Blog

Snooze and lose rule – Tremendous consequencesOctober 13, 2016

Matter of Allstate Ins. Co. (Cappadonia), 2016 NY Slip Op 06584 (4th Dept. 2016)

This is every Plaintiff personal injury attorney’s dream.  Surprisingly, it happens all the time.

(1) “Respondent obtained an automobile liability insurance policy from petitioner for a pickup truck and two passenger vehicles. The policy provided SUM coverage to respondent, and also included an arbitration clause. While the policy was in effect, respondent sustained personal injuries when a motorcycle he was operating was struck by an allegedly underinsured vehicle. Although the motorcycle was not covered under the policy issued to him by petitioner, respondent made a claim with petitioner for SUM coverage. Petitioner disclaimed coverage on the ground that the motorcycle was not covered under the policy, prompting respondent to demand arbitration pursuant to CPLR 7503 (c). More than five months after respondent’s demand, petitioner commenced this proceeding to stay arbitration, asserting, as it did in the disclaimer letter, that no SUM coverage existed in connection with the accident because the motorcycle on which petitioner was riding was not a covered vehicle under the policy.”

(2) “We agree with respondent that the petition to stay arbitration is time-barred because it was not filed within 20 days of respondent’s formal arbitration demand”

New York’s 20-day rule to stay an arbitration when there is palpably no coverage is just brutal at times.  You snooze, you lose.

Leave a Reply