The opinion
Progresssive Ins. Co. v Tubon
2023 NY Slip Op 34826(U)
May 19, 2023
Supreme Court, Queens County
Docket Number: Index No. 723000/2022
Judge: Ulysses B. Leverett
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publication.
FILED: QUEENS COUNTY CLERK 05/22/2023 02:45 PM INDEX NO. 723000/2022
NYSCEF DOC. NO. 35 RECEIVED NYSCEF: 05/22/2023
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF QUEENS
---•-------------------------------··-·· ·-· ·-----------············X
PROGRESSSIVE INSURANCE COMPANY,
Petitioner, Index No.: 723000/2022
-against•
ORDER
JOHN CALLAHAN,
Respondent Motion Sequence No.: 1
•and-
ERIK A. CHIMBORAZO TUBON, HEREFORD FILED
INSURANCE COMPANY, 5/22/2023
COUNTY CLERK
Additional Respondents. QUEENS COUNTY
-···-----------··---···-···------- ---------·--··-·--·---------·-··X
PRESENT: ULYSSES B. LEVERETT, J.S.C.
Petitioner Progressive Insurance Company (Progressive) brings this petition to
permanently stay the demand for arbitration made by Respondent John Callahan for
supplementary uninsured/underinsured (SUM/UM) motorist coverage following a June 13, 2021
accident. Respondent Callahan in opposition to the petition asserts that petitioner's application to
stay the arbitration should be denied because the petition is untimely having been filed more than
twenty (20) days after respondent's service of the demand for arbitration as required by CPLR
§7503(c).
Respondent Hereford Insurance Company (Hereford) in opposition to the petition to stay
arbitration asserted that it is the insurer of Mohammed Hossain, who owned and operated the
motor vehicle in which respondent was a passenger on the alleged date of loss. Respondent
Hereford additionally stated that it tendered its full "For hire" policy limit of $25,000 to
respondent Callahan and should not be added as
an additional respondent to the proceeding.
Petitioner Progressive argued that its application to stay arbitration may still be heard
after the 20-day statutory time period of CPLR §7503(c) on the basis it never agreed to arbitrate
a claim for which no coverage was provided under its policy. Petitioner asserts its provided
policy coverage to Lyft for its Transportation Network Company (TNC) vehicles as defined by
its policy but not for Hossain's Taxi and Limou·s ine Commission (TLC) regulated vehicle which
was insured by Hereford.
Pursuant to the Order of this Court dated January 31, 2023, this matter was set down for a
trial of the framed issues of whether the petition seeking a permanent stay of arbitration was
timely and whether the policy issued by petitioner to Lyft Inc. affords coverage to respondent for
the June 13, 2021 motor vehicle accident.
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. A trial on the framed issues was held before this Court on March .9, 2023 and post
heanng memorandum were submitted on or before March 31, 2023. The parties submitted
documentary exhibits into evidence as per the stipulation dated March 8, 2023 and Senior Claims
Specialist Stephen Silvas was the sole witness for Progressive.
The Court makes the following findings of facts and conclusions of law.
Respondent Callahan was invo]ved in a motor vehicle accident on June 13, 2021 at 3 :50
a.m. at Fresh Pond Road and Eliot Avenue, Queens, NY while a passenger in a 2016 Toyota
bearing New York license plate number T712746C, owned and operated by Mohammed S.
Hossain. The accident also involved an uninsured 2014 Ford, bearing Pennsylvania license plate
number KYW5485, owned by additional respondent Eric A. Chimborazo Tubon. Respondent
Callahan was a passenger in Mr. Hossain's vehicle at the time of the accident and was
transported to Elmhurst Hospital with injuries. Mr. Hossain sustained severe trauma and was
pronounced deceased at Wyckoff Hospital on June 13, 2021. Additional respondent Tubon was
arrested for disregarding a red traffic signal and driving while intoxicated. Additional respondent
Hereford issued a "For hire automobile policy" to Mohammed Hossain for coverage of his 2016
Toyota which was effective at the time of the accident. The policy provided the statutory
uninsured motorist coverage in the amount of $25,000 per person, $50,000 per accident. On or
about January 10, 2022 additional respondent Hereford tendered the $25,000 policy limits of Mr.
Hossain's policy to respondent Callahan. The trip in which respondent was a passenger and Mr.
Hossain was a driver allegedly originated in New York County where respondent was picked up
at 50 E Broadway, NY at 3 :36am. The accident occurred approximately at 3 :50 am in Queens
County.
Petitioner Progressive argues that its policy with Lyft provided coverage for TNC
arranged trips but that Mr. Hossain maintained a TLC policy with Hereford Ins, which paid UM
benefits to respondent and that the subject vehicle of Mr. Hossain was operated not as a TNC
vehicle but rather a TLC vehicle at the time of accident since the ride originated within the five
boroughs of New York City.
Respondent Callahan argues that petitioner Progressive untimely demand for a stay of
arbitration was filed 343 days after its receipt of the respondent's demand for arbitration contrary
to the 20 day rule ofCPLR §7503(c); that progressive was not entitled to an exception to the 20
day rule as where there is no agreement to arbitrate; that the denial of coverage was based upon a
policy Exclusion 4 of the SUM Endorsement which requires compliance with the 20 day rule.
The policy Exclusion 4 specifically excludes SUM coverage when "bodily injury to an
insured incurred while, pursuant to 44B of New. York Vehicle and Traffic Law(VTL), the motor
vehicle used by a TNC driver while the driver is not engaged in a TNC prearranged trip." See
also VTL § 1693(2)(a). However, the Court notes that pursuant to VTL § I 693(3)(a), when a
driver is logged in and engaged in a TNC prearranged trip, the TNC must provide bodily injury
(BI) and Sum coverage at $1,250,00.00.
Petitioner Progressive argues that its TNC policy with Lyft did not provide coverage in
the first instances to Hossain's lNC vehicle pursuant to its policy definition of a TNC vehicle.
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.
New York Vehicle and Traffic Law (VTL) §1691 et seq and Progressive's policy sets
forth in pertinent part: ·
"Transportation Network Company Vehicle" or
"TNC vehicle" means vehicle that is
(a) used by a transportation network company driver to
provide a TNC prearranged tripwithin the state of New York; and
(b) owned, leased or otherwise authorized for use by ·
the transportation network company driver.
Such term shall not inchide:
(a) A taxicab, as defined in section 148-a of Title-I,
Article 1 of the New York Vehide and Traffic Law, section 19-
502 of the administrative code of the city of New York, or as
otherwise denied in local law; ....
(d) a for-hire vehicle, as defined in section 19-502 of
the administrative code of the city •of New York, or as otherwise
defined in local law; ....
(g) For hire vehicle means a motor vehicle carrying
passengers for hire in the city, with a seating capacity of twenty
passengers or less, not including' the driver other than a taxicab,
coach, wheelchair accessible van, commuter van or an authorized
bus operating pursuant to applicable provisions of law."
4. "Transportation network company driver" or "TNC
driver" means an individual who:
(a) Receives connections to potential passengers and
related services from a transportation network company in
exchange for payment of a fee to the transportation network
company; and
(b) Uses a TNC vehicle to offer or provide a TNC
prearranged trip to transportation network company passengers
upon connection through a digital network controlled by a
transportation network company in exchange for compensation or
payment of a fee.
5. "Transportation network company passenger" or
"passenger" means a person or persons who use a transportation
network company's digital network to connect with a
transportation network company'driver who provides TNC
prearranged trips to the passenger in the TNC vehicle between
points chosen by the passenger.
6. (a) ""'TNC prearranged trip'; or "trip'; means the
a
provision of a transportation by transportation by a transportation
network company driver to a passenger provided through the use
of 1NC's digital network:
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(i) Beginning when a transportation network company
driver accepts a passenger's request for a trip through a digital
network controlled by a transportation network company;
(ii) Continuing while the transportation network
company driver transports the requesting passenger in a TNC
vehicle; and
(iii) Ending when the last requesting passenger departs
from the TNC vehicle.
Petitioner argues the policy definition of a "TNC vehicle" expressly "shall not include
"for-hire" vehicle as defined in the New York City Administrative Code § 19-502. Section 19-502
defines a "for-hire" vehicle as a "motor vehicle carrying passengers for hire in the city of New
York. Petitioner further argues that the subject vehicle was carrying passenger Callahan for hire
and not as a TNC prearranged trip and/or service and that no coverage ever existed for the non-
TNC, for hire vehicle. Finally, petitioner asserts that because the terms of the insuring agreement
or policy were never satisfied "the insurance policy does not contemplate coverage in the first
instance." Worcester Ins. Co. v. Bettenhauser, 712 N.Y.S.2d 433 (2000).
The Court in order to determine whether Progressive has liability obligation to the
respondent Callahan under its policy within Lyft, the Court must examine the terms of the policy
as well as statutory restrictions and preclusions.
CPLR §7503(c) provides a mechanism whereby a party seeking to initiate arbitration by a
demand may shift to his opponent the burden to promptly seek a judicial stay of arbitration on the
basis of the threshold defense ofnon-arbitrability. See Siegel, 5th edition op cite §592 at 1076. The
statute provides that once the "demand" for arbitration is served "'unless the party served applies to
stay the arbitration within twenty days after such service he shall thereafter be precluded from
objecting that a valid agreement was not made or has not been complied with ... "
Here, assuming coverage by Progressive, its disclaimer by reason of exclusion under the
policy was months beyond the twenty days to apply for a stay of arbitrations. Markevics v. Liberty
Mut. Ins. Co., 97 N.Y.2d 646 (1999).
However, petitioner Progressive asserts that there was no SUM coverage for Mr.
Hossain's vehicle because the vehicle was not a TNC vehicle by definition within its policy.
In Singh v. City ofNew York, 2023 WL3098734, 2023 N.Y. Slip Op. 0214 (Decided
April 27, 2023) the New York Court of Appeals examined the relationship of the Taxi and
Limousine Commission (TLC) and smartphone applicated-based competitors like Lyft inc. (Lyft)
and Uber Technologies Inc. (Uber). The Singh Court stated that the TLC regulates and supervises
taxicabs and other for hire vehicle in the city including yellow taxis and "black cars." Citing N.Y.
City Charter §2303[a]. Yellow taxis are the only for hire vehicles permitted "to accept hails from
passenger in the street" citing Administrative Code of City ofNew York §19-504[a][l]. However,
black cars are prohibited from accepting street hails but may only accept passenger on the basis of
phone contact or other prearrangements (see Administrative Code of City of New York § § 19-
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502[U], 19-507 [a][4], 19-516 [a]. Uber and Lyft allow passengers in the city and other arrears to
prearrange for hire transportation through applications or the smart phones. The Court of Appeals
noted "TLC determined that the use of smartphone apps to arrange transportation fit within its
existing regulatory definition of a prearrangement, making such vehicles black cars for regulatory
purposes."
The Court heard the testimony of Progressive's only witness, senior claims specialist
Stephen Silvas who acknowledged that Progressive's petition was filed more than 20 days after
receipt of the demand for arbitration contrary to CPLR §7503(c). However, no testimony was
offered to establish that Progressive did not provide initial coverage to respondent for his SUM
claim. While Progressive alleged in its pleadings a 3:36 a.m. commencement time and origin of
respondent's trip, no testimony or documentary evidence was offered to show that the trip was not
prearranged through TNC network or that the vehicle was a hailed for hire vehicle rather than a
TNC vehicle. See VTL §1697.
The Court notes that VTL §1692 (1) does provide in part that "neither a 1NC nor a 1NC
driver shall be deemed to provide taxicab or for hire vehicle service while operating as a 1NC or
TNC driver pursuant to this article" but that the article does not apply to cities with a population of
one million or more. However, § 1692 (7) does require that TNC prevents the driver from
accepting TNC prearranged trips within a city of a million or more people.
No evidence was offered that the trip was not a TNC prearranged trip that originated
"within the State ofNew York" as defined by §1691 (1), or if prearranged that Progressive denied
services to respondent via its TNC as a precluded passenger for hire or that progressive timely
sought exclusion under its policy.
The Court finds that Progressive has not established that the vehicle occupied by
respondent and operated by Hossain was not a TNC vehicle or was being operated to carry hailed
passengers for hire or that coverage did not exist in the first place. Nor has Progressive timely
asserted the threshold defense of exclusion under its policy as a provided remedy for timely
determined improper use of a TNC vehicle.
Accordingly, petitioner's application to permanently stay the arbitration demanded by the
respondent for Sum coverage is denied. The matter may proceed to arbitration after discovery
provided in Progressive/Petitioner policy. The petition is dismissed.
The is the decision and order of this Court.
Hon. Utysses B. Leverett
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