March 24, 2011

Allstate Ins. Co. v DeMoura (2011 NY Slip Op 50430(U))

https://www.beynensonlaw.com/case-law/allstate-ins-co-v-demoura-2011-ny-slip-op-50430u/

Court: Appellate Term, First Department
Decided: March 24, 2011
Citation: 2011 NY Slip Op 50430(U) · 30 Misc 3d 145(A)
Posture: Article 75 petition
Later treatment: Distinguished in 1 and followed in 3 later decisions (see Cited by)
Issues: Policy issues CPLR article 75 (arbitration awards) Timeliness and preclusion
Legal questions: Court review of arbitration awards · Exhaustion of policy limits (see the maps)

Cite as

Allstate Ins. Co. v DeMoura, 30 Misc 3d 145(A), 2011 NY Slip Op 50430(U) (App Term, 1st Dept 2011)

Posture, outcome, issues and treatment by other decisions are Beynenson Law’s classification. Treatment labels are assigned by a language model reading the citing decision; negative and appeal-history labels are checked by a second reader.

Summary

Editorial summary by Beynenson Law, not part of the court’s decision.

An arbitrator exceeds the arbitrator's power by directing payment beyond a no-fault policy's $50,000 limit. Policy exhaustion may be asserted despite failure to deny within 30 days, and the objection is preserved if raised in opposition to confirmation. In the insurer's proceeding to vacate an award, its submissions raised a factual issue whether the limit had been exhausted before it was obligated to pay the provider's claim. Applying 11 NYCRR 65-1.1 and 65-3.15 and Matter of Brijmohan v State Farm Ins. Co., the Appellate Term, First Department, reversed the order denying vacatur and granting confirmation and remanded for a framed issue hearing on exhaustion. The insurer's remaining arguments were rejected.

Reported in New York Official Reports at Allstate Ins. Co. v DeMoura (2011 NY Slip Op 50430(U))

[*1]

Allstate Ins. Co. v DeMoura

2011 NY Slip Op 50430(U) [30 Misc 3d 145(A)]

Decided on March 24, 2011

Appellate Term, First Department

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on March 24, 2011

APPELLATE TERM OF THE SUPREME COURT, FIRST DEPARTMENT

PRESENT: Shulman, J.P., Hunter, Jr., J.
570324/10

Allstate Insurance Company, Petitioner-Appellant,
against
Alexandre DeMoura a/a/o Miriam Cruceta, Respondent-Respondent.

Shulman, J.P., Hunter, Jr., J.

Allstate Insurance Company,NY County Clerk’s No. Petitioner-Appellant,570324/10 -against- Alexandre DeMoura a/a/oCalendar No. 10-162 Miriam Cruceta, Respondent-Respondent. Petitioner appeals from an order of the Civil Court of the City of New York, New York County (Tanya R. Kennedy, J.), dated March 16, 2009, which denied its petition to vacate an arbitration award in favor of respondent awarding him unpaid no-fault benefits in the principal sum of $11,170.42, and granted respondent’s cross petition to confirm the arbitration award. Per Curiam. Order (Tanya R. Kennedy, J.), dated March 16, 2009, reversed, without costs, and matter remanded to Civil Court for a framed issue hearing regarding whether the $50,000 limit of the subject insurance policy was exhausted before petitioner-insurer was obligated to pay respondent’s claim. When an insurer “has paid the full monetary limits set forth in the policy, its duties under the contract of insurance cease” (Countrywide Ins. Co. v Sawh, 272 AD2d 245 [2000]). A defense that the coverage limits of the policy have been exhausted may be asserted by an insurer despite its failure to issue a denial of the claim within the 30-day period (New York & Presby. Hosp. v Allstate Ins. Co., 12 AD3d 579 [2004]), and an arbitrator’s award directing payment in excess of the $50,000 limit of a no-fault insurance policy exceeds the arbitrator’s power and constitutes grounds for vacatur of the award (see Matter of Brijmohan v State Farm Ins. Co., 92 NY2d 821, 822 [1998]; Countrywide Ins. Co. v Sawh, 272 AD2d at 245; 11 NYCRR 65-1.1). Moreover, as petitioner-insurer correctly argues, such error “will not be waived if the party relying on it asserts it . . . in opposition to an application for confirmation” (Matter of Brijmohan v State Farm Ins. Co., 92 NY2d at 822). Here, petitioner’s submissions on its motion to vacate the arbitration award and in opposition to respondent’s cross motion to confirm the award raised a triable issue of fact regarding whether the $50,000 policy limit had been exhausted before payment could be made to respondent on its claim (see 11 NYCRR 65-3.15). Therefore, we remand the matter to Civil Court for a framed issue hearing on that issue. We note that petitioner’s remaining arguments are without merit. THIS CONSTITUTES THE DECISION AND ORDER OF THE COURT. I concurI concur Decision Date: March 24, 2011

MARCH 24, 2011
SUPREME COURT, APPELLATE TERM, FIRST DEPARTMENT

								June 2010 Term

Petitioner appeals from an order of the Civil Court of the City of New York, New York County (Tanya R. Kennedy, J.), dated March 16, 2009, which denied its petition to vacate an arbitration award in favor of respondent awarding him unpaid no-fault benefits in the principal sum of $11,170.42, and granted respondent’s cross petition to confirm the arbitration award.

Per Curiam.

Order (Tanya R. Kennedy, J.), dated March 16, 2009, reversed, without costs, and matter remanded to Civil Court for a framed issue hearing regarding whether the $50,000 limit of the subject insurance policy was exhausted before petitioner-insurer was obligated to pay respondent’s claim.

When an insurer “has paid the full monetary limits set forth in the policy, its duties under the contract of insurance cease” (Countrywide Ins. Co. v Sawh, 272 AD2d 245 [2000]). A defense that the coverage limits of the policy have been exhausted may be asserted by an insurer despite its failure to issue a denial of the claim within the 30-day period (New York & Presby. Hosp. v Allstate Ins. Co., 12 AD3d 579 [2004]), and an arbitrator’s award directing payment in excess of the $50,000 limit of a no-fault insurance policy exceeds the arbitrator’s power and constitutes grounds for vacatur of the award (see Matter of Brijmohan v State Farm Ins. Co., 92 NY2d 821, 822 [1998]; Countrywide Ins. Co. v Sawh, 272 AD2d at 245; 11 NYCRR 65-1.1). Moreover, as petitioner-insurer correctly argues, such error “will not be waived if the party relying on it asserts it . . . in opposition to an application for confirmation” (Matter of Brijmohan v State Farm Ins. Co., 92 NY2d at 822).

Here, petitioner’s submissions on its motion to vacate the arbitration award and in opposition to respondent’s cross motion to confirm the award raised a triable issue of fact regarding whether the $50,000 policy limit had been exhausted before payment could be made to respondent on its claim (see 11 NYCRR 65-3.15). Therefore, we remand the matter to Civil Court for a framed issue hearing on that issue.

We note that petitioner’s remaining arguments are without merit.

THIS CONSTITUTES THE DECISION AND ORDER OF THE COURT. [*2]

I concurI concur
Decision Date: March 24, 2011

Legal questions (2)

Questions of no-fault law this decision rules on, from our Legal Questions pages. Bars count the decisions on the question by year and court, coloured by category; circles are this decision and the decisions on the question it cites or that cite it. Point at a bar or circle for details. The categories and summaries are Beynenson Law’s classification, made by a language model and checked by a second reading.

Court review of arbitration awards

Open the full map

When does a court vacate, modify or confirm a no-fault arbitrator’s or master arbitrator’s award under CPLR article 75?

This decision: The court cannot decide on the record whether a ground for vacatur exists and orders a hearing or a determination below

Reversed denial of vacatur and confirmation, remanding for a framed-issue hearing because the insurer's submissions raised a triable issue whether the $50,000 limit was exhausted, an award beyond the limit exceeding the arbitrator's power and the objection not waived.

Award standsVacated: irrational/arbitraryVacated: exceeded powerRemanded, undecidedThis decisionCites it or cited by itCited or followed

Of the 55 decisions on this question in the First Department courts and the Court of Appeals, 4 (this one included) are in the same category.

Exhaustion of policy limits

Open the full map

Did the insurer prove the policy’s no-fault limits were properly exhausted before it became obligated to pay the claim?

This decision: Exhaustion cannot be decided on this record: issue of fact, framed-issue hearing, or remittal to decide the defense

Held the insurer's submissions raised a triable issue whether the $50,000 limit was exhausted under 65-3.15 before payment could be made on the claim, the defense surviving the lack of a timely denial; framed-issue hearing ordered.

Limits exhaustedTriable issue / hearingDefense not heardThis decisionCites it or cited by itCited or followedDistinguished or limited

Of the 16 decisions on this question in the First Department courts and the Court of Appeals, 8 (this one included) are in the same category. One decision in other departments that cites or is cited by this one is on the full map.

Cited in this decision

A label shows how this decision treated the case it cites.

New York & Presbyt. Hosp. v Allstate Ins. Co. (2004 NY Slip Op 08669) FollowedAn untimely denial does not preclude an exhaustion defense or establish entitlement to judgment on a previously denied duplicate claim.

Cited by

A label shows how the later decision treated this one.

Breeze Acupuncture, P.C. v Allstate Ins. Co. (2018 NY Slip Op 50138(U)) DistinguishedThe insurer was barred from reducing a judgment based on policy exhaustion known before trial but first raised after judgment.
Allstate Prop. & Cas. Ins. Co. v Northeast Anesthesia & Pain Mgt. (2016 NY Slip Op 50828(U)) FollowedAn arbitration award directing payment beyond a no-fault policy's monetary limit exceeds the arbitrator's power.
Matter of Ameriprise Ins. Co. v Kensington Radiology Group, P.C. (2020 NY Slip Op 00500) FollowedAn arbitration award exceeding policy limits may be challenged with evidence first submitted when confirmation is sought.
Ameriprise Ins. Co. v Kensington Radiology Group, P.C. (2017 NY Slip Op 51911(U)) FollowedThe insurer's policy declarations and payment ledger raised a triable issue of exhaustion before its obligation to pay the claims arose.

Similar decisions

Allstate Fire & Cas. Ins. Co. v Branch Med., P.C. (2022 NY Slip Op 50277(U))An arbitration award directing payment beyond exhausted no-fault policy limits exceeds the arbitrator's power.
Allstate Ins. Co. v Longevity Med. Supply, Inc. (2018 NY Slip Op 50238(U))A master arbitrator may apply law to established facts and correct legal error even when reaching a conclusion different from the arbitrator's. The insurer sought vacatur under CPLR 7511 of an award of unpaid no-fault benefits and attorney fees.
State Farm Mut. Auto. Ins. Co. v Hereford Ins. Co. (2020 NY Slip Op 51304(U))An intercompany reimbursement arbitration cannot relate back to a lawsuit against a different party to toll the limitations period.
Matter of State Farm Mut. Auto. Ins. Co. v Mutual Serv. Cas. Ins. Co. (2004 NY Slip Op 51293(U))The petitioning insurer's reimbursement demand was timely because it was made within three years of its first no-fault payment.
Allstate Ins. Co. v Brown (2019 NY Slip Op 51560(U))The insurer failed to establish grounds to vacate an award rejecting its IME nonappearance defense on a rational evidentiary basis.