Opinion
2514704
Decided April 27, 2005.
The petitioners have applied to this court, pursuant to CPLR 7511 (b)(1)(ii), (b)(2), and (c) to vacate the arbitration award, dated July 9, 2004, on the grounds that it was ". . . arbitrary and capricious and lacking in rational basis, the arbitrator exceeded his powers in rendering the award, the award violates public policy, and the arbitrator engaged in misconduct." Petitioners, Norma Vasquez Guarino and Manuel Taveras, driver and passenger, respectively, in a vehicular accident wherein the other vehicle fled, filed claims for injuries sustained therein which were denied by respondent, Allstate Insurance Company. Petitioners thereupon filed for compulsory arbitration with the American Arbitration Association (AAA). In the absence of any documentary and/or testimonial refutation by the respondent, and despite the fact that both petitioners testified and submitted a memorandum to the effect that they exceeded the "serious injury" threshold imposed by Insurance law § 5102(d), Mr. Alan H. Krystal issued an arbitration award, dated July 9, 2004, of no recovery for the petitioners.
The petitioners note that the arbitrator had engaged in an impermissible ex-parte communication with respondent's counsel immediately following their session, and indicate that on July 24, 2004, they filed an appeal with the AAA to upgrade their awards to $25,000.00 each on the grounds that the arbitrator failed ". . . to use a cognizable standard for evaluating the petitioners' claims against Insurance law § 5102(d), poor drafting of the award including the arbitrator's failure to cite and mis-citations of the cases contained in the award, and the arbitrator's ex-parte communications with respondent's counsel." More specifically, the petitioners argue that it was error for the arbitrator to have denied the petitioner Guarino's claim for not containing any work related restrictions since she presented ". . . evidence that her usual activities, both at work and at home, which included stretching, reaching, and moving from a sitting to standing position, lifting more than 10 pounds, walking long distances and riding her bicycle were curtailed to a great extent [90 days after the accident]." In like manner, petitioner Tavares' claim should not have been denied for lack of "evidence to substantiate being out of work for six months after the accident" or "physician's statement that he was unable to work" when he presented ". . . evidence that his usual activities, which included lifting heavy objects, playing basketball, and working as a housekeeper, were curtailed to a great extent."
The petitioners maintain that Insurance law § 5102(d) ". . . requires application of a two-part test for 'serious injury.' Claimants must first demonstrate, through competent and objective proof, a medically determined injury or impairment resulting from the accident that could have caused the alleged limitations on his or her daily activities; Claimants must then demonstrate a limitation on daily activities for the statutory period." The petitioners also contend that although arbitrator Krystal applied a standard in seeming compliance with the first prong, which considered the MRI studies of both petitioners, there was no compliance with the second requirement; i.e., ". . . no mention of the 'ninety days out of the first one hundred and eighty days' ("90/180") durational consideration." Instead, the petitioners assert that the arbitrator improperly utilized a standard of "evidence that [the claimants'] usual and customary work activities were curtailed to a great extent as opposed to a light curtailment." The petitioners also contend that the arbitrator's "customary work activities" standard was contrary to the "usual activities" standard established by the cases on which he relied; to wit, the third department matters of Bennet v. Reed, 693 NYS2d 2d 738 and Van Norden-Lipe v. Hamilton, 742 NYS2d 173 ; and, that the application of an erroneous, non-statutory standard exceeded his powers, lacked a rational basis, was arbitrary, and capricious.
Lastly, the petitioners assert that opposing counsel's ex-parte communications with the arbitrator constituted misconduct that, when coupled with the failure to have adhered to an objective standard of proof, resulted in the violation of due process that ran afoul of public policy, especially in light of the fact that the AAA's own rules mandate that "all evidence shall be taken in the presence of [. . .] all parties."
The respondent counters that the petitioners requests to increase the awards, pursuant to CPLR 7511 (c), should fail as there was no mistake in the description of persons, things or property; no determination of matters not within the submission to arbitrate; and, no imperfection in matters of form not affecting the merits. In addition, a mistake of law is insufficient to overturn an arbitrator's decision (citing Schine Enterprises Inc. v. Real Estate Portfolio of New York, Inc., 26 NY2d 799, 309 NYS2d 222 (1970), as an arbitrator ". . . may do as he sees fit, applying his own sense of the law and equity as he finds them to be" (citing Silverman v. Ben Mor Coats, Inc., 61 NY2d 299, 474 NYS2d 774 [1984]). Petitioners' request pursuant to CPLR 7511 (b) (2), must fail as it requires the "application of a party who neither participated in the arbitration nor was served with a notice of intention to arbitrate," which neither petitioner can claim. The claim that the arbitration should be set aside pursuant to CPLR 7511 (b)(1)(iii) for being arbitrary and capricious is not a basis for vacating an arbitration award which specifically requires that the arbitrator exceeded a specific limitation on his authority to decide; that the decision is totally irrational; and, that the award is violative of strong public policy (citing Board of Education of the Dover Union Free School District v. The Dover Wingdale Teachers Association, 61 NY2d 913, 474 NYS2d 716 [1984]), none of which criteria have been met since it is clear that the arbitrator acted within the scope of the dispute; it has not been demonstrated that "there was no proof whatsoever to justify the rendering of the award" ( citing Perkerman v. DD Associates, 165 AD2d 289, 567 NYS2d 416 [1st Dept. 1991]); no property right has been withheld from the petitioners without a hearing; and, there was no substantive ex-parte communication between respondent counsel and the arbitrator that was utilized as a basis for the ultimate decision which rested on the petitioners' lack of convincing proof of serious injury within the meaning of Insurance law § 5102(d) in spite of their fifteen exhibits and memorandum of law in the face of respondent's non-submissions.
The petitioners reply that, contrary to respondents assertion, the court must ". . . examine compulsory arbitration awards [as in the instant matter] to see that they are 'in accord with due process and supported by adequate evidence in the record' and if they are rational and satisfy the arbitrary and capricious standards of CPLR article 78" (citing the Fourth Department matter of NY Central Mutual Fire Insurance v. Nichols, 192 AD2d 1131, 596 NYS2d 621). Insurance law § 5102(d) defines serious injury as ". . . a personal injury which results in death; dismemberment; significant disfigurement; a fracture; loss of a fetus; permanent loss of use of a body organ, member, function or system; permanent consequential limitation of use of a body organ or member; significant limitation of use of a body function or system; or a medically determined injury or impairment of a non-permanent nature which prevents the injured person from performing substantially all of the material acts which constitute such person's usual and customary daily activities for not less than ninety days during the one hundred eighty days immediately following the occurrence of the injury or impairment." By all accounts, the parties' dispute involves, in significant part, the latter definition; more particularly what constitutes a person's usual and customary activities and whether that necessarily entails work.
CPLR § 7511(b)(1) provides that an [arbitration] award shall be vacated on the application of a party who either participated in the arbitration or was served with a notice of intention to arbitrate if the court finds that the rights of the party were prejudiced by (i) corruption, fraud or misconduct in procuring the award or (ii) partiality of an arbitrator appointed as a nuetral . . . or (iii) an arbitrator . . . making the award exceeded his power or so imperfectly executed it that a final and definite award upon the subject matter submitted was not made. CPLR § 7511(b)(2) adds that an [arbitration] award shall be vacated on the application of a party who neither participated in the arbitration nor was served with a notice of intention to arbitrate if the court finds that: (i) the rights of that party were prejudiced by one of the grounds specified in paragraph one; or (ii) a valid agreement to arbitrate was not made; or (iii) the agreement to arbitrate had not been complied with; or (iv) the arbitrated claim was barred by [statute of] limitation. CPLR § 7511(c) addresses the modification of awards on three grounds, 1. there was a miscalculation of figures or a mistake in the description of any person, thing or property referred to in the award; or 2. the arbitrators have awarded upon a matter not submitted to them and the award may be corrected without affecting the merits of the decision upon the issues submitted; or 3. the award is imperfect in a matter of form, not affecting the merits of the controversy. It is clear by the arguments advanced by both sides that CPLR § 7511(b)(2) and CPLR § 7511(c) are herein inapplicable. This court therefore need only concern itself with CPLR § 7511(b)(1).
An examination of the arbitrator's decision reveals that petitioner Vasquez' MRI indicated "moderate disc herniation at C5-6 with cord compression. The MRI of the lumbar spine reported disc bulging at L4-5 and L5-S1." Range of motion studies on May 13, 2003 and July 21, 2003, respectively ". . . noted a 12% impairment of cervical range of motion. . . ." [and] ". . . a 17% impairment of lumbar range of motion." A physical examination on July 15, 2003 resulted in Dr. Sandler's finding of "tenderness on palpation of the cervical and lumbar paraspinal muscles with limited range of motion, with a recommendation that Vasquez continue in treatment, not carry any weight more than ten pounds, and complete rest at work for twenty minutes if she felt any pain or discomfort. Dr. Yanovskaya's August 12, 2003 examination reported "mild tenderness on palpation of the cervical and lumbar paraspinal muscles, painful range of motion of the cervical and lumbar spine upon flexion and extension which was "not limited," with a recommendation that she continue treatment for another four weeks and commence home therapy, with no prescribed work related restrictions. Noting that Vasquez had only missed two weeks of work and no indication of any further treatment after August 2003, the arbitrator concluded that "[a]lthough the MRI studies indicate cervical disc herniation and lumbar disc bulging, these findings alone cannot establish the existence of a 'serious injury' in the absence of additional objective evidence of the extent or degree of the alleged physical limitations resulting from the injuries and their duration, or a qualitative assessment of Claimant's functional impairment" (citing Noble v. Ackerman, 252 AD2d 392, 675 NYS2d 86 [1998] and Toure v. Avis Rent A Car, et. al., 98 NY2d 345, 746 NYS2d 865 [2002]). With regards to petitioner Tavares, ". . . the MRI of the cervical spine revealed disc bulging at C3 through C6 and straightening of the cervical lordosis . . . attributed to muscle spasm. The report of the MRI of the lumbar spine . . . reported disc bulging at L5-S1. . . . range of motion studies . . . performed on May 21, 2003. . . . noted a 16% impairment of cervical range of motion and a 15% impairment of lumbar range of motion." Follow-up examinations on August 4, 2003 and September 9, 2003 reported ". . . continued restriction of lumbar and cervical range of motion with muscle spasm and tenderness. . . . crepitus of the left knee and extension to ten degrees . . . [with a recommendation] that Claimant continue therapy and . . . for an orthopedic consultation." Noting that Tavares had missed six months of work as a hotel housekeeper and still experienced "pain in his left knee, neck and back, which prevents him from lifting heavy objects and playing basketball," the arbitrator found that "although the MRI studies indicate cervical and lumbar disc bulging, none of Dr. Schwartz's reports state that these findings were causally related to the accident. While Dr. Schwartz did report continued limitations of cervical and lumbar range motion, the only specified limitations were those set forth in the computerized range of motion studies performed eighteen (18) days after the accident. Therefore, it cannot be determined whether the limitations set forth in Dr. Schwartz's last two reports were significant or slight. With respect to the left knee, there was no MRI studies or other objective tests performed . . . there is no indication in the record that [an orthopedic] consultation ever took place. . . . there is no documentation to substantiate Claimant's testimony that he was out of work for six months, or any statement by his physician that Claimant was unable to work."
It cannot be gainsaid that Insurance law § 5102(d)'s statutory threshold for serious injury is "an elusive standard that all too frequently escapes facile and final resolution" (see Brown v. Achy, 9 AD3d 30 [2004]). In addition, it is to be noted that "in order to raise a triable issue of fact, plaintiff's claim that range of motion is limited must be substantiated by objective medical findings that are 'based on a recent examination of the plaintiff' " (Grossman v. Wright, 268 AD2d 79). However, ". . . a gap in treatment goes to the weight of the evidence, not its admissibility (Brown v. Achy, supra). Furthermore, ". . . positive findings must be accompanied by objective findings of either a specific percentage of the loss of range of motion or a sufficient description of the 'qualitative nature' of plaintiff's limitations 'based on the normal function, purpose and use of the body part'." ( Toure v. Avis Rent A Car, et. al., supra; Noble v. Ackerman, supra; Cruz v. Calabiza, 226 AD2d 242; Rose v. Ferguson, 281 AD2d 857; and, Sainte-Aime v. Ho, 274 AD2d 569). "Where conflicting medical evidence is offered on the issue of whether the plaintiff's injuries are permanent or significant, and varying inferences may be drawn therefrom, the question is one for the jury" (Cooper-Fry v. Kolket, 245 AD2d 846 and Greene v. Frontier Cent. School Dist., 214 AD2d 947).
In considering a summary judgment motion regarding the serious injury threshold, a defendant must first establish a prima facie showing of no serious injury arising from the accident. Once that criterion is met, the burden then shifts to the plaintiff to raise a triable issue of fact that a serious injury was sustained (See Gaddy v. Eyler, 79NY2d 955; and, Thompson v. Abassi, 2005 WL 15941 (NYAD, 1st Dept.), 2005 NY Slip Op. 00024). The standard for reviewing an arbitrator's decision consists of no such two-tier analysis. It requires, instead, a determination as to "whether the award is supported by evidence or basis in reason, as may be appropriate, and appearing in the record. (See Mount St. Mary's Hosp. v. Catherwood, 26 NY2d 493, 311 NYS2d 86; and, Commercial Union Insurance Company v. Ewall, 168 AD2d 247, 562 NYS2d 484; and, Matter of Fernandez, et. al. v. Universal Underwriters Ins. Co., 130 AD2d 657, 515 NYS2d 588). "Moreover, it is well settled that an arbitrator need not justify his award by setting forth the reasons for his determination. . . . Arbitrators, in the discharge of their duties, are not governed by the substantive or evidentiary rules of courts of law" (See Dahn v. Luchs, 92 AD2d 537, 459 NYS2d 101). In Travelers Insurance Company v. Job, 239 AD2d 289, 658 NYS2d 585, the Appellate Division, First Department, aptly noted that ". . . in the interest of preserving the independence of the arbitral process and conserving judicial resources, the courts have been assigned a minimal role in supervising arbitration practice." (Citing, Szabados v. Pepsi-Cola Bottling Co., 174 AD2d 342, 570 NYS2d 553; Matter of Wertlieb and Greystone Partnerships Group, 165 AD2d 644, 569 NYS2d 61). The Appellate Division went on to note that "it is well settled that the question of whether or not a particular claimant sustained a serious injury is a matter within the province of the arbitrator, not the courts (Citing Matter of Aetna Cas. Sur. Co. v. Cochrane, 64 NY2d 798, 486 NYS2d 915), [and that] 'this standard has been interpreted to import into article 75 review of compulsory arbitrations the arbitrary and capricious standard of article 78 review (Citing Matter of Petrofsky v. Allstate Ins. Co., 54 NY2d 207, 445 NYS2d 77; Caso v. Coffey, 41 NY2d 153, 391 NYS2d 88; and Siegel, New York Practice, § 603, pp. 865-866.) In addition, article 75 review questions whether the decision was rational or had a plausible basis (Citing, Caso v. Coffey, supra)." The court therefore reasoned that a court will not "concern itself with the form or sufficiency of the evidence before the arbitrators or some departure from formal technicalities in the absence of a clear showing that statutory grounds exists for vacatur of the award." (Citing, Dahan v. Luchs, 92 AD2d 537, 459 NYS2d 101 [App. Div., 2nd Dept.]; Matter of Pierre v. [General Acc. Ins.], 100 AD2d 705, 474 NYS2d 622 [App. Div., 3rd Dept.]; and Korein v. Rabin, 29 AD2d 351, 287 NYS2d 975 [App. Div., 1st Dept.]). The court added that "even allowing that acceptance of certain evidence by the arbitrator could be said to constitute mistake or error, we noted that vacating an award is unwarranted 'unless it results in a failure of intent or breach of authority or is so gross or palpable as to establish fraud or misconduct'."
There is no convincing proof that the ex parte communication following the hearing in the instant matter was substantive in nature, much less entered into the analysis resulting in the award made. Although it could be argued that another conclusion could have been reached, the fact is that in the matter sub judice the arbitrator made an "award that is supported by evidence or basis in reason appearing in the record." Therefore, judicial deference must be applied to that determination on the bases of the case law hereinabove set forth. In addition, this court finds no violation of CPLR 7511 (b)(1)(ii), (iii), (b)(2), and/or (c). Accordingly, petitioners' request that this court vacate the arbitration award, dated July 9, 2004, on the grounds that it was ". . . arbitrary and capricious and lacking in rational basis, the arbitrator exceeded his powers in rendering the award, the award violates public policy, and the arbitrator engaged in misconduct" is denied. This constitutes the decision and order of this Court.