Banegas v. GEICO Ins. Co.

Decision Date19 December 2018
Docket Number2017–08865,Index No. 1776/17
Citation167 A.D.3d 873,90 N.Y.S.3d 260
Parties In the Matter of Marvin BANEGAS, Appellant, v. GEICO INSURANCE COMPANY, Respondent.
CourtNew York Supreme Court — Appellate Division

Robert K. Young & Associates, P.C., Merrick, N.Y. (Jack Cutrone of counsel), for appellant.

Russo & Tambasco, Melville, N.Y. (Susan J. Mitola of counsel), for respondent.

ALAN D. SCHEINKMAN, P.J., RUTH C. BALKIN, SYLVIA O. HINDS–RADIX, HECTOR D. LASALLE, JJ.

DECISION & ORDER

In a proceeding pursuant to CPLR article 75 to vacate so much of an arbitration award dated March 2, 2017, as denied the petitioner's claim for uninsured motorists' benefits, the petitioner appeals from an order of the Supreme Court, Nassau County (Anthony L. Parga, J.), dated July 7, 2017, which denied the petition and dismissed the proceeding.

ORDERED that the order is reversed, on the law, with costs, the petition is granted to the extent that so much of the arbitration award as denied the petitioner's claim for uninsured motorist benefits is vacated, and the matter is remitted to the Supreme Court, Nassau County, for further proceedings, including directing a new hearing before a different arbitrator.

The petitioner contends that on March 14, 2016, he and his girlfriend were passengers in a motor vehicle owned by Pedro Guerrero (hereinafter the Guerrero vehicle) that was being operated by Kenia Arias. The Guerrero vehicle was stopped in traffic on Front Street in Nassau County, when it was struck by an unidentified "hit and run" motor vehicle that fled the scene. The petitioner demanded arbitration of his uninsured motorist claim, and the respondent, GEICO Insurance Company (hereinafter GEICO), did not move to stay arbitration.

At the arbitration hearing, the petitioner and his girlfriend testified and their medical records were introduced into evidence. The arbitrator, over objection, allowed a continuance of the hearing for GEICO to call Guerrero and Arias as witnesses. As is relevant to this appeal, Arias testified that the petitioner was not occupying the Guerrero vehicle at the time of the accident. The arbitrator credited Arias' testimony, finding her to be "[t]he only fully independent and fully credible witness to have testified in this matter," and further finding "that [the petitioner] was not in the vehicle at the time of this accident."

The petitioner commenced this proceeding pursuant to CPLR 7511(b) to vacate so much of the arbitration award as denied his claim for uninsured motorists' benefits, on the ground that the arbitrator exceeded his powers by considering the issue of whether the petitioner was occupying the vehicle at the time of the accident, because that issue involved a contractual coverage defense which GEICO waived when it failed to seek a stay of arbitration. The Supreme Court found that the arbitration award was rationally based and was not arbitrary and capricious. The court denied the petition and dismissed the proceeding.

An arbitration award may be vacated if the court finds that the rights of the moving party were prejudiced by (1) corruption, fraud, or misconduct in procuring the award; (2) partiality of an arbitrator appointed as a neutral arbitrator; (3) the arbitrator exceeding his or her power; or (4) the failure to follow the procedures of CPLR article 75 (see CPLR 7511[b] ). In addition, an arbitration award may be vacated if it violates strong public policy, is irrational, or clearly exceeds a specifically enumerated limitation on the arbitrator's power (see Matter of Kowaleski [New York State Dept. of Correctional Servs.], 16 N.Y.3d 85, 90–91, 917 N.Y.S.2d 82, 942 N.E.2d 291 ; Matter of United Fedn. of Teachers, Local 2, AFT, AFL–CIO v. Board....

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    ...stated, an arbitrator exceeds his or her authority by reaching issues not raised by the parties ( Matter of Banegas v. GEICO Ins. Co., 167 A.D.3d 873, 875, 90 N.Y.S.3d 260 [2d Dept. 2018] ; Matter of Slocum v. Madariaga, 123 A.D.3d 1046, 1047, 999 N.Y.S.2d 483 [2d Dept. 2014] ). CPLR 7511(c......
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    ...Police Benevolent Assn. v. State of New York, 94 N.Y.2d 321, 326, 704 N.Y.S.2d 910, 726 N.E.2d 462 ; Matter of Banegas v. GEICO Ins. Co., 167 A.D.3d 873, 874, 90 N.Y.S.3d 260 ). With respect to the public policy exception, "a court may vacate an arbitral award where strong and well-defined ......
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