Matter of State Farm Mut. Ins. Co. v Dixon

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Matter of State Farm Mut. Ins. Co. v Dixon 2012 NY Slip Op 31991(U) July 23, 2012 Supreme Court, New York County Docket Number: 106795/2011 Judge: Robert E. Torres Republished from New York State Unified Court System's E-Courts Service. Search E-Courts (http://www.nycourts.gov/ecourts) for any additional information on this case. This opinion is uncorrected and not selected for official publication. .. SCANNED ON 712112012 [* 1] I SUPREME COURT OF THE STATE OF m W YORK NEW YORK COUNTY PRESENT: ROBERTE. TORRES ' JUDGE PART Irrrdre Index Number 106795/2011 STATE FARM MUTUAL AUTOMOBILE IWDEX W O . VS MOTION DATE DIXON, JOHNATHAN Z. Compel or Stay Arbitration Tho following papers, numbend 1 to -, Notlce of MotlonlOrdsr to Show Caur. Anrmrlng Affldrvln - a 9 MOTIOH SEP. NO. - were rrrd on thls motlon wolfor - Atndnvlb - E r h l b b I No(4).,I Hold. Exhlbltr Riplylng AMdrvlts Upan the foregoing papers, It is ordsmd that this motion Is is decided in accordance with the attached decision. E This Constitutes the Decision and Order of the Court. ? e A , J.S.C. ROBERT E. TW O 1. CHECK ONE: ............r...........1................~....,...,,,.,.,,,,....,. 2. CHECK AS APPROPRIATE: ........................... 3. CHECK IF APPROPRUTE: JUM~ON-ANALP Q S ~ I O N DIS CASE DISPOSED MOTION IS: 0 GMNTED 0 DENIED ................................................ nSEnLE ORDER DO NOT POST QRANTEO IN PART DO f H E R uSUBMIT ORDER FIDUCIARY APPOINTMENT 0 REFERENCE [* 2] ,SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK,PART 29 In the Matter of the Petition of STATE FARM MUTUAL INSURANCE COMPANY, INDEX NUMBER: 106795/201 1 Petitioner, -against- Present: HON. ROBERT E,TO= For a Order Staying the Arbitration attempted to be had by n JOHNATHAN 2. DIXON and JOSEPH DIXON, an Mant by his Mother and Natural G a d a , urin JUDITH DIXON, Respondent(s), FILED and MARILU BARBOSA,RAFAEL GONZALEZ and TITAN INDEMNITY COMPANY, JUL 27 2012 Petitioner moves for an Order pursuant to C.P.L.R. 0 7503( c ), permanently.staying the arbitration sought by the Respondents on the grounds that Respondents have not established that the offending vehicle was, in fact, uninsured; or i the alternative, scheduling a framed issue hearing at which the issue of insurance n may be determined; or, alternatively, temporarily staying the instant matter and permitting the Petitioner to conduct discovery in aid of arbitration. Respondents submitted written opposition and also requested a frame issue hearing to the issue of insurance. Proposed Additional Respondent Titan Indemnity Company submitted written opposition requesting this Court to deny the portion the petition seeking to add it as a proposed additional respondent. By decision dated November 21, 201 1, this Court granted a frame issue hearing and directed the parties to appear on January 11, 2012. The matter w s subsequently adjourned to January 25, a 2012.1 The motion to add the additional respondents is hereby granted. On January 25,2012, the parties appeared and informed the Court they wanted the m t e submitted and decided on the atr papers. The Court gave the parties additional time to submit any papers and the petition was thereafter submitted on M r h 8,2012. ac 1 [* 3] ,Respondents allegedly sustained personal injuries when a motor vehicle owned by proposed additional respondent and Pennsylvania resident, Marilu Barbosa; insured by proposed additional respondent TITAN and driven by proposed additional respondent Rafael Gonzalez, ran the red light causing a collision. It is unconverted that Barbosa gave Gonzalez permission to use her motor vehicle at the time of said accident. Titan denied respondents claims because the driver was explicitly excluded from coverage by the provisions of Titan Indemnity, a permissible exclusion under Pennsylvania law. Petitioner argues that New York Insurance Law §5107(a) mandates that, TITAN, an insurer authorized to transact business in New York, provide mhirnum New York required liability insurance coverage for all permissive users of their insured vehicle. In support of this argument, petitioner submits an Applicant Summary statement of the Pennsylvania Department of Transportation which shows a policy was issued to Barbosa with a policy period of June 5, 2010 though June 5 , 2011.1 Petitioner also argues that V.T.L.$ 388 provides a presumption that a motor vehicle is operated wt consent of its owner. ih While TITAN acknowledges that a policy wag issued to Barbosa for the aforementioned period and that Barbosa gave Gonzalez permission to use her vehicle, it argues that there was no coverage on the date of the subject accident because Gonzalez was not a listed driver on Barbosa s insurance and therefore, explicitly excluded fiom coverage. In support of this argument, TITAN submits a certified copy of the Barbosa policy which shows the aforementioned exclusion on the declaration page.3 In reply, petitioner argues that even if the purported exclusion of TITAN Spolicy existed and were applicable, said exclusion is in violation of New York s financial security statute and cannot be enforced. Specifically, petitioner contends that TITAN is required to satisfy New York s financial security requirements because it is a New York authorized insurer and the subject accident occurred in New York State, anan TITAN m i t i s that it does not have to provide insurance for the subject accident because the subject policy was contracted in Pennsylvania with a Pennsylvania resident. As such, TITAN argues that when Sea Exhibit D of the Notice of Petition. See Exhibit A of the AEhation in Opposition. 2 [* 4] interpreting the Barbosa policy, Pennsylvania law applies and not New York law. TITAN does not deny that it is a New York authorized insurer and remains silent on the issue of satisfying New York s k c i d security requirements. TITAN Spolicy contains a Financial Responsibility clause which provides, in pertinent part that: 1.We will adjust this policy to comply wt the financial responsibility law of any state or province which ih iis requires higher liability limits than those provided by this policy. 2. With the kinds and lmt of coverage required of nonresidents by any compulsory motor vehicle insurance law, or similar law. .....,., When we certify this policy as proof under any financial responsibility law, it will comply with the law to the extent of the coverage required by law. The insured agrees to reimburse us for any payment which we would have not have been obligated to make under the terms of this policy except for the agreement outlined in this paragraph. , The Court concludes that pursuant to the language of TITAN s Financial Responsibility clause, the Barbosa automobile can not be considered uninsured. While courts have held that insurance policies, like all contracts, should be enforced according to their terms, they have also ruled that policies will not be enforced if prohibited by public policy, statute or rule. See, Libertv Mutw.l h m c e C~mpmv Aetna Casualtv & v. m p m y , 168 A.D.2d 121, 571 N.Y.S.2d 735 (2ndDept. 1991). Although the driver of the offending vehicle was explicitly excluded from coverage by the provisions of TITAN Sinsurance policy and said exclusion is permissible under Pennsylvania law, it is well settled that a nonresident operator of a foreign ih rm vehicle may not drive upon the public highways of New York State wt complete immunity f o its financial security laws. TITAN s Financial Responsibility clause makes it fair and equitable to deem it to be in compliance and conformity with New York law. See, Mattor of General &c, IQS,Co, v. Joi Trm, 246 A.D.2d 543, 667 N.Y.S.2d417 (2nd dept. 1998). Notably, TITAN has never negated that it is an authorized insurer in New York State and must therefore satisfy New York s financial security requirements. See, New York Insurance Law 0 5107(a). As such, the offending vehicle in the subject accident is deemed to be covered by TITAN Sinsurance policy. Sea, Exhibit A of the A-ation i Opposition, certified copy of the Barbosa policy, page 6. n 3 [* 5] In a proceeding in which an insurer is seeking a stay of uninsured motorist arbitration, the petitioning insurer bears the initial burden of proving that the offending vehicle was in fact inswed at the t m of the ie accident. &&$er of E-ance Cempanv v. T i c b 185 A.D.2d 884, 885 (2 d Dept. 1992). In other words the petitioning insurer must establish a prima facie case of coverage for the adverse or offending vehicle. The Court finds that petitioner has met its burden. Accordingly, petitioner s application for a permanent stay of the uninsured motorist arbitration is granted. This shall constitute the decision and order of this Court. Dated: July 23,2012 4

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