Court Opinion

ID: 5740974
Source: CourtListenerOpinion
Date Created: 2022-01-12 16:41:36.846246+00
Date Added: 2024-06-11T08:41:04.231886
License: Public Domain

Steuer, J. (dissenting).
In September, 1959 petitioner was a passenger in an automobile owned by one Culpepper. There was a collision with another automobile and petitioner was injured. The other automobile was uninsured and petitioner, pursuant to the accident indemnification clause in Culpepper’s policy, demanded arbitration of the issues of negligence and damages between himself and Motor Vehicle Accident Indemnification Corporation (herein MVAIC). The latter refused the demand on the ground that it was not timely. That issue was tried by the court and the demand was found to be timely. Petitioner had also brought suit against Culpepper. This action was settled about the time of the hearings on the question of timeliness. The policy contained a clause excluding MVAIC from liability when the person seeking to recover “shall, without written consent of MVAIC, make any settlement with * 6 K any person or organization who may be legally liable therefor ”.
Immediately on the conclusion of the proceedings as to timeliness, respondent moved to stay arbitration on the basis of this clause. Special Term denied the application with a direction that the issue be included in the matters to be arbitrated. In any event, this provision is improper as it is now recognized that the only matters subject to arbitration are the issues of negligence and damages (Matter of Rosenbaum [Amer. Sur. Co. of N. Y.], 11 N Y 2d 310; Matter of Motor Vehicle Acc. Ind. Corp. [Linder], 17 A D 2d 610). It would follow that whether the quoted clause is a bar to recovery should be determined by the court and not by arbitrators. Respondent has set forth various reasons, namely, waiver, illegality, and actual prior assent to the settlement, why the clause should not be enforced against him. These issues were not litigated below and we believe it is essential that they should be.
The order should be reversed and the matter remitted to Special Term for disposition.
Breitel, J. P., Valente and McNally, JJ., concur in decision; Steuer, J., dissents in opinion in which Eager, J., concurs.
Order entered on October 2, 1961, denying appellant’s motion to stay an arbitration, affirmed.