The order of the Appellate Division should be reversed, with costs, and the arbitration award reinstated.
The question submitted for arbitration was: "Is a conviction or plea or charge of Driving while intoxicated required for the claimant to be excluded from benefits under Section 672 Subd 2(b) of the Insurance Law?" The arbitrator answered the question affirmatively and we see no grounds to upset this determination. Section 672 of the Insurance Law provides that "An insurer may exclude from coverage required by subdivision one a person who * * * (b) is injured as a result of operating a motor vehicle while in an intoxicated condition * * * (within the meaning of section eleven hundred ninety-two of the vehicle and traffic law)". Since section 1192 of the Vehicle and Traffic Law makes operating a motor vehicle while intoxicated a misdemeanor, we do not find the decision of the arbitrator, requiring a conviction or guilty plea to a charge under that section so irrational as to warrant vacatur. It is noted that the arbitrator's decision has no necessary
I dissent and would affirm the order of the Appellate Division.
Were this a consensual arbitration the review of which is governed by CPLR article 75, I would agree that the arbitrator's determination was not so irrational as to require its vacatur. However, inasmuch as submission of this dispute to arbitration was not consensual but compulsory (Insurance Law, § 675, subd 2; Matter of Walters [Government Employees Ins. Co.], 57 A.D.2d 843), due process demands application of a more critical standard of review. (Mount St. Mary's Hosp. v Catherwood, 26 N.Y.2d 493, 508.) Unlike a determination made in a consensual arbitration, which may be vacated only if completely irrational (CPLR 7511, subd [b]; see Rochester City School Dist. v Rochester Teachers Assn., 41 N.Y.2d 578, 582), a determination made in a compulsory arbitration may be vacated where the determination lacks a rational basis. (Caso v Coffey, 41 N.Y.2d 153, 158; Mount St. Mary's Hosp. v Catherwood, 26 NY2d, at p 508, supra.)
Applying this standard of review to the case at hand, I conclude that the arbitrator's award lacks a rational basis. To interpret the reference in the Insurance Law (§ 672, subd 2) to the Vehicle and Traffic Law (§ 1192), as requiring a conviction before an insurer may disclaim coverage because of an insured's intoxication is, in my view, arbitrary and capricious. Certainly, the sole purpose for which this statutory reference was included was to provide a definition of intoxication.
As the Appellate Division observed, to permit an insurer to disclaim coverage only if the insured is convicted of driving while intoxicated places an unreasonable burden upon the insurer. First, as the court noted, the more stringent standard of proof in a criminal case would require that intoxication be proved beyond a reasonable doubt — a requirement standing in marked contrast to additional exclusions available under section 672 provable by a preponderance of the evidence. Moreover, there always exists the possibility that a disclaimer may never be available if, in the exercise of discretion, an insured is not prosecuted for driving while intoxicated.
Order reversed, etc.