Submitted - February 21, 2019
Goldberg, Miller & Rubin, P.C., New York, NY (Harlan R.
Schreiber of counsel), for appellant.
Nicoletti Gonson Spinner Ryan Gulino Pinter LLP, New York, NY
(Benjamin Gonson of counsel), for respondents.
REINALDO E. RIVERA, J.P. MARK C. DILLON SHERI S. ROMAN
COLLEEN D. DUFFY, JJ.
DECISION & ORDER
action, inter alia, for certain declaratory relief, the
nominal defendant Hereford Insurance Company appeals from an
order of the Supreme Court, Kings County (Andrew Borrok, J.),
dated March 29, 2018. The order, insofar as appealed from,
denied the motion of the nominal defendant Hereford Insurance
Company for leave to enter a default judgment on its
counterclaim for loss transfer pursuant to Insurance Law
§ 5105(a) insofar as asserted against the plaintiff
Repwest Insurance Company and deemed the reply of the
plaintiff Repwest Insurance Company to the counterclaim to
have been served.
that the order is reversed insofar as appealed from, on the
law, with costs to the plaintiff Repwest Insurance Company,
and the counterclaim of the nominal defendant Hereford
Insurance Company is dismissed for lack of subject matter
plaintiff Repwest Insurance Company (hereinafter Repwest)
commenced this action for a judgment declaring, inter alia,
that it has no duty to provide insurance coverage for any
claims arising out of a collision between a livery vehicle
insured by the nominal defendant Hereford Insurance Company
(hereinafter Hereford) and a vehicle driven by the defendant
Nazim Hanif and insured by Repwest. The defendants Dinorah
Carmen Anglero, Dario Ferrer de la Cruz, and Ramon Duarte
Garcia were passengers in the livery vehicle and no-fault
benefits were paid on their behalf by Hereford. Repwest
alleged that there is no coverage for the subject incident
because it was not an accident, but rather the result of an
intentional act/fraudulent scheme. Thereafter, Hereford
interposed an answer to the complaint and asserted a
counterclaim against Repwest, among others, for loss transfer
pursuant to Insurance Law § 5105(a).
Repwest failed to timely reply to the counterclaim, Hereford
moved for leave to enter a default judgment on its
counterclaim insofar as asserted against Repwest. The Supreme
Court denied Hereford's motion and deemed Repwest's
reply to the counterclaim to have been served. Hereford
to Insurance Law § 5105(b), "[t]he sole remedy of
any insurer or compensation provider to recover on a claim
arising pursuant to subsection (a) hereof, shall be the
submission of the controversy to mandatory arbitration
pursuant to procedures promulgated or approved by the
superintendent" (see Matter of Infinity Indem. Ins.
Co. v Hereford Ins. Co., 149 A.D.3d 1075, 1076; see
also State Farm Mut. Auto. Ins. Co. v Nationwide Mut. Ins.
Co., 150 A.D.2d 976, 977). Contrary to Hereford's
contention, since its counterclaim is for loss transfer
pursuant to section 5105(a), the counterclaim is subject to
mandatory arbitration and the Supreme Court had no subject
matter jurisdiction over the counterclaim (see
Insurance Law § 5105[b]; State Farm Mut. Auto. Ins.
Co. v Nationwide Mut. Ins. Co., 150 A.D.2d at 977-978).
Repwest's complaint and its disclaimer of coverage for
the subject incident do not dictate a different result
(see State Farm Mut. Auto. Ins. Co. v Nationwide Mut.
Ins. Co., 150 A.D.2d at 977-978; DTG Operations,
Inc. v American Tr. Ins. Co., 2013 NY Slip Op 30119[U]
[Sup Ct, NY County]; 11 NYCRR 65-4.11[a]).
Repwest did not seek dismissal of the counterclaim in the
Supreme Court, "a court's lack of subject matter
jurisdiction is not waivable, but may be [raised] at any
stage of the action, and the court may, ex mero motu
[on its own motion], at any time, when its attention is
called to the facts, refuse to proceed further and dismiss
the action" (Financial Indus. Regulatory Auth., Inc.
v Fiero, 10 N.Y.3d 12, 17 [internal quotation marks
omitted]; see Caffrey v North Arrow Abstract &
Settlement Servs., Inc., 160 A.D.3d 121, 133). Since the
court lacked subject matter jurisdiction over Hereford's
counterclaim, the counterclaim should have been dismissed
(see Empire Ins. Co. v Metropolitan Suburban Bus
Auth., 159 A.D.2d 312, 312; see also State Farm Mut.
Auto. Ins. Co. v Nationwide Mut. Ins. Co., 150 A.D.2d at
light of our determination, we need not reach the