Eagle Ins. Co. v Republic W. Ins. Co.
Annotate this CaseDecided on October 24, 2008
Supreme Court, Nassau County
Eagle Insurance Company, Petitioner,
against
Republic Western Insurance Co., Respondent.
12410/2008
COUNSEL FOR PETITIONER
Ruffo, Tabora, Mainello & McKay, P.C.
3000 Marcus Avenue - 1W6
Lake Success, New York 11042
COUNSEL FOR RESPONDENT
Rubin, Fiorella & Friedman, LLP
292 Madison Avenue, 11th Floor
New York, New York 10017
Leonard B. Austin, J.
Petitioner seeks a judgment pursuant to CPLR 7510 confirming the arbitration
award of Arbitration Forums, Inc., dated December 30, 2007.
Respondent, Republic Western Insurance Co., moves for an order pursuant to CPLR 304, 403(b) [*2]and 3211(a)(8) dismissing the petition for want of personal jurisdiction.
BACKGROUND
The insured of Petitioner Eagle Insurance Company ("Eagle"), was involved in a motor vehicle accident with a vehicle insured by Respondent, Republic Western Insurance Co. ("Republic Western"), on January 30, 2001. Republic Western's insured allegedly rear-ended Eagle's insured, whose vehicle had three passengers.
On or about April 1, 2003, Eagle served Republic Western with a Notice to Arbitrate the four individuals' claims with Arbitration Forums, Inc. ("AFI") pursuant to Insurance Law § 5105. After a lengthy investigation, on October 24, 2007, Republic Western denied coverage for Eagle's claim on the grounds that the accident was staged.
On October 25, 2007, Republic Western submitted its contention to AFI that the loss was
staged and was accordingly not covered. Republic Western argued that AFI lacked jurisdiction
since coverage was contested and that Eagle's claim must be dismissed. Republic Western
explained that, through its investigation, it had determined that the loss involved individuals who
were part of a criminal ring that staged accidents with U-Haul and other vehicles for the purpose
of defrauding insurance companies. It maintained that Tara Pizzingrillo, the lessee and driver of
the U-Haul vehicle in the
underlying claim, was arrested in connection with staging accidents and that she was
indicted for being part of a scheme to defraud numerous insurance carriers by submitting
fraudulent claims and intentionally colliding into automobiles.
A no-fault hearing was held on December 18, 2007. Republic Western asserted its objection to jurisdiction again at the hearing. By decision, dated December 30, 2007, the Arbitrator rejected Republic Western's challenge to jurisdiction and found Republic Western 100% liable for Eagle's no-fault payments to the injured parties. The Arbitrator denied Republic Western's affirmative defense of no coverage because "indictments list other accidents, not his loss;" "U-Haul driver was indicted for fraud;" and, Eagle's insured was "an innocent party." By letter, dated January 22, 2008, Republic Western's counsel requested that AFI reconsider whether it had jurisdiction over the matter under 11 NYCRR 65-4.11(a)(6).
On or about December 30, 2007, Republic Western filed a Petition in Supreme Court, New
York County seeking to vacate the arbitration award. However, that action was discontinued by
stipulation without prejudice on account of a stay of actions against Eagle issued by the Superior
Court of New Jersey on January 29, 2007. That stay was given comity by this Court by order
dated June 15, 2007. (In the Matter of Eagle Insurance Company in Rehabilitation, Newark
Insurance Company in Rehabilitation, GSA Insurance Company in Rehabilitation, and NCIC
Insurance Company in
Rehabilitation [Order dated June 15, 2007, Index No. 3202/07 (Supreme
Court Nassau County)]).
Eagle commenced this proceeding to confirm the arbitrator's award on July 7, 2008.
Republic Western maintains that personal jurisdiction has not been obtained; that the award is invalid because it is not signed (CPLR 7507); and that the Arbitrator exceeded his authority in determining that this was a covered event (see, 11 NYCRR 65-4.11[a][6]). [*3]
DISCUSSION
Review of an arbitration award is accomplished by way of a special proceeding. CPLR
7502(a); Scott v. Allstate Ins. Co.,
45 AD3d 690 (2nd Dept. 2007). "A special proceeding is commenced by the filing of a
petition (CPLR 304)." Star Boxing Inc.
v. Daimler Chrysler Motors Corp., 17 AD3d 372 (2nd Dept. 2005). See also, Scott v.
Allstate Ins. Co., supra; and Queens Community Medical Centers v. Eveready
Ins. Co., 7 Misc 3d 1010(A) (Civ. Ct. Kings Co. 2005). "Thereafter, the petitioner must serve
the respondent with a notice of petition, the petition and supporting affidavits (CPLR 403[b])."
Star Boxing, Inc. v. Daimsler Chrysler Motors Corp., supra. See also, Scott v
Allstate Ins. Co., supra; Queens Community Medical Centers v. Eveready Ins. Co.,
supra. "Pursuant to CPLR 403(c), a notice of petition shall be served in the same
manner as a summons in an action." Star Boxing, Inc. v. Daimsler Chrysler
Motors Corp., supra. See also, Scott v. Allstate Ins. Co., supra;
Queens Community Medical Center v. Eveready Ins. Co., supra. Neither service
on a party's attorney nor service by regular mail alone is sufficient. CPLR 308, et seq.
The petition must be served in accordance with CPLR 308. Application of County Wide Ins.
Co., 114 AD2d 754 (1st Dept. 1985). See also, Hehl V. Government Employees Ins.
Co., 203 AD2d 572 (2nd Dept. 1994).
Republic Western did not waive its jurisdictional objection by procuring an adjournment of the return date of the Petition. Parrotta v. Wolgin, 245 AD2d 872 (3rd Dept. 1997), citing McLaughlin, Practice Commentaries, McKinney's Cons. Laws of NY, Book 7B, CPLR C320:2 at 492; CPLR 320(b); Becker v. Lesnick, 96 Misc 2d 819, 821-822 (Sup. Ct. NY Co. 1978). See also, Pendergast v. St. Mary's Hospital, 156 AD2d 436 (2nd Dept.1985). The petition in this proceeding was served on Republic Western and its attorney by regular mail. Since Eagle Insurance Co. failed to serve the petition properly, this Court lacks jurisdiction and this proceeding must be dismissed. Star Boxing, Inc. v. Daimsler Chrysler Motors Corp., supra; and Queens Community Medical Center v. Eveready Ins. Co., supra.
In view of the foregoing, the parties' remaining contentions need not be reached.
Accordingly, it is,
ORDERED, that Respondent Republic Western's motion to dismiss the Petition pursuant to CPLR 3211(a)(8) is granted and the Petition is hereby dismissed.
This constitutes the decision and Order of the Court.
Dated: Mineola, NY_____________________________
October 24, 2008Hon. LEONARD B. AUSTIN, J.S.C.
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