Opinion
0106458/2007.
October 23, 2007.
ORDER and JUDGMENT
Petitioner Republic Western Insurance Company (Republic) brings this proceeding, pursuant to CPLR 7507 and 7511, to vacate the arbitration award dated February 19, 2007, which granted respondent Liberty Mutual Insurance Company (Liberty) $12,215.62 on behalf of injured party Anthony Tndorola, and $10,157.98 on behalf of Jerry Schmidt.
On or about February 20, 2003, Liberty served Republic with a subrogation action in Arbitration Forums, Inc. (AFI) to recover the no-fault benefits that Liberty had provided to its insureds Indorola, Schmidt, and Nicholas Ruggiero, in connection with a vehicular loss on March 22, 2000. In that loss, the vehicle insured by Liberty, driven by Ruggiero, and occupied by passengers Indorola and Schmidt, was allegedly struck from behind by a U-Haul vehicle insured by Republic, driven by Brian McFarland and carrying a passenger named Joseph Pizzingrillo. Liberty contended that McFarland was liable in negligence for the loss.
On or about October 7, 2004, Republic commenced a proceeding to stay the arbitration, contending that the vehicular loss was a staged accident and that, accordingly, there was no insurance coverage, and Liberty could not be reimbursed through loss transfer arbitration. Prior to the commencement of that proceeding, McFarland had been indicted for scheming to defraud in the first degree by staging accidents, and Tara Pizzingrillo, who had been indicted with McFarland, pled guilty to insurance fraud in the third degree, admitting that she had staged accidents together with McFarland and her brother, Joseph Pizzingrillo. By order dated April 8, 2005, Justice York temporarily stayed the arbitration as to Ruggiero, but not as to Indorola or Schmidt. Justice York set the Ruggiero matter down for a framed issue hearing, and noted that Republic had failed to mention either Indorola or Schmidt in the petition and in the affidavit of a special investigator that Republic had employed. Republic Western Ins. Co. v Liberty Mut. Ins. Co., a/a/o Anthony Indorola, Jeremy Schmidt, and Nicholas Ruggerio and Arbitration Forums, Inc., Index No. 114383/04 (Sup Ct, NY County, York, J.). By order filed on August 29, 2006, Justice York found that the alleged loss on March 22, 2000 was a purposefully staged accident that is not covered under the No-Fault Law. Justice York permanently stayed arbitration with regard to Ruggiero, and held that no results from the alleged accident could be "used to obtain relief for damages." Id.
On May 23, 2006, Republic submitted to AFI a May 2006 ruling by Justice York, to the same effect, which he had read into the record. On or about January 4, 2007, Republic notified AFI of Justice York's written order. When the arbitration commenced on January 16, 2007, Republic argued that there was no coverage for the loss pursuant to Justice York's August 29, 2006 order. Liberty argued that Justice York's earlier refusal to stay arbitration with regard to Indorola and Schmidt required Republic to provide coverage for those two claims. On February 19, 2007, AFI issued the Award.
The mandatory arbitration between insurers that is provided for by Insurance Law § 5105 (b) applies only to benefits due to a "covered person." Insurance Law § 5105 (a). It is settled that, where an automobile collision is not accidental, no injury resulting from the collision is covered under the No-Fault Law. See e.g. Matter of Government Employees Ins. Co. v Robbins, 15 AD3d 484 (2nd Dept 2005); Matter of Allstate Ins. Co. v Massre, 14 AD3d 610 (2nd Dept 2005). Accordingly, once Republic notified AFI that Justice York had held that the purported accident had been staged, and therefore no party thereto had coverage, AFI was without jurisdiction to continue the arbitration absent consent to do so from Republic.
In addition, although CPLR 7507 requires arbitral awards to be "in writing, signed and affirmed by the arbitrator," the Award is unsigned.
Accordingly, it is hereby
ORDERED and ADJUDGED that the petition is granted and the arbitration award dated February 19, 2007, which granted respondent Liberty Mutual Insurance Company $12,215.62 on behalf of injured party Anthony Indorola, and $10,157.98 on behalf of Jerry Schmidt is vacated.
This constitutes the decision and judgment of the court.