Opinion
Index No. 505692/2024
05-10-2024
Government Employees Insurance Company, Petitioner, v. Anna Bruk, Respondent.
Law Office of James G. Bilello & Associates, Westbury (Eric Greenberg of counsel), for petitioner. Khavinson & Mandronico, P.C., Manhattan (Andrea Yankovsky of counsel), for respondent.
Unpublished Opinion
Law Office of James G. Bilello & Associates, Westbury (Eric Greenberg of counsel), for petitioner.
Khavinson & Mandronico, P.C., Manhattan (Andrea Yankovsky of counsel), for respondent.
Aaron D. Maslow, J.
The following numbered papers were used on this motion:
Submitted by Petitioner
NYSCEF Doc No. 1: Petition
NYSCEF Doc No. 2: Notice of Petition
NYSCEF Doc No. 3: Exhibit A - Demand for Arbitration
NYSCEF Doc No. 4: Exhibit B - Policy
NYSCEF Doc No. 5: Exhibit C - Disclaimer
NYSCEF Doc No. 6: Statement of Authorization for Electronic Filing
NYSCEF Doc No. 7: Request for Judicial Intervention
NYSCEF Doc No. 8: Affirmation of Service
Submitted by Respondent
NYSCEF Doc No. 9: Stipulation of Adjournment
Filed by Court
NYSCEF Doc No. 9: Interim Order Rejecting Stipulation of Adjournment
Introduction
The mere filing of a CPLR 7503 petition to stay arbitration and paying the index number filing fee should not be deemed the functional equivalent of the pro forma purchase of a ticket to obtain a framed issue hearing. More is required.
Respondent Anna Bruk claimed to have been in a motor vehicle accident with a hit-and-run driver on January 13, 2023, at Avenue V and East 8 Street in Brooklyn, New York. Claiming to have sustained personal injuries, she served a demand for uninsured motorist (UM) arbitration with her insurance carrier, Petitioner Government Employees Insurance Company (GEICO). (See NYSCEF Doc No. 1, petition ¶¶ 3, 4; NYSCEF Doc No. 3, request for UM arb.)
UM coverage exists to provide a measure of recompense to persons injured through the use and operation of uninsured vehicles. SUM is similar in that it is designed to provide "supplementary underinsured motorist" coverage.
In response, Petitioner commenced the instant special proceeding by serving and filing a notice of petition and petition to stay the arbitration pursuant to CPLR 7503 (c). The alternative branches of relief sought were: (a) a permanent stay of arbitration, (b) a temporary stay of arbitration pending a hearing (known as a "framed-issue hearing") on the issue of whether Respondent was involved in a hit-and-run accident and whether she timely reported it to the police, and (c) a temporary stay of arbitration pending Respondent's compliance with a Court directive to submit to an examination under oath and physical examinations and to provide medical records and authorizations for same.
Adjournment Denied
This special proceeding was calendared for. On May 7, 2024, a stipulation of adjournment executed by counsels for the parties was filed on NYSCEF. That same day, the Court rejected the stipulation:
Stipulation to Adjourn REJECTED;
Not compliant with IAS Part 2 Rules.
SO ORDERED
B'klyn, NY 5/7/24/s/
HON. AARON D. MASLOW
Justice of the Supreme Court of the
State of New York
This Court's Part Rules provide:
Contents of applications for adjournments and stipulations of adjournment. Applications for adjournments and stipulations of adjournment must (a) identify which party seeks the adjournment, (b) set forth the good-cause reason for it, (c) provide details of any prior adjournments of the motion, and (d) list future motion calendar dates for other sequenced motions in the case. Under no circumstances shall counsel stipulate to adjourn a motion to a specific date; since adjournments are at the discretion of the Court, if a motion is adjourned the Court will determine the adjourned date. (IAS Part 2 Rules, Part I, Subpart D, § 3, available at https://ww2.nycourts.gov/courts/2jd/kings/civil/MaslowRules.shtml [last accessed ].)
A trial court possesses the right to enforce the rules governing practice and procedure before it (e.g. McGee v Bishop, 192 A.D.3d 1446 [3d Dept 2021] [page-limit for memoranda of law]; Basie v Wiggs, 173 A.D.3d 1127 [2d Dept 2019] [Matrimonial Part rules]; Appleyard v Tigges, 171 A.D.3d 534 [1st Dept 2019] [60-day summary judgment motion deadline]; Biscone v Jetblue Airways Corp., 103 A.D.3d 158 [2d Dept 2012] [provide working copies of electronically-filed documents]; Maddus v Bowman, 12 A.D.2d 626 [2d Dept 1960] [Statement of Readiness Rule requiring plaintiff to furnish authorization to obtain hospital records]; Shmerelzon v Gravesend Mgt., Inc., 80 Misc.3d 1233 [A], 2023 NY Slip Op 51155[U] [Sup Ct, Kings County 2023] [adjournment requests must contain specified data and be submitted on three days in advance]; Wade v Khadka, 80 Misc.3d 1222 [A], 2023 NY Slip Op 51058[U] [Sup Ct, Kings County 2023] [identify party seeking adjournment and good cause reason]; Brick&Mortar LLC v Momo Sushi Inc., 79 Misc.3d 1239 [A], 2023 NY Slip Op 50838[U] [Sup Ct, Kings County 2023] [submission of referenced electronically-filed documents as exhibits to motion papers]; Stipa Sprecase v Tenreiro, 2023 WL 3972435 [Sup Ct, NY County 2023] [motions to reargue or renew be made by order to show cause]; Latorre v Rahman, 2022 NY Slip Op 32044[U] [Sup Ct, NY County 2022] [no motions allowed until conference is held]; Bedingfield v Dairymade Farms, Inc., 46 Misc.2d 146, 148 [Sup Ct, Suffolk County 1965] [rule requiring statement of readiness be filed with note of issue "is consistent with the inherent power of the Court to control its business"]; Scully v Jefferson Truck Renting Corp., 43 Misc.2d 48 [Sup Ct, Kings County 1964] [statement of readiness be filed with note of issue]; cf. Crawford v Liz Claiborne, Inc., 11 N.Y.3d 810 [2008] [IAS Part rule not in effect when preliminary conference order issued, resulting in application of Local Rules]). "[I]t is within the court's inherent and statutory power to control the order of its business, and to so conduct its business as to safeguard the rights of all litigants, to preclude unfair procedural advantage to any party, and to prevent needless disruption of orderly court procedures" (Maddaud v Bowman, 12 A.D.2d 626, 626 [2d Dept 1960]).
Since the stipulation of adjournment, presumably initiated by Respondent, who had not filed responsive papers to the petition herein, did not contain the information required by IAS Part 2 Rules, the Court adheres to its determination not to adjourn this special proceeding. The Court also takes into account that special proceedings are designed to be expeditiously resolved (see Rotunno v Gruhill Constr. Corp., 29 A.D.3d 772 [2d Dept 2006]). "A special proceeding is a civil judicial proceeding in which a right can be established or an obligation enforced in summary fashion. Like an action, it ends in a judgment (CPLR 411), but the procedure is similar to that on a motion (CPLR 403, 409). Speed, economy and efficiency are the hallmarks of this procedure." (Vincent C. Alexander, Prac Commentaries, McKinney's Cons Laws of NY, CPLR C401:1.)
Discussion
Petitioner's insurance policy providing coverage to Respondent provides in pertinent part as follows:
Uninsured motor vehicle. The term "uninsured motor vehicle" means a motor vehicle that, through its ownership, maintenance or use, results in bodily injury to an insured, and for which:
...
(b) neither owner nor driver can be identified (including a hit-and-run vehicle), and which causes bodily injury to an insured by physical contact with the insured or with a motor vehicle occupied by the insured at the time of the accident, provided that:
(i) the insured or someone on the insured's behalf shall have reported the accident within 24 hours or as soon as reasonably possible to a police, peace or judicial officer or to the Commissioner of Motor Vehicles and shall have filed with the Company a statement under oath that the insured or the insured's legal representative has a cause or causes of action arising out of such accident for damages against a person or persons whose identity is unascertainable, and setting forth the facts in support thereof.... (NYSCEF Doc No. 4, ins policy at 29.)
In support of its position that a permanent stay of arbitration is warranted, Petitioner alleged in its petition and at oral argument that the alleged hit-and-run accident was not reported to police within 24 hours. In other words, a condition precedent to UM insurance coverage was not complied with by Respondent.
In terms of allegations, the petition alleged:
5. Your affiant submits that the respondent must be permanently stayed from proceeding to arbitration on the grounds that she failed to comply with a condition precedent to arbitration, namely, reporting this "hit-and-run" accident to the police within 24 hours or as soon as reasonably possible.
...
7. Upon information and belief, the respondent did not report the accident to the police. Accordingly, respondent failed to satisfy a necessary condition precedent, namely, reporting the "hit-and-run" accident within a reasonable time to the police.
8. To that end, a disclaimer of coverage was issued by GEICO. (See, Exhibit "C"). (NYSCEF Doc No. 1, petition ¶¶ 5, 7-8.)
Therefore, asserted Petitioner, the issues needed to be "decided," i.e., a framed-issue hearing was sought:
9. It is respectfully submitted that prior to arbitration, the issues of whether or not there was, in fact, a "hit-and-run" accident, and whether the police were properly notified within a 24-hour period, or as soon as reasonably possible, must be decided. (Id. ¶ 9.)
CPLR 409, in connection with the hearing in a special proceeding, provides:
(b) Summary determination. The court shall make a summary determination upon the pleadings, papers and admissions to the extent that no triable issues of fact are raised. The court may make any orders permitted on a motion for summary judgment. (CPLR 409 [b].)
However, "If triable issues of fact are raised they shall be tried forthwith and the court shall make a final determination thereon" (CPLR 410). These provisions are summarized as follows: "Subdivision (b) of CPLR 409 makes clear that the special proceeding is to be adjudicated in the same manner as a motion for summary judgment. See, e.g, Friends World College v. Nicklin, 1998, 249 A.D.2d 393, 671 N.Y.S.2d 489 (2d Dep't). See generally CPLR 3212. Thus, if the papers fail to raise a triable issue of fact, the court is to grant judgment as a matter of law in favor of the appropriate party. If a triable issue of fact is raised, reference must be made to CPLR 410." (Alexander, Prac Commentaries, CPLR 409.) In the context of CPLR 7503 petitions for stays of UM/SUM arbitration, the trials of disputed issues take place in the form of framed-issue hearings, usually before special referees or judicial hearing officers.
Since taking office as a Justice of the Supreme Court last year, this Court has observed that insurance company petitions to stay UM/SUM arbitration (and uphold disclaimers of coverage) are being filed with frequency for the purpose of obtaining court determinations on a myriad of issues such as alleged failures to comply with conditions precedent, alleged non-contact with another vehicle, alleged existence of sufficient insurance such that UM/SUM coverage is unavailable, comparisons of different companies' policies, assertions that another company's policy has priority in affording coverage, and disputes concerning the maximum amount recoverable by the injured person.
What is common in a lot of instances is that the petitions commencing the special proceedings are drafted in barebones fashion with the most minimal of supporting details and without sufficient evidentiary support. For example, policies, letters, emails, police reports, and other documents are being appended without authentication so as to render them admissible in evidence - similar to the need to do so on a motion for summary judgment, to which the special proceeding has been compared (see id.). While it is not the role of the Court to scrutinize a party's papers to locate defects on behalf of the adversary, there are some instances where the defects and omissions simply cannot be ignored. After all, the Court is bound to apply CPLR 409 and 410, quoted above, in performing its function of adjudicating these special proceedings: whether there is there a need for a hearing on a disputed issue or not.
It has become apparent, however, that petitions filed by insurance companies to stay UM/SUM arbitration are being drafted with the assumption that they are, in effect, tickets to obtaining framed-issue hearings on issues which the companies have not fully investigated on their own. Perhaps insurance companies are under the impression that a petition to stay arbitration which commences a special proceeding is a substitute for a thorough internal inquiry and that the facts will all come out at the framed-issue hearing. In essence, the mere submission of a petition to stay arbitration and paying the index number fee has become the gateway for a process which really should not be engaged in unless the company has demonstrated that it possesses solid facts warranting disclaimer of coverage.
This is borne out by the papers submitted by Petitioner herein in the instant special proceeding to stay UM arbitration (see supra at 4-5). In the briefest fashion, the petition alleged that Respondent failed to report the accident to the police within 24 hours. It is not asserted with certainty; rather the assertion is made upon information and belief. The source of the information and belief is not disclosed. For example, the petition fails to disclose whether Petitioner undertook a due diligence investigation with the local police precinct to determine whether the accident had been reported. Neither did Petitioner disclose if it had sought information from Respondent whether she reported the accident as required by the insurance policy.
The petition is signed by an attorney with the in-house firm representing Petitioner - not by a claim examiner who reviewed the claim records. Thus, there is no indication that the attorney has personal knowledge of the facts and circumstances concerning the particular claim.
Petitioner did submit as Exhibit C a letter dated August 4, 2023, purportedly sent to the co-policyholder of Respondent in which it cited the policy condition precedent of having to report the accident within 24 hours to the police and asserting,
With respect to the automobile accident that occurred on January 13, 2023, the GEICO General Insurance Company hereby denies any and all liability or obligation to you and to others under policy 6038901150.
This disclaimer is made because there was no 24 hour reporting or proof of loss. (NYSCEF Doc No. 5, disclaimer.)
This letter was not authenticated in the manner for admitting business records into evidence per an exception to the hearsay rule. The letter does not set forth the basis for the conclusory statement that there was no 24-hour reporting.
The party seeking a stay of arbitration has the burden of showing the existence of sufficient evidentiary facts to establish a preliminary issue which would justify the stay (see Matter of Country-Wide Ins. Co. v Adams, 187 A.D.3d 1013 [2d Dept 2020]; Matter of AutoOne Ins. Co. v Umanzor, 74 A.D.3d 1335 [2d Dept 2010]; Matter of Liberty Mut. Ins. Co. v Morgan, 11 A.D.3d 615 [2d Dept 2004]; Matter of Government Empls. Ins. Co. v Estate of Sosnov, 275 A.D.2d 322 [2d Dept 2000]); Matter of Eagle Ins. Co. v Viera, 236 A.D.2d 612, 612 [2d Dept 1997]).
In the context of a UM insurer's argument that the offending vehicle in the accident was insured and, therefore, there was coverage available to the injured person, it was held, "The petitioner failed to submit any documentary evidence to support its claim..." (Matter of Eagle Ins. Co. v Viera, 236 A.D.2d at 612 [2d Dept 1997]). Without specifying further detail, the court, in Matter of Liberty Mut. Ins. Co. v Morgan (11 A.D.3d at 616), held, "We agree with the Supreme Court that the petitioner failed to establish its entitlement to a stay of arbitration in this case." In Matter of AutoOne Ins. Co. v Umanzor (74 A.D.3d at 1336), the court stated:
Here, the petition seeking to permanently stay arbitration of the appellant's claim for uninsured motorist benefits was unverified, and the petitioner offered no evidentiary proof to support its assertion that the appellant is not a "resident relative" who is entitled to coverage as an insured under the subject policy. Since the petitioner failed to sustain its initial burden of demonstrating that a factual issue exists as to whether the appellant is a "resident relative," the Supreme Court should have denied that branch of the petition which was to permanently stay arbitration upon the ground that the appellant is not an insured under the subject policy.
In another failure by a petitioner insurance company to show the existence of sufficient evidentiary facts to warrant a stay of UM arbitration, it was held, "Here, the evidence submitted by the petitioner failed to demonstrate that GEICO General Insurance Company ever insured Joel [the other driver]" (Matter of Country-Wide Ins. Co. v Adams, 187 A.D.3d at 1013).
In Matter of Government Empls. Ins. Co. v Estate of Sosnov (275 A.D.2d at 322), the court stated, "The police accident report submitted in support of the petition failed to establish as a matter of law that there was no physical contact with the alleged hit-and-run vehicle." More on point to the issue before this Court was the holding, "Furthermore, the petitioner failed to show that the respondent did not comply with a condition precedent to coverage under its insurance policy." Likewise in the case at bar before this Court, Petitioner GEICO failed to support with any substantive, admissible evidence its barebones allegation of a failure to comply with the condition precedent of 24-hour reporting to the police.
In the setting of another special proceeding determined by a colleague Justice here in Supreme Court, Kings County, it was written:
State Farm by the instant petition has commenced a special proceeding to, among other things, permanently stay an arbitration. 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 an affidavit is to enable the matter to be brought before the court for summary disposition, as in the case of motion practice.
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 A.D.3d 950, 951 [2nd Dept 2016] citing Matter of Hertz Corp. v Holmes, 106 A.D.3d 1001, 1003 [2nd Dept 2013]). Thereafter, the burden is on the party opposing the stay to rebut the prima facie showing (Matter of Hertz Corp., 106 A.D.3d at 1003 citing, Metropolitan Property & Cas. Ins. Co. v Singh, 98 A.D.3d 580 [2nd Dept 2012]).
CPLR Rule 2214 (a) and (c), in pertinent part, provide the following:
(a) Notice of motion. A notice of motion shall specify the time and place of the hearing on the motion, the supporting papers upon which the motion is based, the relief demanded and the grounds therefor. Relief in the alternative or of several different types may be demanded.
(c) Furnishing papers to the court. Each party shall furnish to the court all papers served by that party. The moving party shall furnish all other papers not already in the possession of the court necessary to the consideration of the questions involved.
State Farm's motion papers contain several deficiencies. The petition contains allegations apparently made by State Farm's counsel based on information and belief. The petition, however, is not verified and, therefore, may not serve as an affidavit (see CPLR 105 (u); Worldwide Assets Publishing LLC v. Karafotias, 9 Misc.3d 390 [Civ.Ct., Kings County 2005]). In fact, State Farm's papers contain[ ] no sworn allegations of fact by anyone with personal knowledge of any of the facts asserted therein.
Inasmuch as the petition and its annexed supporting documents contain[ ] no allegation of fact based on personal knowledge, it provides no sworn evidence of any of the matters asserted therein (see Martinez v Reiner, 104 A.D.3d 477, 478 [1st Dept 2013]). State Farm has annexed four exhibits to the petition, namely, a copy of Bandele's demand for arbitration, a police accident report, a copy of a Supplementary Uninsured Motorist Endorsement, and State Farm's discovery demands to Bandele.
Bandele's demand for arbitration does not provide evidentiary support for either a permanent or temporary stay of arbitration. The police report, or MV 104AN, is not certified and State Farm's petition does not contain an affidavit or other sworn evidence from someone with personal knowledge to establish its authenticity or accuracy. It is, therefore, inadmissible and disregarded (see CPLR 4518 (c); Peerless Insurance Company v Milloul, 140 A.D.2d 346 [2nd Dept 1988]). (Matter of State Farm Mut. Auto. Ins. Co. v Bandele, 63 Misc.3d 1220 [A], 2019 NY Slip Op 50605[U] [Sup Ct, Kings County 2019].)
Similarly, here Petitioner GEICO commenced a special proceeding to permanently stay UM arbitration, Petitioner had the burden of showing the existence of sufficient evidentiary facts to establish a preliminary issue which would justify the stay, Petitioner's papers had deficiencies, allegations were made on information and belief and there were none by anyone with personal knowledge of any of the asserted facts, there was no sworn evidence of any asserted matters, and there was no supporting documentary evidence in admissible form.
Where a UM insurer presents undisputed evidence that a claimant failed to report the alleged hit-and-run accident to the police or to the Commissioner of Motor Vehicles within 24 hours of the accident or as soon as reasonably possible thereafter, as required under the policy, UM arbitration will be permanently stayed (see Matter of Government Empls. Ins. Co. v Bartlett, 112 A.D.3d 826 [2d Dept 2013]; Matter of Government Empls. Ins. Co. v Baik, 94 A.D.3d 888 [2d Dept 2012]; Matter of Eagle Ins. Co. v Brown, 309 A.D.2d 749 [2d Dept 2003]). In the instant special proceeding, Petitioner has failed in the first instance to show the existence of sufficient evidentiary facts to establish a preliminary issue which would justify a permanent stay, or even a temporary stay pending a framed-issue hearing.
Inasmuch as Respondent has not interposed opposition to providing discovery vis-à-vis claimed personal injuries, this Court will temporarily stay the UM arbitration for the purpose of enabling Petitioner to conduct appropriate medical examinations and an examination under oath, and to obtain medical records.
Conclusion
Accordingly, it is ORDERED and ADJUDGED that those branches of Petitioner Government Employees Insurance Company's petition to permanently stay UM arbitration and, alternatively, to temporarily stay arbitration pending a framed-issue hearing, are DENIED.
That branch of Petitioner Government Employees Insurance Company's petition to temporarily stay arbitration for the purpose of discovery is GRANTED to the following extent: (a) By June 17, 2024, Respondent shall provide Petitioner with a list of all medical facilities and health service providers at which she treated as well as authorizations to obtain medical records from same and copies of any medical records relating to treatment which are in her possession. (b) By July 10, 2024, Petitioner shall notice Respondent for an examination under oath and independent medical examinations to be conducted no later than August 12, 2024. (c) Upon compliance with the foregoing, counsels for both parties shall jointly inform the designated arbitration entity of same, and arbitration shall then proceed.