Second Department Affirms Denial of Petition to Stay UM Arbitration -- Insurer's Late Notice & Lack of Physical Contact Grounds Rejected

UM – AUTO  – LATE NOTICE – PREJUDICE – PHYSICAL CONTACT
Matter of New York Cent. Mut. Fire Ins. Co. v. Vento
(2nd Dept., decided 6/9/2009)

The insured, Ann Vento, sought to compel arbitration of her uninsured motorists (UM) coverage claim after she allegedly was struck by an unidentified vehicle while crossing a street at a crosswalk on October 14, 2006.  New York Central Mutual (NYCM) petitioned the Supreme Court to permanently stay arbitration on the ground that the insured had failed to comply with the notice provisions of the subject insurance policy and failed to demonstrate that her injuries were caused by physical contact with the hit-and-run vehicle.

The first notice provision in the supplemental uninsured/underinsured motorist endorsement required that "the insured or someone on the insured's behalf ... shall have filed with the [insurer] a statement under oath."  The second notice provision of the SUM endorsement required both a "notice of claim" and a "proof of claim." Written notice of claim was required "[a]s soon as practicable."  However, written proof of claim was required, upon forms furnished by NYCM, "[a]s soon as practicable after [the petitioner's] written request."

Suffolk Supreme conducted a non-jury framed-issue hearing on the issue of whether the insured's claimed injuries were caused by physical contact with a hit-and-run vehicle and denied NYCM's petition for a stay of the insured's UM arbitration.  NYCM appealed.

In AFFIRMING the trial court's order, the Second Department concluded that: (1) NYCM had not demonstrated prejudice from the insured's delay in providing either notice of claim or proof of claim; and (2) the trial court's non-jury determination of physical contact was supported by the record and, as such, could not be disturbed on appeal:

The insurer's own submissions in support of its petition demonstrated that the insured provided it with notice of the accident as soon as practicable (see Matter of Firemen's Ins. Co. v Clinton, 54 AD3d 759, 759). To the extent that the insurer demonstrated a delay in receiving the "Notice of Intention to Make Claim" form after it sent a written request for proof of claim, the insurer failed to demonstrate that it was prejudiced by any such delay (see Rekemeyer v State Farm Mut. Auto. Ins. Co., 4 NY3d 468, 476; Matter of New York Cent. Mut. Fire Ins. Co. v Ward, 38 AD3d 898, 901; Matter of Nationwide Mut. Ins. Co. [Mackey], 25 AD3d 905, 906-907). 

Furthermore, the sworn, signed, and notarized "Notice of Intention to Make Claim" form received by the insurer satisfied the first notice provision of the subject policy which required that the insured file a "statement under oath" that indicated that the insured had a cause of action arising out of an accident against a person whose identity was unascertainable (cf. Matter of Allstate Ins. Co. v Estate of Aziz, 17 AD3d 460, 461; Matter of Eveready Ins. Co. v Ruiz, 208 AD2d 923, 923), and the insurer failed to demonstrate that it was prejudiced thereby (accord Rekemeyer v State Farm Mut. Auto. Ins. Co., 4 NY3d at 476; Matter of New York Cent. Mut. Fire Ins. Co. v Ward, 38 AD3d at 901; Matter of Nationwide Mut. Ins. Co. [Mackey], 25 AD3d at 906-907).

With respect to the insurer's contention that the insured failed to demonstrate physical contact, we note that "[p]hysical contact is a condition precedent to an arbitration based upon a hit-and-run accident involving an unidentified vehicle" (Matter of Great N. Ins. Co. v Ballinger, 303 AD2d 503, 504; see Insurance Law § 5217; State Farm Mut. Auto. Ins. Co. v Johnson, 287 AD2d 640, 640-641; Matter of Aetna Life & Cas. v Gramazio, 242 AD2d 530, 530). When there is an issue of fact as to whether physical contact occurred, a hearing on the issue must be conducted (see State Farm Mut. Auto. Ins. Co. v Johnson, 287 AD2d at 640-641; Matter of Aetna Life & Cas. v Gramazio, 242 AD2d at 530).

Where, as here, a case is tried without a jury, this Court's power to review the evidence is as broad as that of the trial court, "taking into account in a close case the fact that the trial judge had the advantage of seeing the witnesses'" (Northern Westchester Professional Park Assoc. v Town of Bedford, 60 NY2d 492, 499, quoting York Mortgage Corp. v Clotar Costr., 254 NY 128, 133-134). In this case, the Supreme Court's determination that the insured had been struck by an unidentified vehicle is supported by the record and will not be disturbed on appeal (see Matter of Halycon Ins. Co. v Fox, 44 AD3d 662). The insured's testimony, credited by the court, demonstrated that she had come into physical contact with the hit-and-run vehicle (see Matter of Nova Cas. Co. v Musco, 48 AD3d 572, 573; Matter of Allstate Ins. Co. v McMahon, 251 AD2d at 572; Matter of Aetna Life & Cas. v Gramazio, 242 AD2d at 530).