December 2010

Queenswww.qcba.org Bar Bulletin Queens County Bar Association / 90-35 One Hundred Forty Eighth Street, Jamaica, NY 11435 / (718) 291-4500 Vol. 74 / No. 3 / December 2010 Impact of Two Court Unauthorized Insurance Decisions on Carriers In New York Parking Violations BY FRANCIS SCAHILL feasor to be without insurance coverage. This article Bureau explores the applicability of the New York State When a non-domiciliary comes into New York Insurance Law and New York State Insurance BY DENNIS BOSHNACK operating a vehicle registered and insured in a for- Regulations and the interplay of New York case law eign state, New York Insurance Law §5107 pro- with respect to unauthorized insurers. The following The New York City vides protection for New York residents injured in issues are addressed in this article: Parking Violations a motor vehicle accident with a non-domiciliary. 1.) A non-resident operating a vehicle insured by an Bureau reportedly adjudi- New York Insurance Law §5107 provides: unauthorized insurer and the applicability of the New cated over 3.2 million a.) “Every insurer authorized to transact or transact- York State Insurance Law threshold codified in parking tickets in fiscal ing business in this state, or controlling or con- §5102(d). year 2010, and about 2.8 million last year. trolled by or under common control by or with Francis Scahill 2.) A non-resident operating a vehicle insured by an such an insurer, which sells a policy providing unauthorized insurer with limits below the New York According to two recent motor vehicle liability insurance coverage or any similar cov- Statutory mandate of $25,000 per person/ $50,000 per occur- Supreme Court, New Dennis Boshnack erage in any state or Canadian province, shall include in each rence. York County, decisions-- such policy coverage to satisfy the financial security require- 3.) A non-resident operating a vehicle insured by an unautho- Matter of Meyers Van Lines Inc. v City of New ments of Article 6 or 8 of the Vehicle & Traffic Law and to rized insurer having limits at or above the mandatory statuto- York Dept. of Fin. Parking Violations Bur. (Nov provide for the payment of first party benefits pursuant to ry minimum. 10, 2009, Index No. 106783/2008) and Matter of Subsection (A) of §5103 of this article when a motor vehicle 4.) A New York resident operating a vehicle insured by an unau- Dong Sic Ko v City of New York Dept. of Fin. covered by such policy is used or operated in this state. thorized insurer having limits below the mandatory statutory Parking Violations Bur., 28 Misc 3d 603 (May b.) Every policy described in Subsection (A) hereof shall be con- minimum. 12, 2010)--PVB violated VTL 242, by making strued as having the coverage required by Subsection (A) of 5.) The relationship of MVAIC to a claim involving an unau- payment a prerequisite for taking an appeal, and §5103 of this article” 1 thorized insurer. 238 (2), by using mailing as process service. The This statute, commonly known as the New York “Deemer” 6.) A New York resident operating a vehicle insured by an unau- author handled both cases. This article focuses on Provision unequivocally applies to any policy of insurance thorized insurer having limits at or above the mandatory PVB’s nine-month failure to follow Meyers and underwritten by an authorized insurer in New York. In the mat- statute. on PVB’s continuing failure to follow Ko, and ter of Allstate Insurance Company v. Ramos the Appellate 7.) An action involving a “covered” individual v. a “non-cov- suggests PVB’s failure to follow them lacks Division, 1st Department in a unanimous decision, indicated, ered” individual. merit. “Consistent with New York public policy to protect the innocent 8.) Choice of law principals where the underlying policy limits victims of traffic accidents, personal protection insurance liabil- are at or greater than the New York statutory minimum. MEYERS ity coverage underwritten in a sister state by insurers authorized 9.) Subrogation of first-party benefits paid to a covered person v. PVB rule 19 Rules of the City of New York to do business in New York is required to conform to New York a non-covered person. (RCNY) 39-12 (b) (3) makes paying fines and minimal financial requirements and, if not, is deemed to do so”. Some 784 companies are listed by the New York Insurance penalties or posting a bond a prerequisite for tak- 2 Department as authorized to do business in New York. 7 §65- ing an administrative appeal. That rule states: 11 NYCRR §65.5 codifies the New York Rule with respect to 1.8( c) of the New York State Insurance Regulations also pro- “No appeal shall be permitted unless the fines the requirement that an out of state policy conform to the mini- vides “Any other unauthorized insurer may file with the and penalties assessed by the Hearing Examiner mum insurance requirements of New York. 3 The Court of Superintendent of Insurance a statement that its automobile are paid, or the respondent shall have posted a Appeals as early as 1974 in the action of Rosado v. Everready insurance policy sold in any other state or Canadian province cash or recognized surety company bond in the Insurance Company indicated, “It is the public policy of New will be deemed to satisfy the financial security requirements of full amount of the final determination appealed York to protect the innocent victims of traffic accidents”. 4 Article 6 or 8 of the New York Vehicle & Traffic Law and will from.” The Court discussed the legislative intent indicating that be deemed to provide for the payment of first-party benefits pur- The Rochester parking violations bureau had a “Motorists shall be financially able to respond in damages for suant to §5103 of the New York Insurance Law when the rule virtually identical to 19 RCNY 39-12 (b) (3). their negligent acts, so that innocent victims of motor vehicle insured motor vehicle is used to operated in this State”. 8 Ahl v Howard, 12 Misc 3d 870 (Sup Ct, Monroe accidents may be recompensed for the injury and financial loss What is the applicability of New York Law to a non-resident County 2006), held the Rochester parking viola- inflicted upon them”. 5 operating a vehicle in New York insured by an unauthorized tions bureau rule was unenforceable for being What happens to the victim of a traffic accident who is injured insurer. In American Millennium Insurance Company v. Castro 9 inconsistent with VTL 242. According to the in New York by a non-resident operating a vehicle insured by an Judge Louis B. York of Supreme Court, New York County was court, VTL 242 (3) provides the procedure to unauthorized insurance carrier who does not do business in New faced with a fact pattern which involved a New York resident as appeal and VTL 242 does not make payment of York? Vehicle & Traffic Law §318 Subsection 5(a) provides a passenger in a vehicle owned by a New Jersey corporation, either a fine or a bond a prerequisite for taking an “The Commissioner, upon receipt of evidence that a person operated by a New Jersey driver with a New Jersey license, reg- appeal. other than the owner of the vehicle, has operated upon the pub- istered to a New Jersey corporation. The vehicle was insured by In Meyers the second decretal paragraph of the lic highways of this state a motor vehicle not registered in the a New Jersey commercial policy issued by American Millennium judgment declares PVB rule 19 RCNY 39-12 (b) state, with knowledge of proof of financial security was not in Insurance Company who was not authorized to do business in (3) is unenforceable: effect with respect to such vehicle shall revoke the driver’s New York. The vehicle was subsequently involved in an accident “ADJUDGED AND DECLARED that license of such person, or if he is a non-resident, the non-resident in New York. Respondent’s rule, RCNY 39-12 (b) (3), which privileges of such person.” 6 For purposes of a coverage analysis the first inquiry by cover- requires payment of the fines in full prior to the The revocation of driving privileges to the non-resident is lit- age counsel or claims personnel is whether the insurance carrier taking of an appeal, is unenforceable inasmuch as __________________________________ tle comfort to the New York accident victim who finds the tort- Continued On Page 17 ________________________Continued On Page 8 INSIDE THIS ISSUE Unauthorized Insurance Carriers In NY .1 Video Conferencing.................................4 Impact of Two Court Decisions on Recent Decision Changing Law of Parking Violations Bureau ...................1 Editor’s Message: Our QCBA Heritage ...2 Paternity by Estoppel ...........................5 President’s Message ...............................3 Marital Quiz .............................................8 Breakfast At Brandeis: Photo Corner ....................................10-11 Bagels and Latkes................................3 Attorney Affirmation Required in Court Notes ...........................................12 Residential Foreclosure Actions..........3 Culture Corner .......................................13 2 THE QUEENS BAR BULLETIN – DECEMBER 2010 EDITOR’S MESSAGE Our QCBA Heritage By Paul E. Kerson mon culture, now sweeping the world. Five Borough and County “City of New In the 19th century, “Mayflower” ances- LeBaron Bradford Prince was born in York” we know today was not formed (or try was very respected by the voting popu- This past November 13, 2010, I had Flushing, Queens County, NY in 1840 malformed) until 1898. lation. L. Bradford Prince went to local occasion to be invited to celebrate our into the region’s most prominent and eco- On his mother’s side, L. Bradford Flushing schools, and graduated from the Queens County Bar Association (QCBA) nomically important family.

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