State-Wide Insurance v. Mingione

65 Misc. 2d 310, 318 N.Y.S.2d 895, 1970 N.Y. Misc. LEXIS 1870
CourtNew York Supreme Court
DecidedFebruary 24, 1970
StatusPublished
Cited by1 cases

This text of 65 Misc. 2d 310 (State-Wide Insurance v. Mingione) 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
State-Wide Insurance v. Mingione, 65 Misc. 2d 310, 318 N.Y.S.2d 895, 1970 N.Y. Misc. LEXIS 1870 (N.Y. Super. Ct. 1970).

Opinion

Leo Brown, J.

This is an application pursuant to CPLR 7503 through which the petitioner seeks to stay arbitration on the grounds (1) that the respondents have not satisfactorily established the uninsured status of the other vehicle involved in an accident with them, and (2) that the respondents have failed to serve itemized medical statements and documentary proof of all items of special damage and to submit themselves to oral or physical examinations as required by the conditions of the insurance agreement between the parties.

It appears that on July 30, 1969 respondents sustained personal injuries when an auto in which they were riding collided [311]*311with a vehicle owned and operated by Charles Devon Nixon and bearing a North Carolina license plate. On August 8, 1969, the North Carolina Department of Motor Vehicles informed respondents that insurance coverage on the Nixon vehicle had been terminated effective April 3, 1969 and that, according to the department’s records, the vehicle was uninsured on July 30, 1969. On August 11, 1969, the respondents accordingly notified their own insurance carrier, the petitioner herein, of their intention to make a claim against it under the “New York State Automobile Accident Indemnification ” indorsement of their policy. The petitioner, acknowledging receipt of this notice, in turn forwarded standard claim forms to respondents to be completed by them and returned. To date, respondents have not complied with petitioner’s request for the information sought by the forms forwarded to them.

On November 21, 1969, the respondents served upon the petitioner by certified mail, return receipt requested, a written demand for arbitration containing the 10-day caveat provision of OPLB 7503 (subd. [c]). This was received by the petitioner on November 24, 1969. The petitioner thereupon served upon the respondents, also by certified mail, a notice and petition for a stay "of arbitration. These papers were mailed on December 3, 1969, and respondents received them several days thereafter.

OPLB 7503 (subd. [c]) provides that if a party served with a demand for arbitration as provided therein, containing a 10-day time limitation, fails to apply for a stay of arbitration ‘ within ten days after such service he shall thereafter be precluded from objecting that a valid agreement was not made or has not been complied with * * *. Such notice shall be served in the

same manner as a summons or by registered or certified mail, return receipt requested.” Bespondents contend that this 10-day period is measured from the date upon which the demand for arbitration was mailed, November 21, 1969, to the date upon which the notice and petition to stay arbitration were actually received by the respondents, some time after December 3, 1969. Bespondents thus oppose petitioner’s application on the ground that service of its notice and petition was untimely.

The issue here presented — how to measure the 10-day time period prescribed by OPLB 7503 — is in some respects already settled by decisional law. It has been held that the 10-day period within which the petitioner must serve a notice and petition for. a stay must be measured from the date upon which it receives the demand to arbitrate, not from the date of its mailing. (Monarch Ins. Co. v. Pollack, 32 A D 2d 819.) As the court said (p. 820): “ when CPLR 7503 (subd. [c]) states that an applica[312]*312tion to stay arbitration must be made by the party served within ten days after service upon Mm of the notice ’ (emphasis supplied), it means within 10 days of his receipt of the notice ”. So the present petitioner, having received the demand to arbitrate on November 24, had until December 4 to serve its notice and petition for a stay of arbitration. (See, also, General Construction Law, § 20.)

The question that remains is — when is the application for a stay deemed “served” under CPLR 7503? Is it the date of mailing by the petitioner or the date of receipt by respondents ?

Service of papers in a pending action is governed by CPLR 2103, which provides that service by mail shall be complete upon mailing, but the rule enunciated by this statute is not applicable to a notice and petition to stay arbitration. (Monarch Ins. Co. v. Pollack, supra.) The rationale that supports this conclusion is that CPLR 2103 applies only to the service of papers in a “pending” action or proceeding and under CPLR 7503 there is no action or proceeding pending until petitioner serves its petition to stay arbitration. (Monarch Ins. Co. v. Pollack, supra.) This reasoning driven to its logical conclusion, classifies service of an application to stay arbitration as a jurisdictional condition precedent to the commencement of a special proceeding in much the same way as the service of a summons is to the commencement of an action. (See CPLR 304.)

In several recent decisions (Matter of All City Ins. Co. [Mikell], N. Y. L. J., Feb. 16,1970, p. 16, col. 1; Matter of Knickerbocker Ins. Co. [Gilbert], N. Y. L. J., Feb. 16,1970, p. 16, col. 1; State-Wide Ins. Co. v. Harrington, N. Y. L. J., Dec. 4,1969, p. 16, col. 7; Matter of Finest Rest. Corp. [L & A Music Co.], 52 Misc 2d 87), it was held that the jurisdictional nature of the notice and petition to stay arbitration requires a finding that service of the application to stay is complete on the date of receipt and not on the date of mailing. It was further concluded in two of these decisions that nothing short of actual delivery and receipt within 10 days will give the court jurisdiction of the parties and the proceeding (Matter of Knickerbocker Ins. Co., supra; State-Wide Ins. Co. v. Harrington, supra).

On the other hand, the courts in Matter of All City Ins. Co. (supra) and Matter of Finest Rest. Corp. (supra) indicate that either actual delivery or the first attempt at delivery by the post office is sufficient to constitute service of the application for a stay. This position, however, is inconsistent with the basic holding of those courts, for it seems clear that if service of the notice and petition is, as the courts held, a jurisdictional requisite, then an attempt at delivery by the postal authorities [313]*313is as incomplete a mode of service as is deposit of the papers in a mail box.

None of these four cases gives consideration to the very fundamental provision of CPLR 7503 (subd. [c]) which provides a party seeking to stay arbitration with optional means of effecting service, as follows: ‘ Such notice shall be served in the same manner as a summons or by registered or certified mail, return receipt requested.” To hold that a party utilizing the option to serve by certified or registered mail must act so expeditiously that receipt of the notice is assured before the expiration of 10 days so negates the intended purpose of the option granted by the statute as to render it a futile gesture on the part of the Legislature. A petitioner utilizing service by mail would be placed under an overwhelming burden. An application for a stay placed in the mail as shortly as two days after receipt of a demand for arbitration could through an unforeseen delay in mail delivery, fail to be delivered until after the expiration of 10 days.

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Related

In re the Arbitration between Knickerbocker Insurance & Gilbert
268 N.E.2d 758 (New York Court of Appeals, 1971)

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Bluebook (online)
65 Misc. 2d 310, 318 N.Y.S.2d 895, 1970 N.Y. Misc. LEXIS 1870, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-wide-insurance-v-mingione-nysupct-1970.