Allstate Ins. Co. v Autoone Ins. Co.

[*1] Allstate Ins. Co. v Autoone Ins. Co. 2012 NY Slip Op 50874(U) Decided on May 11, 2012 Appellate Term, Second Department Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on May 11, 2012
SUPREME COURT, APPELLATE TERM, SECOND DEPARTMENT, 2d, 11th and 13th JUDICIAL DISTRICTS
PRESENT: : PESCE, P.J., WESTON and ALIOTTA, JJ
2010-2425 Q C.

Allstate Insurance Company as Subrogee of LEO FIORICA, Respondent,

against

Autoone Insurance Company, Appellant.

Appeal from a judgment of the Civil Court of the City of New York, Queens County (Jodi Orlow, J.), entered August 11, 2010. The judgment, entered pursuant to an order of the same court entered May 3, 2010 denying Autoone Insurance Company's motion for leave to renew its prior application to vacate an arbitration award and confirming the award, awarded Allstate Insurance Company the principal sum of $7,500 and implicitly dismissed Autoone Insurance Company's cross petition to vacate the arbitration award.

ORDERED that the judgment is reversed, without costs, the order entered May 3, 2010 is vacated, the motion by Autoone Insurance Company for leave to renew its prior application to vacate the arbitration award is granted, the arbitration award is vacated, and Allstate Insurance Company's petition to confirm the arbitration award is dismissed.

Allstate Insurance Company (Allstate) commenced this proceeding, pursuant to CPLR 7510, to confirm an arbitration award rendered against Autoone Insurance Company (Autoone) in the principal amount of $7,500. Autoone filed a cross petition to vacate the award. According [*2]to Allstate's petition, the inter-company arbitration arose from an accident that occurred on October 8, 2005. A vehicle driven by Leo Fiorica was insured by Allstate, and a vehicle driven by Andriy Garidzhuk was insured by Autoone. After Fiorica brought a claim against Garidzhuk for bodily injuries, Autoone initially denied the claim based on lack of coverage. At some point thereafter, Fiorica brought an uninsured motorist claim against Allstate, which paid Fiorica $7,500. It is unclear from the record when Autoone reversed its position and acknowledged coverage; however, Autoone ultimately paid Fiorica its full policy limit of $25,000 in settlement of his personal injury claim. Allstate then commenced inter-company arbitration against Autoone to recover the $7,500 it had paid to Fiorica on his uninsured motorist claim. Following the arbitration, Allstate was awarded the sum of $7,500 against Autoone. In a judgment entered August 11, 2010, pursuant to an order entered May 3, 2010 denying Autoone's motion for leave to renew its prior application to vacate the arbitration award, the Civil Court confirmed the arbitration award and implicitly dismissed Autoone's cross petition.

CPLR 7511 (b) (1) (3) provides that an arbitration award should be vacated when the rights of a party participating in the arbitration are prejudiced by an arbitrator exceeding the limits of his power. Here, the arbitrator exceeded his authority in directing the payment of the $7,500 at issue, as the award was in excess of the limit of the subject insurance policy that had already been exhausted (see Matter of Brijmohan v State Farm Ins. Co., 92 NY2d 821 [1998]; Countrywide Ins. Co. v Sawh, 272 AD2d 245 [2000]; Matter of State Farm Ins. Co. v Credle, 228 AD2d 191 [1996]).

Accordingly, the judgment is reversed, the order entered May 3, 2010 is vacated, the motion by Autoone for leave to renew its prior application to vacate the arbitration award is granted, the arbitration award is vacated, and Allstate's petition to confirm the arbitration award is dismissed.

Pesce, P.J., Weston and Aliotta, JJ., concur.
Decision Date: May 11, 2012