In re the Arbitration between Bauer & Motor Vehicle Accident Indemnification Corp.

55 Misc. 2d 991, 287 N.Y.S.2d 206, 1968 N.Y. Misc. LEXIS 1741
CourtNew York Supreme Court
DecidedFebruary 13, 1968
StatusPublished
Cited by2 cases

This text of 55 Misc. 2d 991 (In re the Arbitration between Bauer & Motor Vehicle Accident Indemnification Corp.) is published on Counsel Stack Legal Research, covering New York Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re the Arbitration between Bauer & Motor Vehicle Accident Indemnification Corp., 55 Misc. 2d 991, 287 N.Y.S.2d 206, 1968 N.Y. Misc. LEXIS 1741 (N.Y. Super. Ct. 1968).

Opinion

William W. Serra, J.

This matter has been brought on before the court on an application to compel arbitration under the provisions of CPLR 7503 (subd. [a]).

The petitioners were involved in and injured in an automobile accident within the State of New York on May 17, 1964. They allege the accident was caused solely by the negligence of the operator of an uninsured motor vehicle. At the time of the accident it is alleged that the petitioner, Dale B. Bauer, was an infant. Notices of intention to arbitrate were not served on the respondents until September 16, 1964, and were subsequently, after resubmission with changes, rejected as untimely by the respondent Motor Vehicle Accident Indemnification Corporation, on October 31,1964. The policy of insurance provided, ‘1 Within 90 days or as soon as practicable, the insured or other person making claim shall give to MVAIC written notice of claim under this endorsement.” It is the claim of the petitioners, among other things, that the respondent, State Farm Mutual Insurance Company, brought about the delay by misleading the petitioners concerning the matters of seeking legal advice and filing notices and claims, and is, therefore, a proper party to this proceeding. The insurance policy of the petitioners with the State Farm Mutual Insurance Company contained the clauses required by statute as to liability of the Motor Vehicle Accident Indemnification Corporation (hereinafter designated MVAIC) for accidents with uninsured motor vehicles as required by subdivision 2-a of section 167 of the Insurance Law (L. 1958, ch. 759). It provides, in substance, that MVAIC will pay all sums which the insured shall be entitled to recover as damages [993]*993under the circumstances alleged by the petitioners herein when caused by the operator of an uninsured automobile. The petitioners are both “ insureds ” under the definitions contained in the policy and are entitled to the benefit of the six-year Statute of Limitations in which to compel arbitration under their contract of insurance. (Matter of De Luca [MVAIC], 17 N Y 2d 76 [1966].) The policy of insurance in force and effect at the time of the accident imposed no liability on the carrier under the circumstances. No liability was mandated by law as to the carrier before the provisions of the Insurance Law were drastically revised by the amendments effective July 1,1965 (L. 1965, ch. 322). The matters of conduct of the State Farm Mutual Insurance Company representatives are evidentiary only, as to the respondent MVAIC. The question of actionable tort liability of the carrier is not before this court on this application. Under the circumstances the insurance company is not a proper party to this proceeding and the proceeding as to it must be dismissed.

The problem raised by the position of MVAIC requires a further development of the facts. The petitioners on December 6, 1967 each caused to be served a “ demand for arbitration ” dated November 30, 1967, on MVAIC by certified mail, return receipt requested. The demands were mailed December 6, 1967, and received December 8, 1967. Such demands may be considered as the statutory notices of intention to arbitrate. (CPLR 7503, subd. [c]; Matter of Beverly Cocktail Lounge [Emerald Vending Mach.], 45 Misc 2d 376 [1965].) The respondent MVAIC served by certified mail, return receipt requested, a notice of application for stay of arbitration and petition directed to both petitioners herein, applying for a stay of arbitration under CPLR 7503 (subd. [b]) on the grounds that issues of fact remain to be determined as to timely filing of notice of claim, diligence in determining that the defendant was an uninsured motorist, and failure to prove that the claimants were involved in an accident with an uninsured motorist. Such issues are not matters for arbitration (CPLR 7503; Matter of MVAIC [Brown], 15 A D 2d 578 [1961], app. dsmd. 11 N Y 2d 968). The notice of motion to stay was served on the petitioners by service on their attorney on December 15,1967. It was made returnable at a Special Term of the Supreme Court, New York County, on January 8, 1968. The petitioners claim that such proceeding is a nullity, that •it confers no jurisdiction over the petitioners in New York County Supreme Court and that by reason of the failure of MVAIC to institute a proper appheation to stay arbitration within 10 days after service of notice of intention to arbitrate, [994]*994the right to litigate all disputes on these issues has been waived and precluded by CPLR 7503 (subd. [c]). This proceeding has been brought on upon a verified petition and affidavits, and noticed by an order to show cause signed by the Presiding Justice of the Supreme Court at Special Term, Erie County, December 21, 1967. It was made returnable at the Trial and Special Term of the Supreme Court, Allegany County, on January 2, 1968. It was personally served on MVAIC, by its assistant secretary, on December 26, 1967.

The respondent herein, MVAIC, contends in substance that CPLR 7503 (subd. [c]) is not clear as to whether either this application or the application to stay in New York County is a motion, a special proceeding or a statutory application. The respondent further contends that the indorsements of the petitioners’ attorney on the notices of intention, on the claims, on the postal envelopes and return receipts in all the proceedings prior to the application for a stay constitute notice of retainer and appearance and entitle the respondent to initiate the stay application by service on the petitioners’ attorney. If this be so, then it is obvious that this proceeding must fail, as the issues of timeliness and contract compliance must be heard on the prior application for a stay of arbitration. The New York County application, if valid as a motion in a pending proceeding, is prior in time of commencement. (CPLR 2211.)

Early authority under article 17-A of the Insurance Law would seem to support the position of the respondent. In Matter of Ward Leonard Elec. Co. (Local 419) (12 Misc 2d 304 [1958]) it was clearly held that arbitration was a special proceeding existing from the service of a notice of intention to arbitrate. Application for a stay was, then, held to be a motion in a special proceeding as to which service on the attorney was deemed sufficient. One unreported current decision referred to by respondent, Matter of Musto (MVAIC) (N. Y. L. J., Aug. 10,1967, p. 8, cob 4), appears to follow this rule. It is, however, determined on multiple grounds, including failure to give proper 10-day notice of intention under CPLR 7503 (subd. [c]) and on a consent stipulation to be heard on the merits, by reason of which .this court feels it is clearly distinguishable. The Ward Leonard Electric case was determined under subdivision 2 of section 1458 of the Civil Practice Act, which specifically authorized the application for a stay of arbitration on motion. Section 1459 of the Civil Practice Act further specified that arbitration under section 1458, “ shall be deemed a special proceeding ”, and, further, that the application “ shall be made and heard in [995]*995the manner provided by law for the making and hearing of motions ’ ’.

With the passage of the CPLR, the Legislature made clearly defined changes in the notice and application procedures in arbitration matters and enacted a new general article on special proceedings.

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Related

In re the Arbitration between Bauer & Motor Vehicle Accident Indemnification Corp.
31 A.D.2d 239 (Appellate Division of the Supreme Court of New York, 1969)

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Bluebook (online)
55 Misc. 2d 991, 287 N.Y.S.2d 206, 1968 N.Y. Misc. LEXIS 1741, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-the-arbitration-between-bauer-motor-vehicle-accident-nysupct-1968.