MOTOR VEHICLE ACCIDENT INDEMNIFCATION CORP., ET AL., RESPONDENT, v. AETNA
CAS. & SUR. CO. , APPELLANT.
89 N.Y.2d 214, 674 N.E.2d 1349, 652 N.Y.S.2d 584 (1996).
November 21, 1996
1 No. 238 (1996 NY Int. 226)
Decided November 21, 1996
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This opinion is uncorrected and subject to revision before publication
in the New York Reports.
John P. D'Ambrosio, for Appellant.
John M. Freyer, for Respondent.
LEVINE, J.:
Two questions are presented by this appeal. First, we are called upon
to determine substantively what Statute of Limitations applies to a
cause of action to recover payments of first-party benefits by
respondent Motor Vehicle Accident Indemnification Corporation (MVAIC),
against the insurer of a vehicle who denied no-fault coverage, and
when the applicable period of limitations begins to run. Second, we
are asked to determine the effect of the decision of appellant Aetna
Casualty and Surety Company (Aetna) to initially raise its Statute of
Limitations defense in an arbitral forum, rather than moving to stay
the arbitration proceeding and obtain preliminary judicial review of
that defense (see, CPLR 7502; 7503(b)), upon its application to vacate
an arbitration award in which the Statute of Limitations may have been
erroneously applied.
On February 10, 1989, following a two-car collision in New York City,
two passengers riding in one of those vehicles sustained personal
injuries. Prior to the date of the accident, the owner of the host
vehicle had obtained insurance under an automobile liability policy
provided by Aetna. The two passengers claimed no-fault benefits (see,
Insurance Law § 5103) and Aetna denied coverage, asserting that its
policy with the vehicle's owner had been canceled on September 26,
1988.
As a result of Aetna's denial of coverage, the passengers each served
notice of intention to make claim for no-fault benefits upon MVAIC, on
March 17, 1989 and April 20, 1989 respectively. MVAIC made a series of
payments to one claimant totalling $22,817.53 from August 11, 1989
through November 11, 1991 and to the other claimant totalling
SNIPPETS:
MOTOR VEHICLE ACCIDENT INDEMNIFCATION CORP., ET AL., RESPONDENT, v. AETNA
First, we are called upon to determine substantively what Statute of Limitations applies to a
Second, we are asked to determine the effect of the decision of appellant Aetna Casualty and
The two passengers claimed no-fault benefits (see, Insurance Law § 5103) and Aetna denied
When MVAIC did not receive payment within 30 days, it commenced a proceeding in Supreme Court
Supreme Court confirmed the arbitrator's awards, concluding that the arbitrator necessarily
Supreme Court determined that the three-year limitations period in CPLR 214for statute-based
The court reasoned that because MVAIC's demand was served on Aetna within three years from
(directing compulsory arbitration where a dispute arises between insurers as to which of them
96 AD2d 881; Aetna Cas.
In either case, Aetna maintains that MVAIC's right to recover its payments of no-fault
Precedent also exists to support this reasoning (see, Matter of Nationwide Mut.
Co., 77 AD2d 5, lv denied, 53 NY2d 602).
MVAIC's obligation to pay no-fault benefits to an injured party where the accident vehicle's
Contrary to the apparent determination of the arbitrator, explicitly adopted by the courts
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