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Lack of personal jurisdiction for an out of state insurance carrierJune 25, 2018

Pavlova v American Ind. Ins. Co., 2018 NY Slip Op 50943(U)(App. Term 2d Dept. 2018)

To me, this is the ultimate fight.  The accident occurred in New York and putting aside whether the deemer applies, you cannot drag the carrier into a NY Court.

“In this action by a provider to recover assigned first-party no-fault benefits, defendant moved to dismiss the complaint, pursuant to CPLR 3211 (a) (8), on the ground that the Civil Court lacked personal jurisdiction over defendant. In several affidavits in support of the motion, defendant’s employees asserted that defendant is a Pennsylvania company, which is not licensed to do business in New York, maintains no offices in New York, has no agents operating out of, or representatives soliciting business in, New York, and does not own, use or possess any real property in New York. Furthermore, defendant argued that it had been held in prior cases that the courts in the State of New York cannot exercise personal jurisdiction over this defendant. Plaintiff opposed the motion with an affirmation by its counsel, who made unsupported assertions that defendant had transacted business in New York by knowingly issuing policies to New York drivers, and that defendant had established an ongoing relationship with defense counsel in New York, thereby subjecting defendant to jurisdiction in New York. Defendant’s attorney asserted in a reply affirmation that the arguments raised by plaintiff had been rejected by this court in Compas Med., P.C. v American Ind. Ins. Co. (47 Misc 3d 134[A], 2015 NY Slip Op 50481[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2015]). Defendant appeals from an order of the Civil Court entered August 11, 2016 denying defendant’s motion to dismiss the complaint.

Defendant made a prima facie showing that personal jurisdiction had not been obtained over it. “In opposing a motion to dismiss pursuant to CPLR 3211 (a) (8) on the ground of lack of personal jurisdiction, ‘a plaintiff need only make a prima facie showing that such jurisdiction exists’ ” (Hopstein v Cohen, 143 AD3d 859, 860 [2016], quoting Lang v Wycoff Hgts. Med. Ctr.[*2]55 AD3d 793, 798 [2008]). In the case at bar, the affirmation of plaintiff’s attorney was insufficient to demonstrate that personal jurisdiction over defendant existed under the Civil Court’s long-arm statute (see CCA 404 [a]), as plaintiff’s counsel failed to establish that he possessed personal knowledge of the facts”

I hate ending a post with a categorical statement that does not complete the story.  Assume Plaintiff filed an arbitration?

“While personal jurisdiction is required for the exercise of the state’s judicial power over a party, arbitration is a form of dispute resolution almost wholly independent of the court system (see Siegel, NY Prac § 586 at 1050 [5th ed 2011]). “Except for a few basic guarantees, such as the right to be heard and to be represented by counsel at the arbitration, the procedural law of the state is also inapplicable to arbitration, including the rules of  [***5] evidence” (id. at 1052). In short, personal jurisdiction is not required for arbitration that is controlled by the parties’ agreement. Therefore, the Supreme Court erred in granting the petition to permanently stay arbitration on the ground that there was no personal jurisdiction over AIIC.”  American Ind. Ins. Co. v Art of Healing Medicine, P.C., 104 A.D.3d 761, 763 (2d Dept. 2014)
And then, the Court held:  “Although this Court has held, HN5 in the context of claims for uninsured or supplemental underinsured motorist benefits, that ” ‘[a] party will not be compelled to arbitrate absent evidence affirmatively establishing that the parties expressly agreed to arbitrate their disputes’ ” (Matter of Progressive Specialty Ins. Co. v Louis, 122 AD3d 637, 638, 996 NYS2d 89 [2014], quoting Matter of State Farm Mut. Auto. Ins. Co. v Juma, 44 AD3d 963, 963, 844 NYS2d 364 [2007]; see Matter of State Farm Mut. Auto. Ins. Co. v Torcivia, 277 AD2d 321, 715 NYS2d 75 [2000]), those cases do not apply to claims for the payment of first-party benefits, ostensibly because Insurance Law § 5106 (b) mandates every insurer to provide a claimant with the option to arbitrate disputes concerning first-party benefits. Indeed, the obligation to arbitrate is not found in the policies but is imposed upon the policies by the No-Fault Law”  Matter of American Ind. Ins. Co. v Nova Acupuncture, P.C., 137 A.D.3d 1270, 1272 (2d Dep,. 2018)
I guess Oleg should put on his Arbitration hat and leave Room 809 in Civil Court, Kings County for this one.

2 Responses

  1. slick says:

    Arbitrators dont really understand this issue, and will usually followthe court cases no matter how much you yell and scream over it.

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