Court of Appeals Declines to Disturb SUM Arbitration Award Despite Arbitrator's Refusal to Give Collateral Estoppel Effect to Prior No-Fault Arbitration Award

SUM – NO-FAULT – COLLATERAL ESTOPPEL – VACATING ARBITRATION AWARD
Matter of Falzone v. New York Cent. Mut. Fire Ins. Co.
(Ct. Apps., decided 10/21/2010)

Falzone arbitrated New York Central Mutual's denial of no-fault benefits and won.  She then arbitrated her related SUM claim against NYCM before a different arbitrator and lost on the ground that her injuries were not caused by the accident.  Contending that the second arbitration decision was inconsistent from the first, and that NYCM was collaterally estopped in the SUM arbitration from relitigating the issue of causation with respect to her injuries, Falzone commenced this CPLR article 75 special proceeding to vacate or modify the SUM arbitration award.  Supreme Erie granted petitioner's motion to vacate the SUM award and NYCM appealed.

In a 3-2 split decision, the Fourth Department, Appellate Division, reversed the order and confirmed the SUM arbitration award, the three-justice majority noting that "[t]he 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[.]"

In 6-1 split decision, the New York Court of Appeals AFFIRMED the Appellate Division's decision, the six-judge majority holding: 

It is well settled that a court may vacate an arbitration award only if it violates a strong public policy, is irrational, or clearly exceeds a specifically enumerated limitation on the arbitrator's power (see Matter of New York City Tr. Auth. v Transport Workers' Union of Am., Local 100, AFL-CIO, 6 NY3d 332, 336 [2005]; Matter of United Fedn. of Teachers, Local 2, AFT, AFL-CIO v Board of Educ. of City School Dist. of City of N.Y., 1 NY3d 72, 79 [2003]; CPLR 7511 [b] [1] [iii]).  Even where an arbitrator has made an error of law or fact, courts generally may not disturb the arbitrator's decision (see Transport Workers' Union of Am., Local 100, AFL-CIO, 6 NY3d at 336 ["[C]ourts are obligated to give deference to the decision of the arbitrator.  This is true even if the arbitrator misapplied the substantive law in the area of the contract (citations omitted)."]).  Here, petitioner's claim —- that the arbitrator erred in failing to apply collateral estoppel to preclude litigation of the causation issue in the SUM arbitration — falls squarely within the category of claims of legal error courts generally cannot review.

* * * * *

Here, the prior (no-fault) arbitration award involved the same parties, the same accident, the same injuries, and resolution of the same issue (causation) as the subsequent (SUM) arbitration award. Respondent insurer, a party to the prior arbitration, lost on the causation issue. Petitioner, the prevailing party on that issue in the prior arbitration, reasonably argued that collateral estoppel should apply to bar relitigation of the causation issue in the subsequent SUM arbitration. The SUM arbitrator rejected petitioner's argument, had the parties relitigate the causation issue and, contrary to the no-fault arbitrator's determination, found in respondent insurer's favor on the causation issue.

It is not for us to decide whether the SUM arbitrator erred in not applying collateral estoppel (i.e., not giving preclusive effect to the no-fault arbitrator's determination on the issue of causation). Because the SUM arbitration award was not patently irrational or so egregious as to violate public policy, the instant SUM arbitration award (and whether the SUM arbitrator erred or exceeded his authority) is beyond this Court's review powers.

As I observed when posting about the Fourth Department's decision, although some practitioners may regard this decision as standing for the proposition that collateral estoppel no longer attaches to no-fault arbitration awards in New York, the ruling is much more narrow than that.  The Fourth Department's majority reversed the trial judge and confirmed the award not because they believed collateral estoppel could or did not apply to preclude NYCM from relitigating injury causality, but because they (and the dissent) adhered to the rule that collateral estoppel is not a basis on which Supreme Court may, under CPLR 7511, vacate an arbitration award.  On that procedural basis the Court of Appeals agreed and declined to disturb the arbitrator's award. 

New York Supreme Finds That Insurer Did Not Timely Commence Special Proceeding to Stay Arbitration of UM Claim from Mexico Motor Vehicle Accident

UM – CPLR § 7503(C) – 20-DAY LIMITATION FOR COMMENCING SPECIAL PROCEEDING TO STAY ARBITRATION
Matter of Allstate Ins. Co. v. LeGrand
(Sup. Ct., New York Co., decided 2/3/2010)

CPLR § 7503(c) has been called "The Shortest Statute of Limitations Known to the Law".  Dachs, Norman and Dachs, Jonathan, NYLJ, June 12, 1990.  It provides that "[a]n application to stay arbitration must be made by the party served within twenty days after service upon him of the notice or demand [for arbitration or intention to arbitrate], or he shall be so precluded." With respect to UM and SUM arbitration demands, the 20-day period accrues, or begins to run, from the insurer's receipt of the demand for arbitration and ends when the special proceeding is actually commenced by the filing of a petition for a stay. There are a number of exceptions to the 20-day rule that have received extensive treatment in the courts.

Allstate's insured, Jose LeGrand allegedly was injured when the rental car he was driving was rear-ended by a drunk driver in Cancun, Mexico.  On September 22, 2009, LeGrand gave Allstate written notice, via facsimile and regular and certified mail, of his intention to assert an uninsured motorist (UM) coverage claim.  Allstate acknowledged receipt of that notice the same day, but did not commence this special proceeding to permanently stay the arbitration of LeGrand's UM claim until November 2009, well more than 20 days after Allstate had received LeGrand's notice of intention to make a UM claim.  In its petition, Allstate asserted that LeGrand's accident was not a "covered event" because his policy's UM/SUM endorsement provided UM/SUM coverage "only to accidents that occur during the policy period shown in the Declarations, and in the United States, its territories or possessions, or Canada.”  As Mexico fell outside the coverage territory for UM/SUM coverage, Allstate argued that LeGrand's UM claim was not arbitrable. 

LeGrand opposed Allstate's petition on the ground that Allstate had failed to commence this special proceeding within 20 days of its receipt of LeGrand's notice of intention to make a UM claim, as required by CPLR § 7503(c).  In response, Allstate argued that since LeGrand's accident had occurred outside of the UM/SUM coverage territory, there was no coverage and, therefore, no agreement to arbitrate. 

New York County Supreme Court Justice Alice Schlesinger disagreed with Allstate's position, finding that the 20-day deadline of CPLR § 7503(c) to commence the special proceeding did apply to Allstate's non-coverage defense:

However, citing to In re Matarasso v. Continental Casualty Co., 56 NY2d 264 (1982), Allstate insists that the twenty-day period does not apply here because of the coverage limitation in the SUM Endorsement.  In Matarasso, the Court of Appeals carved out a limited exception to the twenty-day rule with respect to applications under CPLR §7503(c) where no agreement to arbitrate exists.  Allstate here contends that because the parties never agreed to arbitrate claims regarding accidents in Mexico, the Matarasso exception
applies and its application is timely.

Allstate’s reliance on Matarasso is misplaced, as the holding is limited to situations where no agreement to arbitrate exists, as opposed to situations like the case at bar where the dispute is whether the arbitration clause applies.  The limitation on the Matarasso exception is clear based on the Court‘s discussion of the facts, as well as its unambiguous holding.

* * * * *

Counsel necessarily agree that LeGrand’s policy contains an arbitration clause applicable to uninsured motorist claims.  Their dispute is whether LeGrand’s injuries are covered because the accident took place in Mexico and the SUM Endorsement does not include Mexico in the territory covered.  The issue relates to the scope of coverage, not to the existence of the arbitration agreement itself.  Thus, the Matarasso exception to the twenty-day rule does not apply.

The courts have no discretion to extend the twenty-day rule to permit consideration of an untimely application such as this one. Matarasso, 56 NY2d at 267; State Farm v. Kankam, 3 AD3d 418 (1st Dep't 2004) (petition dismissed as untimely where arbitration agreement existed and the dispute was whether the conditions had been satisfied).  Allstate cites Zappone v. Home Ins. Co., 55 NY2d 131 (1982) for the proposition that the courts cannot create coverage where none exists. However, Zappone is wholly inapposite, as there the patty was seeking coverage from Home Insurance Company for a car insured by Aetna, and the issue was what steps, if any, Home Insurance was required to take under the Insurance Law to deny coverage. Neither CPLR §7503(c), nor the issue of timeliness, was even involved.

With due respect to Justice Schlesinger, I believe she's wrong on this one.  The UM/SUM endorsement's requirement that an accident take place within the policy period and coverage territory is not akin to a condition precedent or subsequent to coverage, the asserted breach of which would be governed by the 20-day SOL of CPLR § 7503(c).  Instead, to me that issue is more like the question of whether someone qualifies as an "insured" under the UM/SUM endorsement's Insuring Agreement, a coverage issue and "Matarasso exception" the New York courts repeatedly have held is not subject to the 20-day SOL of CPLR § 7503(c).  See, e.g., Matter of Aetna Cas. & Sur. Co. v. Cartigliano, 178 A.D.2d 472 (2nd Dept. 1991).

Master No-Fault Arbitration Award Not Vacated

NO-FAULT – GROUNDS FOR VACATING MASTER ARBITRATION AWARD – CPLR ARTICLE 75 PROCEEDING
Matter of Travelers Indem. Co. v. United Diagnostic Imaging, P.C.
(2nd Dept., decided 2/23/2010)

New York Civil Practice Law and Rules section 7511(b) sets forth the grounds upon which a court may vacate an arbitration award:

(b) Grounds for vacating. 

1. The award shall be vacated on the application of a party who either participated in the arbitration or was served with a notice of intention to arbitrate if the court finds that the rights of that party were prejudiced by: 

(i) corruption, fraud or misconduct in procuring the award; or 

(ii) partiality of an arbitrator appointed as a neutral, except where the award was by confession; or 

(iii) an arbitrator, or agency or person making the award exceeded his power or so imperfectly executed it that a final and definite award upon the subject matter submitted was not made; or

(iv) failure to follow the procedure of this article, unless the party applying to vacate the award continued with the arbitration with notice of the defect and without objection.

Case law makes it clear that New York courts apply these four grounds narrowly, declining more times than not to vacate arbitration awards.   This case is no different, the Second Department affirming the lower court's denial of Travelers' petition to vacate the master arbitration award, with costs.

In support of its petition to vacate, Travelers argued that the arbitration award should be vacated pursuant to CPLR 7511(b)(1)(iii) because the master arbitrator had exceeded his power in confirming the award.  Travelers also contended that both the arbitrator and master arbitrator "acted in a manner that was arbitrary, capricious, irrational, and without a plausible basis."  Both the Supreme Court and Second Department disagreed, the appellate court holding:

"Consistent with the public policy in favor of arbitration, the grounds specified in CPLR 7511 for vacating or modifying a no-fault arbitration award are few in number and narrowly applied" (Matter of Mercury Cas. Co. v Healthmakers Med. Group, P.C., 67 AD3d 1017, 1017).  * * * * *

"An arbitration award in a mandatory arbitration proceeding will be upheld if it is supported by the evidence and is not arbitrary and capricious" (Matter of State Farm Mut. Auto. Ins. Co. v City of Yonkers, 21 AD3d 1110, 1111). "On review, an award may be found to be rational if any basis for such a conclusion is apparent to the court based upon a reading of the record" (id.; see Caso v Coffey, 41 NY2d 153, 158).

Here, the petitioner failed to demonstrate that the master arbitrator's award should have been vacated pursuant to CPLR 7511(b)(1)(iii) (see generally Matter of New York City Tr. Auth. v Transport Workers' Union of Am., Local 100, AFL-CIO, 6 NY3d 332, 336). Moreover, the determination of the master arbitrator confirming the original arbitration award had evidentiary support and a rational basis, and was not arbitrary and capricious. Accordingly, the Supreme Court properly denied the petition to vacate the award.

Remember that pursuant to New York Insurance Law § 5106(c) and 11 NYCRR § 65-4.10(h)(1)(ii), if the master arbitrator's award is $5,000 or more, exclusive of interest and attorney’s fees, either party may, in lieu of commencing a CPLR article 75 proceeding, institute a court action to adjudicate the dispute de novo.  Can't do both, however.  It's either commence a special proceeding to vacate the award pursuant to CPLR 7511(b) or commence an action to adjudicate the disputed claim de novo.  Pursuant to 11 NYCRR § 65-4.10(h)(2) and CPLR 7511(a), the deadline for commencing either a special proceeding or de novo action is 90 days after delivery of the master arbitrator's award to that party.  "Delivery" has been held to mean receipt for purposes of CPLR 7511(a)'s 90-day statute of limitations.  Matter of Lowe v. Erie Ins. Co., 56 AD3d 130 (4th Dept. 2008).

Grown Daughter Not a "Resident" of Her Parents' Household, Despite Visiting Often and Still Having a Room with Some Belongings There

UM – CPLR ARTICLE 75 PROCEEDING – HOUSEHOLD "RESIDENT"
Matter of State Farm Mut. Auto. Ins. Co. v. Bonifacio
(2nd Dept., decided 1/19/2010)

Respondent lived most of her life at her parents' residence in Yorktown Heights until she graduated from college in 2005. Shortly afterwards, in September of that year, she rented an apartment in Manhattan with two other people. Two months later, the respondent began employment in Manhattan where she worked five days a week, 11 to 12 hours a day. More than two years later, after spending a Sunday afternoon with some friends near her hometown, the respondent was struck by a car while crossing Route 9A in Ardsley.

Respondent made a claim for uninsured motorists (UM) coverage benefits to State Farm, her mother's personal auto insurer.  State Farm denied UM coverage based on its conclusion that she did not qualify as an "insured" for UM coverage purposes because she was no longer a a resident of her parents' household at the time of the accident.  The respondent demanded arbitration of her UM claim, and State Farm commenced this special proceeding for a permanent stay of that arbitration.  After conducting an evidentiary hearing, Westchester Supreme denied State Farm's petition and directed that the parties proceed to arbitration.  State Farm appealed.

In REVERSING the lower court's order, the Second Department ruled that the evidence presented at the hearing established that the respondent did not reside in her mother's household at the time of the accident and, thus, was not a covered person under the subject policy:

A person's status as a resident of an insured's household "requires something more than temporary or physical presence and requires at least some degree of permanence and intention to remain" (Matter of State Farm Mut. Auto. Ins. Co. v Nicoletti, 11 AD3d 702, 702 [internal quotation marks omitted]; see Lindner v Wilkerson, 2 AD3d 500, 501-502; Fennell v New York Cent. Mut. Fire Ins. Co., 305 AD2d 452, 453; Government Empls. Ins. Co. v Paolicelli, 303 AD2d 633, 633; Matter of New York Cent. Mut. Fire Ins. Co. v Bonilla, 269 AD2d 599; New York Cent. Mut. Fire Ins. Co. v Kowalski, 195 AD2d 940, 941; see also Matter of Aetna Cas. & Sur. Co. v Gutstein, 80 NY2d 773, 775; Matter of Aetna Cas. & Sur. Co. v Panetta, 202 AD2d 662). The issue of residency is a question of fact to be determined at a hearing (see Government Empls. Ins. Co. v Paolicelli, 303 AD2d at 633; Matter of American Natl. Prop. & Cas. Co. v Chulack, 265 AD2d 550). Based on the evidence presented here, we disagree with the hearing court's finding that the respondent resided in the household of the petitioner's named insured, the respondent's mother, at the time of the accident.

* * * * * 

Although the respondent testified at the hearing that she visited her parents at the Yorktown residence at least once a month, "most often more," and that her parents maintained a room for her there where she kept some of her personal belongings, the respondent was emancipated from her parents, paid rent at the Manhattan residence, filed her own tax returns, and was no longer a dependent on her parents' tax returns. Evidence that the respondent's driver's license still listed her parents' address as her home address, that she possessed a key to her parents' home and, in 2008, voted in Yorktown Heights, and that she previously opened a bank account at a Chase branch in Yorktown Heights, was insufficient to establish that the respondent was residing at the Yorktown residence of her parents at the time of the accident (see Matter of Aetna Cas. & Sur. Co. v Gutstein, 80 NY2d 773; Matter of Aetna Cas. & Sur. Co. v Panetta, 202 AD2d 662; D'Amico v Pennsylvania Millers Mut. Ins. Co., 72 AD2d 783, affd 52 NY2d 1000; cf. Dutkanych v United States Fid. & Guar. Co., 252 AD2d 537). Moreover, physical presence in the parents' home was insufficient to establish residency, particularly where, as here, the respondent had previously established another legal residence in Manhattan and signed a new one-year lease at that residence only two months before the accident (see Hollander v Nationwide Mut. Ins. Co., 60 AD2d 380, 383; Appleton v Merchants Mut. Ins. Co., 16 AD2d 361; Allstate Ins. Co. v Jahrling, 16 AD2d 501).

Based on the evidence presented, the respondent was not a covered person under the subject policy and, therefore, the petition to permanently stay the arbitration should have been granted.

Factors offered in support of respondent's ultimately unsuccessful argument that she was a resident:

• her parents kept a room with some of her belongings in their home for her;
• she visited them once a month or more;
• her driver's license still listed her parents' address as her home address;
• she had a key to her parents' home;
• in the year of the accident, she voted in Yorktown Heights, where her parents lived; and
  
• she previously opened a bank account at a Chase branch in Yorktown Heights.
  

Factors cited by the court for its conclusion that respondent was not a resident:

• she worked in Manhattan, five days a week, 11-12 hours a day;
• she had previously established a legal residence in Manhattan;
• she had just signed a one-year lease for that Manahattan apartment, two months before the accident;
• she was emancipated from her parents;
• she paid rent at the Manhattan residence; and
  
• she filed her own tax returns and was no longer claimed as a dependent on her parents' tax returns.

SUM Lack of Proof

SUM – CPLR ARTICLE 75 PROCEEDING – CHANGE ENDORSEMENT – OFFICE MAILING PROCEDURE – LACK OF PROOF
Matter of Government Employees Ins. Co. v. Brunner
(2nd Dept., decided 1/19/2010)

GEICO brought this CPLR article 75 special proceeding for a permanent stay of the arbitration of respondent's supplementary uninsured motorists (SUM) coverage claim.  In support of its application, GEICO contended the SUM limits of the policy under which respondent had claimed SUM coverage had been reduced by a policy change endorsement to $25,000/$50,000.   After an evidentiary hearing on the issue, Suffolk Supreme denied GEICO's petition, dismissed the proceeding, and directed the parties to proceed to arbitration.  GEICO appealed.

In AFFIRMING the lower court's judgment, the Second Department agreed that GEICO had failed to prove that the change endorsement was mailed to the policyholder prior to the accident:

The Supreme Court properly concluded that the petitioner failed to meet its burden of proving that an insurance policy endorsement dated October 21, 2005, which purportedly reduced the limits applicable to the uninsured/underinsured motorist endorsement of the relevant policy to the sums of $25,000 per person and $50,000 per accident, was properly mailed to the policy holder prior to the date of the subject accident. The underwriter who testified at the hearing failed to offer "evidence of an office [procedure] geared to insure the likelihood that [the endorsements are] always properly addressed and mailed" (Federal Ins. Co. v Kimbrough, 116 AD2d 692, 692; see Nassau Ins. Co. v Murray, 46 NY2d 828, 829-830; Matter of Transcontinental Ins. Co. v Gibbs, 34 AD3d 488; New York & Presbyt. Hosp. v Allstate Ins. Co., 29 AD3d 547; Lumbermens Mut. Cas. Co. v Gamble, 250 AD2d 540; Matter of Allstate Ins. Co. v Ramirez, 208 AD2d 828, 830; Sea Ins. Co. v Kopsky, 137 AD2d 804; Anzalone v State Farm Mut. Ins. Co., 92 AD2d 238; cf. Kaufmann v Leatherstocking Coop. Ins. Co., 52 AD3d 1010, 1012; Morales v Yaghoobian, 13 AD3d 424, 425; Matter of Metlife Auto & Home v Pennella, 10 AD3d 726).

SUM Arbitration Award Confirmed -- Inconsistency of Prior No-Fault Arbitration Award Not Given Preclusive Effect

SUM – NO-FAULT – COLLATERAL ESTOPPEL – VACATING ARBITRATION AWARD
Matter of Falzone v. New York Cent. Mut. Fire Ins. Co.
(4th Dept., decided 7/2/2009)

Falzone arbitrated New York Central Mutual's denial of no-fault benefits and won.  She then arbitrated her related SUM claim against NYCM before a different arbitrator and lost on the ground that her injuries were not caused by the accident.  Contending that the second arbitration decision was inconsistent from the first, and that NYCM was collaterally estopped in the SUM arbitration from relitigating the issue of causation with respect to her injuries, Falzone commenced this CPLR article 75 special proceeding to vacate or modify the SUM arbitration award.  Supreme Erie granted petitioner's motion to vacate the SUM award and NYCM appealed.

In a 3-2 split decision, the Fourth Department, Appellate Division, REVERSED the order and confirmed the SUM arbitration award, holding:

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). 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). 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, lv denied 3 NY3d 605, cert denied 543 US 1148; Matter of Guetta [Raxon Fabrics Corp.], 123 AD2d 40, 41), and thus the SUM arbitrator was not required to state that he had considered that contention.

Two justices dissented and voted to affirm the award.  While acknowledging that collateral estoppel "is not a basis on which [Supreme C]ourt may, under CPLR 7511, vacate an arbitration award," the dissent nevertheless noted that

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, quoting Matter of New York City Tr. Auth. v Transport Workers' Union of Am., Local 100, AFL-CIO, 6 NY3d 332, 336; see generally CPLR 7511 [b] [1] [iii]). In our view, the arbitrator who issued the award with respect to supplemental uninsured motorist (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; Motor Veh. Acc. Indem. Corp. v Travelers Ins. Co., 246 AD2d 420, 422).

The dissent further observed that in this matter there were no factual issues regarding whether the no-fault arbitration award should be given preclusive effect.  "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' ", reasoned the dissent. 

Although some practitioners may regard the majority's decision as standing for the proposition that collateral estoppel no longer attaches to no-fault arbitration awards in the Fourth Department, the majority's ruling is much more narrow than that.  The majority reversed the trial judge and confirmed the award not because they believed collateral estoppel could or did not apply to preclude NYCM from relitigating injury causality, but because they (and the dissent) adhered to the rule that collateral estoppel is not a basis on which Supreme Court may, under CPLR 7511, vacate an arbitration award.

Editor's Note ~~ The New York Court of Appeals AFFIRMED this decision on October 21, 2010.  The Court's 6-1 opinion is here.  

Special Proceeding to Stay UM Arbitration Dismissed as Untimely Commenced

UM – CPLR § 7503(C) – 20-DAY LIMITATION FOR COMMENCING SPECIAL PROCEEDING TO STAY ARBITRATION
Matter of Nova Cas. Co. v. Martin
(2nd Dept., decided 12/2/2008)

CPLR § 7503(c) has been called "The Shortest Statute of Limitations Known to the Law". Dachs, Norman and Dachs, Jonathan, NYLJ, June 12, 1990. It provides that "[a]n application to stay arbitration must be made by the party served within twenty days after service upon him of the notice or demand [for arbitration or intention to arbitrate], or he shall be so precluded." With respect to UM and SUM arbitration demands, the 20-day period accrues, or begins to run, from the insurer's receipt of the demand for arbitration and ends when the special proceeding is actually commenced by the filing of a petition for a stay. There are a number of exceptions to the 20-day rule that have received extensive treatment in the courts. See, generally, Dachs and Dachs, "Petitions to Stay Arbitration: Special Considerations for Special Proceedings", July 1997.

Nova Casualty commenced this special proceeding to stay the UM arbitration demanded by its insured, contending that the offending vehicle was insured by GMAC. Apparently, Nova did not commence this proceeding within 20 days of its receipt of its insured's demand for arbitration, but argued that the allegedly insured status of the offending vehicle was an issue falling outside of arbitration to which the 20-day SOL of CPLR § 7503(c) did not apply.

Kings Supreme agreed, but the Second Department didn't, REVERSING the lower court's order which had granted Nova a framed-issue hearing on the offending vehicle's insurance status and instead dismissing Nova's petition in its entirety:

The petitioner's contention that there is no coverage under its policy's uninsured motorist provisions because the offending vehicle was, in fact, insured, is irrelevant to the issue of whether the instant proceeding pursuant to CPLR article 75 was timely commenced (see Matter of Steck [State Farm Ins. Co.], 89 NY2d 1082; Matter of Travelers Indem. Co. v Castro, 40 AD3d 1005, 1006-1007; Matter of Hartford Ins. Co. v Buonocore, 252 AD2d 500, 501). Such contention "relates to whether certain conditions of the contract have been complied with and not whether the parties have agreed to arbitrate" and, thus, the petitioner's contention is outside the exception articulated by the Court of Appeals in Matter of Matarasso (Continental Cas. Co.) (56 NY2d 264) (Matter of Steck [State Farm Ins. Co.], 89 NY2d 1082, 1084; see Matter of Hartford Ins. Co. v Buonocore, 252 AD2d 500, 501).

Since the petition to stay arbitration of the demand was made well beyond the 20-day period set forth in CPLR 7503 (c), and the exception set forth in Matter of Matarasso does not apply, the Supreme Court should not have, in effect, granted that branch of the petition which was for a framed-issue hearing to determine whether there was insurance available through GMAC Insurance Company. Rather, the proceeding should have been dismissed in its entirety (see Matter of Travelers Indem. Co. v Castro, 40 AD3d 1005, 1007; Matter of Hartford Ins. Co. v Buonocore, 252 AD2d 500, 501).

Demands for UM or SUM arbitration should receive the highest claim processing priority and be forwarded to defense counsel immediately if the insurer has grounds and wishes to commence a special proceeding for a permanent stay of arbitration.

Petition to Stay SUM Arbitration Denied

SUM – "UNDERINSURED" – SPECIAL PROCEEDING TO STAY ARBITRATION
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).

UM Arbitration Award of $15,000 for Scalp Scar Confirmed Over Claims of Arbitrator Partiality, Bias, or Prejudice

AUTO – UM – CPLR 7511(B) APPLICATION TO VACATE ARBITRATION AWARD – PARTIALITY, BIAS AND PREJUDICE OF ARBITRATOR
Travelers Prop. Cas. Co. of Am. v. Swen
(Sup. Ct., Queens Co., decided 6/24/2008)

Swen arbitrated his hit-and-run UM claim against Travelers. After a hearing, the arbitrator found that that the accident was solely attributable to the negligence of the hit-and-run vehicle, the scar on Swen's scalp qualified as "a significant disfigurement" pursuant to Insurance Law §5102(d), and the value of that injury was $15,000. Swen brought this CPLR article 75 special proceeding to vacate the arbitrator's award pursuant to CPLR § 7511(b) based on the arbitrator's alleged partiality, bias and/or prejudice. Travelers cross moved to confirm the arbitration award.

Swen contended that the arbitrator and Traveler's defense attorney had worked together at The Robert Plan for many years. He alleged that "these critical facts" were never presented to him prior to the hearing, and that had he been aware of the close relationship between the arbitrator and Traveler's attorney, he would not have consented to the arbitrator's appointment. Additionally, he argued that the arbitrator has an unfavorable view of scarring injuries, relying on one other decision rendered by the arbitrator in a matter involving a scar.

Travelers opposed Swen's application and supported its cross motion with an affirmation of its counsel, who explained that although he and the arbitrator were employed by the same company for just over one year a decade earlier, at no time had he ever maintained a social relationship with the arbitrator. Travelers also pointed out the arbitrator had disclosed his employment history prior to the start of the arbitration, and both sides agreed to go forward.

In denying Swen's petition and granting Travelers' cross motion to confirm the award, Queens County Supreme Court Justice Jaime Rios held:

CPLR 7511(b) provides that an application to vacate an arbitration award by a party who has participated in the arbitration may only be granted upon the grounds that the rights of that party were prejudiced by corruption, fraud, or misconduct in procuring the award, partiality of the arbitrator, the arbitrator exceeded his powers or failed to make a final and definite award, or a procedural failure that was not waived (citations omitted).

* * * A party who proceeds with an arbitration with actual knowledge of a relationship between his adversary and the arbitrator, waives his objection to the arbitration (citations omitted). Furthermore, a party that has facts that would reasonably prompt further inquiry has a responsibility to ascertain the potentially disqualifying facts (citations omitted).

Swen waives any claim related to the bias or partiality of the arbitrator since he proceeded with the arbitration after learning of the prior relationship (citation omitted). His claim that he was not aware of the alleged relationship prior to attending the hearing is of no consequence, since it is undisputed that the arbitrator disclosed the prior employment relationship prior to the commencement of the arbitration and, although, he was given the opportunity to object, he chose to go forward.

An arbitrator is not required to justify his award, it must merely be evident that there exists a rational basis for it upon a reading of the record (citations omitted).

Here, the arbitrator's decision was based upon Swen's testimony, medical reports and records, his review of the scars and photographs taken. The arbitrator found that the scar on Swen's scalp, which he described as "clearly visible, as an extensive whitish discoloration" qualified as "a significant disfigurement". He concluded that "while the scarring on the knee and shoulder are also visible, they are on parts of the body that are generally concealed by clothing", and that Swen's other injuries were not based upon "competent medical proof".

Swen's allegation that he was prejudiced by the arbitrator's unfavorable view of "scarring injuries" is unsubstantiated.

Non-Cooperation by Insured In Defense of Personal Injury Action Justified Disclaimer, Leaving Injured Party Uninsured

UM – STAY OF ARBITRATION – NON-COOPERATION
Matter of Allstate Ins. Co. v. Gardaner
(2nd Dept., decided 6/10/2008)

Allstate brought this CPLR article 75 proceeding to permanently stay the arbitration of its insured's UM claim stemming from an motor vehicle accident the claimant had with a vehicle insured by Travelers. Travelers apparently had disclaimed liability coverage to its named insured and insured driver after the commencement of a personal injury action based on the named insured's breach of the policy's cooperation clause. The plaintiff then presumably made a UM claim to Allstate and demanded arbitration. After a framed hearing, Kings Supreme denied Allstate's petition and ordered that the UM arbitration proceed.

In AFFIRMING the lower court's order, the Second Department held that Travelers was justified in disclaiming insurance coverage for its insured because of his failure to cooperate in the defense of an action against him:

Under the circumstances of this case, where there was no cooperation by the insured, the insured could not be located after a diligent search, and there had been misrepresentations made by the insured when applying for insurance, there was a breach of the cooperation clause (citations omitted). Additionally, inasmuch as the driver of the insured's vehicle supplied the police with a nonexistent address, Travelers' failure to serve a separate disclaimer on the driver did not render the original disclaimer ineffective (see Matter of Allstate Ins. Co. v Rico, 28 AD3d 353, 354).

The key in supporting a disclaimer based on an insured's non-cooperation in the defense of a pending personal injury action is the insurer making and documenting diligent but unsuccessful efforts calculated to bring about the insured's cooperation. In this case, Travelers apparently tossed in the insured's application misrepresentations as yet more evidence of its insured's non-cooperation.

No UM Coverage for Claimant Who Already Recovered from Driver's Insurer

UM – HIT-AND-RUN – OFFSET
Matter of Government Employees Ins. Co. v. Dunbar
(1st Dept., decided 6/10/2008)

Dunbar was injured while a passenger in a motor vehicle owned and operated by Chambers, which was involved in a hit-and-run accident. Geico insured the Chambers vehicle. Dunbar received a settlement payment of $25,000 from Geico, based on the negligence liability of Chambers.

Dunbar then sought to arbitrate a UM coverage claim for that same amount, which was the UM coverage limit of Chambers policy, based on the responsibility of the unidentified hit-and-run driver. Geico commenced this special proceeding to stay that arbitration on the ground that any recovery based on UM benefits (to a limit of $25,000) was offset by the $25,000 Dunbar had already recovered for this same injury.

Bronx Supreme denied Geico's petition to stay, and the First Department REVERSED:

Respondent's demand for arbitration clearly refers to the policy issued to driver Chambers. However, the only policy included in the record, in this proceeding to stay arbitration, is a separate policy issued by petitioner to the injured respondent passenger himself, in which respondent purchased supplemental uninsured/underinsured (SUM) coverage, and the court appears to have denied the petition to stay arbitration on the ground that petitioner failed to make a sufficient showing that recovery under the Chambers policy precludes recovery under the SUM provision of the policy issued to respondent.

Since respondent received $25,000 in settlement of his claimed injuries, any potential UM claim under either the Chambers policy or a SUM claim under respondent's own policy was offset by the prior settlement payment (citation omitted]). Sufficient evidence was presented to the court to make such determination, inasmuch as there was no dispute as to the existence and terms of the Chambers policy or the amount of payment of the settlement in the underlying action.

UM Arbitration Stayed Due to No Physical Contact with Hit-and-Run Vehicle

AUTO – UM – HIT-AND-RUN – NO PHYSICAL CONTACT
Matter of Government Employees Ins. Co. v. Steinmetz
(2nd Dept., decided 5/27/2008)

GEICO commenced this special proceeding for a permanent stay of arbitration of defendant's uninsured motorists (UM) coverage claim, contending that there had been no physical contact between the defendant's vehicle and the alleged hit-and-run vehicle, as required for UM coverage. After a hearing, the lower court agreed and granted GEICO's petition.

In AFFIRMING the lower court's ruling, the Second Department held:

"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'" (Terry v State of New York, 39 AD3d 846, 846, quoting Northern Westchester Professional Park Assoc. v Town of Bedford, 60 NY2d 492, 494). We decline to disturb the Supreme Court's finding that there was no physical contact between the appellant's vehicle and an alleged hit-and-run vehicle (see Matter of Progressive Northeastern Ins. Co. v Sheikh, 40 AD3d 763, 764; Matter of Metropolitan Prop. and Cas. Co. v Sands, 5 AD3d 601, 602).

No Flitting Between Forums For No-Fault Claim

NO-FAULT – STAY OF ARBITRATION – CHOICE OF FORUM
Travelers Indem. Co. v. Sung Won Lee
(Sup. Ct., Queens Co., decided 5/28/2008)

By summons and complaint dated January 24, 2006, defendant EIP commenced an action against Travelers in Queens County Civil Court for "at least $25,000" in no-fault benefits, presumably for surgical costs that Mr. Lee had not yet incurred. Travelers answered and served discovery demands and a motion to dismiss. In October 2007, the court granted Travelers' motion "without prejudice" on the grounds that the lawsuit was premature as having been filed prior to plaintiff's surgery in August of 2007.

Two weeks later, Lee filed for no-fault arbitration of his claim for $19,000 in surgical costs with the American Arbitration Association. Travelers commenced this special proceeding for a permanent stay of that arbitration pursuant to CPLR article 75. Travelers argued that Lee was barred from proceeding with the arbitration since he had exercised his option and elected the courts as the forum within which to prosecute his claims. In response, Lee argued that the AAA arbitration may proceed as there currently was no court action pending in the subject no-fault dispute and because he did not have the option of filing for arbitration at the time he commenced the civil court action in January of 2006 since his surgery had not yet been performed.

In granting Traveler's petition for a permanent stay of the AAA arbitration, Queens County Supreme Court Justice Jaime Rios held:

Having decided his course of recovery, Lee cannot flit between forums for the resolution of issues or items of damages arising from the same injury (see Roggio v Nationwide Mut. Ins. Co., 106 AD2d 3 [3d Dept., 1985]; see also Gibeault v Home Ins. Co., 221 AD2d 826 [3d Dept., 1995]). To hold otherwise would create an intolerable drain on our resources for dispute resolution, senselessly prolonging controversies and inviting inconsistent adjudication (see A.B. Medical Services PLLC v. New York Cent. Mut. Fire Ins. Co., 2006 WL 901211 [Kings Cty Civ Ct, 2006]; Advanced Medical Care, PLLC ex rel. Kabelsky v Travelers Property Cas., 6 Misc 3d 1040[A] [NY City Civ Ct,2005]).

Assignment to Different Entity Leaves Provider Without Standing to Arbitrate

NO-FAULT – ASSIGNMENT OF BENEFITS – LACK OF STANDING – MASTER ARBITRATION – PETITION TO VACATE
L.I. Community Medical, P.C. a/a/o Victoria Ramos v. Allstate Ins. Co.
(App. Term, 2nd Dept., decided 5/1/2008)

It would be easy to overlook the potential significance, or at least noteworthiness, of this very short decision from the Appellate Term.

Petitioner medical provider brought a CPLR article 75 special proceeding to vacate a master arbitration award upholding Allstate's denial of no-fault benefits.

In AFFIRMING the lower court's denial of the petition to vacate, the Appellate Term ruled that the master arbitrator's award was rationally based and not arbitrary or capicious because the assignment of benefits was to an entity different from the petitioner and, thus, the petitioner lacked standing to seek reimbursement of no-fault benefits. In so ruling, the Appellate Term cited its 2004 decision in Damadian MRI in Garden City, P.C., a/a/o Sharon Gamboa v. Windsor Group Ins., 2 Misc 3d 138[A], (App. Term, 2d & 11th Jud. Dists., 2004), in which the court similarly held, albeit in the context of an action to recover no-fault benefits rather than an arbitration, that "plaintiff failed to establish its prima facie entitlement to summary judgment inasmuch as it did not show that the assignor made an assignment to plaintiff Damadian MRI in Garden City, P.C."

The issue of whether proof of a valid assignment is a required part of a provider's prima facie showing in a no-fault recovery suit remains somewhat muddled.

Both the Second and Third Departments of the Appellate Division, as well as the Court of Appeals, have previously held that a no-fault insurer's "failure to object to the adequacy of . . . claim forms within 10 days of receipt constitute[s] a waiver of any defenses based thereon, including the alleged lack of a valid assignment of benefits." Hospital for Joint Diseases v. Travelers Prop. Cas. Ins. Co., 34 A.D.3d 532 (2nd Dept. 2006), affd. 9 N.Y.3d 312 (2007)("In our view, any defect or deficiency in the assignment * * * simply does not implicate a lack of coverage warranting exemption from the preclusion rule. We therefore determine that the failure by Travelers to seek verification of the assignment in a timely manner prevents the carrier from litigating the issue now."); see, also, Hosp. for Joint Diseases v. Allstate Ins. Co., 21 A.D.3d 348 (2nd Dept. 2005); Nyack Hosp. v. Metro. Prop. & Cas. Ins. Co., 16 A.D.3d 564 (2nd Dept. 2005); LMK Psychological Servs., P.C. v. Liberty Mut. Ins. Co., 2006 NY Slip Op 4486, 1 (3rd Dept. 2006).

Contrast those decisions to Kings County New York City Civil Court Judge Genine Edwards' July 2006 decision in Elite Med. Care, P.C. v. Travelers Prop. & Cas. Ins. Co., 2006 NY Slip Op. 51397U (NYC Civ. Ct., Kings Co., 2006):

This Court is aware of the many summary judgment decisions that have found that the defendant waives its right to raise the deficiencies in the assignment of benefits forms when the denial was untimely and/or did not allege such defects. Nyack Hosp. v. Metropolitan Prop. & Cas. Ins. Co., 16 A.D.3d 564, 791 N.Y.S.2d 658 (2nd Dept. 2005); Nyack Hosp. v. Encompass Ins. Co., 23 A.D.3d 535, 806 N.Y.S.2d 643 (2nd Dept. 2005); Chiropractic Neurodiagnostics, P.C. v. Travelers Indem. Co., 11 Misc. 3d 644, 812 N.Y.S.2d 300 (NYC Civ. Ct., New York Co., 2006); SZ Medical P.C. v. Country-Wide Ins. Co., 12 Misc. 3d 52, 817 N.Y.S.2d 851, 2006 NY Slip Op. 26194, 2006 N.Y. Misc. LEXIS 1182 (App. Term 2nd & 11th Jud. Dists. 2006); Delta Diagnostic Radiology, P.C. v. Progressive Cas. Ins. Co., 11 Misc. 3d 136(A), 816 N.Y.S.2d 694 (App. Term 2nd & 11th Jud. Dists. 2006); Hospital for Joint Diseases v. Allstate Ins. Co., 21 A.D.3d 348, 800 N.Y.S.2d 190 (2nd Dept. 2005) Hosp. for Joint Diseases v. Allstate Ins. Co., 21 A.D.3d 348, 800 N.Y.S.2d 190 (2nd Dept. 2005); Multiquest PLLC, 10 Misc. 3d 1061(A), 814 N.Y.S.2d 563, supra. However, those decisions discuss deficiencies in the forms. This Court is faced with rendering a decision in a bench trial of a no-fault action where there is lack of proof of an assignment. To be certain, a broad interpretation of a "technical defect" in the claim forms as discussed in Chiropractic Neurodiagnostics, P.C., supra, does not include the scenario where, at trial, there is no proof of an assignment at all.

So what should we make of the Appellate Term's ruling in the captioned case? Can it be reconciled with the Court of Appeals' 2007 decision in Hospital for Joint Diseases v. Travelers? Did Judge Edwards correctly note a distinction between alleged "technical defects" in an assignment versus no assignment at all? Is legal standing from a valid assignment part of a provider's prima facie showing or not?

A clue in answering these questions may be found in Judge Graffeo's majority's opinion in Hospital for Joint Diseases v. Travelers:

Finally, Travelers contends that an assignment of benefits is a necessary component of the hospital's prima facie case for recovery of no-fault benefits. Even assuming that this is true, we conclude that an assignment form stating that the patient's signature is "on file" satisfies that burden where the carrier does not timely take action to verify the existence of a valid assignment.

Notice that the Court of Appeals' majority did not reject, as it easily could have, Traveler's contention that an assignment of benefits is a necessary component of the hospital's prima facie case for recovery of no-fault benefits. Instead, the Court found that the "signature on file" assignment submitted by the provider satisfied such a burden "where the carrier does not timely take action to verify the existence of a valid assignment."

Defense counsel can and will argue that only "signature on file" assignments that otherwise properly identify the provider and are submitted in admissible form in support of a provider's motion for summary judgment fall within the Court of Appeals' holding in Hospital for Joint Diseases v. Travelers. Providers' counsel will argue the contrary, viz, that legal standing to sue by virtue of a proper and admissible assignment is not part of a provider's prima facie burden of proof on a motion for summary judgment.

This appears to be an issue that will foster additional litigation before becoming settled. At this point, it appears certain that insurers that wish to defend no-fault billings based on alleged defects in assignment of benefit forms must timely request verification and/or deny claims on that basis in order to preserve their right to raise such a defense. On the other hand, providers wishing to obtain summary judgment would be well advised to continue submitting in admissible form the assignments upon which they base their claims for recovery.

NF-10 Wars -- Arbitrator Held to Have Erroneously Invalidated PT Denial Based on Lack of Medical Rationale Set Forth in Denial

NO-FAULT – NCV-EMG COSTS – SPECIAL PROCEEDING TO VACATE MASTER ARBITRATION AWARD – NF-10 SUFFICIENCY – MEDICAL RATIONALE – PROVIDING COPY OF IME-PEER REVIEW REPORT WITH DENIAL
American Transit Ins. Co. v. 21st Ave. Medical Plaza, P.C. a/a/o Dennene Baker
(Sup. Ct., New York Co., decided 5/8/2008)

In April 2007, the Second Department issued its decision in A.B. Med. Servs., PLLC v. GEICO Cas. Ins. Co., 39 AD3d 778, holding that a no-fault insurer is not required to set forth with sufficient particularity the factual basis and medical rationale upon which NF-10 denial of claim forms are based:

The applicable regulations provide that if a no-fault claim is denied in whole or in part based on a medical examination or peer review report requested by the insurer, then the insurer shall release a copy of that report to, among others, the applicant or its attorney, upon written request (see 11 NYCRR 65-3.8 [b] [4]). Had it been the intent of the Department of Insurance to require the carrier to set forth a medical rationale in the prescribed denial of claim form (see NYS Form N-F 10; 11 NYCRR 65-3.4 [c] [11]), it would have so provided.

In this case, defendant conducted NCV/EMG (nerve conduction velocities/electromyography) studies of and provided PT (physical therapy) to the defendant's assignor in conjunction with defendant's treatment of her. American Transit denied payment of both the NCV/EMG and PT billings, based on negative peer review and IME reports, respectively. Plaintiff provider sought payment of those services in compulsory no-fault arbitration.

One day before the Second Department decided A.B. Med. Services, PLLC v. GEICO, the arbitrator ruled against American Transit, finding: (1) that the peer review report relied upon to deny payment of the NCV/EMG studies was "not very persuasive"; and (2) that American Transit's denial of reimbursement for PT treatments based on the negative IME performed by a consulting physiatrist was defective because a copy of the IME report had not been sent to the assignor within thirty days of the date American Transit issued the denial. The lower arbitrator stated that because the IME report was not timely sent to the claimant, she was "constrained to
preclude the IME report."

American Transit appealed the lower arbitrator's decision to a master arbitrator, who, based on the Appellate Term's (not Division's) decision in A.B. Med. Services, PLLC v. GEICO, upheld the arbitrator's decision in both respects. American Transit then brought this CPLR article 75 special proceeding to vacate the master arbitrator's decision.

In partly denying and partly granting American Transit's petition, New York County Supreme Court Justice Kibbie F. Payne found: (1) that the lower arbitrator acted within her authority in considering but rejecting as legally and factually deficient and unpersuasive the peer review report concerning the NCV/EMG studies; and (2) that the master arbitrator's decision upholding the lower arbitrator's refusal to consider the IME report and invalidation of America Transit's NF-10 for PT services violated existing law and was not rationally based.

UM Arbitration Stayed

UM – STAY OF ARBITRATION – POLICE REPORT SUBMISSION – PRIORITY OF COVERAGE
Matter of GEICO v. Coppolino
(Sup.Ct., Nassau Co., decided 4/15/2008)

Coppolino, a GEICO insured, was injured in an MVA while driving a vehicle insured by State Farm. According to the police accident report, the tortfeasor Kent's offending vehicle was insured by Hartford. For reasons not clear from the court's decision, Coppolino demanded arbitration of his UM claim with GEICO, rather than pursuing Kent. GEICO then commenced this special proceeding for a stay of that arbitration, naming Hartford and State Farm as proposed additional respondents.

GEICO established a prima facie case sufficient to warrant a temporary stay of the UM arbitration by submitting a police accident report that listed the Kent vehicle as insured by Harford and Coppolino's vehicle as insured by State Farm. As there was a "presumption of coverage" arising from the police report' s insurance code designation, the court found that GEICO had met its initial burden of presenting some evidence to establish that the allegedly offending vehicle was insured on the date of the accident. With GEICO having done so, the burden then shifted to Hartford to show that no such policy was in effect or applicable at the time of the occurrence.

In addition to ordering that Coppolino's UM arbitration be temporarily stayed, the court ordered that this proceeding be consolidated with a similar one that State Farm had previously commenced in relation to the UM claim of a passenger of the vehicle Coppolino was driving.

It sometimes happens that vehicle occupants file and pursue UM claims against the vehicle's insurer rather than contesting the coverage denial of the offending vehicle's insurer. We have even seen instances in which claimants have pursued UM coverage and demanded arbitration after the offending vehicle's insurer merely denies tort liability of the driver/owner, rather than coverage. In those instances, UM insurers should consider commencing a timely special proceeding under New York CPLR article 75 to stay arbitration, naming all involved insurers as additional repondents so that the coverage rights and responsibilities of all insurers may be determined and declared.