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MATTER ARBITRATION BETWEEN HERMAN TAUB ET AL. (03/13/69)

SUPREME COURT OF NEW YORK, APPELLATE DIVISION, FIRST DEPARTMENT 1969.NY.40831 <http://www.versuslaw.com>; 298 N.Y.S.2d 212; 31 A.D.2d 378 March 13, 1969 IN THE MATTER OF THE ARBITRATION BETWEEN HERMAN TAUB ET AL., APPELLANTS, AND MOTOR VEHICLE ACCIDENT INDEMNIFICATION CORPORATION, RESPONDENT Appeal from an order and judgment (one paper) of the Supreme Court at Special Term (Wilfred A. Waltemade, J.) entered May 24, 1968 in New York County, granting respondent's motion for a stay of arbitration. Norman Perlman of counsel (Horowitz & Perlman, attorneys), for appellants. Sidney Gaines of counsel (Edward Cherney with him on the brief; Friedlander, Gaines, Ruttenberg & Goetz, attorneys), for respondent. Rabin, J. Eager, J. P., Tilzer, Nunez and Macken, JJ., concur. Author: Rabin


Appeal from an order and judgment (one paper) of the Supreme Court at Special Term (Wilfred A. Waltemade, J.) entered May 24, 1968 in New York County, granting respondent's motion for a stay of arbitration.

Rabin, J. Eager, J. P., Tilzer, Nunez and Macken, JJ., concur.

Author: Rabin

 The claimants, Herman and Anne Taub, appeal from an order which granted the respondent Motor Vehicle Accident Indemnification Corporation's (hereinafter referred to as MVAIC) motion for a permanent stay of arbitration. The facts are not in dispute. The claim arose out of an accident which allegedly occurred within the State of New York on February 22, 1965. The claimants were in an automobile which was involved in a two-car collision. The second car (the alleged offending vehicle), owned by one Richard E. Schwartz, was registered in New Jersey. On the date of the accident the Schwartz vehicle was insured by the United Benefit Fire Insurance Company of Omaha, Nebraska. The claimants were insured by the Government Employees Insurance Company under a policy issued in 1964 which, pursuant to the Insurance Law, as then written, contained the standard MVAIC uninsured motorists provision. That provision, as more fully discussed herein, provides for MVAIC's liability for injuries inflicted in certain circumstances from accidents occurring within this State.*fn*

Subsequent to the accident, by decree of the District Court of Douglas County, Nebraska, dated November 24, 1965, the United Benefit Fire Insurance Company was declared insolvent and liquidation was ordered. Thereafter, the claimants filed notice of claim against MVAIC and demanded arbitration. MVAIC applied for a stay of arbitration, arguing that the claim was not proper since the Schwartz vehicle was insured at the time of the accident, and did not fall within any of the categories of section 600 of the Insurance Law. That section lists categories which the Legislature found to present situations where previous existing legislation failed to accomplish the purpose of securing to innocent victims of automobile accidents, reimbursement for injuries sustained by them. The categories are as follows:

"(1) uninsured motor vehicles registered in a state other than New York,

"(2) unidentified motor vehicles which leave the scene of the accident,

"(3) motor vehicles registered in this state as to which at the time of the accident there was not in effect a policy of liability insurance,

"(4) stolen motor vehicles,

"(5) motor vehicles operated without the permission of the owner,

"(6) insured motor vehicles where the insurer disclaims liability or denies coverage, and

"(7) unregistered motor vehicles."

Special Term found that the offending vehicle, having been insured at the time of the accident, was an insured vehicle within the meaning of the Insurance Law. It held that it did not matter that after the accident the insurance company was liquidated and, consequently, found that there could be no recourse to MVAIC.

The issue thus presented on this appeal is whether the standard uninsured motorist endorsement extends coverage to an injured innocent "insured" victim of an automobile accident, where the alleged tort-feasor at the time of the accident was covered by liability insurance which subsequently became ineffective by reason of the insolvency of the tort-feasor's insurer. The actual policy issued to the claimants is not included in this record and, therefore, the exact language of the uninsured motorists provision is not before the court. Nevertheless, such endorsement must of necessity be considered as containing the provisions listed in subdivision 2-a of section 167 of the Insurance Law (above quoted), because by the terms of the statute, automobile insurers, prior to 1965, were mandated to include provisions in the policy to give protection through MVAIC to the insureds in situations as enumerated in the statute. Hence, if the claimants were injured as the result of any accident with an automobile, which automobile can be considered as coming within any of such provisions, the claimants may proceed to seek arbitration with MVAIC as the result of the uninsured motorist endorsement in their policy. The claimants argue that the Schwartz vehicle, being registered out of the State, must be deemed to be an uninsured vehicle within the meaning of category 1 of section 600, despite the fact that at the time of the accident it was covered by insurance. They point to the distinction between this category and category 3 which, referring to vehicles registered in this State, provides that only vehicles not having liability insurance "at the time of the accident" may come within the provisions of the section. The claimants urge that no such limitation being contained in category 1, it must be read to mean that a vehicle must be deemed to be an uninsured vehicle within the meaning of that category where there is no insurance in effect available to a claimant seeking timely relief. There may be a good deal of merit to that position.

Be that as it may, however, the claimants, in the alternative, argue that the situation here presented brings them within category 6, "insured motor vehicles where the ...


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