Matter of Allstate Fire & Casualty Insurance Company v Melanie L. Rios
Attorneys and Parties
Brief Summary
Insurance coverage and arbitration—supplemental underinsured motorist (SUM) benefits; stay of arbitration under CPLR article 75 [New York statute governing arbitration-related proceedings, including applications to stay or compel arbitration].
Granted a permanent stay of arbitration without a hearing.
The order permanently staying arbitration of the SUM claim.
The insurer failed to meet its prima facie burden because it did not submit the actual insurance policy or relevant provisions and instead relied on a 'Sample Document'; rights and obligations turn on the specific policy language.
Background
On December 8, 2020, Melanie L. Rios, while riding a bicycle in Queens County, allegedly collided with a motor vehicle’s opening door. She demanded arbitration of a claim for supplemental underinsured motorist benefits under a policy issued by Allstate to the father of her legal domestic partner at the time of the accident. Allstate commenced a CPLR article 75 proceeding seeking, among other relief, a permanent stay of the arbitration, arguing Rios was not a covered 'resident relative.'
Lower Court Decision
The Supreme Court, Queens County, without conducting a hearing, granted the branch of Allstate’s petition seeking a permanent stay of arbitration.
Appellate Division Reversal
Reversed, with costs. The court held Allstate did not satisfy its initial burden to justify a stay because it failed to submit the operative policy and instead relied on a four-page 'Sample Document.' Since coverage turns on the policy’s specific language, Allstate failed to make a prima facie showing. The court denied the permanent stay and rejected Allstate’s request for a framed-issue hearing because the insurer had not met its prima facie burden.
Legal Significance
Insurers seeking to stay SUM arbitration must submit the actual policy (or relevant provisions) and admissible evidence establishing a threshold issue; sample or illustrative documents are insufficient. Without a prima facie showing, courts will neither grant a stay nor hold a framed-issue hearing, and arbitration proceeds.
To obtain a stay of SUM arbitration, an insurer must annex the operative policy and proof supporting a threshold defense; failure to do so results in denial of a stay and no framed-issue hearing.