In the Matter of State Farm Mutual Automobile Insurance Company, Appellant,v.Patrick Fitzgerald, Respondent.BriefN.Y.February 12, 2015APL-2014-70 Queens County Clerk’s Index No. 20498/11 Appellate Division, Second Department Docket No. 2012-00577 Court of Appeals STATE OF NEW YORK In the Matter of the Petition of STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Petitioner-Appellant, against PATRICK FITZGERALD, Respondent-Respondent. >> >> REPLY BRIEF FOR PETITIONER-APPELLANT RICHARD T. LAU & ASSOCIATES Attorneys for Petitioner-Appellant RIVKIN RADLER LLP Appellate Counsel for Petitioner-Appellant 926 RXR Plaza West Tower, 9th Floor Uniondale, New York 11556 516-357-3000 Date Completed: August 29, 2014 Of Counsel: Evan H. Krinick Cheryl F. Korman Henry Mascia To Be Argued By: Henry Mascia Time Requested: 30 Minutes i TABLE OF CONTENTS Page TABLE OF AUTHORITIES ......................................................................... ii PRELIMINARY STATEMENT ................................................................... 1 ARGUMENT ................................................................................................. 3 POINT I THE TERM “MOTOR VEHICLE” EXCLUDES POLICE VEHICLES FOR THE PURPOSES OF THE SUM ENDORSEMENT ...................................................... 3 POINT II RESPONDENT IGNORES THE RELEVANT STATUTES, AS INTERPRETED BY THIS COURT, AND MISSTATES THEIR LEGISLATIVE HISTORY ...................................................................................... 6 A. Respondent’s Contention That The Legislature Did Not Exclude Police Vehicles Contravenes The Text Of The Statutes As Interpreted By This Court ..... 6 B. Respondent Misrepresents The Amendments To The Relevant Statutes, Refuting Respondent’s Contention That A Distinction Between Vehicle And Motor Vehicle Is Material To This Case ........ 8 C. Respondent’s Reliance On Cases Interpreting The Term “Uninsured Motor Vehicle” For Purposes Of Insurance Law § 5202(a) Is Misplaced ......... 13 D. Respondent’s Reliance On Hogan Is Misplaced ................ 16 E. Respondent Fails To Address Critical Arguments ............. 18 CONCLUSION ............................................................................................ 21 ii TABLE OF AUTHORITIES Page(s) CASES Allstate Ins. Co. v. Shaw, 52 N.Y.2d 818 (1980) ......................................................................................... 19 Harper v. Lumbermens Mut. Cas., 174 A.D.2d 1031, appeal dismissed without op., 78 N.Y.3d 1110 (1991) ................................................................................. 13, 14 Matter of Liberty Mut. Ins. Co. v. Hogan, 82 N.Y.2d 57 (1993) ............................................................................... 16, 17, 18 Liberty Mut. Fire Ins. Co. v. Rondina, 32 A.D.3d 1230 (2d Dep’t 2006) .................................................................. 13, 14 Matter of Allstate Ins. Co. v. Rivera, 12 N.Y.3d 602 (2009) ......................................................................................... 19 Matter of Country-Wide Ins. Co. v. Wagoner, 45 N.Y.2d 581 (1978) ............................................................................. 1, 3, 7, 17 Matter of Metropolitan Prop. & Cas. Ins. Co. v. Mancuso, 93 N.Y.2d 487 (1999) ......................................................................................... 19 Progressive Northeastern Ins. Co. v. Scalamandre, 51 A.D.3d 932 (2d Dep’t 2008) .................................................................... 13, 14 Rafellini v. State Farm Mut. Auto. Ins. Co., 9 N.Y.3d 196 (2007) ............................................................................................. 7 State Farm Mut. Auto Ins. Co. v. Amato, 72 N.Y.2d 288 (1988) ...................... 3, 4, 5, 6, 8, 9, 10, 11, 12, 13, 14, 16, 19, 20 State Farm Mut. Auto. Ins. Co. v. Fitzgerald, 112 A.D.3d 166 (2d Dep’t 2013), lv. granted, 22 N.Y.3d 1168 (2014) ................................................................................. 15, 18 iii STATUTES Former Insurance Law § 167 (2) ............................................................................. 11 Insurance Law § 3420 ........................................................................................ passim Insurance Law § 5202 .................................................................................. 14, 15, 16 Insurance Law § 5208 .............................................................................................. 16 Former Vehicle and Traffic Law § 2 (8) .................................................................. 12 Former Vehicle and Traffic Law § 59. .................................................................... 11 Vehicle and Traffic Law § 125 ........................................................3, 4, 8, 12, 13, 15 Vehicle and Traffic Law § 311 ........................................................................ 4, 8, 10 Vehicle and Traffic Law § 312 .............................................................................. 4, 7 Vehicle and Traffic Law § 388 ....................... 3, 4, 6, 8, 9, 10, 11, 12, 15, 16, 19, 20 OTHER AUTHORITIES 11 N.Y.C.R.R. § 60-2.3 (f) .................................................................................. 1, 17 L. 1945, ch 409 ........................................................................................................ 11 L. 1950, ch. 176 ....................................................................................................... 12 L. 1958, ch. 577 § 1 ................................................................................................. 11 L. 1958, ch. 577 § 3 ................................................................................................. 11 L. 1976, ch. 617, § 1 ................................................................................................ 10 L. 1977, ch. 892 ................................................................................................... 5, 19 L. 1984, ch. 367, § 1 .................................................................................................. 9 L. 1984, ch. 805, § 82 .............................................................................................. 10 L. 2002, ch. 584, § 4 ................................................................................................ 10 iv McKinney’s Cons. Law of N.Y., Book 1, Statutes § 96 .......................................... 20 McKinney’s Cons. Law of N.Y., Book 1, Statutes § 221 .......................................... 5 PRELIMINARY STATEMENT In this proceeding to permanently stay an arbitration, State Farm submits this brief in response to the brief filed by respondent Patrick Fitzgerald and in further support of State Farm’s appeal from an order of the Appellate Division, Second Department, that (1) denied State Farm’s petition and (2) reversed a Supreme Court order (a) granting State Farm’s petition and (b) permanently staying the arbitration. The issue presented is whether the definition of “motor vehicle” excludes police vehicles for the purposes of the supplementary uninsured/underinsured motorist (“SUM”) endorsement. 11 N.Y.C.R.R. § 60-2.3 (f). State Farm demonstrates below that, for purposes of the SUM endorsement, the term “motor vehicle” does not include police vehicles. Although the SUM endorsement does not define the term “motor vehicle,” “the neutral sources that brought [the SUM endorsement] into being” – the text of the statute mandating the SUM endorsement (Insurance Law § 3420(f)), the statutory scheme, and the statutory purpose of Insurance Law § 3420(f) – all indicate that the Legislature intended to exclude police vehicles from the definition of “motor vehicle.” Matter of Country-Wide Ins. Co. v. Wagoner, 45 N.Y.2d 581, 586 (1978). In response to this argument, Respondent misconstrues the law and misstates the legislative history of the relevant statutes. Respondent does not offer any 2 principled reason for the Court to adopt his interpretation of the SUM endorsement and fails to address the absurd consequences that follow from his interpretation. Accordingly, the Court should reverse the Appellate Division order and grant the petition to permanently stay the arbitration. 3 ARGUMENT POINT I THE TERM “MOTOR VEHICLE” EXCLUDES POLICE VEHICLES FOR THE PURPOSES OF THE SUM ENDORSEMENT For purposes of the SUM endorsement, the term “motor vehicle” excludes police vehicles. Although the SUM endorsement does not define the term “motor vehicle,” “the neutral sources that brought [the endorsement] into being” indicate that the Legislature intended to exclude police vehicles from the definition of “motor vehicle.” Matter of Country-Wide Ins. Co. v. Wagoner, 45 N.Y.2d 581, 586 (1978). The definition of motor vehicle that applies to Insurance Law § 3420(f) – the statute mandating the SUM endorsement – excludes motor vehicles. See State Farm Mut. Auto Ins. Co. v. Amato, 72 N.Y.2d 288, 295 (1988). In Amato, this Court held that the definition of motor vehicle found in Insurance Law § 3420(e) also applies to Insurance Law § 3420(f). Amato, 72 N.Y.2d at 294. Section 3420 (e) of the Insurance Law applies to the operation “of any motor vehicle or of any vehicle as defined in [Vehicle and Traffic Law § 388].” See also Amato, 72 N.Y.2d at 294-295. Section 388 of the Vehicle Traffic Law (“VTL”) provides that “‘vehicle’ means a ‘motor vehicle,’ as defined in [VTL § 125], except fire and police vehicles, self-propelled combines, self-propelled corn and hay harvesting machines and tractors used exclusively for agricultural purposes...” 4 Although the facts in Amato required an interpretation of subsection (f) (1) (mandating uninsured motorist (“UM”) coverage), not (f) (2) (mandating SUM coverage), the Court expressly held that the definition of “motor vehicle” applies to “Insurance Law § 3420 (f)” without further qualification, and there exists no principled reason why subsection (f) (1) would have a different definition from subsection (f) (2). 72 N.Y.2d at 295. Indeed, the text of the statute demonstrates that the same terms in the two subsections should be given the same definition because they both refer to the same policy. See Insurance Law §§ 3420 (f) (1) (beginning “[n]o policy insuring against loss resulting from...” and describing the parameters of UM coverage), (f) (2) (expressly referring to subsection (f) (1) by beginning “[a]ny such policy...”). In addition, the statutory scheme demonstrates that the Legislature intended the term “motor vehicle” to exclude police vehicles. See VTL §§ 311, 388; Insurance Law § 3420(e)-(f)(2). The Legislature required that owners be vicariously liable for the use of a certain class of vehicles, which expressly excludes police, fire and farm vehicles (VTL § 388). The owners of that same class of vehicles must also purchase specified liability insurance. See Insurance Law § 3420 (e); VTL §§ 311-312 (requiring proof of financial security, such as liability insurance, to register any “motor vehicle” as defined in VTL § 125, except fire and police vehicles and certain farm equipment). Such liability insurance must include 5 UM coverage. See Insurance Law § 3420 (f) (1). Thus, when the Legislature expanded UM coverage in 1977 to include an optional protection from underinsured motorists up to the amount of liability coverage the individual had purchased, it obviously contemplated that this expanded coverage (SUM coverage) would apply to the same class of vehicles. See L. 1977 Ch. 892; see generally McKinney’s Cons. Law of N.Y., Book 1, Statutes § 221 at 376 (statutes relating to the same subject matter are in pari material and “should, if possible, be given uniformity of application and construction, and applied harmoniously and consistently”). Finally, the statutory purpose of Insurance Law § 3420(f)(2) – to allow insureds, at their own option, to obtain the same level of protection as they purchased to protect themselves against liability to others – ostensibly refers to the type of liability coverage mandated by Insurance Law § 3420 (e), which excludes police vehicles from the definition of motor vehicle. See Amato, 72 N.Y.2d at 294. Thus, the definition of “motor vehicle” for purposes of the SUM endorsement does not include police vehicles. Accordingly, the Court should reverse the Appellate Division order and grant the petition to permanently stay the arbitration. 6 POINT II RESPONDENT IGNORES THE RELEVANT STATUTES, AS INTERPRETED BY THIS COURT, AND MISSTATES THEIR LEGISLATIVE HISTORY A. Respondent’s Contention That The Legislature Did Not Exclude Police Vehicles Contravenes The Text Of The Statutes As Interpreted By This Court Respondent argues that this Court should not apply VTL § 388 (2) to the term “motor vehicle” in Insurance Law § 3420 (f) (2) and the SUM endorsement because VTL § 388 (2) defines “vehicle,” not “motor vehicle.” Respondent’s Br. at 8. This Court, however, unambiguously held in Amato that the scope of the term “motor vehicle” for purposes of Insurance Law § 3420 (f) is limited to the class of vehicles identified in VTL § 388. State Farm Mut. Auto Ins. Co. v. Amato, 72 N.Y.2d 288, 294-95 (1988). The Court expressly stated: “Although this exclusionary language [of VTL §388] is not repeated in the uninsured motorist provision of the Insurance Law [§ 3420 (f)], it would be illogical to assume that, while there is no legal obligation to insure police vehicles for death or bodily injury in the first instance, the City is nevertheless required to provide uninsured motorist coverage for its police vehicles.” Id. at 294. Based upon this reasoning, the Court held that “Insurance Law § 3420 (f) – providing that all ‘motor vehicle’ insurance policies must contain uninsured motorist coverage – has no application to police vehicles.” Id. at 295. Respondent 7 has not articulated any justification for interpreting Insurance Law § 3420 (f) to have a definition of “motor vehicle” that excludes police, fire and farm vehicles for purposes of subsection (1) (mandating UM coverage), but a definition that includes such vehicles for purposes of subsection (2) (mandating SUM coverage). Indeed, it is difficult to imagine any justification whatsoever, given that this Court has, for decades, “viewed [SUM] coverage as an extension of [UM] coverage.” Rafellini v. State Farm Mut. Auto. Ins. Co., 9 N.Y.3d 196, 204 (2007). If insurers are not required to include liability insurance on policies issued to police vehicles (Insurance Law § 3420 (e)), and owners of police vehicles are not required to establish financial security (VTL §§ 311, 312) or purchase UM coverage (Insurance Law § 3420 (f) (1)) because a police vehicle is not a “motor vehicle,” then Insurance Law § 3420 (f) (2), which requires insurers to also offer SUM coverage on the same vehicles, does not apply to police vehicles. If Insurance Law § 3420 (f) (2) does not apply to police vehicles, then the term “motor vehicle” in the SUM endorsement, which is mandated by Insurance Law § 3420 (f) (2), does not include police vehicles. See Matter of Country-Wide Ins. Co. v. Wagoner, 45 N.Y.2d 581, 586 (1978). 8 B. Respondent Misrepresents The Amendments To The Relevant Statutes, Refuting Respondent’s Contention That The A Distinction Between Vehicle And Motor Vehicle Is Material To This Case To avoid the most natural application of the relevant statutes, as interpreted by this Court, Respondent argues that “State Farm erroneously relies upon the text of Insurance Law § 3420 (e) as it existed at the time this Court decided [Amato], but not as the statute existed at any time relevant to this case.” Respondent’s Br. at 10. Respondent also claims that “[t]he mandatory liability requirements previously contained within Insurance Law § 3420 (e) have been removed...and are now contained within § 311 of Article 6 of the Vehicle and Traffic Law.” Respondent’s Br. at 14. Respondent’s confusion appears to have arisen from the following statement in Amato: “Under Insurance Law § 3420 (e), automobile liability insurance need only be issued on a ‘motor vehicle’ as it is ‘defined in section three hundred eighty-eight of the vehicle and traffic law.’” Amato, 72 N.Y.2d at 294; see also Respondent’s Br. at 11-13. Respondent reads this quotation to mean that Insurance Law § 3420 (e) did not reference both “vehicles” and “motor vehicles” at the time Amato was decided; based upon this interpretation, Respondent jumps to the conclusion that “[i]t is clear that the legislature (sic) considered a ‘motor vehicle’ to be defined in [VTL § 125].” Respondent’s Br. at 13. This argument lacks merit for several reasons. 9 First, the premise of Respondent’s argument – that Insurance Law § 3420 (e), VTL §§ 311, 388 (2) were different at the time the Court decided Amato – is demonstrably false. Currently, all three provisions are the same as they were when Amato was decided. At the time of this Court’s decision in Amato, Insurance Law § 3420 (e) provided: “No police or contract of personal injury liability insurance or of property damage liability insurance, covering liability arising from the ownership, maintenance or operation of any motor vehicle or of any vehicle as defined in section three hundred eighty-eight of the vehicle and traffic law...” Insurance Law § 3420 (e), as amended by L. 1984, ch. 367, § 1. The current version of Insurance Law § 3420 (e) is exactly the same, providing: “No policy or contract of personal injury liability insurance or of property damage liability insurance, covering liability arising from the ownership, maintenance or operation of any motor vehicle or of any vehicle as defined in section three hundred eighty- eight of the vehicle and traffic law...” Likewise, the Legislature has not amended VTL § 388 as Respondent contends. Respondent’s Br. at 17. At the time Amato was decided, VTL § 388 (2) provided: “As used in this section, ‘vehicle’ means a ‘motor vehicle,’ as defined in section one hundred twenty-five of this chapter, except fire and police vehicles, self- propelled combines, self-propelled corn and hay harvesting machines and tractors used exclusively for agricultural purposes...” 10 VTL § 388 (2), as amended by L. 1976, ch. 617, § 1. Section 388 (2) remains exactly the same today. See VTL § 388 (2).1 Thus, Respondent’s contention that VTL § 388 was different in a legally relevant way at the time of Amato is inaccurate. Respondent’s Br. at 17. Finally, VTL § 311 (2) is currently the same as it was when Amato was decided in 1988. Compare VTL § 311 (2), as amended by L. 1984, ch. 805, § 82 with VTL § 311 (2). Thus, contrary to Respondent’s contentions, the provisions found in Insurance Law § 3420 (e) at the time of Amato have not “been removed” and are not “now contained within § 311 of Article 6 of the [VTL].” Respondent’s Br. at 14. Second, the Court’s interpretation of Insurance Law § 3420 (e) in Amato was correct. Indeed, both the dissent and the majority in Amato recognized that Insurance Law § 3420 (e) only applies to vehicles defined in VTL § 388 (2). See Amato, 72 N.Y.2d at 295. This was the basis for the majority’s holding regarding section 3420 (e), 72 N.Y.2d at 295 n 2, and although the dissent rejected the majority’s conclusion, it accepted this premise, stating: “A literal interpretation of the statutes, exempting governmental entities from the requirement to provide insurance or proof of financial responsibility for death or 1 The only amendment to VTL § 388 since 1976 occurred in 2002. The 2002 amendment, however, revised subsection (4), not subsection (2). See L. 2002, ch. 584, § 4. VTL § 388 has not been amended since 2002. 11 injury caused by police vehicles (Vehicle and Traffic Law arts 6, 7; Insurance Law § 3420 (e)) but not exempting them from providing uninsured motorist protection (Insurance Law § 3420 (f)), is not illogical and serves to carry out the legislative intent.” Id. (Meyer, J., in dissent) (emphasis added). The majority’s interpretation of § 3420 (e), with which the entire Court agreed, demonstrates that the Court viewed the exclusion of police vehicles in VTL § 388 (2) to apply both to “vehicles” and “motor vehicles.” The definitions of the terms “vehicle” and “motor vehicle” at the time the Legislature amended former Insurance Law § 167 (2) (now Insurance Law § 3420 (e)) support the Court’s interpretation that this provision was not meant to apply to police vehicles. Former Insurance Law § 167 (2) provided: “No policy or contract of personal injury liability insurance....arising from the ownership, maintenance or operation of any motor vehicle shall be issued...” Former Insurance Law § 167 (2), as amended by L. 1945, ch 409. In 1958, the Legislature amended former Insurance Law § 167 (2) added the phrase “or of any vehicle as defined in section 59 of the Vehicle and Traffic Law.” See Former Insurance Law § 167 (2), as amended by L. 1958, ch. 577 § 3. At that time, former VTL § 59 provided that “‘vehicle’ means a ‘motor vehicle,’ as defined in section two of this chapter...” Former VTL § 59 (2), as amended by L. 1958, ch. 577 § 1. In 1958, Section 2 defined “motor vehicle” as “all vehicles propelled by any power other than 12 muscular power, except...fire and police vehicles, tractors used exclusively for agricultural purposes...” Former VTL § 2 (8), as amended by L. 1950, ch. 176. Further, if Respondent were correct that the term “motor vehicle” for purposes of Insurance Law § 3420 (e) carries the current definition of VTL § 125, then, contrary to both the majority and dissent in Amato, Insurance Law § 3420 (e) would apply to police vehicles because they unquestionably fall within the ambit of VTL § 125. See VTL § 125. Respondent, however, has not identified a single case, decided before or after Amato, applying the requirements of Insurance Law § 3420 (e) to “motor vehicles” as defined by VTL § 125, which include police, fire and farm vehicles. To adopt such a definition now would defy logic, common sense, the intent of the Legislature and this Court’s precedent. Third, regardless of whether the Court in Amato correctly interpreted Insurance Law § 3420 (e), the distinction between “vehicle” and “motor vehicle” in Insurance Law § 3420 (e), if any, is not dispositive here. As discussed, this Court unambiguously held in Amato that the scope of the term “motor vehicle” for purposes of Insurance Law § 3420 (f) is limited to the class of vehicles identified in VTL § 388, and Respondent has not articulated any justification for interpreting Insurance Law § 3420 (f) to have a definition of “motor vehicle” that excludes police, fire and farm vehicles for purposes of (f) (1) (mandating UM coverage), but a definition that includes such vehicles for purposes of (f) (2) (mandating SUM 13 coverage). Further, Respondent has not identified any reason for this Court to overturn Amato and upend the settled expectations of the insurance industry and 25 years of this Court’s jurisprudence. C. Respondent’s Reliance On Cases Interpreting The Term “Uninsured Motor Vehicle” For Purposes Of Insurance Law § 5202(a) Is Misplaced Respondent contends that “[t]he appellate courts of this state...have consistently held that Vehicle and Traffic Law § 125 provides the definition of the term ‘motor vehicle’ as used in the uninsured motorist endorsement.” Respondent’s Br. at 20 (citing Progressive Northeastern Ins. Co. v. Scalamandre, 51 A.D.3d 932 (2d Dep’t 2008); Liberty Mut. Fire Ins. Co. v. Rondina, 32 A.D.3d 1230 (2d Dep’t 2006); Harper v. Lumbermens Mut. Cas., 174 A.D.2d 1031 (4th Dep’t), appeal dismissed without op., 78 N.Y.3d 1110 (1991)). Respondent further contends that “State Farm has made no argument whatsoever as to why any of these cases are distinguishable from this case or why the rationale applicable to those cases is not applicable to this case.” Respondent’s Br. at 21. Contrary to Respondent’s contentions, State Farm distinguished these cases. See Appellant’s Br., at 18-19. In these cases, the issue for the Appellate Division to determine was whether an all-terrain vehicle (“ATV”) constituted an “uninsured motor vehicle” as defined by the UM endorsement. See Scalamadre, 51 A.D.3d at 933; Rondina, 32 A.D.3d at 1231; Harper, 174 A.D.2d at 1031. Thus, every case 14 upon which Respondent relies cites Insurance Law § 5202, which defines the term “uninsured motor vehicle.” Scalamadre, 51 A.D.3d at 933 (citing Insurance Law § 5202 (a)); Rondina, 32 A.D.3d at 1231 (same); Harper, 174 A.D.2d at 1031 (same); see also Insurance Law § 5202 (a), (c), (d). These cases do not support Respondent’s position for two reasons. First, the definition in Insurance Law § 5202 (a), (c), (d) applies to the term “uninsured motor vehicle” – the vehicle operated by the uninsured motorist who caused the injury. Compare Insurance Law §§ 3420 (f) with 5202 (a), (c), (d); see Amato, 72 N.Y.2d at 295 n 2; see also Scalamadre, 51 A.D.3d at 933 (where “[t]he appellant was injured when her automobile collided with [an ATV]” that “was uninsured”); Rondina, 32 A.D.3d at 1231 (where the insured’s son as “a passenger on uninsured [ATV]”); Harper, 174 A.D.2d at 1031 (where “[t]he insurance policy issued by defendant cover[ed] injuries resulting from an accident with an uninsured automobile”) (emphasis added). Therefore, as applied to this case, these cases only address whether the car that injured Mr. Fitzpatrick constitutes an “uninsured motor vehicle.” Of course, that issue is irrelevant in this case because the car that injured Mr. Fitzpatrick was undisputedly insured by GEICO, which paid Mr. Fitzpatrick the full policy limit on his claim (10). Second, although the outcome reached by these courts was correct, the statement that uninsured motorist protection “extends to all motor vehicles as 15 defined by [VTL] § 125” is overly broad. State Farm Mut. Auto. Ins. Co. v. Fitzgerald, 112 A.D.3d 166, 169 (2d Dep’t 2013), lv. granted, 22 N.Y.3d 1168 (2014). Insurance Law § 5202 (a) expressly states that the term “motor vehicle” “shall exclude fire and police vehicles” and certain farm vehicles. Section 125 of the VTL, however, unquestionably includes police, fire and farm vehicles in its definition of “motor vehicle.” Thus, UM coverage covers injuries caused by most VTL § 125 vehicles, but not all VTL § 125 vehicles. Of course, this statement was not outcome determinative in these cases because the “motor vehicle” in question was an ATV, not a police, fire or farm vehicle. Thus, aside from one overly broad statement, these cases do not support Respondent’s interpretation of the term “motor vehicle.” Third, these cases support State Farm’s interpretation of “motor vehicle.” The term “motor vehicle” as defined by VTL § 388 includes all VTL § 125 vehicles “except fire and police vehicles, self-propelled combines, self-propelled corn and hay harvesting machines and tractors used exclusively for agriculture purposes...” Likewise, an “uninsured motor vehicle” for purposes of the UM endorsement and a claim against MVAIC also includes all uninsured motor vehicles as defined by VTL § 125, except “fire and police vehicles, self-propelled combines, self-propelled corn and hay harvesting machines and tractors used exclusively for agricultural purposes...” Insurance Law § 5202 (a), (c), (d). 16 Therefore, the Legislature sensibly defined both “motor vehicles” and “uninsured motor vehicle” to exclude police, fire and farm vehicles. See Insurance Law §§ 5208, 5202(a), (c), (d); VTL § 388; see also Amato, 72 N.Y.2d 288 at 295, n 2. D. Respondent’s Reliance On Hogan Is Misplaced Respondent also contends that “State Farm is constrained to address, though it never mentions, this Court’s decision in Matter of Liberty Mut. Ins. Co. v. Hogan, 82 N.Y.2d 57 (1993) holding that insurers cannot limit their liability under the uninsured motorist endorsement by exclusions to coverage not authorized under Insurance Law § 3420 (f).” Respondent correctly observes that the Appellant’s Brief does not mention Hogan; this decision, however, does not compel, or even suggest, a different outcome in this case. In Hogan, the Court interpreted Liberty Mutual’s particular uninsured motorist endorsement, which excluded livery vehicles. 82 N.Y.2d at 59. The issue presented to the Court was whether the uninsured motorist endorsement in the regulations permitted Liberty Mutual to include such a provision in its uninsured motorist endorsement. Id. at 58. The Court observed that “[n]either that statute [Insurance Law § 3420 (f) (1)] nor any regulations applicable to it mentions any exclusions” and that such absence “is in contrast to the regulations for liability coverage...and supplemental uninsured/underinsured.” Id. at 60. The Court therefore concluded that the livery exclusion “is not based on statute or regulation 17 and is inconsistent with the purpose of the mandatory uninsured motor vehicle statutes and the public policy of this State, and, therefore, is unenforceable.” 82 N.Y.2d at 58. In this case, by contrast, there is no need to consider whether State Farm’s policy deviates from the SUM endorsement because, as noted in the Appellant’s Brief, the policy is exactly the same as the SUM endorsement in the regulations. Appellant’s Br. at 8 (quoting 11 N.Y.C.R.R. § 60-2.3 (f) (Regulations 34-D)). The Court’s interpretation of State Farm’s policy, therefore, is essentially an interpretation of the SUM endorsement. Under these conditions, the Court should “lean heavily on the realities that surround the language to be construed” because, the endorsement, like “other provisions in contracts offered to the public by the government-regulated insurance industry, is not the product of insurance company draftsmanship.” Matter of Country-Wide Ins. Co. v. Wagoner, 45 N.Y.2d 581, 586 (1978) (determining whether a motorcycle was included in the definition of the term “automobile” for purposes of the former uninsured motorist endorsement). Moreover, the text of the statute mandating the SUM endorsement (Insurance Law § 3420(f)), the statutory scheme and the statutory purpose of Insurance Law § 3420(f) all indicate that the definition of “motor vehicle” excludes police vehicles. Appellant’s Br. at 9. Thus, what was fatally absent in 18 Hogan – an exclusion based on a statute or regulation and in conformity with the purpose of the statute – is present in this case. Respondent also quotes Hogan for the proposition that “when the Legislature and the State want to allow exclusions, they say so.” Hogan, 82 N.Y.2d at 60. As State Farm argued in the Appellant’s Brief, the Legislature has expressed its intention to exclude police vehicle from the definition of “motor vehicle” by the text of the statute that mandate the SUM endorsement’s existence, Insurance Law § 3420 (f), the statutory purpose and the statutory scheme. For these reasons, Hogan simply does not apply to this case. Consistent with this analysis, neither Supreme Court nor the Appellate Division relied on Hogan (3-4). See State Farm v. Fitzgerald, 112 A.D.3d 166 (2d Dep’t 2013), lv. granted, 22 N.Y.3d 1168 (2014). E. Respondent Fails To Address Critical Arguments Respondent’s arguments center around nonexistent amendments to the relevant statutes and inapplicable case law, but Respondent never addresses several key points in the Appellant’s Brief. Respondent does not address the absurd results that will follow from his interpretation of the SUM endorsement, such as affording SUM coverage to the hypothetical passenger of a tractor. See Appellant’s Br. at 15-16. 19 Respondent also fails to address the statutory purpose of SUM coverage. Respondent emphasizes the statutory purpose for UM coverage: the Legislature’s “‘grave concern that motorists who use the public highways be financially responsible to ensure that innocent victims of motor vehicle accidents be recompensed for their injuries and losses.’” Respondent’s Br. at 18 (quoting Allstate Ins. Co. v. Shaw, 52 N.Y.2d 818 (1980)). The purpose of SUM coverage, however, is to allow insureds, at their own option, to obtain “the same level of protection for themselves and their passengers as they purchased to protect themselves against liability to others.” Matter of Allstate Ins. Co. v. Rivera, 12 N.Y.3d 602, 608 (2009) (internal citations omitted) (quoting Matter of Metropolitan Prop. & Cas. Ins. Co. v. Mancuso, 93 N.Y.2d 487, 492 (1999)); see also L. 1977 Ch. 892. The reference to “liability to others” ostensibly refers to the liability insurance mandated by Insurance Law § 3420 (e). The liability coverage required by Insurance Law § 3420(e), of course, only applies to VTL § 388 motor vehicles, which excludes police vehicles. See Insurance Law § 3420(e) (requiring liability insurance for “motor vehicles,” as defined by VTL § 388); see also Amato, 72 N.Y.2d at 294-95 (holding that Insurance Law § 3420 (e) does not apply to police vehicles). Thus, the level of protection that an insured purchased for their liability to others cannot refer to the liability associated with the operation of fire, police 20 and certain farm vehicles because the law does not require individuals to purchase liability coverage for such vehicles. See Insurance Law § 3420(e); see also Amato, 72 N.Y.2d at 294-95. Accordingly, applying the VTL § 388 definition to Insurance Law § 3420 (f) (2) and the SUM endorsement furthers the statutory purpose of SUM coverage. See McKinney’s Cons. Law of N.Y., Book 1, Statutes § 96 at 203-205 (“construction is to be preferred which furthers the object, spirit and purpose of the statute”). 21 CONCLUSION WHEREFORE, it is respectfully requested that this Court (1) reverse the Appellate Division order, with costs; (2) grant State Farm’s petition; and (3) permanently stay the arbitration. Dated: Uniondale, New York August 29, 2014 Respectfully submitted, RIVKIN RADLER LLP Attorneys for Petitioner-Appellant STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY By:______________________________________ Henry Mascia 926 RXR Plaza Uniondale, New York 11556-0926 (516) 357-3000 Of Counsel: Evan H. Krinick Cheryl F. Korman Henry Mascia