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The Appellate Division grants an Article 75 petition and remands the matter back to AAA arbitrationMay 31, 2010

Matter of Mvaic v Interboro Med. Care & Diagnostic PC, 2010 NY Slip Op 04522 (1st Dept. 2010)

“MVAIC defended the arbitration on the ground that the police accident report showed that the offending vehicle was registered out-of-state and was insured, but the arbitrator refused to consider that defense on the merits on the ground that MVAIC had failed to pay or deny the claim within 30 days of its submission, as required by the no-fault law (Insurance Law § 5106[a]; 11 NYCRR 65-3.8[a][1]; [c]). This was contrary to settled law (see generally Matter of State Farm Mut. Auto. Ins. Co. v Lumbermens Mut. Cas. Co., 18 AD3d 762, 763 [2005]) recognizing a narrow exception to the 30-day deadline for defenses based on lack of coverage (Hospital for Joint Diseases v Travelers Prop. Cas. Ins. Co., 9 NY3d 312, 318 [2007]). New York Hosp. Med. Ctr. of Queens v MVAIC (12 AD3d 429 [2d Dept 2004], lv denied 4 NY3d 705 [2005]), relied on by the arbitrator, did not involve a lack of coverage issue.”

A few things should be observed.  First, note the special treatment the courts give MVAIC as opposed to that given the insurance carriers that my fellow brethren and I regulalry defend.  That being said, the Appellate Division correctly found the existence of a triable issue of fact as to coverage.  But note how the Appellate Division, Second Department has insulated most arbitration awards from judicial scrutiny, whereas the First Department appears willing to look at the merits of an arbitral dispute.

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