Allstate Insurance v. Farina

In a proceeding pursuant to CPLR 7503 (subd [c]) to stay arbitration, petitioner appeals from so much of an order of the Supreme Court, Suffolk County, entered July 27, 1978, as denied its application and dismissed the petition. Order reversed insofar as appealed from, on the law, without costs or disbursements, and petition granted to the extent that arbitration is stayed pending judicial determination of the issue of coverage. The matter is remanded to Special Term for such a determination. In a proceeding by an insurer to stay the insured from proceeding to arbitration under his uninsured motorist clause, a threshold question was raised as to whether the offending vehicle actually was uninsured. At issue was the question of the alleged nonpermissive use of the vehicle at the time of the accident. Special Term dismissed the petition on the ground that the coverage issue was for the arbitrator. Where a threshold question of fact is raised as to whether the offending vehicle was driven with or without the owner’s permission, the issue should be adjudicated by the court and not by the arbitrator (see Matter of Rosenbaum [American Sur. Co. of N. Y.], 11 NY2d 310, 313-314; Matter of Aetna Cas. & Sur. Co. [Bruton], 58 AD2d 551, revd 45 NY2d 871 on the dissenting opn of Mr. Justice Silverman; see, also, Matter of Lion Ins. Co. [Clutchker] 58 AD2d 811). Accordingly, the petition to stay arbitration pending determination of this issue was improperly denied and the matter must be remanded to Special Term for said determination. Damiani, J. P., O’Connor, Lazer and Gulotta, JJ., concur.