Self-Employed Driver Not Required to Carry Work Comp, Gets No-Fault Benefits

Saturday, April 7, 2007 | 0

By Larry Rogak

Matter of Global Liberty Ins. Co. v Abdelhaq, 2007 NY Slip Op 00643, (Appellate Division, 2d Dept)

Abdelhaq was a self-employed cab driver involved in a work-related auto accident. His insurer, Global Liberty, denied his no-fault claim on the grounds that workers comp should be primary. Abdelhaq applied for arbitration, and Global brought a petition for a stay. That petition was denied by Supreme Court, Nassau County (see The Rogak Report, 21 February 2006) on the grounds that self-employed cab drivers are not required to carry workers comp insurance. Subsequently, an arbitrator gave that decision res judicata effect in a no-fault arbitration proceeding (see The Rogak Report, 30 November 2006).

Now, on an appeal of the Supreme Court decision, the Appellate Division affirms, and thus establishes a victory for self-insured cab drivers throughout the Second Department.

The Appellate Division wrote, "The petitioner [Global] contends that arbitration of its insured's no-fault claim should have been stayed on the ground that its insured was entitled to workers' compensation benefits as his primary coverage. The insured's claim for workers' compensation benefits was denied on the ground that 'a self employed cab driver who owns his own cab' is not required to carry workers' compensation insurance on himself."

"In this regard, the petitioner contends that the insured's 'base affiliation' with Kenmore Cab Dispatch Service, Inc. (hereinafter Kenmore), obligated the latter to secure workers' compensation coverage for the insured. However, the petitioner failed to submit evidence that Kenmore was the insured's employer at the time of the accident... Indeed, the petitioner stated in its petition that the insured violated his insurance contract 'by not informing' the petitioner that 'he left his base affiliation' with Kenmore. Moreover, the petitioner failed to include a copy of the insurance policy in the record, and failed to submit any evidence in admissible form that the insured actually violated his insurance contract. Indeed, the petitioner asserted in the petition that it was 'not denying coverage on that basis.'"

"In view of the foregoing, the petitioner failed to set forth a basis for permanently staying arbitration of the insured's no-fault insurance claim."

Comment: Insurance carriers have to be careful about choosing cases to appeal, and the choice to appeal this particular one was pretty bad. The Workers Compensation Board had ruled, prior to the bringing of the Petition, that the claimant was not required to carry workers comp insurance. Global Liberty's attorneys should have known that the Court of Appeals has previously held, in O'Rourke v. Long, 41 N.Y.2d 219, that the Workers Compensation Board is vested with primary jurisdiction as to the applicability of workers compensation versus no-fault insurance in work-related motor vehicle accidents. Therefore, once the WCB had ruled that Abdulhaq was not required to carry workers comp, that should have ended the controversy and Global should have just paid the no-fault benefits.

Lawrence N. Rogak is an insurance defense attorney in New York. He writes The Rogak Report, a daily insurance law newsletter, and his insurance law articles appear in several industry publications. For more information see www.Rogak.com.

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