Sunday, June 29, 2008

Petition to Stay SUM Arbitration Denied

Matter of Allstate Ins. Co. v. Dawkins
(2nd Dept., decided 6/24/2008)

Dawkins was injured in a three-car accident. After the tortfeasor's insurer, AIG, offered to settle with three victims of the accident (including Dawkins) for the full amount of the tortfeasor's policy, Dawkins demanded arbitration of his claim for SUM (underinsured motorist) benefits from his own insurer, Allstate. Allstate commenced this special proceeding for a permanent stay of that arbitration, asserting that the tortfeasor's vehicle was not "underinsured" because the limits for bodily injury under the AIG policy were the same as those in the Allstate policy. In opposition, Dawkins argued that he was entitled to benefits pursuant to 11 NYCRR 62-1.8(f)(c)(3)(ii) because the coverage available under the AIG policy had been reduced by payments made to other persons injured in the accident to an amount less than the bodily injury liability limit of his policy with Allstate.

In AFFIRMING the Queens County Supreme Court's denial of Allstate's petition for a permanent stay of arbitration, the Second Department held:
Contrary to Allstate's contention on appeal, the Supreme Court properly declined to address its argument, made for the first time in its reply papers, that there was an issue of fact as to whether AIG made any payments on its policy. The function of reply papers is to address arguments made in opposition to the position taken by the movant, not to permit the movant to introduce new arguments or new grounds for the requested relief (citations omitted). * * * Finally, we decline Allstate's invitation, made for the first time on appeal, to reconsider our case law in this area and hold that the Superintendent of Insurance exceeded his authority in promulgating 11 NYCRR 62-1.8(f)(c)(3)(ii) (citation omitted).

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