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PLAINTIFF INSURER DENIED FOUR CLAIMS FOR NO-FAULT INSURANCE BENEFITS ASSOCIATED WITH FOUR DISTINCT CHIROPRACTIC TREATMENTS PROVIDED BY DEFENDANT TO A WOMAN INJURED IN A TRAFFIC ACCIDENT; EACH OF THE FOUR CLAIMS WAS FOR AN AMOUNT BELOW $5000; AN ARBITRATOR AWARDED THE CLAIMED BENEFITS TO THE DEFENDANT; PLAINTIFF THEN SOUGHT DE NOVO REVIEW OF THE ARBITRAL AWARDS WHICH HAS A $5000 THRESHOLD; THE FOUR DISTINCT ARBITRAL AWARDS CANNOT BE COMBINED TO MEET THE $5000 THRESHOLD (SECOND DEPT). ​

The Second Department, reversing Supreme Court, in a full-fledged opinion by Justice Duffy, determined the complaint in this no-fault insurance-benefit action should have been dismissed for lack of subject matter jurisdiction:

The issue on appeal, an issue of first impression for this Court, is whether, under certain circumstances, separate and distinct arbitral awards can be treated by a court as, in effect, a single arbitral award under Insurance Law § 5106(c) and pursuant to 11 NYCRR 65-4.10(h)(1)(ii) for the purposes of determining whether the requisite $5,000 threshold establishing subject matter jurisdiction has been met to allow for a de novo review of claims for no-fault insurance benefits…. [W]e hold that the plain language of Insurance Law § 5106(c) and 11 NYCRR 65-4.10(h)(1) does not contemplate allowing separate and distinct arbitral awards to be treated as, in effect, a single arbitral award or to be combined by a court for the purposes of meeting the required monetary jurisdictional threshold under Insurance Law § 5106(c) and 11 NYCRR 65-4.10(h)(1)(ii). …

… [P]laintiff American Transit Insurance Company commenced this action pursuant to Insurance Law § 5106(c) and 11 NYCRR 65-4.10(h)(1)(ii) to seek de novo review of four separate arbitral awards issued by a master arbitrator (hereinafter the arbitral awards). The four arbitral awards were issued by the same master arbitrator, following separate arbitration proceedings upon the plaintiff’s denial of payment for medical services performed by the defendant for Nancy Bayona, an individual who alleged that she was injured as a result of a motor vehicle accident in February 2019 when she was riding as a passenger in a taxi insured by the plaintiff. The arbitration proceedings arose upon the plaintiff’s denial of each of four claims submitted to it by the defendant for a repeated course of chiropractic treatment of Bayona performed by the defendant between March 8 and September 4, 2019. After each of the four arbitration proceedings, the master arbitrator issued an arbitral award in favor of the defendant, respectively, as follows: $4,767.63 for chiropractic services performed in March 2019; $4,767.63 for chiropractic services performed in March 2019 and April 2019; $4,767.63 for chiropractic services performed in April 2019 and May 2019; and $3,178.42 for chiropractic services performed in August 2019. … [P]laintiff commenced this action seeking de novo review of the four arbitral awards. American Tr. Ins. Co. v Comfort Choice Chiropractic, P.C., 2025 NY Slip Op 01337, Second Dept 3-12-25

Practice Point: De novo review of an arbitral award of no-fault benefits has a threshold of $5000. Here there were four claims for no-fault benefits for four distinct chiropractic treatments provided to a woman injured in a traffic accident. Each of the four claims was for an amount below $5000. The Second Department held the $5000 threshold for de novo review could not be met by combining the four distinct arbitral awards.

 

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THE DEFENDANT HOTEL BOOKING SERVICE, AGODA, COULD NOT BE COMPELLED TO ARBITRATE IN PLAINTIFF’S SLIP AND FALL ACTION AGAINST THE HOTEL; AGODA’S TERMS OF USE LIMITED LIABILITY TO THE BOOKING SERVICES AND EXPRESSLY EXCLUDED LIABILITY FOR PERSONAL INJURY AT THE HOTEL (FIRST DEPT). ​

The First Department, reversing Supreme Court, determined the defendant hotel booking service, Agoda, could not be compelled to arbitrate in this slip and fall action against the hotel booked through Agoda. The terms of use confined Agoda’s potential liability to the booking services and expressly excluded liability for personal injury:

A “party cannot be compelled to submit to arbitration unless the agreement to arbitrate expressly and unequivocally encompasses the subject matter of the particular dispute” … . Where arbitration provisions do not clearly and unequivocally provide that questions about the scope of the arbitration provisions are for the arbitration panel to determine, the threshold question whether the dispute is encompassed within an agreement to arbitrate is for the courts (CPLR 7503[b] …).

The arbitration clause in the terms of use covers “all disputes or claims arising out of or relating to your relationship with Agoda.” The terms of use also define Agoda’s role as providing a platform for individuals to browse information about accommodations and make reservations at accommodations. Furthermore, the terms of use make clear that “Agoda does not in any way . . . own, manage, operate or control” the accommodations and that Agoda will not be liable in damages for any “(PERSONAL) INJURY . . ., OR OTHER DAMAGES, ATTRIBUTABLE TO THE ACCOMMODATION.” Because plaintiff’s claim is one to recover damages for a personal injury caused by the resort’s negligence, it does not arise from or relate to the relationship between plaintiff and Agoda, which was limited to plaintiff’s booking a reservation at the resort, and therefore is not arbitrable … .

As for Agoda’s motion to dismiss, the terms of use constitute documentary evidence under CPLR 3211(a)(1), and the limitation of liability clause in the terms of use definitively disposes of plaintiff’s claim to recover damages from Agoda for personal injury caused by the resort’s alleged negligence … . McWashington v Hyatt Corp., 2025 NY Slip Op 00050, First Dept 1-7-25

Practice Point: Here the hotel booking service’s terms of use expressly excluded liability for plaintiff’s personal injury at the hotel. Therefore the booking service could not be compelled to arbitrate in plaintiff’s slip and fall case.

 

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PLAINTIFF WAS INJURED IN A LYFT CAR WHICH HAD BEEN ORDERED BY HIS FRIEND THROUGH THE FRIEND’S ACCOUNT; BECAUSE PLAINTIFF HAD SCROLLED THROUGH AND AGREED TO LYFT’S TERMS OF SERVICE, WHETHER PLAINTIFF WAS BOUND BY THE ARBITRATION CLAUSE MUST BE DETERMINED BY THE ARBITRATOR (FIRST DEPT).

The First Department, reversing Supreme Court, determined plaintiff, who used another’s Lyft account to order transportation, and who was injured in an accident involving the Lyft car, was subject to an arbitration provision in the contract between Lyft and the account-holder. Whether the plaintiff was bound by the arbitration clause was deemed to be an issue to be decided by the arbitrator:

Arbitration must be compelled because plaintiff was a party to an arbitration agreement with Lyft that expressly delegated the threshold question of arbitrability to the arbitrator. It is undisputed that, prior to the subject accident, plaintiff scrolled through and agreed to Lyft’s Terms of Service (the TOS), which included an agreement to arbitrate. As part of the arbitration agreement, the parties agreed to delegate “disputes concerning the arbitrability of a Claim (including disputes about the scope, applicability, enforceability, revocability or validity of the Arbitration Agreement)” to the arbitrator. When the parties’ contract delegates the arbitrability question to an arbitrator, the courts must respect the parties’ decision “even if the arguments of the party seeking to arbitrate ‘appear[] to the court to be frivolous’ or even ‘wholly groundless'” … .

There is no dispute that if plaintiff had ordered the subject ride through his own Lyft account, then the instant claims would be subject to arbitration because plaintiff was party to a valid and enforceable arbitration agreement with a valid and enforceable delegation provision — even if there were a question as to the arbitration agreement’s scope … . We find that the question of whether the agreement to arbitrate encompassed claims stemming from plaintiff’s presence in a Lyft that he did not order is a question of arbitrability that must be decided by the arbitrator … . Samuel v Islam, 2024 NY Slip Op 06675, First Dept 12-31-24

Practice Point: If you scroll through and agree to the terms of service when a Lyft car is ordered though another’s account, and you are subsequently injured in an accident in the Lyft car, you are compelled to arbitrate the question whether you are subject to the arbitration clause just as the account-holder would be.

 

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BY CLICKING ON CONTRACT TERMS ON HER SMART PHONE, PLAINTIFF AGREED TO ARBITRATE HER PERSONAL INJURY CLAIM AGAINST UBER; PLAINTIFF ALLEGED INJURY AFTER AN UBER DRIVER LEFT HER OFF IN TRAFFIC (CT APP).

The Court of Appeals, in a full-fledged opinion by Judge Cannataro, over a two-judge dissent, determined that plaintiff, by clicking on notifications of contract terms from Uber on her smart phone, agreed to submit her personal injury action against Uber to arbitration. Plaintiff alleged the Uber driver left her off in traffic and she was injured as a result. The opinion is too detailed to fairly summarize here. The precise language of the notifications from Uber are laid out:

On this appeal, we apply centuries-old principles of contract law to a web-based “terms of use” update containing an arbitration agreement. The parties dispute the validity of that agreement and its applicability to this personal injury action, which plaintiff commenced two months before she indicated her assent to the updated terms of use by means of a series of clicks on her smartphone.

We conclude that the “clickwrap” process Uber used to solicit plaintiff’s assent resulted in the formation of an agreement to arbitrate. Moreover, a key term of that agreement expressly delegates to an arbitrator the exclusive authority to resolve all disputes as to the applicability and enforceability of the agreement. Because plaintiff has not established that the delegation provision is invalid, her challenges to the portions of the agreement that purportedly apply to pending legal claims were properly directed to the arbitrator. Wu v Uber Tech., Inc., 2024 NY Slip Op 05869, CtApp 11-25-24

Practice Point: Here plaintiff was notified by Uber of updated contract terms in a message sent to her smart phone. By “clicking” agreement to the terms on her phone’s screen, plaintiff agreed to arbitrate her personal injury action against Uber.

 

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THE CONTRACT PROVISIONS MANDATING ARBITRATION WERE PROPERLY ENFORCED BY SUPREME COURT (FIRST DEPT).

The First Department, in a full-fledged opinion by Justice Oing, affirming Supreme Court, determined the contract provisions compelling arbitration should be enforced in this complex dispute among the owners and operators of nursing homes in Arizona. The terms of the contracts and the history of the litigation are far too detailed to fairly summarize here. Matter of Fein v Langer, 2024 NY Slip Op 04906, First Dept 10-8-24

Practice Point: In this case, the proverb cited in the opinion—“be careful what you wish for”—-means the contract provisions compelling arbitration controlled and the court litigation which had been commenced was precluded.

 

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THE ARBITRATOR’S INTERPRETATION OF THE COLLECTIVE BARGAINING AGREEMENT WAS NOT IRRATIONAL; THE AWARD MUST BE CONFIRMED EVEN WHERE THE COURT DISAGREES WITH THE INTERPRETATION (FOURTH DEPT).

The Fourth Department, reversing Supreme Court, determined the arbitrator’s ruling that petitioner firefighters were entitled to paid emergency leave should have been confirmed. In recent weeks, the appellate courts across the state have been emphasizing the finality of an arbitrator’s award, even where the court might have decided the matter differently:

“[J]udicial review of arbitration awards is extremely limited” … . “The court must vacate an arbitration award where the arbitrator exceeds a limitation on his or her power as set forth in the CBA [collective bargaining agreement]” … . The court, however, lacks the authority to “examine the merits of an arbitration award and substitute its judgment for that of the arbitrator simply because it believes its interpretation would be the better one” … .

Here, the arbitrator merely interpreted and applied the provisions of the relevant CBA, as he had the authority to do … . We are powerless to set aside that interpretation even if we disagree with it … . Contrary to respondent’s urging, the arbitrator’s determination was not irrational; nothing in the CBA suggests that a request for emergency leave may not be made prior to the start of a tour of duty, and the arbitrator provided a justification for his determination … . Matter of Local 32, Intl. Assn. of Fire Fighters, A.F.L.-C.I.O.-C.L.C. (City of Utica), 2024 NY Slip Op 04878, Fourth Dept 10-4-24

Practice Point: The appellate courts are making it clear that an arbitrator’s award should not be tampered with by the courts as long as the arbitrator has not exceeded his or her powers.

 

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SUPREME COURT’S VACATION OF THE ARBITRATION AWARD AS “IRRATIONAL” REVERSED, CRITERIA EXPLAINED (FOURTH DEPT).

The Fourth Department, reversing Supreme Court, determined the arbitrator’s award should not have been vacated as “irrational.” Petitioner, a registered nurse, did not take her first dose of the COVID vaccine by the deadline imposed by her employer. She was suspended and requested an arbitration in accordance with the collective bargaining agreement (CBA). The arbitrator found that failure to take the vaccine was misconduct and petitioner’s employment was terminated:

A court’s authority to vacate an arbitrator’s award is limited to the grounds set forth in CPLR 7511 (b), which permits vacatur of an award where the arbitrator, as relevant here, “exceed[s] [their] power” … by issuing an ” ‘award [that] violates a strong public policy, is irrational or clearly exceeds a specifically enumerated limitation on the arbitrator’s power’ ” … .

Where … the parties agree to submit their dispute to an arbitrator pursuant to a collective bargaining agreement, “[c]ourts are bound by an arbitrator’s factual findings, interpretation of the contract and judgment concerning remedies. A court cannot examine the merits of an arbitration award and substitute its judgment for that of the arbitrator simply because it believes its interpretation would be the better one. Indeed, even in circumstances where an arbitrator makes errors of law or fact, courts will not assume the role of overseers to conform the award to their sense of justice” … . * * *

… [T]he court erred in vacating the award on the ground that it was irrational. ” ‘An award is irrational if there is no proof whatever to justify the award’ ” … . Where, however, “an arbitrator ‘offer[s] even a barely colorable justification for the outcome reached,’ the arbitration award must be upheld” … . Here, inasmuch as it was undisputed that SUNY Upstate directed petitioner to receive the vaccine by a date certain, that it apprised her that her continued employment was dependent upon her compliance, and that petitioner refused to be vaccinated by the required date, the court erred in concluding that the arbitrator’s award was irrational. Matter of Spence (State Univ. of N.Y.), 2024 NY Slip Op 04677, Fourth Dept 9-27-24

Practice Point: If there is “even a barely colorable justification” for an arbitrator’s award, the courts won’t tamper with it. Here a nurse lost her job because she wouldn’t take the COVID vaccine. The COVID vaccine regulation which was the basis for the misconduct charge against petitioner was repealed just before the arbitrator decided the matter, but the repeal was not considered by the arbitrator. Because there was a valid basis for the arbitrator’s award, it could not be vacated as “irrational.”

 

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THE ARBITRATION RULING THAT THE CONTRACT WAS TERMINATED UNDER A “FRUSTRATION OF PURPOSE” THEORY PRECLUDED, UNDER THE DOCTRINE OF RES JUDICATA, ANY CONSIDERATION OF THE BREACH OF CONTRACT CAUSES OF ACTION THAT AROSE FROM THE SAME FACTS (FIRST DEPT).

The First Department, in a detailed full-fledged opinion by Justice Oing, determined the arbitration-ruling that a multi-million dollar contract for construction and operation of a liquid-natural-gas-related facility was terminated under a “frustration of purpose” theory precluded consideration of the breach of contract causes of action (res judicata). New technology for the extraction of natural gas from shale had rendered the liquid natural gas facility obsolete. The opinion is much too detailed to fairly summarize here. In simple terms, the arbitration ruling precluded the breach of contract causes of action under the doctrine of res judicata because all arose from the same facts:

Under the transactional analysis, the test is to determine whether a claim should be precluded by viewing a claim or cause of action as conterminous with the transaction, regardless of the number of substantive theories or variant forms of relief available to a litigant … . The analysis embraces a broadened view of the scope of a claim in order to limit the number of possible actions arising out of a single controversy … . The application of this test means that a final judgment on the merits of a claim or claims will bar future claims or causes of action arising from “all or any part of the transaction, or series of connected transactions, out of which the [prior] action arose” … . The question for us to resolve is whether the [breach of contract causes of action] arise from “all or any part of the transaction, or series of connected transactions” out of which the prior arbitration arose. We hold they do. Gulf LNG Energy, LLC v Eni S.p.A., 2024 NY Slip Op 04517, First Dept 9-24-24

Practice Point: Here an arbitration ruling that the contract was terminated for “frustration of purpose” precluded, under the doctrine of res judicata, any consideration of the breach of contract causes of action that arose from the same facts.

 

THE FOURTH DEPARTMENT REJECTED SUPREME COURT’S RULING THAT THE ARBITRATOR “MANIFESTLY DISREGARDED SUBSTANTIVE LAW” AND THAT THE ARBITRATION AWARD WAS “IRRATIONAL,” EXPLAINING THE CRITERIA FOR BOTH (FOURTH DEPT).

The Fourth Department, reversing Supreme Court, determined that none of Supreme Court’s grounds for vacating the arbitration award were valid. The arbitrator did not “manifestly disregard the substantive law.” The award was not “irrational.” The Fourth Department explained the criteria for both:

… [T]he court determined that the arbitrator manifestly disregarded “substantive law” applicable to the parties’ dispute when the arbitrator distinguished, rather than applied, two prior arbitration awards that petitioner and the court read as favorable to petitioner’s position on the timeliness issue. That was error. “The effect, if any, to be given to an earlier arbitration award in subsequent arbitration proceedings is a matter for determination in that forum” … . Neither petitioner nor the court identified any “substantive law applicable to the parties’ dispute” to support application of the doctrine of manifest disregard of law … . In any event, even if the two prior arbitration awards constituted substantive law, inasmuch as the record establishes that the arbitrator considered, but distinguished, those arbitration awards, we conclude that petitioner failed to establish that the arbitrator “knew of a governing legal principle” that was “well defined, explicit, and clearly applicable to the case” and “yet refused to apply it or ignored it altogether … .* * *

“An award is irrational if there is no proof whatever to justify the award” … . Where, however, “an arbitrator offer[s] even a barely colorable justification for the outcome reached, the arbitration award must be upheld” … .

Here, the arbitrator issued a thoughtful, well-reasoned opinion and award in which he considered the terms of the CBA [collective bargaining agreement], the evidence adduced at the hearing, and prior arbitration awards, and we thus conclude that “[i]t cannot be said that the arbitrator’s procedural resolution of the issue concerning compliance with the contractual requirement that the demand for arbitration be made within a specified time . . . was irrational” … . Matter of Buffalo Teachers’ Fedn. (Board of Educ. of Buffalo City Sch. Dist.), 2024 NY Slip Op 02429, Fourth Dept 5-3-24

Practice Point: Read this decision to understand how limited the court’s role is when reviewing an arbitration award.

 

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THE PLAINTIFF IN THIS WRONGFUL DEATH ACTION AGAINST DEFENDANT NURSING HOME IS THE DECEDENT’S DAUGHTER AND HAD SIGNED THE ADMISSION AGREEMENT AS THE “RESPONSIBLE PARTY;” THE LANGUAGE OF THE AGREEMENT DID NOT CREATE AN AGENCY RELATIONSHIP BETWEEN PLAINTIFF AND HER MOTHER; THE ARBITRATION CLAUSE IN THE ADMISSION AGREEMENT COULD NOT, THEREFORE, BE ENFORCED BY THE NURSING HOME (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the defendant nursing home’s (the Facility’s) motion to compel arbitration of the wrongful death action should not have been granted. The admission agreement had been signed by plaintiff, not the decedent (the resident of the nursing home). The admission agreement referred to plaintiff as the “responsible party” who was “primarily responsible to assist the [decedent] to meet … her obligations under [the agreement].” But there was no indication the decedent agreed to have plaintiff act on her behalf:

“Essential to the creation of apparent authority are words or conduct of the principal, communicated to a third party, that give rise to the appearance and belief that the agent possesses authority to enter into a transaction. The agent cannot by [her or] his own acts imbue [herself or] himself with apparent authority. Rather, the existence of apparent authority depends upon a factual showing that the third party relied upon the misrepresentation of the agent because of some misleading conduct on the part of the principal — not the agent. Moreover, a third party with whom the agent deals may rely on an appearance of authority only to the extent that such reliance is reasonable” … .

… [T]he Facility failed to demonstrate that it reasonably relied upon any word or action of the decedent to conclude that the plaintiff had the apparent authority to enter into the agreement or to bind the decedent to arbitration on the decedent’s behalf … . To the extent that the Facility contends that it reasonably relied upon the plaintiff’s own acts, this contention is also without merit, as an agent cannot “by [her] own acts imbue [her]self with apparent authority” … . … [T]he plaintiff’s status as the decedent’s daughter did not give rise to an agency relationship … . Lisi v New York Ctr. for Rehabilitation & Nursing, 2024 NY Slip Op 01171, Second Dept 3-6-24

Practice Point: Here decedent’s daughter signed the nursing-home admission agreement as the “responsible party.” Because there was no indication decedent agreed to have her daughter act on her behalf, the nursing home could not claim the daughter had the “apparent authority” to bind decedent to the agreement. Therefore the nursing home could not enforce the arbitration clause in the wrongful death action.

 

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