New York's “no-fault” benefits law is designed to compensate victims of motor vehicle accidents quickly and with a minimum of legal wrangling. But there are cases where an insurer who pays no-fault benefits may attempt to recover its costs from another insurer. For example, if you receive no-fault benefits from your insurer after an accident caused by another driver, your insurer may later seek arbitration to compel reimbursement from the other driver's insurance company. But this does not hold true in every accident involving a motor vehicle, as a recent decision by a New York appeals court illustrates.
Matter of Fiduciary Insurance Company v. American Bankers Insurance Company of Florida
In October 2006, a man was riding a horse along a path in Queens. The horse “suddenly bolted into the roadway,” according to court records, colliding with a taxicab. The rider was thrown from the horse and suffered serious injuries to his head and leg.
The rider then sought no-fault benefits from the taxicab's insurance company. The insurer ended up paying the rider about $60,000. The horse's owner had no insurance on the animal. But the horse was kept at a nearby stable. The rider filed a personal injury lawsuit against the owner and operators of the stable, but Queens Supreme Court dismissed the case in 2009, citing the plaintiff's “assumption of risk” when he chose to ride the house.
The stable also had a commercial liability policy, which provided no-fault coverage for accidents caused by the use of “mobile equipment,” i.e., machinery not intended for use on public roads. In 2012, the taxicab insurer that initially paid no-fault benefits to the rider filed a claim against the stable's commercial insurer, seeking reimbursement. Under New York law, any such dispute between insurers must be submitted to arbitration. Before the arbitrator, the taxicab's insurer argued its customer was not at fault for the accident—as the horse hit the taxi, not the other way around—and the stable was negligent in allowing the horse to ride on a path so close to a busy roadway.
The stable's insurer did not contest or participate in the arbitration. Nevertheless, the arbitrator entered an award (judgment) for the stable's insurer, holding the insurance policy at issue did not apply to motor vehicles, and therefore the taxicab's insurer could not seek reimbursement under the laws governing no-fault benefits.
The taxicab's insurer then filed a petition in Queens Supreme Court to vacate the arbitrator's award. The petitioner argued the arbitrator improperly raised an “affirmative defense” on behalf of the no-show insurer for the stable. The Supreme Court disagreed and upheld the award, as did the Appellate Division, Second Department, in a July 29 opinion.
As the Second Department explained, the arbitration provision only applies to insurers who cover motor vehicles. A horse, obviously, is not a motor vehicle, nor is it a form of “mobile equipment” as specified in the policy at issue in this case. Furthermore, the stable itself was not a party to the underlying accident. It merely boarded a horse owned by someone else.
Need Help Dealing With Insurers?
In this case, the victim was fortunate in that he received no-fault benefits as partial compensation for his injuries. The litigation here was a matter between insurance companies. Still, whenever dealing with no-fault benefits and insurers, it is important you have the assistance of an experienced New York personal injury attorney. Contact our offices today if you need to speak with an attorney right away.