A New York trial court vacated an award made to an infant in an uninsured motorist arbitration on the grounds that the award was inconsistent with the arbitrator's findings and deviated materially from what could be considered reasonable compensation.

In Allstate Insurance Co. v. Dandan, No. 3384/06, 2007 WL 4303765 (N.Y. Sup. Ct. Dec. 5, 2007), Nadine and Amir Dandan, both infants, were injured in an automobile accident with an unknown motorist. Following the accident, the infants' claims for uninsured motorist benefits were submitted to arbitration.

The arbitrator awarded Nadine $7,500 for the facial lacerations she sustained in the accident. No award was made to Amir for his injuries. The Dandans moved to modify the award, arguing that the awards did not accurately reflect the value of their injuries. In response, Allstate argued that modification of the award should not be permitted.

The Court recognized that as a general rule, an arbitrator's award may not be vacated unless it is found to be contrary to public policy, totally irrational, or clearly exceeds a specifically enumerated limitation on the arbitrator's power.

However, where arbitration is compulsory in nature (as with uninsured motorist arbitration), New York law permits the arbitrator's award to be vacated upon a finding that it lacks a rational basis. The Court vacated Nadine's award pursuant to this standard.

In vacating the award, the Court explained that "there is a strong public policy which provides for court oversight of proceedings involving an infant in furtherance of the obligations undertaken by the State as parens patriae protecting infant wards from birth to maturity and making their welfare paramount." Moreover, the Court found that the insubstantial award was inconsistent with the arbitrator's findings that Nadine sustained a severe injury.

The Court confirmed the award pertaining to Amir because that award was not irrational or inconsistent, which meant the Court had no authority to examine the merits of the award.