The Second Department, reversing Supreme Court, determined that a framed-issue hearing was required to determined if the insurer, National General, properly disclaimed coverage in this traffic accident case. The insured vehicle, owned by Singh, left the scene of the accident. National General disclaimed coverage alleging the vehicle had been stolen at the time of the accident. Santos, the driver of the car struck by the Singh car, then made a demand for arbitration of uninsured motorist against his insurer, Country-Wide. Country-Wide then brought the underlying petition to stay arbitration which was denied. Country-Wide appealed:
“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” … .
… [T]the petitioner met its initial burden by submitting evidence establishing that at the time of the accident the Singh vehicle was covered by a policy of insurance issued by National General … . National General’s disclaimer letter, submitted by Country-Wide in support of its petition, constituted prima facie evidence as to the existence of a policy of insurance covering Singh’s vehicle at the time of the accident. That same letter was sufficient to raise a triable issue of fact as to the validity of National General’s disclaimer … . “Vehicle and Traffic Law § 388 creates a strong presumption that the driver of a vehicle is operating it with the owner’s consent, which can only be rebutted by substantial evidence demonstrating that the vehicle was not operated with the owner’s permission” … . “[E]vidence that a vehicle was stolen at the time of the accident may overcome the presumption of permissive use” … . Under these circumstances, a framed-issue hearing is necessary to determine whether National General properly disclaimed coverage of Singh’s vehicle … . Matter of Country-Wide Ins. Co. v Santos, 2019 NY Slip Op 06767, Second Dept 9-25-19