SUPREME COURT OF THE STATE OF NEW YORK

Appellate Division, Fourth Judicial Department

920 

CA 14-02294 

PRESENT: SCUDDER, P.J., SMITH, CENTRA, PERADOTTO, AND CARNI, JJ. 

 

IN THE MATTER OF PROGRESSIVE CASUALTY 

INSURANCE CO., PETITIONER-RESPONDENT,

V MEMORANDUM AND ORDER

JEFFREY BEARDSLEY, RESPONDENT, 

AND MERCHANTS MUTUAL INSURANCE CO., 

RESPONDENT-APPELLANT. 

 

HISCOCK & BARCLAY, LLP, ROCHESTER (JOSEPH A. WILSON OF COUNSEL), FOR

RESPONDENT-APPELLANT. 

LAW OFFICE OF KEITH D. MILLER, LIVERPOOL (KEITH D. MILLER OF COUNSEL),

FOR PETITIONER-RESPONDENT. 

 

Appeal from an order of the Supreme Court, Oswego County (Norman

W. Seiter, Jr., J.), entered June 24, 2014 in a proceeding pursuant to

CPLR article 75. The order, among other things, determined that

respondent Merchants Mutual Insurance Co., and petitioner Progressive

Casualty Insurance Co., are coinsurers for purposes of the SUM claims

of respondent Jeffrey Beardsley. 

It is hereby ORDERED that the order so appealed from is

unanimously modified on the law by vacating the second ordering

paragraph and as modified the order is affirmed without costs in

accordance with the following memorandum: Jeffrey Beardsley

(respondent) sustained injuries when he was struck by a vehicle while

walking across a parking lot, and he subsequently recovered the full

$25,000 policy limit from the insurer of that vehicle. Respondent

thereafter submitted a claim for supplemental uninsured/underinsured

motorist (SUM) benefits pursuant to a personal automobile policy

issued by petitioner, Progressive Casualty Insurance Co.

(Progressive), to his father, Jeffrey F. Beardsley (Beardsley), which

listed respondent as an insured driver and household resident. 

Respondent also submitted a claim for SUM benefits under a commercial

automobile policy issued by respondent Merchants Mutual Insurance Co.

(Merchants) with respect to certain vehicles associated with

Beardsley’s excavation business. Merchants disclaimed coverage on the

ground that Beardsley was “insured as a corporation,” and the SUM

coverage provided in its policy did not extend to respondent inasmuch

as he was not a member of Beardsley’s excavation business and was not

occupying an insured vehicle at the time of the incident. Respondent

thereafter demanded arbitration with respect to his claims for SUM

coverage under each policy. Progressive commenced this proceeding
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CA 14-02294 

pursuant to CPLR article 75 seeking a temporary stay of arbitration

pending the completion of discovery. In addition, Progressive sought

an order determining that Merchants is a coinsurer for purposes of

respondent’s SUM claims and that any SUM award be paid in proportion

to each insurer’s policy limit. In its answer, Merchants asserted,

inter alia, a “counterclaim and crossclaim” alleging that its policy

was issued to Beardsley “as a ‘corporation’ engaged in excavation

operations,” and that respondent did not qualify as an insured because

a policy issued to a corporation does not provide SUM coverage for

family members of its officers or shareholders. Merchants thus sought

a permanent stay of arbitration. In reply, Progressive asserted that

the named insured on Merchants’ policy was Beardsley as an individual,

and that there was no indication that Beardsley was a corporation. 

Supreme Court granted Progressive’s petition for a temporary stay of

arbitration, and the court determined that Progressive and Merchants

were coinsurers for purposes of respondent’s SUM claims and that any

award would be payable on a pro rata basis according to the insurer’s

policy limits. Merchants appeals.

“Where an automobile insurance policy contains a SUM provision

and is issued to an individual, that individual and others in his or

her family may be afforded SUM coverage under the policy when such

person is injured in any vehicle, including a vehicle owned and

insured by a third party” (Roebuck v State Farm Mut. Auto. Ins. Co.,

80 AD3d 1126, 1127). “Where such a policy is issued to a corporation,

however, the SUM provision does not follow any particular individual,

but instead ‘covers any person [injured] while occupying an automobile

owned by the corporation or while being operated on behalf of the

corporation’ ” (id., quoting Buckner v Motor Veh. Acc. Indem. Corp.,

66 NY2d 211, 215). Here, the declarations page of Merchants’

commercial automobile policy states that the policy was issued to

“Jeffrey F Beardsly [sic]” as the named insured, but the term

“corporation” is listed on the “form of business” line. Inasmuch as

the insurers do not contend that the Merchants’ policy is ambiguous

but, rather, they dispute whether it was issued to an individual or a

corporation, and the record does not establish whether “Jeffrey F

Beardsly [sic]” is a corporation (cf. Buckner, 66 NY2d at 212-213;

Roebuck, 80 AD3d at 1127-1128), we conclude under the circumstances of

this case that a temporary stay of arbitration is warranted for the

further reason that additional discovery is needed to determine

whether the Merchants’ policy was issued to an individual or a

corporation (see generally Matter of AIG Claims Servs., Inc. v Bobak,

39 AD3d 1178, 1179). We therefore modify the order accordingly.

Entered: November 20, 2015 Frances E. Cafarell

Clerk of the Court