Case ID: ny-2d_21/html/0281-01.html
Source: Caselaw Access Project
Author: {"author": "Scileppi, J. Keating, J. (dissenting).", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

In the Matter of the Arbitration between Karen A. Napolitano, as Administratrix of the Estate of Edward D. Judge, Deceased, Respondent, and Motor Vehicle Accident Indemnification Corporation, Appellant.
    Argued November 27, 1967;
    decided December 29, 1967.
    
      
      Francis J. Holloway and Warner M. Bouck for appellant.
    I. Since it is undisputed that the total of workmen’s compensation benefits exceed the maximum amount of any possible award under the standard endorsement, a stay of arbitration should be granted. (Matter of Rosenbaum [American Sur. Co. of N. Y.], 11 N Y 2d 310; Matter of Motor Vehicle Acc. Ind. Corp. [Malone], 16 N Y 2d 1027; Matter of Motor Vehicle Acc. Ind. Corp. [Downey], 11 N Y 2d 995; Matter of De Luca [MVAIC], 17 N Y 2d 76; Matter of Durant [MVAIC], 15 N Y 2d 408.) II. Even though the demand for arbitration purports to relate solely to damages for wrongful death and pecuniary loss by reason of death, the standard endorsement requires deduction of workmen’s compensation benefits paid during the lifetime of decedent. (Matter of Edwards v. Motor Vehicle Acc. Ind. Corp., 25 A D 2d 420.) III. The petition for stay of arbitration was timely served.
    
      Forrest N. Case, Jr., for respondent.
    I. Objection to arbitration was not timely made and therefore was waived. (Glimes v. Muszynski, 15 A D 2d 435; Pitti v. Warshaw, 35 Misc 2d 875; Mendoza v. Mendoza, 4 Misc 2d 1060; Montgomery v. East Ridgelawn Cemetery, 182 Misc. 562, 268 App. Div. 857.) II. There is no legal basis shown in the moving papers for a permanent stay of arbitration. (Matter of Rosenbaum [American Sur. Co. of N. Y.], 11 N Y 2d 310; Matter of Durant [MVAIC], 15 N Y 2d 408; Matter of De Luca [MVAIC], 17 N Y 2d 76; Hamilton v. Erie R. R. Co., 219 N. Y. 343; Stutz v. Guardian Cab Corp., 273 App. Div. 4; Paskes v. Buonaguro, 42 Misc 2d 1004; Taylor v. United States Cas. Co., 269 N. Y. 360.)
   Scileppi, J.

On September 19, 1964 the decedent, Edward Daniel Judge, while operating a motor vehicle in the course of his employment, collided with an uninsured vehicle owned and operated by John H. Bulmer, Jr.

The injuries suffered by Mr. Judge necessitated his confinement to a hospital from the date of the accident to February 12,1965. Following a second hospital confinement of eight days, Mr. Judge died on April 25, 1965, allegedly as a result of the accident.

It is undisputed that the decedent, during his lifetime, received more than $10,000 in workmen’s compensation benefits from the Traveler’s Insurance Company.

On May 26,1965, the petitioner filed with MVAIC a notice of intention to file a claim. On the 5th of November, 1965, MVAIC was served with a demand for arbitration on behalf of the decedent’s administratrix. MVAIC moved for a permanent stay of arbitration contending that, since the arbitrator could make no award, there was no issue to arbitrate.

MVAIC pointed out that the standard New York Automobile Accident Indemnification Endorsement contains the following provision under condition 5:

“ (a) The limit of liability of MVAIC for all damages, including damages for care or loss of services, because of bodily injury sustained by one person as the result of any one accident is $10,000 * * *
“(b) Any amount payable under the terms of this endorsement, including amounts payable for care or loss of services, because of bodily injury sustained by one person, shall be reduced by * * * (3) the amount paid and the present value of all amounts payable on account of such bodily injury under any workmen’s compensation law, exclusive of non-occupational disability benefits.”

It argued that, since this court held in Matter of Durant (MVAIC) (15 N Y 2d 408) that workmen’s compensation benefits paid to the insured were to he deducted from the award payable to the insured under the standard MVAIC endorsement and since the insured had received more than $10,000 in workmen’s compensation benefits, the arbitrator was powerless to make an award.

Petitioner attempted to avoid the deduction of workmen’s compensation benefits by seeking in her demand for arbitration “ Damages' for the wrongful death and pecuniary loss to decedent’s next of kin and disbursements by reason of his death in the sum of Ten Thousand Dollars ($10,000) due to an accident occurring on September 19, 1964, on 5th Avenue in the City of Troy, New York, at or near the intersection of Ferry Street, under the New York Automobile Indemnification endorsement of the insurance policy of the said Edward Daniel Judge, deceased.”

MVAIC took the position that the petitioner could not circumvent Durant (supra) by filing a claim for wrongful death and that the payment of workmen’s compensation benefits to the decedent during his lifetime precluded his next of kin from receiving an award under the MVAIC endorsement for wrongful death. The petitioner, of course, argued that her cause of action for wrongful death is a separate and distinct cause of action brought for the benefit of next of kin, and, therefore, the workmen’s compensation benefits paid to the decedent during his lifetime are not deductible from any award to which they would be entitled.

Special Term denied MVAIC’s application holding, inter alia, that there was no threshold question for the court to decide since the resolution of the issue presented by the conflicting contentions of the parties was within the province of the arbitrator.

The Appellate Division affirmed.

The lower courts’ determination that there was no threshold question for the courts to decide was erroneous. This court has repeatedly held that the jurisdiction of the arbitrator under a standard MVAIC endorsement is limited to the fact issues of fault and damages (Matter of De Luca [MVAIC], 17 N Y 2d 76; Matter of MVAIC [Malone], 16 N Y 2d 1027; Matter of Rosenbaum [American Sur. Co. of N. Y.], 11 N Y 2d 310; Matter of MVAIC [Downey], 11 N Y 2d 995). The threshold issue presented by this case, viz.—whether the payment of workmen’s compensation benefits to the decedent in excess of $10,000 precludes his next of kin from receiving an award for wrongful death—is one of law. Since the arbitrator’s jurisdiction is limited to the resolution of the fact question of fault and damages, the courts below should have decided the issue.

It would serve little purpose, however, to remand this case to Special Term to decide a question of law which must ultimately be decided by this court. Since the issue has been fully briefed in this court by both parties and in the interest of avoiding future appellate litigation (Matter of Grace v. Grace Inst., 19 N Y 2d 307, 315), we reach the issue presented and hold that workmen’s benefits paid to the decedent during his lifetime should be set off against an award payable to the next of kin for wrongful death.

Our holding is compelled by the language of the MVAIC endorsement. Section 1 of that endorsement provides: Damages for Bodily Injury Caused by Uninsured Automobiles: MVAIC will pay all sums which the insured or his legal representatives shall be legally entitled to recover as damages from the owner or operator of an uninsured automobile because of bodily injury, sickness or disease, including death resulting therefrom, hereinafter called bodily injury ’, sustained by the insured, caused by accident and arising out of the ownership, maintenance or use of such uninsured automobile ” (emphasis added).

Paragraph (b) of Condition 5 of the MVAIC endorsement specifically provides that any amount payable under the endorsement “ because of bodily injury ” shall be reduced by the amount payable “ on account of such bodily injury under any workmen’s compensation law”. Therefore, since the definition of bodily injury includes death, workmen’s compensation benefits paid to the decedent during his lifetime must be deducted from any award made under the endorsement—whether the award be for personal injury or for death resulting therefrom. No other construction of the endorsement is possible.

Since we have resolved the legal issue in favor of the appellant and have held that the maximum award, including an award for wrongful death, payable under the MVAIC endorsement is $10,000, the stay of arbitration should be granted. Our holding today, coupled with our decision in Durant (supra), renders the arbitrator powerless to make an award. To proceed to arbitration under such circumstances would be an exercise in futility.

Accordingly, the order appealed from should be reversed and a permanent stay of arbitration should be granted.

Chief Judge Fuld (concurring). I, too, am for reversal, and for the reasons stated in the court’s opinion.

Concededly, an injured person (or his estate if he dies) may not recover more than $10,000 from MVAIC. But to hold, as we are doing under constraint of our decision in Matter of Durant (MVAIC) (15 N Y 2d 408), that he may recover nothing from MVAIC, even though he actually suffered damages of $50,000, if his workmen’s compensation benefits amounted to $10,000, seems to me to thwart the very purpose and design of the uninsured motorist legislation which is to place the injured person in as good a position as he would have been in had he been injured by an insured motorist carrying the minimum amount of $10,000. Since, however, the result we are now reaching is compelled by the language contained in the standard uninsured motorist endorsement (Conditions, No. 5, par. [b]) — which had the approval of the Superintendent of Insurance — the Legislature might well consider the advisability of amendatory legislation to eliminate the apparent inequity resulting to the injured person.

At the present time, however, I see no alternative but to reverse.

Keating, J. (dissenting).

The Insurance Law (§ 167, subd. 2-a) provides that “ No policy insuring against loss resulting from liability imposed by law for bodily injury or death * * * arising out of the ownership, maintenance and use of a motor vehicle * * * shall be issued * * * unless it contains a provision whereby the insurer agrees that it will pay to the insured * * * subject to the terms and conditions set forth therein to be prescribed by the board of directors of the Motor Vehicle Accident Indemnification Corporation and approved by the superintendent [of insurance'] ” all sums not exceeding $10,000 in case of the injury or death of one person.

Pursuant to this statute, the board of directors of the corporation, with the consent of the Superintendent of Insurance, formulated the following condition, appearing as condition 5 in the endorsement attached to all policies of insurance:

“ (a) The limit of liability of MVAIC for all damages, including damages for care or loss of services, because of bodily injury sustained by one person as the result of any one accident is $10,000 * * *
“ (b) Any amount payable under the terms of this endorsement, including amounts payable for care or loss of services, because of bodily injury sustained by one person, shall be reduced by * * * (3) the amount paid and the present value of all amounts payable on account of such bodily injury under any workmen’s compensation law, exclusive of non-occupational disability benefits. ’ ’

In Matter of Durant (MVAIC) (15 N Y 2d 408) we sustained the validity of this clause as it applied to a personal injury action even though there was no provision in the statute authorizing the reduction of amounts otherwise payable under the endorsement by the amounts received by the insured pursuant to the Workmen’s Compensation Law.

The purpose of this condition relates to the problem of the subrogation of the rights of the workmen’s compensation carrier and the Motor Vehicle Accident Indemnification Corporation as against the uninsured tort-feasor. (See 1957 Proceedings of the Section on Insurance, Negligence and Compensation Law of the American Bar Association, p. 35.) Thus, in the case at bar, by virtue of the operation of the condition, only the workmen’s compensation carrier would have had recourse against the tort-feasor whereas, if the insured had recovered from both, there would have been a conflict among the two for the limited assets of the tort-feasor.

Where the recovery from the Motor Vehicle Accident Indemnification Corporation is solely for the injuries to the insured— and the insured has personally recovered from the workmen’s compensation carrier, then the condition in the endorsement and the purpose it is designed to effectuate might justify the reduction of workmen’s compensation benefits from the amount otherwise owed by the Motor Vehicle Accident Indemnification Corporation, even absent legislative authorization.

A different problem presents itself when the action is being brought, not for the benefit of the injured party, who has already received compensation for the same injury, but for the benefit of the family of the deceased to whom the Legislature has given a right to recover against the MVAIC.

The basis of the statutory creation of the wrongful death action was outlined by Chief Judge (then Associate Judge) Cardozo long ago and it has considerable bearing on the problem presented here. Nearly everywhere,” wrote the Chief Judge, “ the principle is now embodied in statute that the next of kin are wronged by the killing of their kinsman. The family becomes a legal unit, invested with rights of its own, invested with an interest in the continued life of its members, much as it was in primitive law. * * * The damages may be compensatory or punitive according to the statutory scheme * * * In either case, the plaintiffs * * * sue to redress an outrage peculiar to themselves,” (Loucks v. Standard Oil Co., 224 N. Y. 99,104.)

The Legislature specifically provided that wrongful death actions may be enforced under the provisions creating the Motor Vehicle Accident Indemnification Corporation. I see no warrant in that legislation for denying a widow and children redress for the violation of their ‘ ‘ peculiar ’ ’ right merely because the deceased received workmen’s compensation benefits for lost time and medical expenses prior to his death. No administrative regulation may deprive those beneficiaries of the right to commence an action for wrongful death.

I would affirm the order of the Appellate Division and remand the case for arbitration of the remaining issues.

Opinion by Judge Scileppi. All concur, Chief Judge Fuld in a separate opinion in which Judges Burke and Bergan also concur, except Judge Keating who dissents and votes to affirm in an opinion.

Order reversed, without costs, and matter remitted to Special Term for further proceedings in accordance with the opinion herein. 
      
      . The term bodily injury is defined earlier in the endorsement to include death actions.
     
      
      . The workmen’s compensation carrier’s right to subrogation is granted pursuant to section 29 of the Workmen’s Compensation Law. This right does not otherwise inhere to other personal injury insurers (Ann., 70 ALR 2d 464, 475). It is for this reason that nonoecupational disability benefits received by an injured party need not be deducted from the amount recoverable from MVAIC.