SUPREME COURT : COUNTY OF CHAUTAUQUA

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In the Matter of the Application of

NATIONAL GRANGE MUTUAL INSURANCE COMPANY,

Petitioner, Index #H-10862

For a Judgment Staying the Arbitration

Commenced by JOHN W. KNIGHT,

Respondent.

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BURKE, GROSSMAN, VALENTI

& RZEPLA (Thomas J.

Rzepka, Esq. of Counsel)

for Petitioner

ERICKSON, WEBB & SCOLTON

(Paul V. Webb, Jr., Esq.

of Counsel) for Respondent

DECISION and ORDER

GERACE, J.

By DECISION and ORDER of March 8, 1995, on petitioner's

motion for a stay of respondent's demand for arbitration

before the American Arbitration Association, the Court

directed that a trial be scheduled pursuant to CPLR 2218.

The Court held a trial on the question whether, and

when, respondent received the endorsement mandated by the

State for new and renewal policies providing that disputes

would be resolved by arbitration through the American

Arbitration Association. Respondent claimed he had received

the endorsement prior to his accident.

At the hearing the Court broadened the scope of the

inquiry and permitted both parties to present evidence and

argument regarding the history and implementation of the

mandated change.

The Court also permitted testimony and argument on the

liberalization clause of the policy which provides as

follows:

"If the company revises this policy form with

respect to policy provisions, endorsements or

rules by which the lnsurance hereunder could

be extended or broadened without additional

premium charge, such insurance as is afforded

hereunder shall be so extended or broadened

effective immediately upon approval of such

revision during the policy period by the

appropriate insurance supervisory authority."

Respondent failed to meet his burden of proof that he

received the endorsement prior to the accident. His

responses to questions were that he believed he got it in the

fall of 1993; he believes he received it before his accident;

that he did not bring his file with him; that he doesn't have

the envelope the endorsement came in; that he may have thrown

it away after he saw his attorney.

The testimony of his insurance agent was not helpful;

she did not substantiate his contention. She testified that

she did not receive any "SUM" endorsement for Mr. Knight's

policy between May 6, 1993 and May 6, 1994.

Owen Stehle, policy service manager for National Grange

Insurance Company testified that notices are sent out by

computer; that there is no record of any endorsements having

been sent to Respondent until his policy was renewed several

months after the accident.

Had respondent received the endorsement prior to the

accident there would be no question of its applicability to

the accident in question.

Respondent's proof having failed to establish by a

preponderance of the credible evidence that he received the

endorsement before his accident, the Court must now address

the issue of whether the liberalization clause had the effect

of making the new endorsement part of respondent's

policy. The Court holds that it had that effect.

This conclusion is supported by Part F of the policy

entitled GENERAL PROVISIONS, under the subparagraph entitled

CHANGE, which states as follows:

"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 of the revision

is effective in your state."

It has long been held that where there is a question of

interpretation of an insurance policy, or when the policy is

unclear, the interpretation will be construed against the

authors of the policy, the insurance company.

The Court hereby declares that the unified

SUPPLEMENTARY UNINSURED MOTORIST ENDORSEMENT - NEW YORK,

"SUM" endorsement number PP 04-09-10-93 containing provisions

for arbitration to the American Arbitration Association was

part of John W. Knight's policy effective October 1, 1993,

and that arbitration should proceed post haste.

Petitioner's motion for a stay of the Demand for

Arbitration through the American Arbitration Association is

denied, without costs. The Court directs that arbitration be

scheduled forthwith.

THIS IS THE DECISION, JUDGMENT and the ORDER of this

Court; no further judgment or order shall be necessary.

Dated: June 8, 1995

Mayville, New York

JOSEPH GERACE

Justice of Supreme Court