64 N.Y.2d 796 (1985)
The determination of whether an uninsured motorist claimant has sustained a “serious injury,” as defined by Insurance Law § 671, is an issue for arbitration, not the courts, when the insurance endorsement contains a broad arbitration clause covering legal entitlement to recover damages and the amount of payment.
Summary
This case addresses whether the issue of “serious injury” in an uninsured motorist claim must be determined by a court before arbitration can proceed. The Court of Appeals held that the determination of serious injury is within the scope of arbitration, aligning with the broad arbitration clause in the insurance endorsement. The court reasoned that requiring judicial determination of “serious injury” would involve the courts in the merits of the claim, contradicting the intent of CPLR 7503(b) and the legislative purpose of reducing the burden of automobile personal injury litigation on the courts. The court deferred to the expertise of arbitrators in interpreting the definition of “serious injury”.
Facts
Virginia Cochrane filed an uninsured motorist claim. Aetna Casualty & Surety Co. sought to stay arbitration, arguing that the court should first determine whether Cochrane sustained a “serious injury” as defined in Insurance Law § 671. This law dictates that payment for non-economic loss is only warranted if a claimant has incurred a “serious injury.”
Procedural History
The Appellate Division’s order was appealed to the Court of Appeals. The Court of Appeals affirmed the Appellate Division’s order, holding that the issue of serious injury was for the arbitrator to decide.
Issue(s)
- Whether the determination of “serious injury” under Insurance Law § 671 is a threshold issue to be determined by the court before arbitration can proceed in an uninsured motorist claim.
Holding
- No, because the insurance endorsement contains a broad arbitration clause obligating the claimant and insurer to arbitrate whether the claimant “is legally entitled to recover damages” and “the amount of payment.”
Court’s Reasoning
The court reasoned that the agreement to arbitrate legal entitlement to recover damages is at least as encompassing as a broad arbitration clause. Quoting Matter of Nassau Ins. Co. v McMorris, 41 N.Y.2d 701, 702, the court equated the provision for arbitration of no-fault first-party benefits disputes under Insurance Law § 675 with a broad arbitration clause. It stated that requiring courts to determine “serious injury” would involve them in the merits of the claim, contrary to CPLR 7503(b) and the legislative intent to reduce the burden of automobile personal injury litigation. The court emphasized that the only issues for the court on a stay of arbitration are whether a valid agreement to arbitrate was made and complied with, and whether the claim is barred by limitations.
The court further stated that while the legislative definition of “serious injury” may be imprecise, it should not be presumed that arbitrators will not follow court decisions construing the phrase, or that they are any less expert in interpreting the phrase than are the courts. The court noted the constant flow of claims before arbitrators, suggesting they possess expertise in this area. The court referenced the Memorandum of State Executive Department, 1977 McKinney’s Session Laws of NY, at 2445, 2448, and the Governor’s Message of Approval of L 1977, ch 892, id., at 2534, 2535, to support its view that the Legislature intended to reduce the burden of automobile personal injury litigation upon the courts.