53 N.Y.2d 1041 (1981)

The New York Court of Appeals held that legislative amendments to the No-Fault Insurance Law limited the Superintendent of Insurance’s power to imply additional exclusions beyond those explicitly stated in the statute.

Summary

Vito Servido, the owner of an uninsured vehicle, sought first-party benefits under his father’s insurance policy after being injured in an accident while driving his own uninsured car. The Superintendent of Insurance denied the claim. The Court of Appeals reversed, holding that a legislative amendment excluding motorcycle occupants from eligibility limited the Superintendent’s power to create further exclusions, even if providing benefits to the owner of an uninsured vehicle seemed contrary to the policy goals of the No-Fault Insurance Law. The court suggested the legislature clarify the law to prevent such outcomes in the future.

Facts

Vito Servido owned an uninsured motor vehicle. He was involved in an accident while driving his own uninsured vehicle. His father had a valid insurance policy on a separate vehicle. Servido sought first-party benefits under his father’s policy, claiming to be a relative residing in the same household. The Superintendent of Insurance, acting as rehabilitator of Allcity Insurance Company, denied Servido’s claim.

Procedural History

Servido’s claim was initially denied by the Superintendent of Insurance. The case was appealed to the Appellate Division, which affirmed the denial. Servido then appealed to the New York Court of Appeals. The Court of Appeals reversed the Appellate Division’s decision, remitting the case to the Supreme Court, New York County, for determination of benefits.

Issue(s)

Whether the Superintendent of Insurance, under the No-Fault Insurance Law, has the power to imply exclusions from first-party benefits beyond those explicitly stated in the statute, specifically to deny benefits to the owner of an uninsured vehicle who is related to and resides in the household of an insured vehicle owner.

Holding

No, because a legislative amendment to the No-Fault Insurance Law, which excluded motorcycle occupants, demonstrated the legislature’s intent to limit the Superintendent’s power to create additional, implied exclusions beyond those explicitly written into the statute.

Court’s Reasoning

The court acknowledged that awarding first-party benefits to the owner of an uninsured vehicle, simply because they are related to and reside with a person who owns an insured vehicle, is an “aberrational” outcome that contradicts the policies underlying the No-Fault Insurance Law. Judge Meyer, concurring, stated that but for a change in the insurance law he would affirm the decision to deny benefits. Prior to December 1, 1977, the Superintendent had the power to interpret the statute “in terms of the policies upon which its enactment was based.” However, Chapter 892 of the Laws of 1977 amended section 672 of the Insurance Law to exclude “occupants of a motorcycle” from eligibility for first-party benefits. The court reasoned that by specifically excluding motorcycle occupants (who were previously eligible because motorcycles were not considered “motor vehicles” under the statutory definition), the legislature indicated that the exclusions listed in the statute were intended as a limit on the Superintendent’s authority to imply additional exclusions. The court cited Kurcsics v Merchants Mut. Ins. Co., which constrained the court to vote for reversal. Judge Meyer, in his concurrence, suggested that the Superintendent and Legislature promptly amend the law to clarify that first-party benefits should only be paid for loss arising out of the use or operation of an uninsured motor vehicle not owned by the recipient of the benefits.