Opinion
2014-2516 Q C
04-06-2016
Hanover Insurance Company, Appellant, v. Fiduciary Insurance Company, Respondent, -and- Arbitration Forums, Inc., Defendant.
PRESENT: :
Appeal from an order of the Civil Court of the City of New York, Queens County (Larry Love, J.), entered September 15, 2014. The order, insofar as appealed from, denied plaintiff's motion for summary judgment on so much of the complaint as was asserted against defendant Fiduciary Insurance Company and granted defendant Fiduciary Insurance Company's cross motion for summary judgment dismissing so much of the complaint as was asserted against it.
ORDERED that the order, insofar as appealed from, is affirmed, without costs.
On July 31, 2010, a vehicle insured by plaintiff Hanover Insurance Company (Hanover) and a vehicle "for hire" insured by defendant Fiduciary Insurance Company (Fiduciary) were involved in an accident. Following the accident, Hanover paid first-party personal injury protection (PIP) benefits to or on behalf of its insured. On June 14, 2013, Fiduciary's subrogation specialist sent an email to Hanover's subrogation adjuster which stated, among other things, that Fiduciary was "prepared to issue a 50/50 settlement to the final amount [of first-party PIP benefits] paid" upon Fiduciary's receipt of copies of medical "bills and confirmation of causal relationship to the loss." The email further stated that if Hanover was unable to provide copies of the bills, Fidelity's subrogation specialist could not "issue a settlement" and Hanover would have to file for arbitration. On July 30, 2013, Hanover sought mandatory arbitration, pursuant to Insurance Law § 5105 (a), in order to recover from Fiduciary the first-party PIP benefits that it had paid to or on behalf of its insured. Although both Hanover and Fiduciary informed the arbitrator of the proposed settlement agreement, the arbitrator published an award on November 5, 2013, which found that Hanover had proved 0% liability against Fiduciary. An amended award was published on January 23, 2014, based upon the parties' "[a]greed liability [of] 50%," awarding Hanover the sum of $12,199.41. A January 30, 2014 email message to the parties from defendant Arbitration Forums, Inc. (AFI) informed them that the original decision had been erroneously amended, and that the original decision had been re-published and was final and binding.
On February 19, 2014, Hanover commenced this action against Fiduciary and AFI by filing a summons and complaint asserting, insofar as is relevant to this appeal, that Fiduciary had refused to honor the settlement agreement pursuant to which Fiduciary had agreed to pay 50% of Hanover's total claims, which amounted to $25,638.82, and that Fiduciary was therefore liable to Hanover for $12,819.41. After Fiduciary had served its answer, Hanover moved for summary judgment on so much of the complaint as was against Fiduciary, and Fiduciary cross-moved for summary judgment dismissing so much of the complaint as was asserted against it. Hanover appeals from so much of an order of the Civil Court entered September 15, 2014 as denied Hanover's motion for summary judgment on so much of the complaint as was against Fiduciary, on the ground that Hanover had not timely filed a petition to vacate the arbitration award, and as granted Fiduciary's cross motion for summary judgment dismissing so much of the complaint as was asserted against it.
Contrary to Hanover's contention, Fiduciary's June 14, 2013 email did not demonstrate that there was a binding settlement agreement. As the message contemplated receipt of various documents from Hanover before Fiduciary would settle the matter, the purported "agreement" was therefore conditional upon Hanover's submission and Fiduciary's receipt of the documents, a condition which Hanover failed to demonstrate had been satisfied. Consequently, the purported agreement was not a binding contract and was therefore not enforceable.
Hanover contends that it is not seeking to vacate the arbitration award but, rather, is seeking to enforce the terms of the agreement. However, "[i]n view of the fact that mandatory arbitration provides the sole remedy of loss transfer between insurers the parties surrendered themselves to the jurisdiction of the arbitration forum from which judicial review is circumscribed" (Home Ins. Co. v Country-Wide Ins. Co., 134 AD2d 570, 571 [1987] [citation omitted]). Even if, pursuant to CPLR 103 (c), we were to treat Hanover's action as a special proceeding seeking to vacate the arbitration award under CPLR 7511 (b), which special proceeding would be timely as it was commenced within 90 days after the January 30, 2014 republication date (see CPLR 7511 [a]), we would nonetheless find that Hanover has demonstrated no basis for vacating the arbitration award on any of the grounds set forth in CPLR 7511 (b). In the compulsory arbitration proceeding, under the circumstances presented, the fact that the arbitrator chose not to enforce the proposed conditional settlement agreement does not indicate that the award did not have evidentiary support or that it was arbitrary and capricious (see Motor Veh. Acc. Indemn. Corp. v Aetna Cas. & Sur. Co., 89 NY2d 214, 223 [1996]).Consequently, the order, insofar as appealed from, is affirmed.
Weston, J.P., Solomon and Elliot, JJ., concur. Decision Date: April 06, 2016