In re the Arbitration between Durant & Motor Vehicle Accident Indemnification Corp.

Majority

p. 408

In the Matter of the Arbitration between Santiago Durant, Respondent, and Motor Vehicle Accident Indemnification Corporation, Appellant.

Argued March 17, 1965;

decided April 22, 1965.

p. 409

Patrick J. Hughes for appellant.

I. The legislative history of the MVAJC law demonstrates that the endorsement provisions for deduction of workmen’s compensation payments were known to and approved by the Legislature. (Shuba v. Greendonner, 271 N. Y. 189 ; Matter of Phillips [Amer. Cas. Co.], 9 N Y 2d 873 ; Matter of Four Maple Drive Realty Corp. v. Abrams, 2 A D 2d 753 ; Wilbur v. United States, 281 U. S. 206 ; Anderson v. Erie R. R. Co., 223 N. Y. 277 ; People ex rel. Wallington Apts. v. Miller, 288 N. Y. 31 ; Dillehay v. Texas Ins. Co., 130 Tex. 197 ; Travelers Ind. Co. v. Wells, 316 F. 2d 770 ; Matter of Marburg v. Cole, 286 N. Y. 202 ; Red Hook Cold Stor. Co. v. Department of Labor, 295 N. Y. 1 ; Hotel Armstrong v. Temporary State Housing Rent Comm., 11 A D 2d 395 ; Beck v. Teachers’ Retirement Bd., 15 A D 2d 223 ; Matter of Old Republic Life Ins. Co. v. Wikler, 9 N Y 2d 524 .) II. The legislative omission of an express provision for deduction of workmen’s compensation payments made to a “qualified person” did not evince a legislative intent that the MVAIC endorsement should omit provision for such deduction. (Darweger v. Staats, 267 N. Y. 290 ; Hotel Armstrong v. Temporary State Housing Rent Comm., 11 A D 2d 395 ; Beck v. Teachers’ Retirement Bd.,

p. 410

15 A D 2d 223 ; Szold v. Outlet Embroidery Supply Co., 274 N. Y. 271 ; People v. Friedman, 302 N. Y. 75 ; Bucho Holding Co. v. Temporary State Housing Rent Comm., 11 N Y 2d 469 .) III. The Workmen’s Compensation Law does not prohibit the MVAIC endorsement provision for deduction of compensation payments nor does it give a lien to the compensation carrier upon any recovery from MVAIC. (General Aniline & Film Corp. v. Schraeder & Son, 12 N Y 2d 366 ; Matter of Martin v. C. A. Prods. Co., 8 N Y 2d 226 ; Commissioners of State Ins. Fund v. Pokoik, 11 Misc 2d 1084 ; Moeller v. Associated Hosp. Serv. of Capital Dist., 304 N. Y. 73 ; Commissioners of State Ins. Fund v. Miller, 4 A D 2d 481 .) IV. The court below was required to enforce the endorsement provision for deduction of workmen’s compensation payments in the absence of evidence of legislative intent not to allow such deductions. (Matter of Marchand v. Mead-Morrison Mfg. Co., 226 App. Div. 397 , 252 N. Y. 284 ; Matter of Amalgamated Watch Workers [ Jaeger Watch Co.], 270 App. Div. 802 ; Matter of Western Union Tel. Co. [ACA], 299 N. Y. 177 ; Dodds v. Hakes, 114 N. Y. 260 ; Halstead v. Seaman, 82 N. Y. 27 ; Matter of Rosenbaum [Amer. Sur. Co.], 11 N Y 2d 310 ; Matter of Motor Vehicle Acc. Ind. Corp. [Downey], 11 N Y 2d 995 ; Matter of Motor Vehicle Acc. Ind. Corp. [Brown], 15 A D 2d 578 ; Anderson v. Erie R. R. Co., 223 N. Y. 277 ; People ex rel. Wallington Apts. v. Miller, 288 N. Y. 31 .) V. Special Term was not required to award interest on the arbitrator’s award from the date of its rendition. Its refusal to do so should not have been upset by the court below. (Matter of Feuer Transp. [Local No. 445], 295 N. Y. 87 ; Bender v. Bloom, 223 App. Div. 644 ; Matter of Colwell Worsted Mills [Glass], 228 App. Div. 150 ; Electric Steel Elevator Co. v. Kam Malting Co., 112 App. Div. 686 ; Matter of City of New York [Rockaway Beach], 288 N. Y. 51 ; Matter of Ittleman [City of New York], 286 N. Y. 150 ; Lenart Constructors v. State of New York, 6 Misc 2d 473 ; Matter of Mossman [MVAIC], 19 A D 2d 842 ; Schwartz v. Greenberg, 304 N. Y. 250 .)

Seymour H. Metnick for respondent.

I. The arbitrator’s award was correct on the law. (Matter of Guardian Life Ins. Co. v. Chapman, 302 N. Y. 226 ; Metropolitan Life Ins. Co. v. Durkin, 276 App. Div. 394 , 301 N. Y. 376 ; McCarthy v. Motor

p. 411

Vehicle Acc. Ind. Corp., 16 A D 2d 35 ; Matter of Hering, 133 App. Div. 293 , 196 N. Y. 218 .) II. Even if the arbitrator’s award were not correct on the law, the court is without power to correct that alleged error. (Matter of Rosenbaum [Amer. Sur. Co. of N. Y.], 11 N Y 2d 310 ; Matter of Dembitzer [Gutchen], 3 A D 2d 211 , 3 N Y 2d 851 ; Matter of S. & W. Fine Foods [Off. Employees Int. Union], 8 A D 2d 130 , 7 N Y 2d 1018 ; Matter of Phillips [Amer. Cas. Co.], 10 A D 2d 689 , 9 N Y 2d 873 ; Matter of Kluger [Thomas—MVAIC], 18 A D 2d 704 .) III. The court was without power to modify or correct the award because MVAIC made no motion therefor. (Raven Elec. Co. v. Linzer, 302 N. Y. 188 .) IV. Special Term erred in refusing to grant interest on the award. The Appellate Division properly granted interest on the award, but only from the date of the award instead of from the date of the accident. (Matter of East India Trading Co. [Halari], 280 App. Div. 420 , 305 N. Y. 866 .)

The petitioner’s demand for arbitration was in the role of an “ insured ’ ’ under the terms of a motor vehicle liability policy which contained an endorsement providing coverage by the Motor Vehicle Accident Indemnification Corporation against injury by an uninsured vehicle in pursuance of subdivision 2-a of section 167 of the Insurance Law.

This subdivision also authorizes the board of directors of the corporation to prescribe the conditions of coverage subject to the approval of the Superintendent of Insurance. The endorsement setting up arbitration expressly provided that ‘ ‘ Any amount payable ” under the terms of the endorsement “ shall be reduced by ” amounts paid under any workmen’s compensation law.

Appellant was entitled, therefore, to have deducted from the $10,000 found by the arbitrator as the amount payable the sum of $6,710 paid petitioner as workmen’s compensation benefits. That a “Qualified person ” (not an insured) making a claim under section 610 of the Insurance Law would not have an award reduced by compensation payments does not invalidate the specific terms of the submission to arbitration under a valid policy endorsement. Claimant was entitled to interest from the time of the award under sections 480 and 1464 of the Civil Practice Act then in effect.

Dissent

p. 412

The order of the Appellate Division should be modified to the extent of deducting workmen’s compensation benefits from the award and, as so modified, affirmed, without costs.

We dissent and vote to affirm, that is, to confirm the arbitrator’s award which in this Motol’ Vehicle Accident Indemnification Corporation (MVAIC) case (petitioner injured by uninsured car) computed the damages at $18,000 and allowed recovery against MVAIC of the maximum of $10,000, refusing to deduct therefrom workmen’s compensation benefits received by petitioner in the amount of $6,710.95.

Petitioner-respondent was an “Insured” person under MVAIC provisions (Insurance Law, § 601) —that is, he was one of the insureds covered by an automobile liability policy which contained a paid-for rider mandated by subdivision 2-a of section 167 of the Insurance Law and which covenanted to pay him “ all sums ” not exceeding $10,000 which he should “ be legally entitled to recover as damages from the owner or operator of an uninsured automobile ”.

The statute (§ 167, subd. 2-a) which commands the issuance of the policy rider plainly says and means that such an insured person shall recover from MVAIC all his legally recoverable damages up to $10,000. Everyone who has written on the subject has stated or assumed that the statutory purpose was to afford to the injured person the same protection as he would have were his tort-feasor covered by the compulsory $10,000 automobile liability policy (see N. Y. Legis. Annual, 1958, pp. 244, 299, 436, 473; also the legislative “ Declaration of purpose ” in Insurance Law, § 600; McCarthy v. MVAIC, 16 A D 2d 35 , 38, affd. 12 N Y 2d 922 ; 8 Buffalo L. Rev. 215, 239). Despite all this, the automobile liability insurance policy rider as written announced that any amount payable thereunder should be reduced by amounts received by the injured person and workmen’s compensation benefits. Not only is there nothing in the statute to authorize such a limitation but it defeats the legislative intent of full coverage up to $10,000. It attempts to require deduction of workmen’s compensation moneys even though there is no such deduction under a standard automobile liability policy, to the coverage of which this MVAIC coverage is intended to be equal. And the Legislature itself affirmatively

p. 413

manifested an intent not to allow such reduction. When it legislated as to the MVAIC rights of a so-called “ Qualified person ” (one not covered by a liability policy of his own but injured by a hit-run driver or uninsured driver) it did not allow the deduction of workmen’s compensation payments.

Since there was this clear demonstration of legislative intent, MVAIC and the Superintendent of Insurance must be held to have acted illegally when the former adopted and the latter approved a policy rider permitting the $10,000 limit to be cut down by deduction of compensation payments. The requirement of approval by the Superintendent (Insurance Law, § 167-a) of the terms of the rider cannot be stretched into a grant to the Superintendent to perform an essentially legislative act contrary to the purpose and intent of the Legislature itself.

It is suggested that this allowance for compensation payments is necessary so that the injured person may not have “ duplication of benefits ”. The phrase is meaningless in this context. “ Duplication ” is always present when the injured person has other contemporaneous sources of payment. It still remains that there is nothing in the Insurance Law permitting MVAIC thus to limit or condition its statutorily imposed liability.

The order should be affirmed.

Judges Fuld, Van Voorhis, Burke, Scileppi and Bergan concur in Per Curiam opinion; Chibe Judge Desmond dissents and votes to affirm in a memorandum in which Judge Dye concurs.

Order modified, without costs, in accordance with the opinion herein and, as so modified, affirmed.

Cases cited

Shuba v. Greendonner 271 N. Y. 189 N.Y. 1936-05-19 p. 409
In re Arbitration between Phillips & American Casualty Co. 9 N Y 2d 873 N.Y. 1961-04-27 p. 409, p. 411
Wilbur v. United States ex rel. Kadrie 281 U. S. 206 SCOTUS 1930-04-14 p. 409
Anderson v. Erie Railroad 223 N. Y. 277 N.Y. 1918-04-23 p. 409, p. 410
People ex rel. Wallington Apartments, Inc. v. Miller 288 N. Y. 31 N.Y. 1942-04-23 p. 409, p. 410
Marburg v. Cole 286 N. Y. 202 N.Y. 1941-07-29 p. 409
Red Hook Cold Storage Co. v. Department of Labor 295 N. Y. 1 N.Y. 1945-11-29 p. 409
Hotel Armstrong, Inc. v. Temporary State Housing Rent Commission 11 A D 2d 395 N.Y. App. Div. 1960-11-22 p. 409
Beck v. Teachers' Retirement Board 15 A D 2d 223 N.Y. App. Div. 1961-12-19 p. 409, p. 410
Old Republic Life Insurance v. Wikler 9 N Y 2d 524 N.Y. 1961-04-27 p. 409
Darweger v. Staats 267 N. Y. 290 N.Y. 1935-04-26 p. 409
Szold v. Outlet Embroidery Supply Co. 274 N. Y. 271 N.Y. 1937-05-25 p. 410
People v. Friedman 302 N. Y. 75 N.Y. 1950-12-01 p. 410
Bucho Holding Co. v. Temporary Housing Rent Commision 11 N Y 2d 469 N.Y. 1962-07-06 p. 410
General Aniline & Film Corp. v. A. Schrader & Son, Inc. 12 N Y 2d 366 N.Y. 1963-04-04 p. 410
Claim of Martin v. C. A. Productions Co. 8 N Y 2d 226 N.Y. 1960-07-08 p. 410
Commissioners of State Insurance v. Pokoik 11 Misc 2d 1084 N.Y. Mun. Ct. 1958-01-23 p. 410
Moeller v. Associated Hospital Service 304 N. Y. 73 N.Y. 1952-04-17 p. 410
Commissioners of State Insurance Fund v. Miller 4 A D 2d 481 N.Y. App. Div. 1957-10-22 p. 410
Marchant v. Mead-Morrison Manufacturing Co. 252 N. Y. 284 N.Y. 1929-12-03 p. 410
In re the Arbitration between Western Union Telegraph Co. & American Communications Ass'n 299 N. Y. 177 N.Y. 1949-04-20 p. 410
Dodds v. Hakes 114 N. Y. 260 N.Y. 1889-05-03 p. 410
Halstead v. Seaman 82 N. Y. 27 N.Y. 1880-09-21 p. 410
In re Arbitration between Rosenbaum & American Surety Co. 11 N Y 2d 310 N.Y. 1962-05-17 p. 410, p. 411
In re Arbitration between Motor Vehicle Accident Indemnification Corp. 11 N Y 2d 995 N.Y. 1962-05-17 p. 410
In re the Arbitration between Motor Vehicle Accident Indemnification Corp. & Brown 15 A D 2d 578 N.Y. App. Div. 1961-12-29 p. 410
In re Feuer Transportation, Inc. 295 N. Y. 87 N.Y. 1946-01-17 p. 410
Electric Steel Elevator Co. v. John Kam Malting Co. 112 App. Div. 686 N.Y. App. Div. 1906-05-02 p. 410
In re the City of New York 288 N. Y. 51 N.Y. 1942-04-23 p. 410
In re Ittleman 286 N. Y. 150 N.Y. 1941-07-29 p. 410
Lenart Constructors, Inc. v. State 6 Misc 2d 473 N.Y. Ct. Cl. 1957-06-24 p. 410
Schwartz v. Greenberg 304 N. Y. 250 N.Y. 1952-07-15 p. 410
Guardian Life Insurance Co. of America v. Chapman 302 N. Y. 226 N.Y. 1951-03-08 p. 410
Metropolitan Life Insurance v. Durkin 301 N. Y. 376 N.Y. 1950-07-11 p. 410
McCarthy v. Motor Vehicle Accident Indemnification Corp. 16 A D 2d 35 N.Y. App. Div. 1962-02-22 at 38 p. 411, p. 412
Hering v. Clement 196 N. Y. 218 N.Y. 1909-10-26 p. 411
In re the Arbitration between Dembitzer & Gutchen 3 A D 2d 211 N.Y. App. Div. 1957-02-11 p. 411
In re the Arbitration between Dembitzer & Gutchen 3 N Y 2d 851 N.Y. 1957-07-03 p. 411
In re the Arbitration between S & W Fine Foods, Inc. & Office Employees International Union, Local 153 8 A D 2d 130 N.Y. App. Div. 1959-05-21 p. 411
In re the Arbitration between S & W Fine Foods, Inc. & Office Employees International Union, Local 153 7 N Y 2d 1018 N.Y. 1960-03-24 p. 411
Raven Electric Co. v. Linzer 302 N. Y. 188 N.Y. 1951-03-08 p. 411
In re the Arbitration between East India Trading Co. & Dada Haji Ebrahim Halari 305 N. Y. 866 N.Y. 1953-07-14 p. 411
McCarthy v. Motor Vehicle Accident Indemnification Corp. 12 N Y 2d 922 N.Y. 1963-01-23 p. 412