Allstate Property and Casualty Insurance Company v. Northeast Anesthesia and Pain Management, 2016 N.Y. Slip Op. 50828(U)
The Appellate Term ruled that:
An arbitrator’s award directing payment in excess of the monetary limit of a no-fault insurance policy exceeds the arbitrator’s power and constitutes grounds for vacatur of the award (see Matter of Brijmohan v State Farm Ins. Co., 92 NY2d 821, 822-823 [1998]; Countrywide Ins. Co. v Sawh, 272 AD2d 245 [2000]; 11 NYCRR 65-1.1). Moreover, such error “will not be waived if the party relying on it asserts it . . . in opposition to an application for confirmation” [citation omitted] (Matter of Brijmohan v State Farm Ins. Co., 92 NY2d at 822).
From this decision it appears that policy exhaustion decisions in arbitration are now subject to de novo review. The court further said:
Petitioner’s submissions in support of its petition to vacate the award and in opposition to the cross motion to confirm – including an attorney’s affirmation, the policy declaration page showing the $50,000 policy limit, and a payment ledger listing in chronological order the dates the claims by various providers were received and paid – raised triable issues as to whether the $50,000 policy limit had been exhausted by payments of no-fault benefits to respondent and *2 other health care providers before petitioner was obligated to pay the claims at issue here (see 11 NYCRR 65-3.15; Mount Sinai Hosp. v Zurich Am. Ins. Co., 15 AD3d 550 [2005]; brief for plaintiff-appellant in Mount Sinai Hosp. v Zurich Am. Ins. Co., supra, available at 2004 WL 3417457, *4 [insurer relied upon “affirmation of its attorney with attachments of alleged payout sheets, bills submitted by providers, and other documents” to show policy limits exhausted]; Allstate Ins. Co. v DeMoura, 30 Misc 3d 145[A], 2011 NY Slip Op 50430[U][App Term, 1st Dept. 2011]). Therefore, we remand the matter to Civil Court for a framed issue hearing on that issue.
We note that, contrary to respondent’s contention, defendant was not precluded by 11 NYCRR 65-3.15 from paying other legitimate claims subsequent to the denial of respondent’s claims (see Harmonic Physical Therapy, P.C. v Praetorian Ins. Co., 47 Misc 3d 137[A], 2015 NY Slip Op 50525[U][App Term, 1st Dept. 2015]). Adopting respondent’s position, which would require petitioner to delay payment on uncontested claims pending resolution of respondent’s disputed claim “runs counter to the no-fault regulatory scheme, which is designed to promote prompt payment of legitimate claims” (Nyack Hosp. v General Motors Acceptance Corp., 8 NY3d 294, 300 [2007]; Harmonic Physical Therapy,P.C. v Praetorian Ins. Co., 47 Misc 3d 137[A], supra).