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Unitrin Kemper Auto and Home v. Irizarry

SUPREME COURT OF THE STATE OF NEW YORK Appellate Division, Fourth Judicial Department


December 31, 2008

IN THE MATTER OF THE ARBITRATION BETWEEN UNITRIN KEMPER AUTO AND HOME ("KEMPER"), PETITIONER-RESPONDENT,
v.
ARCELIN A. IRIZARRY, RESPONDENT-RESPONDENT.
LANCER INSURANCE COMPANY, APPELLANT; ALLSTATE INSURANCE COMPANY, RESPONDENT. (APPEAL NO. 2.)

Appeal from a judgment (denominated order and judgment) of the Supreme Court, Monroe County (Matthew A. Rosenbaum, J.), entered October 3, 2007 in a proceeding pursuant to CPLR article 75. The judgment, insofar as appealed from, declared that Lancer Insurance Company provide primary coverage and Allstate Insurance Company provide excess coverage for the incident underlying this proceeding.

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

This opinion is uncorrected and subject to revision before publication in the Official Reports.

PRESENT: SMITH, J.P., CENTRA, LUNN, FAHEY, AND GREEN, JJ.

It is hereby ORDERED that the judgment insofar as appealed from is unanimously reversed on the law without costs and the declarations are vacated.

Memorandum

Petitioner commenced this proceeding pursuant CPLR article 75 seeking a permanent stay of the arbitration demanded by its insured, respondent Arcelina V. Irizarry, after a vehicle driven by her collided with a vehicle owned by Edwin Diaz, doing business as PR Auto Sales (Diaz), a used car dealer, and insured by appellant, Lancer Insurance Company (Lancer). The girlfriend of Diaz, Sandra Gonzalez, who was insured by respondent Allstate Insurance Company (Allstate), was driving the vehicle at the time of the collision, in part for the purpose of test-driving it to determine whether she wished to purchase it for her son. Although it appears from the record that Supreme Court joined Lancer and Allstate as parties to the proceeding "so [the] Court can determine insurance coverage," no declaratory judgment action was ever commenced and neither Diaz or Gonzalez is a party to this proceeding. Further, we are unable to ascertain from the record before us whether an underlying negligence action was in fact commenced, and, if so, which parties are involved in that action. We thus conclude that, in the absence of a declaratory judgment action in which jurisdiction over all necessary parties was obtained, the court erred by, in effect, converting this proceeding in part to a declaratory judgment action and declaring the rights of Lancer and Allstate (see CPLR 103 [c]; cf. Matter of Cologne Life Reins. Co. v Zurich Reins. [N. Am.], 286 AD2d 118, 119).

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