Key Takeaway
Ameriprise v Kensington Radiology: Court grants appeal on $50,000 policy exhaustion defense in NY no-fault insurance arbitration award case.
Ameriprise Insurance Company v Kensington Radiology Group, P.C, 2018 NYSlipOp 80613(U)(1st Dept. 2018)
Respondent having moved for leave to appeal to this Court from the decision and order of the Appellate Term entered in the office of the Clerk of the Supreme Court, New York County, on or about December 22, 2017, Now, upon reading and filing the papers with respect to the motion, and due deliberation having been had thereon,It is ordered that the motion is granted. Respondent-appellant shall file two copies of the pre-argument statement and of this order with the Clerk of the Appellate Term with proof of service, pursuant to Section 600.17 of the Rules of this Court.
Underlying Decision
Ameriprise Ins. Co. v Kensington Radiology Group, P.C., 58 Misc. 3d 144(A)(App. Term 1st Dept. 2017)
Petitioner appeals from an order and judgment of the Civil Court of the City of New York, New York County (Erika M. Edwards, J.), entered on or about November 30, 2016, which denied its petition to vacate an arbitration award in favor of respondent, awarding it unpaid no-fault benefits in the principal sum of $3,548.01, and confirmed the arbitration award.
Per Curiam.
Order and judgment (Erika M. Edwards, J.), entered November 30, 2016, reversed, without costs, and matter remanded to Civil Court for a framed issue hearing regarding whether the $50,000 policy limit of the subject insurance policy was exhausted before petitioner became obligated to pay respondent’s claim.
When an insurer “has paid the full monetary limits set forth in the policy, its duties under the contract of insurance cease” (Countrywide Ins. Co. v Sawh, 272 AD2d 245, 708 N.Y.S.2d 862 ). A defense that the coverage limits of the policy have been exhausted may be asserted by an insurer despite its failure to issue a denial of the claim within the 30—day period (New York & Presbyt. Hosp. v Allstate Ins. Co., 12 AD3d 579, 580, 786 N.Y.S.2d 68 ), and an arbitrator’s award directing payment in excess of the $50,000 limit of a no-fault insurance policy exceeds the arbitrator’s power and constitutes grounds for vacatur [*2] of the award (see Matter of Brijmohan v State Farm Ins. Co., 92 NY2d 821, 822-823, 699 N.E.2d 414, 677 N.Y.S.2d 55 ; Countrywide Ins. Co. v Sawh, 272 AD2d at 245; 11 NYCRR 65-1.1).
Here, petitioner-insurer’s submissions in support of its petition to vacate the arbitration award – including an attorney’s affirmation, the policy declaration page showing the $50,000 limit and a payment ledger listing in chronological order the dates the claims by various providers were received and paid – raised triable issues as to whether the $50,000 policy limit had been exhausted by payments of no fault benefits to respondent and other providers before petitioner became obligated to pay the claims at issue here (see Allstate Prop. & Cas. Ins. Co. v Northeast Anesthesia & Pain Mgt., 51 Misc 3d 149, 41 N.Y.S.3d 448, 2016 NY Slip Op 50828 ; Allstate Ins. Co. v DeMoura, 30 Misc 3d 145, 926 N.Y.S.2d 342, 2011 NY Slip Op 50430 ). [**2] Therefore, we remand the matter to Civil Court for a framed issue hearing on that issue.
THIS CONSTITUTES THE DECISION AND ORDER OF THE COURT.
Please Help
If you represent no-fault carriers and do not want the Second Department priority of payment rule to be the law of the State, file an Amicus with the First Department. Your help is absolutely required. Without your help, the wind may very well determine the outcome of this issue. Is that what you want?
Note: We all can live with Harmonic v. Praetorian. For the most part, it is a fair balance and leaves everybody unhappy. It balances priority of payment with reality. That said, we CANNOT live with Alleviation v. Allstate.
Unfortunately, I do not have the papers so I cannot even send them to you if you ask . I assume you can obtain the papers from the New York County Civil Court’s clerk’s office. Perhaps if you contact Ameriprise’s counsel, they will provide the same to you?
Since this appeal will be heard before the Second Department Alleviation battle, this case may become dispositive of the issue.
