Gastworth v. Merchants Mut. Ins. Co.

• Decision Date: 19 June 1979
• Parties: In re Arbitration between Goldie GASTWORTH, Petitioner-Respondent, and MERCHANTS MUTUAL INSURANCE COMPANY, Respondent-Appellant.
• Court: New York Supreme Court — Appellate Division

Page 689

417 N.Y.S.2d 689

70 A.D.2d 823

In re Arbitration between Goldie GASTWORTH, Petitioner-Respondent,

and

MERCHANTS MUTUAL INSURANCE COMPANY, Respondent-Appellant.

Supreme Court, Appellate Division, First Department.

June 19, 1979.

S. G. Nicholson, Jr., New York City, for petitioner-respondent.

E. G. O'Loughlin, New York City, for respondent-appellant.

Before KUPFERMAN, J. P., and BIRNS, FEIN, LUPIANO and ROSS, JJ.

MEMORANDUM DECISION.

Order, Supreme Court, New York County, entered September 7, 1978, which modified the arbitrator's award from $3,000., to $7,307.60, plus statutory interest, modified, on the law, without costs and disbursements, to the extent of remanding to the arbitrator for consideration of possible error in calculation, and otherwise affirmed.

In compulsory arbitration the test on review is "whether the award is supported by evidence or other basis in reason, as may be appropriate and appearing in the record." Mount St. Mary's Hospital v. Catherwood 26 N.Y.2d 493, at 508, 311 N.Y.S.2d 863, at 874, 260 N.E.2d 508, at 516-517. This concept was expanded in Caso v. Coffey, 41 N.Y.2d 153, at 158, 391 N.Y.S.2d 88, at 91-92, 359 N.E.2d 683, at 686, as follows: "An award may be found on review to be rational if any basis for such a conclusion is apparent to the court . . .. (I)t need only appear from the decision of the arbitrators that the criteria specified in the statute were 'considered' in good faith and that the resulting award has a 'plausible basis'."

We cannot tell from the record the basis used by the arbitrator in reducing petitioner-respondent's uncontested medical bills from $7307.60 to $3000. See § 671 Insurance Law.

All concur except FEIN and LUPIANO, JJ., who dissent in a memo by FEIN, J., as follows:

On this appeal from a judgment of the Supreme Court, New York County, modifying an arbitrator's award under the "no-fault" insurance law, Insurance Law § 670 Et seq., it is undisputed that claimant submitted proof of medical expenses totalling $7,307.60. However, the arbitrator awarded the sum of $3,000 without explaining the basis for his determination. Claimant's application for modification of the arbitrator's award pursuant to CPLR § 7509 was denied by the arbitrator, without explanation.

The majority, in remanding to the arbitrator "for consideration of possible error in calculation", does so because it "cannot tell from the record the basis used by the arbitrator" in arriving at his award. This suggests that the arbitrator is required to explain or state the reasons for his award. I disagree.

Since this is a compulsory arbitration under the "no-fault" insurance law (Insurance Law § 675, subd. 2), the scope of judicial review is broader than in a voluntary arbitration (Mount St. Mary's Hospital v. Catherwood, 26 N.Y.2d 493, 508, 311 N.Y.S.2d 863, 874, 260 N.E.2d 508, 519; Caso v. Coffey, 41 N.Y.2d 153, 391 N.Y.S.2d 88, 359 N.E.2d 683; Carlo Service Corp. v. Rachmani, 64 A.D.2d 579, 407 N.Y.S.2d 700; Matter of Furstenburg v. Aetna Casualty & Surety Co. and Allstate Insurance Co., App.Div., 415 N.Y.S.2d 849). However, the rule to be gleaned from these cases is that the Court is not to interfere with the arbitrator's determination if it appears to have a rational basis in the record. The rule does not require that the arbitrator set forth his rationale.

The arbitrator was under no obligation to state his reasons, and we are powerless to require him to do so or to set aside his determination for failure to do so (Matter of Bay Ridge Medical Group v. Health Insurance Plan of Greater New York, 22 A.D.2d 807, 254 N.Y.S.2d 616; Matter of Willow Fabrics (Carolina Freight Carriers Corp.), 20 A.D.2d 864, 248 N.Y.S.2d 509). Special Term assumed that the arbitrator had reduced the claim by payments made to the claimant under Medicare, described as "Medicaid", and accordingly modified the award to increase the amount thereof for medical expenses from $3,000 to $7,307.60. No basis appears in the arbitrator's award or elsewhere in the record for Special Term's assumption. As Special Term noted, all of claimant's bills had been paid by Medicare, and if a set-off were permissible, the entire claim should have been disallowed. However, at the time of the accident and the arbitration, Insurance Law § 671.2(b) did not allow a set-off for Medicare...