotto to dismiss the complaint against him.

It is hereby ordered that the order so appealed from is unanimously affirmed without costs.

Memorandum: Plaintiff commenced this action in Buffalo City Court seeking to recover the amount that it paid to its insured for property damage sustained in a collision between the insured’s vehicle and a vehicle operated by James W. Celotto (defendant). Plaintiff did not move pursuant to CPLR 3025 (b) to amend the complaint to add a cause of action to recover no-fault personal injury protection (PIP) and additional personal injury protection (APIP) benefits paid to its insured and to increase the ad damnum clause but, rather, it merely informed a court attorney at Buffalo City Court by letter of those proposed amendments. The court attorney advised plaintiff that, because the proposed amendment to the ad damnum clause would remove the action from the jurisdictional limits of Buffalo City Court, the Judge assigned to the action was directing plaintiff to seek removal of the action pursuant to CPLR 325 (b).

Supreme Court granted plaintiff’s motion to remove the action to that court, denied the cross motion of defendant to dismiss the complaint against him, and sua sponte removed the action back to Buffalo City Court pursuant to CPLR 325 (d) and 22 NYCRR 202.13 (e). Defendant contends on appeal that Supreme Court erred in denying that part of his cross motion seeking dismissal of the claims to recover PIP and APIP benefits paid to plaintiff’s insured. The complaint, however, was never amended and it does not contain any such claims (see Everett v Loretto Adult Community, Inc., 32 AD3d 1273, 1274-1275 [2006]). We thus conclude that the court properly denied the cross motion (see generally Moscato v City of New York [Parks Dept.], 183 AD2d 599, 601 [1992]). Present—Martoche, J.P., Centra, Lunn, Peradotto and Green, JJ.