Court Won't Disturb Arbitrator's Ruling on Employer's Entitlement to Reimbursement

Tuesday, November 13, 2018 | 0

A New York appellate court upheld an arbitrator’s decision allowing an employer to be reimbursed for payment of workers’ compensation benefits from the liability insurance carrier for a motorist who was at fault for an employee’s injuries.

Case: Matter of Progressive Advanced Insurance Co. v. New York City Transit Authority, No. 2017-05319, 11/07/2018, published.

Facts: The New York City Transit Authority paid workers’ compensation benefits to an employee who was injured in a car accident. The other motorist had liability insurance coverage from the Progressive Advanced Insurance Co., and the NYCTA demanded that Progressive provide reimbursement for the benefits it had paid its employee.

Progressive admitted that its insured was 100% at fault for the collision, but it contested the amount of the NYCTA’s claim for reimbursement.

Procedural history: An arbitrator held that a 20% no-fault offset set forth in Insurance Law Section 5102(b) did not apply to the workers' compensation wages portion of the benefits NYCTA had paid, because a one-third offset had already been applied to the wages, pursuant to the Workers' Compensation Law.

Progressive objected and petitioned the Queens County Supreme Court for an order vacating the arbitrator’s decision. Justice Darrell L. Gavrin denied the petition.

Analysis: The Appellate Division’s 2nd Department said that under New York law, an award in a compulsory arbitration proceeding "must have evidentiary support and cannot be arbitrary and capricious."

So long as there is any reasonable hypothesis to support the award, the court said it cannot vacate the arbitrator’s ruling.

The court then found that lenient standard was met.

Disposition: Affirmed.

To read the decision, click here.