Central General Hospital v. Hanover Insurance Company, 49 N.Y.2d 952 (1980)
Newly discovered evidence is not a valid basis for vacating an arbitration award under New York Civil Practice Law and Rules (CPLR) 7511(b), particularly in compulsory arbitrations under the no-fault insurance law where judicial review is limited.
Summary
Central General Hospital sought arbitration to recover a bill from Hanover Insurance under New York’s no-fault law. Hanover claimed payment but couldn’t initially produce a canceled check. The arbitrator ruled for the hospital, including attorney’s fees. Hanover later found the check and sought to vacate the award based on this new evidence. The Supreme Court granted the vacatur, but the Appellate Division reversed. The New York Court of Appeals affirmed the Appellate Division, holding that newly discovered evidence is not a ground for vacating an arbitration award under CPLR 7511(b), especially in compulsory no-fault arbitrations where judicial intervention is limited.
Facts
Central General Hospital initiated arbitration against Hanover Insurance Company to recover payment for a bill under New York’s no-fault insurance law.
Hanover asserted that it had already paid the bill but couldn’t immediately produce the canceled check as proof.
The arbitrator granted Hanover a two-month extension to locate the check.
When Hanover failed to produce the check within the extended period, the arbitrator ruled in favor of the hospital, also awarding attorney’s fees.
A month after the arbitration award, Hanover discovered the canceled check.
Procedural History
Hanover Insurance Company filed a proceeding in the Supreme Court to vacate the arbitration award based on newly discovered evidence (the canceled check).
The Supreme Court granted Hanover’s application and vacated the arbitration award.
Central General Hospital appealed, and the Appellate Division reversed the Supreme Court’s decision, reinstating the arbitration award (reduced to the attorney’s fees by consent of the hospital).
Hanover Insurance Company appealed to the New York Court of Appeals.
Issue(s)
Whether newly discovered evidence constitutes a valid ground for vacating a compulsory arbitration award under CPLR 7511(b), specifically in the context of no-fault insurance claims arbitration.
Holding
No, because the discovery of new evidence is not one of the grounds for vacating an arbitration award enumerated in CPLR 7511(b), and judicial review of compulsory arbitrations under the no-fault law is limited.
Court’s Reasoning
The Court of Appeals emphasized that CPLR 7511(b) specifies the grounds for vacating an arbitration award, and newly discovered evidence is not among them. The court cited precedent, including Kwasnik v. Willo Packing Co., which supports the principle that newly discovered evidence is not a basis for vacating an arbitration award.
The court noted that the arbitration in this case was compulsory under the no-fault law (Insurance Law § 675, subd. 2), which further limits judicial intervention. The court stated, “Since the arbitration provided for by the no-fault law in these circumstances is compulsory…judicial intervention is limited.”