St. Chiropractic, P.C. v. Geico General Insurance Co.
53 Misc. 3d 59
| N.Y. App. Term. | 2016Background
- Plaintiff (an assignee) sued to recover unpaid first-party no-fault medical benefits for services to its assignor injured in a New Jersey-insured auto accident.
- Plaintiff moved for summary judgment; defendant cross-moved to dismiss on the ground that the insurance policy and New Jersey law required arbitration.
- The policy specified it would be interpreted under New Jersey law and permitted dispute resolution to be initiated by either party.
- Civil Court denied both summary judgment motions but limited trial to medical necessity, found New Jersey substantive law controlled, and held arbitration was not mandatory under New Jersey law.
- Defendant appealed only the denial of its cross motion to dismiss, arguing the court erred in concluding the policy did not mandate arbitration.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether New Jersey substantive law governs interpretation of the policy | Policy choice-of-law clause makes New Jersey law applicable | Same (defendant agreed New Jersey law applies) | New Jersey substantive law applies; New York procedural law controls |
| Whether New Jersey law or the policy mandates arbitration of no-fault disputes | Court action by plaintiff can proceed; arbitration is optional under NJ law | Policy + NJ law require mandatory arbitration, so complaint should be dismissed | Arbitration is not mandatory under NJ law or the policy; optional submission is insufficient to dismiss the suit |
| Whether defendant was required to move to compel arbitration under CPLR 7503(a) | Plaintiff continued in court; no compulsory arbitration defense raised as a CPLR 7503(a) motion by defendant | Dismissal appropriate without a motion to compel because arbitration clause exists | Defendant needed to move to compel arbitration; absence of such motion is a basis to deny dismissal |
| Whether denial of defendant's cross motion to dismiss should be reversed | Denial proper for reasons above | Denial was erroneous because arbitration clause controls | Appellate court affirmed denial of defendant's cross motion |
Key Cases Cited
- New Jersey Mfrs. Ins. Co. v. Bergen Ambulatory Surgery Ctr., 982 A.2d 1 (N.J. Super. Ct. App. Div.) (arbitration under NJ no-fault dispute resolution framework is permissive/optional)