Opinion
517717/16
04-28-2017
In the Matter of the Application of Liberty Mutual Insurance Company, Petitioner, For a Judgement staying the arbitration demanded v. by Christina Pierre Louis, Respondent, and AKHIRAH NASHAY GRAY, MELILLA DANIELLE SMITH, ACCESS INSURANCE COMPANY AND AMERICAN INDEPENDENT INSURANCE COMPANY, Proposed Additional Party Respondents, Defendants.
Attorney for Petitioner Michelle T. Baginski Harris, King, Fodera & Correia One Battery Park Plaza, 29th Floor New York, New York 10004 (212) 487-9701 Attorney for Proposed Additional Respondent Paul A. Barrett, Esq. Carman, Callahan & Ingham, LLP 266 Main Street
Attorney for Petitioner Michelle T. Baginski Harris, King, Fodera & Correia One Battery Park Plaza, 29th Floor New York, New York 10004 (212) 487-9701 Attorney for Proposed Additional Respondent Paul A. Barrett, Esq. Carman, Callahan & Ingham, LLP 266 Main Street Francois A. Rivera, J.
Recitation in accordance with CPLR 2219 (a) of the papers considered on the notice of petition and petitionfiled on October 11, 2016, under motion sequence number one, by petitioner Liberty Mutual Insurance Company (hereinafter Liberty) for an order: (1) permanently staying arbitration pursuant to CPLR 7503; and (2) adding Akhirah Nashay Gray, Melilla Danielle Smith, Access Insurance Company (hereinafter Access) and American Independent Insurance Company (Independent) as additional respondents; and in the alternative, (3) temporarily staying arbitration and directing an immediate trial on the issue of whether there has been compliance or breach of an arbitration agreement between the parties; (4) declaring that Access is the responsible carrier for the offending vehicle in the subject accident; or in the alternative, (5) declaring that Independent is the responsible carrier for the offending vehicle in the subject accident. Notice of petition and petition Affirmation in support Exhibits A—E Affirmation in opposition by Kang Esq. on behalf of Independent Exhibits A—E Affirmation in opposition by Barrett Esq. on behalf of Access Exhibits A-D Affirmation in reply by Baginski Esq. to opposition by Independent Affirmation in reply by Baginski Esq. to opposition by Access Recitation in accordance with CPLR 2219 (a) of the papers considered on the cross motion filed on December 27, 2016, under motion sequence number three by Access for an order: (1) dismissing Liberty's instant petition pursuant to CPLR 3211 (a) (8) based on the Court's lack of personal jurisdiction over Access under CPLR 302, and (2) granting an award for costs and fees associated with the instant cross motion. Notice of cross motion by Access Exhibits A—D Affirmation in opposition by Baginski Esq. on behalf of Liberty Affirmation in reply by Barret Esq. on behalf of Access
BACKGROUND
By notice of petition, verified petition, and supporting documents filed on October 11, 2016 (hereinafter the commencement papers), Liberty commenced the instant CPLR Article 75 proceeding seeking, among other things, a permanent stay of an uninsured motorist (UM) arbitration. Independent and Access have submitted separate affirmations in opposition to the petition claiming that the Court has no personal jurisdiction over them. Access has also cross moved for dismissal of the petition on this ground.
The petition alleges the following salient facts. Liberty is a foreign corporation authorized to engage in the insurance business in the State of New York. Liberty issued a liability policy to respondent Christina Pierre Louis (hereinafter C. Louis). On September 15, 2016, Liberty received a demand for arbitration of an uninsured motorist claim from C. Louis for personal injuries sustained in an automobile accident that occurred on January 25, 2016 at or near Pennsylvania Avenue in Kings County in the State of New York (hereinafter the subject accident) as a result of the negligence of an uninsured motorist.
A police report of the subject accident revealed the following information. On the date of the subject accident, C. Louis was a passenger in a 1999 GMC registered and operated by Richard W. St Louis. That vehicle came into contact with another vehicle bearing Pennsylvania license plate number JSX9833 (hereinafter the Pennsylvania vehicle). The Pennsylvania vehicle was registered to Akhirah Nasha Gray (hereinafter Gray) and operated by Melilla Danielle Smith (hereinafter Smith). The police report contained a certain code number which indicated that the Pennsylvania vehicle was insured by Independent.
After conducting an investigation and procuring Gray's Insurance Identification Card, Liberty determined that Gray was insured by Access for the period of December 12, 2014 to December 12, 2015.
LAW AND APPLICATION
The petition in a special proceeding is analogous to the complaint in an action. CPLR 402 governs the pleadings requirements for special proceedings and provides as follows:
There shall be a petition, which shall comply with the requirements for a complaint in an action, and an answer where there is an adverse party. The procedure for special proceedings contemplates that the petition will be accompanied by affidavits demonstrating the evidentiary grounds for the relief requested (see CPLR 403 [a]). The purpose of the affidavits is to enable the matter to be brought before the court for summary disposition, as in the case of motion practice.
Liberty's Petition for a Permanent Stay
A party seeking a stay of arbitration of a claim for UM benefits has the initial burden of showing the existence of sufficient evidentiary facts to establish a preliminary issue which would justify the stay (Government Employees Ins. Co. v Hua Huang, 139 AD3d 950, 951 [2nd Dept 2016] citing Matter of Hertz Corp. v Holmes, 106 AD3d 1001, 1003 [2nd Dept 2013]). Thereafter, the burden is on the party opposing the stay to rebut the prima facie showing (Hertz Corp. v Holmes, 106 AD3d 1001, 1003 [2nd Dept 2013] citing, Metropolitan Property & Cas. Ins. Co. v Singh, 98 AD3d 580 [2nd Dept 2012]). Where a triable issue of fact is raised, the Supreme Court, not the arbitrator, must determine it in a framed-issue hearing, and the appropriate procedure under such circumstances is to temporarily stay arbitration pending a determination of the issue Matter of Hertz Corp. v Holmes, 106 AD3d 1001, 1003 [2nd Dept 2013]).
Liberty has annexed five exhibits to the petition labeled A through E. Exhibit A is described as C. Louis' demand for arbitration. Exhibit B is a police accident report or MV 104AM pertaining to the subject accident. The police accident report indicates that the vehicle bearing Pennsylvania license plate number JSX9833 was insured by a carrier affiliated with Code "17957." Exhibit C is described as a document demonstrating that Code 17957 is for Independent. Exhibit D is described as a vehicle record abstract which demonstrated that the vehicle bearing Pennsylvania license plate number JSX9833 was insured by Access. Exhibit E is described as a copy of the Uninsured Motorist Clause of the automobile liability insurance policy issued by Liberty.
Neither Access nor Independent has objected to or contested the admissibility of any of the documents annexed to Liberty's petition. Instead, Access and Independent have separately opposed Liberty's request to add them as additional proposed respondents on the sole basis that the Court lacks personal jurisdiction over them. Access has also made a separate cross motion to dismiss the petition on that basis that it has no presence in the State of New York.
In light of the foregoing, Liberty has shown the existence of sufficient evidentiary facts to establish a preliminary issue which would justify the stay (Government Employees Ins. Co. v Hua Huang, 139 AD3d 950, 951 [2nd Dept 2016]). Liberty's Petition to Add Additional Respondents According to the petition Gray was the registered owner and Smith was the operator of the Pennsylvania vehicle involved in the subject accident. Liberty's commencement papers include an affidavit of service demonstrating that Gray and Smith were both duly served with the commencement papers by certified mail return receipt requested. Use of certified mail, return receipt requested is proper in accordance with the service requirements of CPLR 7503 (c).
Access and Independent are the only proposed additional respondents who have appeared in the instant proceeding. They have both opposed the application to add them as additional respondents on jurisdiction grounds but have taken no position on Liberty's application to add Gray and Smith as proposed additional respondents. Accordingly, Gray and Smith are added as proposed additional respondents. The objection of Access and Independent are discussed separately with their jurisdictional claims. Access' Cross Motion to Dismiss
Access has opposed the petition and cross moved for an order pursuant to CPLR 302 and 3211(a) (8) dismissing Liberty's instant petition based on the lack of personal jurisdiction. New York's long-arm statute, CPLR 302, states, in pertinent part:
"(a) Acts which are the basis of jurisdiction. As to a cause of action arising from any of the acts enumerated in this section, a court may exercise personal jurisdiction over any non-domiciliary ... who in person or through an agent:
"1. transacts any business within the state or contracts anywhere to supply goods or services in the state."
"To determine whether a non-domiciliary may be sued in New York, we first determine whether our long-arm statute (CPLR 302) confers jurisdiction over it in light of its contacts with this State" (America/International 1994 Venture v Mau,146 AD3d 40, 51 [2nd Dept 2016] citing, LaMarca v Pak—Mor Mfg. Co., 95 NY2d 210, 214 [2000]). "If the defendant's relationship with New York falls within the terms of CPLR 302, we determine whether the exercise of jurisdiction comports with due process" (Id.).
CPLR 302 (a) is a "single act statute" (America/International 1994 Venture v Mau,146 AD3d 40, 51 [2nd Dept 2016] citing, Kreutter v McFadden Oil Corp., 71 NY2d 460, 467 [1988]). "[P]roof of one transaction in New York is sufficient to invoke jurisdiction, even though the defendant never enters New York, so long as the defendant's activities here were purposeful and there is a substantial relationship between the transaction and the claim asserted" (America/International 1994 Venture v Mau,146 AD3d 40, 51 [2nd Dept 2016] citing, Kreutter v McFadden Oil Corp., 71 NY2d 460 at 467 [1988]). "Purposeful activities are those with which a defendant, through volitional acts, 'avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws' " (America/International 1994 Venture v Mau,146 AD3d 40, 51 [2nd Dept 2016] citing, Fischbarg v Doucet, 9 NY3d 375, 380 [2007]).
In support of the cross motion Access has submitted an affidavit of its claims manager, Don Bush (hereinafter Bush). It has also submitted an internet search result from the New York State Department of Financial Services and two New York State Supreme Court decision, one from Nassau and the other from Queens County.
Bush's affidavit is based on personal knowledge and avers the following facts, among others. Access is a Georgia based corporation not authorized to conduct business in the State of New York. Access does not control any New York State authorized company nor is it controlled by any company authorized to conduct business in the State of New York. Access does not issue or deliver contracts to New York State residents or to corporations authorized to do business in New York State. Access has no employees either located in or working to solicit business in New York State. Access does not collect premiums, membership fees, assessments or other consideration for any contracts in New York State.
Liberty has not objected to or contested the admissibility of any of the documents annexed to Access' cross motion. Nor has Liberty contested Access' claim that it has insufficient contact in the State of New York to permit the Court to exercise personal jurisdiction over it pursuant to CPLR 302.
Based on the Bush's affidavit, this Court finds that Access does not have sufficient contacts with New York State to be subjected to personal jurisdiction here. Mr. Bush's affidavit establishes that Access is a foreign insurer with insufficient contacts for the exercise of the Court's long-arm jurisdiction (CPLR 302; Geico v Basedow, 28 AD3d 766, [2nd Dept 2006]; Eveready Insurance Co. v Modeste, 25 AD3d 695 [2nd Dept 2006]); Eagle Insurance Co. v Gutierrez-Guzman, 21 AD3d 489 [2nd Dept, 2005]). Moreover, the mere fact that the insured's vehicle was being driven in New York does not satisfy the requirements of the long-arm statue (New York Central Mutual Insurance Co. v Johnson, 20 AD2d 638 [2nd Dept, 1999]).
Under these circumstances, the Court has no personal jurisdiction over Access and can neither add it as a proposed additional respondent or order it to participate in a framed issue hearing on the existence of insurance coverage (Matter of Eagle Ins. Co. v Gutierrez-Guzman, 21 AD3d 489 [2nd Dept 2005). Independent's Opposition to the Petition
Independent has also opposed the petition claiming lack of personal jurisdiction, but has not moved for dismissal or any other affirmative relief. Independent's opposition papers consist of an affirmation of its counsel and five exhibits labeled A through E. Exhibit A contains nine documents denominated as affidavits. Contrary to the requirements of CPLR 2101 (c) none of the nine denominated affidavits contains a caption or an index number. Each one of the denominated affidavits bears a date of signature that is prior to the date of the subject accident. The earliest one was signed sometime in 2005, over eleven years ago. Seven of them were signed between 2007 and 2014. They are all disregarded for these reasons.
For the sake of argument, if any of the denominated affidavits were admissible, the allegations of fact contained therein regarding Independent's lack of contact in the State of New York would necessarily be for the period of time prior to the date that each one was signed. Consequently, each one would be silent regarding Independent's contacts or presence in the State of New York on the date of the subject accident. Independent has also annexed copies of multiple court decisions. Independent contends that the Court's reasoning in each of the annexed decisions is persuasive on its contention that the Court lacks jurisdiction over it. Independent, however, has not made an evidentiary showing sufficient to rebut Liberty's prima facie showing for a stay (Hertz Corp. v Holmes, 106 AD3d 1001, 1003 [2nd Dept 2013]). Nor has it presented an evidentiary showing demonstrating that it should not be added as an additional respondent based on the Court's lack of personal jurisdiction. Accordingly, Independent is added as an additional respondent to the instant petition.
Inasmuch as Liberty has raised a triable issue of fact regarding the existence of insurance coverage on the offending vehicle, the Court, not the arbitrator, must determine this in a framed-issue hearing, and the appropriate procedure under such circumstances is to temporarily stay arbitration pending a determination of the issue (Matter of Hertz Corp. v Holmes, 106 AD3d 1001, 1003 [2nd Dept 2013]). The Court hereby orders a framed-issue hearing on the issue of the existence of insurance coverage on the offending vehicle.
CONCLUSION
That branch of Liberty's petition seeking an order permanently staying an uninsured motorist arbitration is denied.
That branch of Liberty's petition seeking an order temporarily staying an uninsured motorist arbitration is granted pending a determination of a framed-issue hearing on the issue of the existence of insurance coverage.
That branch of Liberty's petition seeking an order adding Akhirah Nashay Gray, Melilla Danielle Smith, Access Insurance Company and American Independent Insurance Company as additional respondents is denied as to Access and granted as to everyone else.
That branch of Liberty's petition seeking an order declaring that Access Insurance Company is the responsible carrier for the offending vehicle in the subject accident is denied.
That branch of Liberty's petition seeking an order declaring that American Independent Insurance Company is the responsible carrier for the offending vehicle in the subject accident is stayed pending a determination of a framed-issue hearing on the issue of the existence of insurance coverage.
Access Insurance Company cross motion for an order dismiss the petition pursuant to CPLR 3211 (a) (8) and CPLR 302 is granted.
The foregoing constitutes the decision and order of this Court.