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AN ARBITRATOR’S DETERMINATION WILL NOT BE REVERSED BECAUSE OF AN ERROR OF LAW, BUT WILL BE REVERSED WHERE, AS HERE, IT IS IRRATIONAL (SECOND DEPT).

The Second Department, reversing the arbitrator, noted that an arbitrator’s determination will not be reversed because of an error of law, but will be reversed if the determination is irrational. Here the arbitrator’s determinations with respect to no-fault insurance coverage were deemed irrational:

“[A] master arbitrator’s determination of the law need not be correct: mere errors of law are insufficient to set aside the award of a master arbitrator” … . “If the master arbitrator vacates the arbitrator’s award based upon an alleged error of ‘a rule of substantive law,’ the determination of the master arbitrator must be upheld unless it is irrational” … . …

The master arbitrator’s determination that a denial of liability based upon a failure to appear at an examination under oath constitutes a defense of lack of coverage, which is not subject to preclusion, is irrational … . Further, the master arbitrator’s application of 11 NYCRR 65-3.5(p) is irrational, as it effectively allows an insurer to avoid the statutory timeliness requirements set forth in 11 NYCRR 65-3.8(a). Where, as here, the initial request for an examination under oath is sent more than 30 days after receipt of the claim, the request is a nullity … , and the insurer’s failure to timely notice the examination under oath is not excused by 11 NYCRR 65-3.5(p) … . Matter of Advanced Orthopaedics, PLLC v Country-Wide Ins. Co., 2022 NY Slip Op 02406, Second Dept 4-13-22

Practice Point: An arbitrator’s determination will not be reversed because the arbitrator made an error of law. Only an irrational determination will be reversed by a court.

 

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