Summary
In Matter of Weisburgh v. MV AIC (28 A.D.2d 783) which involved a stay of arbitration pending a determination of a question of insurance coverage for the alleged tort-feasor it was written "arbitration should be stayed pending the determination of that issue in a court of competent jurisdiction".
Summary of this case from MATTER OF BENAOpinion
June 20, 1967
Appeal by Motor Vehicle Accident Indemnification Corporation from an order of Special Term, Albany County, denying a motion for a stay of arbitration. The claimant was injured as a result of a motor vehicle accident which occurred on June 13, 1963, when the automobile which she was operating collided with an automobile owned by Kathleen Mason and operated by Brian Mason. The claimant, alleging that the Mason automobile was uninsured, asserted a claim against the MVAIC under the terms of the standard New York automobile accident indemnification endorsement, and served a demand for arbitration. The appellant thereafter petitioned the court for an order permanently staying arbitration or, in the alternative, in the event there arises some issue of fact concerning whether the automobile in question was an "uninsured automobile" within the standard endorsement, that the arbitration be stayed pending a judicial determination of such fact. According to the petition, there was a policy of liability insurance on the Mason vehicle issued by the Potomac Insurance Company, being policy No. ACF 89-533-32, dated May 6, 1963 and with an expiration date of May 6, 1964. The petition alleged that this policy had not been cancelled prior to the accident, and that it was the position of the MVAIC that such policy was in full force and effect. The petition also alleged that the operator of the Mason automobile was a member of the same household of his aunt, who had a family-type automobile policy in effect with Jamestown Mutual Insurance Company. In reply, claimant submitted a letter from Potomac Insurance Company dated June 26, 1963, addressed to the Mason's insurance agent which referred to "Diane Weisburgh against Kathleen Mason, accident of 6/13/63" and stated: "This is to advise that we cannot honor the above captioned claim as this risk was terminated as of 6/1/63." Claimant also submitted a notice from the Department of Motor Vehicles dated September 17, 1963, which referred to the accident of June 13, 1963, and stated that, upon investigation, it had been found that the Mason automobile was not covered by financial security on the date of the accident. Appellant also submitted copies of a statement signed by Brian Mason, and a statement signed by his aunt, Marie A. Murphy. In substance, these statements indicate that Brian Mason and Kathleen Mason lived with Marie A. Murphy; that the automobile involved in the accident was purchased on June 10, 1963; that an FS-1 had been obtained on June 7, 1963 from the insurance agent; that the vehicle was registered using the FS-1 on June 10, 1963, and the insurance agent advised them on June 13, 1963, after the accident, that there was no coverage. In Matter of MVAIC [ Malone] ( 16 N.Y.2d 1027, 1028-1029), it was held "As to a similar automobile liability insurance policy endorsement we have held ( Matter of Rosenblum [ American Sur. Co.], 11 N.Y.2d 310) that before being required to go to arbitration on the questions of liability and damage the insurer (MVAIC here) has a right to a preliminary jury trial on the question of whether or not the alleged tort-feasor was or was not insured. * * * We construe subdivision 2-a of section 167 and subdivision (2) of section 600 Ins. of the Insurance Law as giving MVAIC an opportunity to litigate before a court, rather than before an arbitrator, the question of whether the Crown policy failed to take effect or was validly cancelled." In Matter of Vanguard Ins. Co. ( 18 N.Y.2d 376), which involved a disclaimer of coverage under a similar policy indorsement, but which did not involve MVAIC, the court stated (p. 382) "When Vanguard opposed appellants' demand for arbitration on the ground that Smith was not an insured driver, an issue of coverage arose. The arbitration provision of the policy only applied to issues of liability and damage. Thus, the issue of coverage was not an arbitrable issue, and Special Term should have denied appellants' demand for arbitration and held a trial to resolve the issue ( Matter of Motor Vehicle Acc. Ind. Corp. [ Malone], 16 N.Y.2d 1027; Matter of Rosenbaum [ American Sur. Co. of N.Y.], 11 N.Y.2d 310). " It thus appears that, where there is a dispute as to the preliminary issue of insurance coverage of the alleged tortfeasor, arbitration should be stayed pending the determination of that issue in a court of competent jurisdiction. Order reversed, on the law and the facts, and motion granted, without costs. Gibson, P.J., Herlihy, Aulisi, Staley, Jr., and Gabrielli, JJ., concur in memorandum by Staley, Jr., J.