NY Courts Have Jurisdiction Over North Carolina Driver and Insurer

Matter of Geico v Escoto and Farm Bureau Ins. Co., 2019 NYSlip Op 09265 (App Div. 2d Dept 2019)

υThis was an appeal from an order of NY Supreme Court which stayed a UM arbitration and added a North Carolina resident and his auto insurer to the action for a framed issue hearing.

On December 28, 2016, Felix Escoto allegedly was injured when his vehicle was struck in the rear by another vehicle in Brooklyn. The other vehicle left the scene. However, Escoto took a photograph of a North Carolina license plate which was on the other vehicle. Escoto provided that license plate number to the police officer who responded to the scene. The police officer recorded the plate number, make and type of vehicle in the police report.

Escoto’s vehicle was insured by GEICO. The policy included a SUM endorsement. GEICO did a plate search with the North Carolina DMV and determined that the other vehicle, a 2014 Cadillac, was owned by Charles Roberts, Jr., and insured by North Carolina Farm Bureau. But Roberts denied any involvement in the accident and Farm Bureau denied Escoto’s bodily injury claim. Subsequently, Escoto demanded UM arbitration from GEICO.

GEICO filed this CPLR article 75 proceeding to permanently stay arbitration of the uninsured motorist claim, or, in the alternative, to temporarily stay the arbitration pending a framed-issue hearing on the issue of whether the other vehicle involved in the subject accident was “uninsured” on the date of the accident. GEICO’s petition also sought leave to join Roberts and Farm Bureau as additional respondents. In support of its petition, GEICO submitted a copy of the police accident report and the results of its license plate search.

Roberts and Farm Bureau moved to dismiss, asserting that New York did not have jurisdiction over them since Farm Bureau was a North Carolina company not authorized to do business in New York and Roberts was a North Carolina resident who was not involved in the happening of the subject accident. Supreme Court stayed the arbitration and added Roberts and Farm Bureau as parties. The Appellate Division affimed.

“The documents submitted by GEICO in support of the petition demonstrated the existence of sufficient evidentiary facts to establish a preliminary issue justifying a temporary stay,” ruled the Appellate Division. “Through the police accident report and the results of the license plate search for the plate number provided by Escoto, GEICO made a prima facie showing that the other vehicle involved in the subject accident was Roberts’s vehicle and that Roberts’s vehicle had insurance coverage with Farm Bureau.”

“In opposition, Farm Bureau and Roberts raised questions of fact as to whether Roberts’s vehicle was involved in the subject accident and whether Roberts was a nonresident at the time of the accident rendering his vehicle an “uninsured motor vehicle” within the meaning of Insurance Law article 52. For the same reasons that the court properly granted those branches of the petition which were for leave to join Roberts as an additional respondent to the proceeding and to temporarily stay the arbitration pending a framed-issue hearing, the court properly denied that branch of the motion which was to dismiss the petition insofar as asserted against Roberts for lack of personal jurisdiction.”

Comment: Whether or not an out-of-state driver and his insurer are subject to New York jurisdiction is a fact-dependent question: if the driver was actually in New York, the courts there have jurisdiction; otherwise, they do not. Where, as here, there is prima facie evidence that a vehicle was in New York, the courts have jurisdiction for purposes of a hearing to determine the facts. If, at the hearing, the Court is not convinced that the North Carolina vehicle was actually involved in this accident, the Petition against that driver and Farm Bureau will be dismissed.