June 11, 2010

AIU Ins. Co. v State Farm Ins. Co. (2010 NY Slip Op 51064(U))

https://www.beynensonlaw.com/case-law/aiu-ins-co-v-state-farm-ins-co-2010-ny-slip-op-51064u/

Court
Appellate Term, Second Department
Decided
June 11, 2010
Citation
2010 NY Slip Op 51064(U) · 27 Misc 3d 143(A)
Posture
Article 75 petition
Issues
CPLR article 75 (arbitration awards) Priority, other coverage
Cite as
AIU Ins. Co. v State Farm Ins. Co., 27 Misc 3d 143(A), 2010 NY Slip Op 51064(U) (App Term, 2d Dept, 9th & 10th Jud Dists 2010)

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Summary

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

The compulsory intercompany arbitration awards were supported by the evidence and were not arbitrary and capricious. The petitioning insurer sought recovery under Insurance Law § 5105 of no-fault benefits paid to insureds injured in a multivehicle accident. The arbitrator considered the parties' evidence, including a police report and the opposing insurer's affirmative defense, and the awards rested on a reasonable hypothesis. The Appellate Term, Second Department, affirmed the order, insofar as appealed from, denying vacatur and effectively confirming the awards. It also converted the action to a special proceeding under CPLR 103 (c), because CPLR 7502 (a) required that procedure for an initial application to confirm awards under CPLR 7510.

Reported in New York Official Reports at AIU Ins. Co. v State Farm Ins. Co. (2010 NY Slip Op 51064(U))

[*1]
AIU Ins. Co. v State Farm Ins. Co.
2010 NY Slip Op 51064(U) [27 Misc 3d 143(A)]
Decided on June 11, 2010
Appellate Term, Second 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This opinion is uncorrected and will not be published in the printed Official Reports.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 June 11, 2010

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 9th and 10th JUDICIAL DISTRICTS


PRESENT: : TANENBAUM, J.P., MOLIA and LaCAVA, JJ
2009-2052 S C.
AIU Insurance Company, Respondent,

against

State Farm Insurance Company, Appellant.

Appeal from an order of the District Court of Suffolk County, First District (James P. Flanagan, J.), entered July 20, 2009. The order, insofar as appealed from, upon granting defendant’s motion for reargument, denied defendant’s motion to vacate arbitration awards and granted plaintiff’s cross motion for summary judgment.

ORDERED that, on the court’s own motion, the instant action is converted to a special proceeding.

ORDERED that the order, insofar as appealed from, is affirmed without costs.

AIU Insurance Company (AIU) commenced the instant action to confirm arbitration awards issued against defendant State Farm Insurance Company (State Farm) in a mandatory inter-company arbitration proceeding (Insurance Law § 5105) brought by AIU to recover first-party no-fault benefits paid to its insureds as a result of injuries they had suffered in a multi-vehicle accident. State Farm contended that the awards were arbitrary and capricious, and sought to vacate the awards on that basis. The District Court found in favor of AIU, and this appeal by State Farm ensued.

As a preliminary matter, we note that, pursuant to CPLR 7502 (a), “[a] special proceeding shall be used to bring before a court the first application arising out of an arbitrable controversy,” and therefore the proper procedure was to commence a special proceeding, not an action, to confirm the arbitration awards pursuant to CPLR 7510 (see Scaduto v DT Indus., 266 AD2d 149 [1999]; Polednak v Country-Wide Ins. Co., 153 AD2d 930 [1989]). Consequently, on this court’s own motion, we convert the action to a special proceeding (see CPLR 103 [c]; see also Saratoga CCM, Inc. v Guarino, 21 Misc 3d 142[A], 2008 NY Slip Op 52385[U] [App Term, 2d & 11th Jud Dists 2008]). [*2]

Upon a review of the record, we find that the awards in this compulsory arbitration proceeding were supported by the evidence (see Matter of Motor Veh. Acc. Indem. Corp. v Aetna Cas. & Sur. Co., 89 NY2d 214 [1996]; Matter of State Farm Mut. Auto. Ins. Co. v Lumbermens Mut. Cas. Co., 18 AD3d 762 [2005]). The decisions by the arbitrator indicated that he had considered the evidence proffered by the parties, including the police report, as well as State Farm’s affirmative defense. Thus, it cannot be said that the awards were arbitrary and capricious or that they were unsupported by any reasonable hypothesis (see Matter of Motor Veh. Acc. Indem. Corp., 89 NY2d 214). Consequently, the District Court did not err in denying vacatur of the awards. We note that, in granting AIU’s cross motion for summary judgment, the District Court, in effect, confirmed the awards. Accordingly, the order, insofar as appealed from, is affirmed.

Tanenbaum, J.P., Molia and LaCava, JJ., concur.
Decision Date: June 11, 2010

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