Aetna Cas. and Sur. Co. v. Mevorah

• Decision Date: 11 February 1991
• Citation: 566 N.Y.S.2d 842,149 Misc.2d 1011
• Parties: In the Matter of the Application of AETNA CASUALTY AND SURETY COMPANY, Petitioner, v. Rhoda MEVORAH, Respondent, and Norma Crummey and Liberty Mutual Insurance Company, Additional Respondents. /IAS, Part 27
• Court: New York Supreme Court

Page 842

566 N.Y.S.2d 842

149 Misc.2d 1011

In the Matter of the Application of AETNA CASUALTY AND SURETY COMPANY, Petitioner, v. Rhoda MEVORAH, Respondent and Norma Crummey and Liberty Mutual Insurance Company Additional Respondents.

Supreme Court, Nassau County Trial/IAS, Part 27.

Feb. 11, 1991.

Rivkin, Radler, Bayh, Hart & Kremer, Uniondale, for petitioner.

Harvey Sorid, Brooklyn, for additional respondent, Norma Crummey.

Aaron P. Metzger, Lake Success, for respondent, Rhoda Mevorah.

Bellofatto, Callahan, Martyn & Toher, Uniondale, for additional respondent, Liberty Mut. Ins. Co.

MARVIN E. SEGAL, Justice.

By Demand dated July 26, 1990, the respondent, RHODA MEVORAH, served the petitioner, AETNA CASUALTY AND SURETY COMPANY, with a Demand for Arbitration with reference to an insurance policy providing uninsured motorist benefits. Said Demand alleges that said respondent was injured in an accident on September 28, 1989, resulting in multiple, serious injuries to her body. Said Demand By Order dated October 4, 1990, the owner of the alleged offending vehicle, NORMA CRUMMEY, and the insurer of the vehicle, LIBERTY MUTUAL INSURANCE COMPANY, were joined as additional respondents in the proceeding, and a temporary stay of arbitration was granted pending a hearing on the issue of whether the vehicle owned by NORMA CRUMMEY was the subject of a policy of insurance affording coverage to the respondent, RHODA MEVORAH. A hearing was conducted on February 4, 1991. Counsel for the petitioner was present at the hearing, as was counsel for each of the three (3) respondents. At the conclusion of the hearing, the Court reserved Decision.

                further alleges that the offending vehicle's insurance company disclaims coverage.   By Notice of Petition to Stay Arbitration dated August 15, 1990, the petitioner moved for an Order permanently staying arbitration on the ground that said respondent failed to submit proof that the alleged offending vehicle was uninsured.   Petitioner moved in the alternative for an Order adding the owner and insurer of the alleged offending vehicle as additional respondents, and directing that a hearing be held to determine the validity of the disclaimer by the alleged offending vehicle's insurer
                

Based upon all the proceedings had herein, the Court makes the following findings of fact: NORMA CRUMMEY purchased a new, fifteen (15) seat van, Vehicle Identification No. 2B5WB31W4FK209704 in 1985. In 1987, she began to utilize the van to transport herself and some friends to work in Manhattan. MRS. CRUMMEY characterized the arrangement as a "car pool". She testified that her friends agreed to pay $3.00 each trip. No details were elicited at trial as to the manner in which MRS. CRUMMEY and her friends arrived at the designated sum. As of September, 1989, MRS. CRUMMEY, several friends with whom she had social relationships, and a number of "nonfriends" traveled to work on a daily basis in MRS. CRUMMEY's van. The "nonfriends" apparently became riders through an acquaintance with someone already using the van to travel to work.

The van, usually driven by MRS. CRUMMEY's husband, would make four (4) trips each day; MRS. CRUMMEY's friends were picked up at Pennsylvania Avenue and Linden Boulevard, in Brooklyn, N.Y., and the "nonfriends" were picked up in Howard Beach. Each passenger paid $3.00 cash for the ride into Manhattan. MR. CRUMMEY returned home with the van and later picked the passengers up in Manhattan and drove them home, again charging each $3.00 for the return trip. The same group of approximately eight (8) passengers utilized the van on a regular, daily basis. The respondent, RHODA MEVORAH traveled to work in the van for a period of two (2) years, prior to September 1989, on a daily basis. Another witness, BONNIE WEINER, rode to work in the van for one and a half (1 1/2) years, on a daily basis, prior to September, 1989. On two (2) occasions, MR. DONOVAN OGILIVIE drove the van, without renumeration, as a favor to MRS. CRUMMEY's husband, who had asked for his help in driving some friends to work.

MRS. CRUMMEY did not provide the passengers with receipts for the $3.00 payment. She did not provide the passengers with any information regarding the cost of gas, tolls, insurance or other expenses incident to the operation of the van. The riders did, however, contribute toward an increase in the cost of tolls. MRS. CRUMMEY testified that she made no profit transporting her friends and the "non-friends" to work.

On or about January 19, 1988, MRS. CRUMMEY executed a New York Automobile Insurance Plan Application for a private passenger vehicle through Phoenix "A Betta" Insurance Brokerage, whereby she sought insurance coverage for the van herein, for use as a pleasure vehicle. The additional respondent, LIBERTY MUTUAL INSURANCE COMPANY, was designated to issue a policy of insurance on the vehicle through the Assigned Risk Plan. A policy of insurance was issued by LIBERTY MUTUAL for the period January 28, 1988 through January 28, 1989, and was renewed for the period January 28, 1989 through January 28, 1990.

The respondent, MEVORAH, commenced an action alleging that she sustained serious multiple injuries as a passenger in MRS. CRUMMEY's van on September 28, 1989. By letter dated May 23, 1990, LIBERTY MUTUAL notified MRS. CRUMMEY, and counsel for RHODA MEVORAH, in writing, that it was denying coverage under the policy of insurance on the basis that "exclusion 5" of the policy provides no coverage for liability arising out of the ownership or operation of a vehicle while it is being used to carry persons or property for a fee.

As set forth hereinabove, based upon this denial of coverage by LIBERTY MUTUAL, RHODA MEVORAH served a Demand for Arbitration under the uninsured motorist provision of her own insurance policy issued by petitioner, AETNA CASUALTY AND SURETY COMPANY. NORMA CRUMMEY joins the petitioner in seeking a permanent stay of arbitration on the basis that the denial of coverage by LIBERTY MUTUAL, based upon the aforesaid exclusion, is invalid. Both parties contend that the denial of coverage based on "exclusion 5" is invalid on the following grounds: (1) LIBERTY MUTUAL failed to prove that it gave reasonable notice of disclaimer pursuant to Insurance Law Section 3420; (2) MRS. CRUMMEY's use of the van can be reasonably defined as a car pool; (3) Public policy which encourages car pooling mandates an expansive definition of the term car pool; (4) the exclusion asserted by LIBERTY MUTUAL fails to provide coverage mandated by applicable law, which excepts from the definition of "private automobile" only those vehicles used as public or livery...