STATE OF NEW YORK
SUPREME COURT : COUNTY OF CHAUTAUQUA
IN THE MATTER OF THE APPLICATION OF
NATIONAL GRANGE MUTUAL INSURANCE
For a Judgment Staying the
Arbitration Commenced by
-vs Index #H10862
JOHN W. KNIGHT,
BURKE, GROSSMAN, VALENTI &
RZEPKA (Thomas J. Rzepka,
Esq. of Counsel) for
ERICKSON, WEBB & SCOLTON
(Paul V. Webb, Jr., Esq.
of Counsel) for Respondent
DECISION and ORDER
Petitioner seeks a stay of arbitration and a direction that the demand for arbitration by the American Arbitration
Association be set aside on the ground that the policy it issued to the insured May 1993 provided for arbitration by a trio of arbitrators, one selected by each party and the third by the selected two.
Respondent claims he received an endorsement to his policy in September, 1993, providing, among other things, that disputes would be resolved by arbitration through the American Arbitration Association (AAA).
Petitioner denies it ever sent such an endorsement to
respondent prior to the accident but concedes that if the company sent the endorsement before the accident, it effectively modified its insurance agreement with this insured to provide for arbitration by the AAA.
Though October 1, 1993 was the effective date of the state mandated arbitration clause, there was nothing in the law or regulations that would prevent the company from adding the mandated endorsement to insurance policies issued earlier.
Knight argues that once the carrier adopted the endorsement for its policies for any reason, mandate or otherwise, it automatically applied to the current Knight policy because of the following language in the policy:
This policy contains all the agreements
between you and us. Its terms may not be changed
or waived except by endorsement issued by us. If
a change requires a premium adjustment, we will
adjust the premium as of the effective date of
We may revise this policy form to provide
more coverage without additional premium charge.
If we do this your policy will automatically
provide the additional coverage as of the date the
revision is effective in your state."
He says that at the very least, receipt of the endorsement by Knight even after the accident effectively modified the policy.
He argues that the policy should be construed most strictly against the carrier as the author of its terms.
The Court declines to make that broad a ruling when there is an opportunity to resolve the case on narrower grounds; but, may address this point should Knight's proof on the date of receipt fall short of establishing it as occurring prior to the date of the accident.
CPLR §2218 provides that if a motion raises an issue of fact, the Court may order it tried separately before the Court or referee.
The Court hereby orders an immediate hearing of the questions of whether, and when, petitioner sent the endorsement to the insured. The hearing is set down for FRIDAY, MAY 5, 1995 at 9:30 A.M.
The Court reserves on all other arguments.
This is the DECISION and ORDER of this Court. No further
order shall be necessary.
Dated: March 8, 1995
Mayville, New York
Justice of Supreme Court