In this proceeding to stay uninsured motorist arbitration sought by Hoque against American Transit, the insurer sought to add American Independent Ins. Co. as an additional party respondent, over American Independents opposition on the grounds that it does no business in New York. American Transits motion was granted by Supreme Court, New York County. The First Department reversed.

American Independent demonstrated, without rebuttal, that it is not doing business in New York (CPLR 301), since it is a Pennsylvania company not licensed to do business in New York, it maintains no offices in New York, has no bank accounts here, has no agents operating out of or representatives soliciting business in New York, and does not own or possess real property in New York. Nor is appellant transacting business in New York (CPLR 302)... held the court.

The fact that the driver of the offending vehicle, which was registered in Pennsylvania, drove in this state is not purposeful activity on the part of [American Independent Ins. Co.]. Accordingly, New York does not have personal jurisdiction over [it].

While not mentioned by the parties, we note that our decision in Matter of Preferred Mut. Ins. Co. (Fu Guan Chan) (267 AD2d 181 [1999]) is not to the contrary. In Preferred, we directed a hearing to determine whether there was jurisdiction over the insurer since, while the evidence that it did not do business in New York was the same as here, the driver of the offending vehicle was a New York resident, so the insurer may have been transacting business in this state by knowingly issuing policies to New York drivers (see Bunkoff Gen. Contrs. v State Auto Mut. Ins. Co., 296 AD2d 699 [2002]).

Comment: The significance of this decision is that even if an out of state motorist gets into an accident in New York, its insurer cannot be brought into a petition to stay UM arbitration if that insurer does no business in New York. The issue of whether or not that insurer has coverage or not therefore must either be litigated without that insurers participation (in which case, a decision that the carrier does have coverage will result in a stay of UM arb but is not binding on the out of state carrier).

Incidentally, Insurance Law section 5107 provides that when an insurer does not issue policies in New York, is not authorized to do so, and has no business presence here, it is not required to provide New York PIP when one of its insureds gets into an accident here. See my book, Rogaks New York No-Fault Law & Practice, Section 32, for details.

Matter of American Tr. Ins. Co. v. Hoque, American Independent Ins. Co. et al., 2007 NY Slip Op 08389, Appellate Division, First Department