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. >> >> 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: July 1, 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 ........................................................................ iii PRELIMINARY STATEMENT ................................................................... 1 QUESTION PRESENTED ............................................................................ 2 FACTS AND PROCEDURAL HISTORY ................................................... 2 A. Background Facts ................................................................. 2 B. State Farm’s Petition ............................................................ 3 C. Respondent’s Opposition ..................................................... 3 D. State Farm’s Reply ............................................................... 4 E. Supreme Court Order ........................................................... 5 F. Appellate Division Order ..................................................... 6 ARGUMENT ................................................................................................. 8 THE APPELLATE DIVISION ERRED IN CONCLUDING THAT “MOTOR VEHICLE” INCLUDES POLICE VEHICLES FOR PURPOSES OF THE SUM ENDORSEMENT AND OFFICER KNAUSS’S PRIVATE AUTOMOBILE INSURANCE POLICY ........................................................................................ 8 A. The Text Of Insurance Law § 3420(f) Excludes “Motor Vehicle” From The Definition Of Police Vehicles ..................................................................... 9 B. Excluding Police Vehicles From The Definition Of Motor Vehicles Coheres With The Statutory Scheme ............................................................................... 13 ii C. Excluding Police Vehicles From The Definition Of Motor Vehicles Furthers The Statutory Purpose Of Insurance Law § 3420(f) ............................................... 16 D. The Appellate Division Definition’s Arbitrary Definition Of “Motor Vehicle” Defies The Legislative Intent ................................................................ 18 E. Conclusion .......................................................................... 21 iii TABLE OF AUTHORITIES Page(s) CASES Matter of Allstate Ins. Co. v. Rivera, 12 N.Y.3d 602 (2009) ......................................................................................... 16 Matter of Country-Wide Ins. Co. v. Wagoner, 45 N.Y.2d 581 (1978) ....................................................................... 1, 8, 9, 19, 21 Matter of Liberty Mut. Fire Ins. Co. v. Rondina, 32 A.D.3d 1230 (4th Dep’t 2006) ........................................................................ 19 Matter of Metropolitan Prop. & Cas. Ins. Co. v. Mancuso, 93 N.Y.2d 487 (1999) ......................................................................................... 16 Matter of Progressive Northeastern Ins. Co. v. Scalamandre, 51 A.D.3d 932 (2d Dep’t 2008) .......................................................................... 19 Rafellini v. State Farm Mut. Auto. Ins. Co., 9 N.Y.3d 196 (2007) ............................................................................... 11, 12, 14 Reiley v. Department of Motor Vehicles, 240 A.D.2d 296 (1st Dep’t 1997) ........................................................................ 18 State Farm Mut. Auto. Ins. Co. v. Fitzgerald, 112 A.D.3d 166 (2d Dep’t 2013) .................................................................. 18, 19 State Farm Mutual Automobile Insurance Company v. Amato, 72 N.Y.2d 288 (1988) .............................................. 4, 5, 6, 10, 11, 12, 19, 20, 21 Williams v. City of New York, 144 A.D.2d 553 (2d Dep’t 1988) ...................................................................... 4, 5 iv STATUTES Insurance Law § 3420 et. seq. ...........................................................................passim Insurance Law § 5102 ............................................................................................ 3, 4 Insurance Law § 5202 (a) .................................................................................. 19, 20 McKinney’s Cons. Law of N.Y., Book 1, Statutes § 92 .......................................... 13 McKinney’s Cons. Law of N.Y., Book 1, Statutes § 96 .......................................... 17 McKinney’s Cons. Law of N.Y., Book 1, Statutes § 145 ........................................ 15 McKinney’s Cons. Law of N.Y., Book 1, Statutes § 221 ........................................ 14 McKinney’s Cons. Law of N.Y., Book 1, Statutes § 236 .................................. 12, 13 Vehicle and Traffic Law § 125 ...................................... 7, 11, 13, 15, 17, 18, 19, 20 Vehicle and Traffic Law § 388 ............................. 5, 6, 10, 11, 13, 14, 17, 18, 20, 21 OTHER AUTHORITIES 11 N.Y.C.R.R. 60-2.3............................................................................. 1, 8, 9, 12, 16 L. 1977 Ch. 892 .................................................................................................. 14, 16 L. 1984, Ch. 367 ....................................................................................................... 11 Regulations 35-D ..................................................................................................... 12 PRELIMINARY STATEMENT In this proceeding to permanently stay an arbitration, State Farm appeals 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). Accordingly, the Court should reverse the Appellate Division order and grant the petition to permanently stay the arbitration. 2 QUESTION PRESENTED Does the term “motor vehicle” exclude police vehicles for the purposes of the SUM endorsement? This question should be answered in the Affirmative. FACTS AND PROCEDURAL HISTORY A. Background Facts Michael Knauss, a police officer, insured his personal vehicle through State Farm and purchased SUM coverage for that vehicle. On January 2, 2011, Patrick Fitzgerald, also a police officer, was riding as a passenger in a marked New York City police vehicle operated by Knauss. The police vehicle was involved in an accident with a vehicle that was owned and operated by Arnold Walton. The Walton vehicle was insured by GEICO with policy limits for liability of $25,000 for losses arising from bodily injury and $50,000 for losses arising from death caused by an uninsured motorist ($25,000/$50,000). The full $25,000 from the Walton policy was tendered to Fitzgerald. On or about August 18, 2011, Officer Fitzgerald made an arbitration demand on State Farm to collect on the SUM coverage in the Knauss policy (10-13). State Farm refused to make payment on the claim. 3 B. State Farm’s Petition State Farm commenced this proceeding by filing a Notice of Petition and Petition dated August 31, 2011, seeking a stay of arbitration (5-9). State Farm argued that Officer Fitzgerald failed to establish that he qualifies as an insured for underinsured motorist benefits under the State Farm policy. Specifically, State Farm contended that it issued a policy to Michael Knauss insuring a vehicle that was not the vehicle involved in the subject accident. State Farm explained that the vehicle involved in the accident was a police vehicle, which was not insured by State Farm (8). Additionally, State Farm noted that a police vehicle does not qualify as a motor vehicle and that Fitzgerald does not qualify as an insured under the Knauss policy simply because he was occupying a police car operated by Knauss (8). C. Respondent’s Opposition Respondent maintained that he qualified as an insured for underinsured motorist coverage under the Knauss policy. Specifically, respondent pointed to the language in the policy that defines an insured as “any other person while occupying … any other motor vehicle while being operated by you or your spouse” (22). Respondent relied upon Insurance Law § 5102, which specifically provides: “(f) ‘Motor vehicle’ means a motor vehicle as defined in section three hundred eleven of the vehicle and traffic 4 law and also includes fire and police vehicles. It shall not include any motor vehicle not required to carry financial security pursuant to article six, eight or forty- eight-A of the vehicle and traffic law or a motorcycle, as defined in subsection (m) hereof.” (23). Respondent argued that the definition in Section 5102 applies to the terms used in the Insurance Law, which governs the instant claim (23). Additionally, respondent cited to the Court of Appeals decision in State Farm Mutual Automobile Insurance Company v. Amato, 72 N.Y.2d 288 (1988) and Williams v. City of New York, 144 A.D.2d 553 (2d Dep’t 1988) where the Courts determined that municipalities are not required to provide uninsured motorist coverage to police officers operating their police vehicles and that the police officers’ private insurers were required to provide such benefits, and argued that a similar result should follow for his claim for underinsured motorist benefits under his partner’s personal policy (23-24). D. State Farm’s Reply State Farm argued that respondent’s reliance on the definition of a “motor vehicle” pursuant to Insurance Law § 5102 is misplaced as that section only applied to Article 51 of the Comprehensive Motor Vehicle Insurance Reparations Act, which is inapplicable here (33). 5 State Farm further argued that State Farm v. Amato, supra, was distinguishable and actually supports State Farm’s position. State Farm emphasized that in Amato, the Court held that the City of New York was not required to provide liability coverage for police vehicles under Insurance Law § 3420 inasmuch as police vehicles were not “motor vehicles” as defined by Vehicle and Traffic Law (“VTL”) § 388(2). See (34). Additionally, it was noted that Amato only held in favor of claimants who held uninsured motorist policies as named insureds. It did not hold that passengers of police vehicles, who are not in privity with the insurer, enjoyed the SUM benefits under the operator’s policy (34). E. Supreme Court Order By decision and order dated December 7, 2011, Supreme Court, Queens County (Rios, J.), granted State Farm’s petition and permanently stayed the arbitration. Specifically, the Court held: [W]hile it has been held that a passenger in a police vehicle involved in a motor vehicle accident may avail himself of uninsured motorist benefits from his private insurer (see Williams v. City of New York, 144 A.D.2d 553 [2d Dept. 1988]), here unlike the respondent in Williams v. City of New York (supra), respondent is not the policy holder. The definition of insured under Knauss’ policy does not include respondent since the term insured, as it pertains to respondent, refers to “any other person while occupying … any motor vehicle while being operated by you [Knauss] …”. Since a police vehicle is specifically 6 excluded from the definition of motor vehicle as it appears in Vehicle and Traffic Law section 388[2], respondent is not an insured under the Knauss policy. (see Matter of State Farm Mut. Auto Ins. v. Amato, 72 N.Y.2d 288 [1988]). (4). Respondent appealed (2). F. Appellate Division Order The Appellate Division (1) reversed the Supreme Court order on the law and (2) denied the petition. The Appellate Division, Second Department distinguished Amato on the grounds that it involved New York City’s obligation to provide uninsured motorist protection under Insurance Law § 3420(f)(1), not an interpretation of SUM coverage under Insurance Law § 3420(f)(2). The Second Department recognized that this Court in Amato held that “police vehicles were specifically exempted from the requirements of Insurance Law § 3420 (f)” but refused to apply Amato because “it would result in the denial of uninsured/underinsured motorist coverage virtually every time a police officer is injured in a car accident involving a police vehicle, especially since a municipality is under no obligation to provide such coverage to its police officers.” State Farm Mut. Auto. Ins. Co. v. Fitzgerald, 112 A.D.3d 166, 169 (2d Dep’t 2013). The Second Department held that “VTL § 125, instead of VTL § 388(2), should be used to define the term ‘motor vehicle,’ as it appears in the uninsured/underinsured motorist endorsement.” 112 A.D.3d at 168. The Court 7 applied VTL § 125 because it is “a general provision that defines the relevant terminology for the entire VTL” and because “uninsured motorist coverage extends to all ‘motor vehicles,’ as defined by VTL § 125.”1 112 A.D.3d at 169. State Farm moved for leave to appeal. This Court granted the motion.2 1 VTL § 125 defines motor vehicle, with certain exceptions not relevant here, as “[e]very vehicle operated or driven upon a public highway which is propelled by any power other than muscular power.” 2 This Court also stayed enforcement of the Appellate Division order 8 ARGUMENT THE APPELLATE DIVISION ERRED IN CONCLUDING THAT “MOTOR VEHICLE” INCLUDES POLICE VEHICLES FOR PURPOSES OF THE SUM ENDORSEMENT AND OFFICER KNAUSS’S PRIVATE AUTOMOBILE INSURANCE POLICY_______________ The issue in this case is the definition of the term “motor vehicle” for purposes of the SUM endorsement. The SUM endorsement, which is identical to the Knauss policy, defines the term “insured” as: (1) you, as the named insured and, while residents in the same household, your spouse and the relatives of either you or your spouse; (2) any other person while occupying: (i) a motor vehicle insured for SUM under this policy; or (ii) any other motor vehicle while being operated by you or your spouse; and (3) any person, with respect to damages such person is entitled to recover, because of bodily injury to which this coverage applies sustained by an insured under paragraph (1) or (2) above. 11 N.Y.C.R.R. § 60-2.3 (f). The SUM endorsement does not define the term “motor vehicle.” To define “motor vehicle,” the Court should “lean heavily on the realities that surround the language to be construed” because, in this context, the Court “does not write on a blank page, but one that already records a history of judicial, legislative and administrative action.” Matter of Country-Wide Ins. Co. v. 9 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). Specifically, 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,” but the product of the regulatory agency charged with drafting the endorsement to effectuate the statute enacted by the Legislature. Wagoner, 45 N.Y.2d at 586. In this context, the Court does not interpret the endorsement in a vacuum, but looks to “the neutral sources that brought [the SUM endorsement] into being for clues about [its] intended scope.” Wagoner, 45 N.Y.2d at 586-589. In Wagoner, the neutral sources expressly relied upon by this Court were the definitions in the text of the statute mandating the endorsement, the statutory scheme and the statutory purpose of the statute mandating the endorsement. See Wagoner, 45 N.Y.2d at 586-589. Here, 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. A. The Text Of Insurance Law § 3420(f) Excludes “Motor Vehicle” From The Definition Of Police Vehicles SUM endorsement was drafted by the Insurance Department to implement Insurance Law § 3420(f). See 11 N.Y.C.R.R. § 60-2.3 (f). Section 3420(f) of the 10 Insurance Law requires all automobile liability policies to provide a minimum amount of coverage to the policy holder for losses arising out of injuries caused to the insured by uninsured motorists. Insurance Law § 3420(f)(1) (“Uninsured Motorist Protection” or “UM Coverage”). Uninsured Motorist Protection requires all automobile liability policies to also cover insureds for up to $25,000 in losses arising from bodily injury and $50,000 ($25,000/$50,000) in losses for death caused by uninsured motorist. Insurance Law § 3420(f)(1). “Any such policy,” must also offer the insured the option of purchasing supplementary uninsured/underinsured motorist coverage (SUM coverage) for “an amount up to the bodily injury liability insurance limits of coverage provided under such policy, subject to a maximum” of $250,000/$500,000 for losses arising out of injuries or death caused by individuals with insurance that is insufficient to cover all their losses. Insurance Law § 3420(f)(2). Thus, SUM coverage provides protection when the liability limits on the offending vehicle are less than the liability limits in the insured’s policy. Insurance Law § 3420(f)(2). Insurance Law § 3420(f) does not contain a definition of motor vehicle. In Amato, however, 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 defines “motor vehicle” as “any vehicle as defined in [VTL § 388].” See Amato, 72 N.Y.2d at 294. Section 11 388 of the 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.” Thus, the VTL § 388 definition of motor vehicle – which excludes police vehicles – applies to Insurance Law § 3420(f). Although the facts in Amato required an interpretation of subsection (f)(1), not (f)(2), the Court expressly held that the definition of “motor vehicle” applies to “Insurance Law § 3420 (f)” without further qualification. 72 N.Y.2d at 295. If the Court believed a distinction between subsections (1) and (2) were necessary, it could have specifically cited subsection (1) because at the time of the Amato decision, subsection (f), which had previously been two paragraphs in a single subsection, had been renumbered and separated into two subsections. See Rafellini v. State Farm Mut. Auto. Ins. Co., 9 N.Y.3d 196, 204 (2007) (chronicling the Legislative history of the Insurance Law). Moreover, there exists no principled reason why this Court’s holding in Amato would not apply to section 3420(f)(2). This Court “has viewed [SUM] coverage as an extension of uninsured motorist coverage” for decades. Rafellini, 9 N.Y.3d at 204. Indeed, for many years Insurance Law § 3420 (f) did not contain any subsections; the subsections were only added after the Legislature recodified the Insurance Law in 1984. See L. 1984, Ch. 367; see also Rafellini, 9 N.Y.3d at 12 204. This Court has acknowledged that the recodification was obviously not intended to enact a substantive change in the law. Rafellini, 9 N.Y.3d at 204. Thus, the definition of the term “motor vehicle” is the same for subsection (f) (1) and subsection (f) (2). See Insurance Law § 3420(f); see also Amato 72 N.Y.2d at 295. Additionally, the text of the statute demonstrates that the same terms in the two subsections should be given the same definition. Subsection (f) (1) begins “No policy insuring against loss resulting from...” and describes the parameters of UM coverage. Subsection (f) (2) expressly refers to subsection (f) (1) by beginning “Any such policy...” Insurance Law § 3420(f)(2). Thus, both subsections unambiguously refer to the same policy. Accordingly, Regulations 35- D requires the SUM endorsement to include “the mandatory uninsured motorists (UM) coverage.” 11 N.Y.C.R.R. 60-2.3(d). It would be unusual, indeed, for the same policy to have two different definitions for the same term. See generally McKinney’s Cons. Law of N.Y., Book 1, Statutes § 236 at 402 (“whenever a word is used in a statute...with one meaning, and subsequently the same word is used in a statute on the same subject matter, it is understood to have been used in the same sense”). Although the Legislature and the Insurance Department could, in theory, have two definitions for “motor vehicle,” a strong justification for doing so would have to exist, and the policy would have to expressly state which definition applies 13 in which context to avoid creating an unintelligible endorsement. See generally Statutes § 236 at 402 (the same words carry the same meaning “unless there is something in the context or nature of things to indicate that a different meaning was intended”). Finally, the text of the Insurance Law § 3420 does not contain any evidence that the VTL § 125 definition applies. Insurance Law § 3420 is a general provision applicable to all liability insurance policies. Insurance Law § 3420 defines the term “motor vehicle” for the first time in subsection (e), using the VTL § 388 definition. Insurance Law § 3420 does not contain any other definition of the term “motor vehicle,” and the section never refers to VTL § 125. See generally McKinney’s Cons. Law of N.Y., Book 1, Statutes § 92 at 185 (“courts may not read into a law any word or provision unless good grounds appear for thinking that the lawmakers intended to include something which they have failed to plainly express”). B. Excluding Police Vehicles From The Definition Of Motor Vehicles Coheres With The Statutory Scheme Using the VTL § 388 definition of “motor vehicle,” which excludes police vehicles, also coheres with the statutory scheme enacted by the Legislature. Pursuant to VTL § 388 (1)-(2), the Legislature required that owners of a specified class of vehicles, which excludes fire, police and farm vehicles, would be vicariously liable for the use of their vehicle by others. VTL §§ 388(1)-(2). The 14 Legislature further required that the owners of that same class of vehicles carry liability insurance that covers harm caused by the use of such vehicles. Insurance Law § 3420(e). In addition, the Legislature mandated that the liability policy that the owners were required to purchase for this class of vehicles under Insurance Law § 3420(e) would have to include Uninsured Motorist Protection. Insurance Law § 3420(f). Subsequently, the Legislature required the same policy to offer the insured the opportunity to purchase SUM coverage to protect the insured from underinsured motorists at the same level they decided to protect themselves from liability to others. See Insurance Law § 3420(f)(2); L. 1977 Ch. 892; Rafellini, 9 N.Y.3d at 204. In short, the Legislature required that owners be vicariously liable for the use of a certain class of vehicles (VTL § 388) and required those owners to purchase liability insurance and UM coverage on that same class of vehicles. Insurance Law § 3420(e)-(f)(1). Thus, when the Legislature expanded UM coverage 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 15 material and “should, if possible, be given uniformity of application and construction, and applied harmoniously and consistently”). If SUM coverage applied to a broader class of vehicles, it would afford the benefit of SUM coverage to passengers of a vehicle whose owner (1) was not vicariously liable for the driver’s actions, (2) was not required to purchase liability insurance or Uninsured Motorist Protection and (3) was never offered the opportunity to purchase SUM coverage. Interpreting the SUM endorsement in this manner would produce absurd results. See McKinney’s Cons. Law of N.Y., Book 1, Statutes § 145 at 294 (“it will be presumed that the Legislature did not intend an absurd result to ensue from the legislation enacted”). A hypothetical case involving a tractor illustrates this point. Suppose a farmer owns a tractor she uses exclusively for farming. Further suppose that this farmer hires two employees. Employee A has SUM coverage on his private vehicle, but Employee B does not. Finally, suppose that Employee A is operating the tractor when it collides with an underinsured vehicle, and Employee B, who is riding as a passenger in the tractor, is injured. The tractor clearly falls within the definition of VTL § 125, which defines motor vehicle, with certain exceptions not relevant here, as “[e]very vehicle operated or driven upon a public highway which is propelled by any power other than muscular power.” Thus, if “motor vehicle” is defined by VTL § 125, 16 Employee B will enjoy the benefits of Employee A’s SUM coverage purchased for his private automobile. However, the farmer, who owns the tractor, is not vicariously liable for the operator’s negligence, was not required to purchase liability insurance that included Uninsured Motorist protection and was never offered SUM coverage for the tractor, which would have covered all the passengers of the vehicle. See 11 N.Y.C.R.R. § 60-2.3(f)(2)(i) (defining “insured” as “any other person while occupying a motor vehicle insured for SUM under this policy”). If the Legislature intended a radical deviation from the statutory scheme that produces such anomalous results, it would have manifested this intention in some discernable way. C. Excluding Police Vehicles From The Definition Of Motor Vehicles Furthers The Statutory Purpose Of Insurance Law § 3420(f) Moreover, the purpose of SUM coverage implies that police vehicles are excluded from the definition of “motor vehicle.” The purpose of SUM coverage 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. Using the VTL § 388 definition furthers the statutory purpose of SUM coverage. See McKinney’s Cons. Law of N.Y., Book 1, Statutes § 96 at 203-205 17 (“construction is to be preferred which furthers the object, spriit and purpose of the statute”). 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. Insurance Law § 3420(e) (requiring liability insurance for “motor vehicles,” as defined by VTL § 388). 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 and certain farm vehicles because the law does not require individuals to purchase liability coverage for such vehicles. See Insurance Law § 3420(e). Further, the VTL § 125 definition of motor vehicle would arbitrarily expand the scope of SUM coverage. See McKinney’s Cons. Law of N.Y., Book 1, Statutes § 96 at 205-206 (“To avoid an unintended result a statute should be given a rational interpretation consistent with achieving its purpose and with justice and common sense”). The VTL § 125 definition of motor vehicle is “[e]very vehicle operated or driven upon a public highway which is propelled by any power other than muscular power, except ... electrically-driven mobility assistance devices,” “vehicles which run only upon rails or tracks,” “snowmobiles” and “all terrain vehicles.” This broad definition includes a nineteen-pound, 1.2-horsepower “goped.” See Reiley v. Department of Motor Vehicles, 240 A.D.2d 296 (1st Dep’t 18 1997). However, there exists no principled reason for choosing a definition of “motor vehicle” for purposes of the SUM endorsement that includes a “goped” yet excludes “all-terrain vehicles.” Further, if the statutory purpose of expanding coverage were without boundaries, choosing a definition of “motor vehicle” that includes snowmobiles and all-terrain vehicles would effectuate the statutory purpose better than VTL § 125. D. The Appellate Division Definition’s Arbitrary Definition Of “Motor Vehicle” Defies The Legislative Intent The text and purpose of the statute mandating the SUM endorsement, the statutory scheme and this Court’s precedents demonstrate that the definition of the term “motor vehicle” is coterminous with the definitions of “motor vehicle” in the rest of the statutory scheme, which do not include police vehicles. In addition, the inadequacies of the alternative definitions further establish that the definition of “motor vehicle” found in VTL § 388 applies to the SUM endorsement. The Appellate Division arbitrarily chose VTL § 125 for the definition of “motor vehicle.” State Farm Mut. Auto. Ins. Co. v. Fitzgerald, 112 A.D.3d 166, 169 (2d Dep’t 2013). The Court chose to apply VTL § 125 because it is “a general provision that defines the relevant terminology for the entire VTL.” 112 A.D.3d at The Court did not explain why VTL § 125 is preferable to VTL § 388 (2), the provision that applies to the statute that mandated State Farm to offer Mr. Knauss this coverage. See Insurance Law § 3420(f); Amato, 72 N.Y.2d at 294. 19 Rather, the Court reasoned that “it has been recognized that uninsured motorist coverage extends to all ‘motor vehicles,’ as defined by VTL § 125.” 112 A.D.3d at 169 (citing Matter of Progressive Northeastern Ins. Co. v. Scalamandre, 51 A.D.3d 932, 933 (2d Dep’t 2008); Matter of Liberty Mut. Fire Ins. Co. v. Rondina, 32 A.D.3d 1230, 1231 (4th Dep’t 2006); Insurance Law § 5202 (a); and Matter of Country-Wide Ins. Co. v. Wagoner, 45 N.Y.2d 581 (1978). These cases do not support the Appellate Division determination. The Second Department honed in on one statement in Scalamandre and Rondina: “[uninsured motorist] coverage extends to all motor vehicles as defined by Vehicle and Traffic Law § 125.” Scalamandre, 51 A.D.3d at 933 (alterations added); Rondina, 32 A.D.3d at 1231 (alterations in original) (internal quotation marks omitted). Although the holdings in these cases were correct, this statement is overly broad. It is true that the Motor Vehicle Accident Indemnification Corporation Act, Insurance Law § 5202 et seq., defines “motor vehicle” in terms of VTL § 125, but it is not true that uninsured motorist coverage “extends to all motor vehicles defined by [VTL] § 125.” 112 A.D.3d at 169 (emphasis added); see Insurance Law §5202 (a). First, the definition in Insurance Law § 5202 (a) applies to the vehicle operated by the uninsured motorist, not the vehicle containing the injured person. Insurance Law §§ 3420 (f), 5202 (a); see Amato, 72 N.Y.2d at 295 n 2. Second, Insurance Law § 5202 (a) expressly states that the term “motor 20 vehicle” “shall exclude fire and police vehicles” and other enumerated vehicles. Thus, uninsured motorist protection does not “extend[] to all motor vehicles as defined by [VTL] § 125.” 112 A.D.3d at 169 (emphasis in original). Moreover, as previously discussed, applying the VTL § 125 definition of motor vehicle would afford the benefit of SUM coverage to passengers of a vehicle whose owner (1) was not vicariously liable for the driver’s actions (VTL § 388), (2) was not required to purchase liability insurance (Insurance Law § 3420(e)) or Uninsured Motorist Protection (Insurance Law § 3420(f)(1)) and (3) was never offered the opportunity to purchase SUM coverage (Insurance Law § 3420(f)(2)). This interpretation would ascribe a definition of “motor vehicle” to Insurance Law § 3420(f)(2) that is out of step with the rest of Insurance Law § 3420. Compare VTL § 125 with VTL § 388; Insurance Law § 3420(e), (f)(1)-(2). By contrast, using the VTL § 388 definition of “motor vehicle” furthers the statutory purpose of SUM coverage, while aligning the SUM endorsement with the statute mandating its existence and harmonizing SUM coverage with the statutory scheme. Accordingly, applying the VTL § 388 definition of motor vehicle to the SUM endorsement best effectuates the Legislature’s intent. E. Conclusion In sum, the SUM endorsement does not define the term “motor vehicle.” However, “the neutral sources that brought [the endorsement] into being” indicate 21 that the Legislature intended to exclude police vehicles from the definition of “motor vehicle.” Wagoner, 45 N.Y.2d at 586. The definition of motor vehicle in the text of Insurance Law § 3420(f) – the statute mandating the SUM endorsement – excludes motor vehicles. See Amato, 72 N.Y.2d at 295. In addition, the statutory scheme demonstrates that the Legislature intended for the statues mandating vicarious liability for the owners of vehicles, liability coverage, UM protection and SUM protection to apply to the same class of vehicles, which does not include police vehicles. See VTL § 388; Insurance Law § 3420(e)-(f)(2). 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 expressly excludes police vehicles from the definition of motor vehicle. 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. 22 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 July 2, 2014 Respectfully submitted, RIVKIN RADLER LLP Attorneys for Petitioner-Movant 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