Hereford Ins. Co. v. Corona Med.

2021 NY Slip Op 32512(U)

In the Matter of the Arbitration of certain controversies between HEREFORD INSURANCE COMPANY Petitioner, v. CORONA MEDICAL PC and MVAIC Respondents

Index No. CV 13288/21

Civil Court of the City of New York, New York County

October 20, 2021

Unpublished Opinion

GOLDBERG, MILLER & RUBIN P.C. Attorneys for Petitioner By: Harlan R. Schreiber, Esq.

ISRAEL, ISRAEL & PURDY, LLP Attorneys for Respondent Corona Medical P.C. By: Michael Hoenig, Esq.

MARSHALL & MARSHALL, PLLC Attorneys for Respondent MVAIC By: Jeffrey Kadsushin, Esq.

DECISION

Hon. Sabrina B. Kraus, JCC

BACKGROUND

Mostafa Hekal (Assignor), a 29 year old male, was injured in a motor vehicle accident on March 8, 2019. Assignor was driving a 2018 Ford, with New Jersey plate L62KUG, when it was involved in a collision on the Southern State Parkway in Hempstead New York. The 2018 Ford was a rental car owned by AutoTeam, Inc. and insured under New Jersey code 989, by Unitrin Preferred Insurance Company.

Assignor maintained a business policy in New York through Hereford, which is a New York State livery insurer. Assignor submitted the claim to Hereford and Hereford denied the claim, because the rental car was not an insured vehicle under the Hereford policy.

Assignor then submitted the claim to MVAIC who denied the claim because AutoTeam has a policy which covered the vehicle.

The amount in dispute was $550.00.

The parties submitted to arbitration to resolve the underlying dispute regarding no fault benefits. Corinne Pascariu (CP), the Arbitrator, held a hearing on June 29, 2020 and October 22, 2020 and issued a decision finding that MVAIC was not liable for the claim as a policy existed. CP further found:

... where, as here, there maybe more than one insurer - the insurer providing coverage to the vehicle Assignor had been renting and the insurer providing for hire coverage to the vehicle Assignor had been driving - liable for providing first-party No-Fault benefits, and "a dispute regarding priority of payment arises among insurers who otherwise are liable for the payment of first party benefits then the first insurer to whom notice of claim is given...shall be responsible for payment....

CP went on to find that as Hereford was the first to receive the notice of claim, it was responsible for processing the claim and its assertion that AutoTeam Inc is the insurer responsible must be resolved through intercompany arbitration. ^[1]

The award was confirmed by Victor J. D'Ammora (VD), a Master Arbitrator pursuant to decision dated March 1, 2021. VD agreed with CP's analysis and conclusions and found that CP's decision was neither arbitrary and capricious nor incorrect as a matter of law.

THE PETITION

Hereford filed the petition commencing this proceeding on May 14 2021. MVAIC and Corona Medical both appeared by counsel and filed opposition and cross-petitions. On October 14, 2021, the papers were fully submitted, and on October 15, 2021, the case was assigned to this court for determination.

The petition and cross-petitions are consolidated herein for determination.

For the reasons stated below, the petition to vacate the award is granted and the cross-petitions are denied.

There Was No Basis in the Record to Find Coverage by Hereford Existed

CPLR § 751 l(b)(1)(iii) provides for an application for a party to vacate an arbitration award, where the arbitrator exceeded her power. While judicial review of arbitration awards is limited to the grounds set forth in CPLR 7511, an award that is the product of compulsory arbitration, such as the case at bar, has an additional layer of review to insure that the award is supported by evidence in the record and that the award is not arbitrary and capricious (Liberty Mutual Fire Insurance Co v Global Liberty Insurance Co. of NY 144 A.D.3d 1160, 1161).

In this case, the insurance policy issued by Hereford clearly on its face indicates it covers only the automobile owned by Assignor, and therefore provides no coverage for the vehicle Assignor rented and was driving when he got into the accident. The vehicle covered by Hereford is a 2015 Chevrolet, specifically identified by a PIN number on the declaration page of the policy issued by Hereford. The issue below was not one of priority of payment, as ruled on by the Arbitrator, but a lack of coverage defense, which the Arbitrator did not rule on, noting only that there "may" be coverage under the policy issued by Hereford without citing any evidence for this conjecture.

It is well settled that where an insurance company made no contract of insurance with the person and for the vehicle involved in the accident, liability is properly denied (Zappone v Homes Ins. Co. 55 N.Y.2d 131, 136). In such a situation "... although the carrier may have some other relationship with the owner or driver of the vehicle, it has no contract with that person with respect...