Arner v. Liberty Mutual Insurance

233 A.D.2d 321, 649 N.Y.S.2d 185, 1996 N.Y. App. Div. LEXIS 11657

• Court: Appellate Division of the Supreme Court of the State of New York
• Decided: November 4, 1996
• Status: Published

Opinions

In a proceeding pursuant to CPLR 7510 to confirm an arbitration award, the appeal is from an order and judgment (one paper) of the Supreme Court, Suffolk County (D’Emilio, J.), entered July 18, 1994, which granted the petition and denied the appellant’s cross motion to vacate the award.

Ordered that the order and judgment is affirmed, with costs.

Contrary to the appellant’s contentions, a party otherwise entitled to a judicial determination of the arbitrability of a dispute may waive that right by actively participating in the arbitration (see, CPLR 7511 [b] [2]; Matter of Thompson [S.L.T. Ready-Mix], 216 AD2d 656; Matter of Eveready Ins. Co. v Royal Ins. Co., 215 AD2d 557; Matter of Smullyan [SIBJET S. A.], 201 AD2d 335; see also, Matter of National Cash Register Co. [Wilson], 8 NY2d 377). Here, the appellant proceeded to appoint an arbitrator and fully participated in the arbitration, without seeking a stay on the ground that the matter was not arbitrable.

Moreover, the appellant waived any claims related to the alleged bias of an arbitrator by proceeding with the arbitration after learning of the prior relationship between the claimant’s counsel and one of the arbitrators (see, e.g., Lebis Contr. v City of Lockport, 174 AD2d 1012; 1000 Second Ave. Corp. v Rose Trust, 171 AD2d 429; Matter of Lincoln Graphics Arts v Rohtal New Century Communications, 160 AD2d 871).

The court did not err in confirming the arbitrators’ award of $300,000, notwithstanding the fact that the uninsured motorist limits of Robert L. Arner’s policy were $20,000 per person and $40,000 per accident. Arner renewed his policy and increased the policy limits to $300,000 per accident on March 20, 1989. On July 1, 1989, the following amended version of Maryland Insurance Code Annot, art 48A, § 541 (c) (2) became effective: "There shall be offered in writing to the insured the opportunity to contract for higher amounts than those provided under Title 17 of the Transportation Article if those amounts do not exceed the amounts of the motor vehicle liability coverage provided by the policy” (emphasis supplied). It is not disputed that at no time before Arner’s November 9, 1989, accident did the appellant "offer” Arner "in writing” up to $300,000 in uninsured coverage for a modest increase in premium, as was contemplated by the amended statute (cf., e.g., Libby v Government Empls. Ins. Co., 79 Md App 717, 558 A2d 1236).

Maryland law provides that where a contract is in violation of a statute, one possible remedy is to reform the contract to incorporate the statutory standard and then specifically enforce the amended contract (see, Rogers Refrigeration Co. v Pulliam’s Garage, 66 Md App 675, 505 A2d 878; O’Keefe v Irvington Real-Estate Co., 87 Md 196, 39 A 428). The arbitrators had plenary jurisdiction to impose such a remedy in the instant case (see, e.g., Snyder v Berliner Constr. Co., 79 Md App 29, 555 A2d 523; see also, Hastings v United Pac. Ins. Co., 318 NW2d 849 [Minn]; cf., Jacobson v Illinois Farmers Ins. Co., 264 NW2d 804 [Minn]), and their award is in other respects supported by evidence in the record (see, Caso v Coffey, 41 NY2d 153). We note, for example, that an official DMV investigation disclosed that Arner was entirely without fault in the happening of the accident, and even the arbitrator chosen by the appellant conceded that Arner’s injuries warranted a $300,000 recovery. Moreover, as the Supreme Court correctly found, the appellant’s belated discovery of a form signed by Arner, "waiving” an increase in his uninsured motorist benefits in connection with an earlier policy, which was never submitted to the arbitrators, does not constitute a sufficient ground upon which to vacate an arbitration award (see, CPLR 7511 [b]; Karlan Constr. Co. v Burdick Assocs. Owners Corp., 166 AD2d 416). Copertino, J. P., Pizzuto and Friedmann, JJ., concur.