May 27, 2010

Matter of MVAIC v Interboro Med. Care & Diagnostic PC (2010 NY Slip Op 04522)

Headnote

MVAIC petitioned to vacate a no-fault arbitration award after the arbitrator refused to consider its defense that the offending vehicle was registered out of state and insured. The arbitrator ruled MVAIC was precluded because it failed to pay or deny the claim within 30 days. The Appellate Division held this was contrary to settled law recognizing a narrow exception to the 30-day deadline for lack-of-coverage defenses, and that the case the arbitrator relied on did not involve lack of coverage. It reversed, granted the motion, vacated the award, and remanded for a merits determination, noting MVAIC bears the burden of proving the defense.

Reported in New York Official Reports at Matter of MVAIC v Interboro Med. Care & Diagnostic PC (2010 NY Slip Op 04522)

Matter of MVAIC v Interboro Med. Care & Diagnostic PC
2010 NY Slip Op 04522 [73 AD3d 667]
May 27, 2010
Appellate Division, First Department
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
As corrected through Wednesday, June 30, 2010


In the Matter of MVAIC, Appellant,
v
Interboro Medical Care & Diagnostic PC, Respondent.

—[*1] Marshall & Marshall, Jericho (Jeffrey Kadushin of counsel), for appellant.

Order, Supreme Court, New York County (Eileen A. Rakower, J.), entered March 12, 2009, which denied petitioner MVAIC’s application to vacate a no-fault arbitration award, unanimously reversed, on the law, without costs, the motion granted, the award vacated, and the matter remanded for a determination on the merits of the coverage issue.

MVAIC defended the arbitration on the ground that the police accident report showed that the offending vehicle was registered out-of-state and was insured, but the arbitrator refused to consider that defense on the merits on the ground that MVAIC had failed to pay or deny the claim within 30 days of its submission, as required by the no-fault law (Insurance Law § 5106 [a]; 11 NYCRR 65-3.8 [a] [1]; [c]). This was contrary to settled law (see generally Matter of State Farm Mut. Auto. Ins. Co. v Lumbermens Mut. Cas. Co., 18 AD3d 762, 763 [2005]) recognizing a narrow exception to the 30-day deadline for defenses based on lack of coverage (Hospital for Joint Diseases v Travelers Prop. Cas. Ins. Co., 9 NY3d 312, 318 [2007]). New York Hosp. Med. Ctr. of Queens v Motor Veh. Acc. Indem. Corp. (12 AD3d 429 [2d Dept 2004], lv denied 4 NY3d 705 [2005]) relied on by the arbitrator, did not involve a lack of coverage issue. We would add that the burden is on MVAIC to prove its lack-of-coverage defense. Concur—Tom, J.P., Friedman, Nardelli, Acosta and Abdus-Salaam, JJ. [Prior Case History: 2009 NY Slip Op 30536(U).]