Matter of Country-Wide Ins. Co. v. American Tr. Ins. Co.
Opinion
Matter of Country-Wide Ins. Co. v American Tr. Ins.
Co.
2024 NY Slip Op 32959(U)
August 20, 2024
Supreme Court, New York County Docket Number: Index No. 655443/2023 Judge: John J. Kelley
Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various New York State and local government sources, including the New York State Unified Court System's eCourts Service. This opinion is uncorrected and not selected for official publication.
FILED: NEW YORK COUNTY CLERK 08/21/2024 04:45 PM INDEX NO. 655443/2023 NYSCEF DOC. NO. 7 RECEIVED NYSCEF: 08/21/2024
SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY
PRESENT: HON. JOHN J. KELLEY PART 56M Justice
---------------------------------------------------------------------------------X INDEX NO. 655443/2023 In the Matter of
MOTION DATE 07/12/2024 COUNTRY-WIDE INSURANCE COMPANY, MOTION SEQ. NO. 001 Petitioner,
-v-
DECISION, ORDER, AND
AMERICAN TRANSIT INSURANCE COMPANY, JUDGMENT
Respondent.
---------------------------------------------------------------------------------X
The following e-filed documents, listed by NYSCEF document number (Motion 001) 1, 2, 3, 4, 5, 6 were read on this motion to/for VACATE - DECISION/ORDER/JUDGMENT/AWARD .
Country-Wide Insurance Company (Country-Wide) petitions pursuant to CPLR 7511(b)(1)(iii) to vacate an arbitration award rendered on August 23, 2023 by an arbitrator acting under the auspices of Arbitration Forums, Inc. (AFI). The respondent, American Transit Insurance Company (ATIC), did not oppose the petition and, thus, Country-Wide essentially seeks to obtain a default judgment against ATIC. The petition nonetheless is denied, inasmuch as Country-Wide failed properly to serve the notice of petition and petition upon ATIC and, thus, the court lacks jurisdiction to enter a default judgment against ATIC. The denial is without prejudice to renewal upon proper papers establishing proof of proper service.
The underlying dispute arises from a two-car automobile accident that occurred on November 2, 2015. Country-Wide’s allegations and submissions established that, between 2015 and 2021, it had paid the total sum of $53,110.40 in first-party, personal injury protection (PIP) no-fault automobile insurance benefits to, or on behalf of, Jennifer Booker and Kyron Rogers, who allegedly were injured in the vehicle that it had insured. Country-Wide alleged that, on March 11, 2022, it sought inter-insurer arbitration with ATIC, since the other vehicle
655443/2023 COUNTRY-WIDE INSURANCE COMPANY vs. AMERICAN TRANSIT INSURANCE Page 1 of 6 COMPANY Motion No. 001
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FILED: NEW YORK COUNTY CLERK 08/21/2024 04:45 PM INDEX NO. 655443/2023 NYSCEF DOC. NO. 7 RECEIVED NYSCEF: 08/21/2024
involved in the subject accident, which ATIC had insured, was a “motor vehicle used principally for the transportation of persons or property for hire” (Insurance Law § 5105[a]). It thus alleged that it was entitled to seek a PIP “loss transfer” from ATIC to reimburse it for the benefits that it had paid out to, or on behalf of, Booker and Rogers (see A.I. Transp. v New York State Ins. Fund, 301 AD2d 380, 380 [1st Dept 2003]; Arvatz v Empire Mut. Ins. Co., 171 AD2d 262, 268 [1st Dept 1991]; Insurance Law §§ 5102[a], [b]; 5103[a]). To obtain this loss transfer, Country- Wide was required to establish that the operator of the vehicle insured by ATIC was completely or partially at fault in the happening of the accident. Insurance Law § 5105(b) provides that, where an insurer seeks to recover first-party benefits/PIP loss transfer from the “insurer of any other covered person” on the ground that the other covered person was at fault in the happening of the accident, “[t]he sole remedy . . . shall be the submission of the controversy to mandatory arbitration pursuant to procedures promulgated or approved by the superintendent” of the New York State Department of Financial Services (DFS). Pursuant to those regulations, AFI has been designated as the exclusive forum for resolution of no-fault loss-transfer related arbitration matters (see 11 NYCRR 65-4.11[b][1]).
In the challenged arbitration award, the arbitrator found that the drivers of the two vehicles involved in the subject accident were each 50% at fault in the happening of the accident, and that Country-Wide was thus entitled to recover 50% of the amount that it timely, properly, and legitimately had paid out to or on behalf of Booker and Rogers. The arbitrator, however, did not allow Country-Wide a full recovery of 50% of the benefits it had actually paid out. Rather, the arbitrator found that Country-Wide’s “[l]edger shows payments made over 30 days from received date which is out of regulation.” In other words, he concluded that, inasmuch as Country-Wide did not timely and seasonably pay out the greater portion of those benefits within 30 days subsequent to its verification of the relevant claims, as required by statute and applicable regulations (see Insurance Law § 5106[a]; 11 NYCRR 65-3.5, 11 NYCRR
65-3.8[a][1]), Presbyterian Hosp. v Maryland Cas. Co., 90 NY2d 274, 278 [1997]; New York & 655443/2023 COUNTRY-WIDE INSURANCE COMPANY vs. AMERICAN TRANSIT INSURANCE Page 2 of 6 COMPANY Motion No. 001
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FILED: NEW YORK COUNTY CLERK 08/21/2024 04:45 PM INDEX NO. 655443/2023 NYSCEF DOC. NO. 7 RECEIVED NYSCEF: 08/21/2024
Presbyterian Hosp. v Allstate Ins. Co., 30 AD3d 492, 493 [2d Dept 2006]; A & S Med., P.C. v Allstate Ins. Co., 15 AD3d 170, 170 [1st Dept 2005]), it was not entitled to recover them in a loss transfer arbitration proceeding.
According to Country-Wide, the arbitrator exceeded his authority by failing fully to consider and apply its updated payment ledgers, which included all of the payments of benefits that it had made between 2015 and 2021, thus “reducing” the amounts that it had asserted that it had paid, from $27,406.70 to $8,905.93 with respect to Booker, and from $25,703.70 to $1,529.58 with respect to Rogers. In this respect, Country-Wide explained that, in numerous parallel arbitration proceedings conducted by arbitrators acting under the auspices of the American Arbitration Association (AAA), and in several civil actions, health-care providers who had treated both Booker and Rogers had challenged Country-Wide’s initial denials of claims for reimbursement of various medical expenses. The supporting documentation that County-Wide submitted to the court demonstrated that it had conciliated or settled most of those claims, and thus paid out additional tens of thousands of dollars to the injured claimants’ health-care providers over and above the amounts approved by the arbitrator. The documentation also demonstrated, however, that Country-Wide necessarily paid those clams long beyond the 30- day period mandated by applicable law and regulations.
Country-Wide contended that the arbitrator had only been empowered to determine the apportionment of fault between the drivers involved in the subject accident. It argued that he exceeded his authority by independently determining the amounts that were properly made the subject of the loss transfer proceeding, and by rejecting Country-Wide’s claims to recover a loss transfer for claims deemed not to have been paid in a timely fashion, particularly when the amounts that had been paid beyond the 30-day payment period already been the subject of prior arbitrations and actions, or had been the subject of settlement agreements. Country-Wide thus argued that the arbitrator should have awarded it a loss transfer in the sum of 50% of the
entirety of the amounts that it actually had paid out to the injured claimants or their health-care 655443/2023 COUNTRY-WIDE INSURANCE COMPANY vs. AMERICAN TRANSIT INSURANCE Page 3 of 6 COMPANY Motion No. 001
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FILED: NEW YORK COUNTY CLERK 08/21/2024 04:45 PM INDEX NO. 655443/2023 NYSCEF DOC. NO. 7 RECEIVED NYSCEF: 08/21/2024
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