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Trial Court Should Have Stayed Arbitration and Held Framed-Issue Hearing to Determine Whether Another Driver Involved in Collision​

There was a collision involving a car self-insured by Hertz, the petitioner.  The respondent driver of the Hertz car alleged she collided with another car which left the scene.  Based on a description of the other vehicle and the last four digits of the license number. Hertz determined the owner, Morrison, and insurer, Travelers, of the other car.  Morrison denied involvement in the accident and Travelers denied the respondent’s property damage claim on that basis. The respondent sought supplementary uninsured motorist arbitration with Hertz.  Hertz then commenced a proceeding to temporarily stay arbitration pending a framed-issue hearing to determine if Morrison was involved in the collision.  In determining Hertz petition should have been granted, the Second Department wrote:

“The party seeking a stay of arbitration has the burden of showing the existence of sufficient evidentiary facts to establish a preliminary issue which would justify the stay”…. Thereafter, the burden is on the party opposing the stay to rebut the prima facie showing…. Where a triable issue of fact is raised, the Supreme Court, not the arbitrator, must determine it in a framed-issue hearing, and the appropriate procedure under such circumstances is to temporarily stay arbitration pending a determination of the issue …. Here, the documents submitted by Hertz in support of the petition demonstrated the existence of sufficient evidentiary facts to establish a preliminary issue justifying a temporary stay. In opposition to the petition, Morrison denied any involvement in the accident. As the evidence submitted by the parties raised a triable issue of fact as to whether Morrison’s vehicle was involved in the subject accident, the Supreme Court should have conducted a framed-issue hearing on that issue before rendering a determination on the petition … .  Matter of Hertz Corp v Holmes, 2013 NY Slip Op 03674, 2nd Dept, 5-22-13

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