Liberty Mut. Ins. Co. v. Lodha
| Decision Date | 04 April 1986 |
| Parties | Matter of LIBERTY MUTUAL INSURANCE COMPANY, Petitioner, v. Tara LODHA, Respondent. |
| Court | New York Supreme Court |
Sheehan, Hockett, Jennings & Ponzan, Lake Success, for petitioner.
Bertram Herman, P.C., East Norwich, L.I., for respondent.
This is an application by petitioner, Liberty Mutual Insurance Company, to vacate an arbitration award dated August 28, 1985 and for a trial de novo. Respondent cross-moves for an order confirming the award.
Respondent purchased motor vehicle liability insurance from the petitioner, including an "Underinsured Motorist" endorsement. The endorsement provided coverage for bodily injury sustained by respondent in the event she was injured as the result of an accident with a motor vehicle carrying less bodily injury liability insurance coverage than provided by her own policy.
On March 27, 1984, respondent was injured in a motor vehicle accident. Respondent's action against the other vehicle was settled for the liability policy limit on that vehicle of $10,000. Alleging that her injuries exceeded $10,000, respondent filed a demand for arbitration upon petitioner pursuant to the Underinsured Motorist endorsement contained in her policy. Upon completion of a hearing, the arbitrator awarded $65,000 to respondent.
It is petitioner's contention that since the arbitration award exceeds $10,000, it is not bound by the decision pursuant to the terms of its Underinsured Motorist endorsement. The endorsement provides, in pertinent part, for binding arbitration only in the event a sum of $10,000 or less is awarded to its insured. If a greater sum is awarded, the determination is not binding and either party may elect to proceed to a trial de novo.
Respondent asserts that petitioner waived its rights to seek vacatur of the award by forgoing the arbitration provisions contained in the Underinsured Motorist endorsement and participating in the method of arbitration prescribed for binding arbitration in the case of "uninsured" motorist claims. Respondent further maintains that the non-binding arbitration clause is void as against public policy. Moreover, she urges that, even assuming petitioner is entitled to vacate the arbitration award, the trial in this matter should be limited to an assessment of damages.
The Motor Vehicle Accident Indemnification Corporation requires that endorsements for uninsured motorist coverage...
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