American Arbitration Ass'n, Matter of

• Decision Date: 29 September 1978
• Citation: 96 Misc.2d 477,409 N.Y.S.2d 196
• Parties: In the Matter of AMERICAN ARBITRATION ASSOCIATION. Otis HICKS and Robert Whitfield, Claimants, v. ROYAL GLOBE INSURANCE COMPANY, Respondent.
• Court: New York Supreme Court

Page 196

409 N.Y.S.2d 196

96 Misc.2d 477

In the Matter of AMERICAN ARBITRATION ASSOCIATION Otis HICKS and Robert Whitfield, Claimants, v. ROYAL GLOBE INSURANCE COMPANY, Respondent.

Supreme Court, Special Term, Bronx County, Part I.

Sept. 29, 1978.

Irving Cohen, New York City, for claimants.

Francis J. Young, Hartsdale, for respondent.

ALEXANDER CHANANAU, Justice:

Claimants move to confirm in part the award and report of the arbitrator and to reverse and disaffirm that part of the award and decision of the arbitrator which declined to make an award for certain medical benefits and which held that claimants must first seek their recovery from the compensation carrier. The respondent cross-moves to confirm the arbitrator's award.

This is a case arising out of an automobile accident which occurred on July 5, 1974 in which claimants were injured in the course of their employment, while passengers in the motor vehicle owned and operated by their employer, which was in collision with the vehicle of a third party. At the root of the controversy presented is the issue of whether the employee is exclusively relegated to the legal remedies available under and flowing from Section 11, the Workmen's Compensation Law, or whether the more recently enacted no-fault legislation (Article 18 of the Insurance Law, Section 671) shall apply, under which first party benefits, which include reimbursement of reasonable and necessary medical benefits, are made available to a victim of a motor vehicle accident.

The arbitrator in rendering his decision on May 19, 1978 determined that the exclusivity of remedy provision of Section 11 of the Workmen's Compensation Law required that he abdicate determination of that part of the claim under no-fault. However, on May 11, 1978, the Court of Appeals in Ryder Truck Lines Inc. v. Maiorano, 44 N.Y.2d 364, 405 N.Y.S.2d 666, 376 N.E.2d 1311, unanimously ruled "that the entitlement of the employee to first party no-fault benefits is to be determined in arbitration". Thus the arbitrator's decision is in conflict with the rule of law expressed in Ryder.

The issue presented on this motion and cross motion is whether the arbitrator's decision, Based on a mistake of law, is within the scope of permissible judicial review.

Various grounds for judicial review are set forth in CPLR 7511, none of which, however, address themselves to the issue presented herein.

There has, however, evolved a body of judicial precedent which has addressed itself to the expansion of the scope of judicial review. A fundamental distinction has been found depending on whether the arbitration proceeding was voluntary or compulsory. Thus, in Garcia v. Federal Insurance Company, 61 A.D.2d 236, 401 N.Y.S.2d 540 (2nd Dept.), the Court held that " * * * the judicial review of compulsory arbitration must be broader than that of voluntary arbitration, because the parties to voluntary arbitration waive their due process right to judicial review, while the parties to compulsory arbitration do not." The standard of review in compulsory arbitration cases only is "whether the award is (sustained) by evidence or other basis in reason, as may be appropriate, and appearing in the record." (Mt. St. Mary's Hospital of Niagara Falls v. Catherwood, 26 N.Y.2d 493, at p. 508, 311 N.Y.S.2d 863, at p. 875, 260 N.E.2d 508, at p. 516.)

The breadth of the legal issues raised herein are analyzed and discussed in a learned and extensive article by my colleague Mr. Justice DiFede in the Syracuse Law Review's Annual Survey of New York Law, Insurance (Final Draft), in the chapter entitled "Arbitration Under No Fault Law" (1978), which, in summarizing the holding in Garcia v. Federal Insurance Co., supra, concludes that in compulsory arbitration the scope of review was that of administrative standards, which means in effect that the award must be supported by...