The Appellate Division panel ruled Tuesday 45-pound shepherd mix Lena was not at fault for the collision with cyclist Wolfgang Doerr, 46, on Central Park's loop in 2009 because the canine did not "have a propensity to interfere with traffic," the New York Post reported Thursday.
The five-judge panel wrote the owners of pets are only liable for traffic incidents involving their animals if the pet's "own instinctive, volitional behavior" caused the incident.
Doerr fractured his jaw and broke five molars in the crash, while Lena suffered only minor bruises.
Doerr filed a lawsuit against owner Julie Smith in 2010 and it was upheld by a lower court judge.
Doerr's attorney, Gregory Bagen, said an appeal of Tuesday's decision will be filed.