In re the Arbitration between Graphic Arts Mutual Insurance & Leno
Court: Appellate Division of the Supreme Court of the State of New York; June 10, 1998; New York; State Appellate Court
Order affirmed with costs. On a prior appeal, reasonable discovery was granted to determine if Edward and April Leno were using a vehicle without a reasonable belief they were entitled to do so, which would affect their ability to recover under the uninsured motorists insurance endorsement of the policy issued by Graphic Arts Mutual Insurance Company. The court stayed arbitration pending this discovery. The issue of whether the nonpermissive use exclusion in the policy violates Insurance Law § 3420 (f)(1) was not previously addressed, but the current finding concludes that the exclusion does not violate this law. After discovery, the court found that Edward and April Leno were not entitled to recover under the uninsured motorists insurance endorsement because they lacked a reasonable belief of entitlement to use the vehicle. This conclusion is supported by the public policy of New York, which generally denies recovery for injuries sustained while committing a serious criminal act. Their knowing and active participation in the unauthorized use of the vehicle barred their recovery. Consequently, the court properly granted a permanent stay of arbitration. The appeal was from the Supreme Court, Monroe County, with Judges Denman, Pine, Wisner, Callahan, and Fallon present.