The failure to stay a compulsory arbitration on jurisdictional grounds precludes appellate review of the improperly arbitrated jurisdictional issue

In UM and SUM arbitration, it has been held that the failure to stay the arbitration within 20-days of the service of an intent to arbitrate waives the right to contest jurisdictional issues.  We learn today that a modified rule holds true for UM arbitrations.

State Farm Mut. Auto. Ins. Co. v Statewide Ins. Co., 2010 NY Slip Op 50588(U)(App. Term 2d Dept. 2010)

“Petitioner argued that the matter was not subject to mandatory arbitration since, although the application for arbitration alleged that its insured’s vehicle weighed over 6,500 pounds, its insured’s vehicle did not weigh more than 6,500 pounds (see Insurance Law § 5105 [a]). In a judgment entered January 14, 2009, the Civil Court denied the petition and dismissed the proceeding. The instant appeal by petitioner ensued.

Since petitioner failed to apply for a stay of arbitration prior to the arbitration, it waived its claim that the matter was not arbitrable under Insurance Law § 5105 (see Matter of Liberty Mut. Ins. Co. [Allstate Ins. Co.], 234 AD2d 901 [1996]; see also Matter of Silverman [Benmor Coats], 61 NY2d 299 [1984]; Matter of Utica Mut. Ins. Co. v Incorporated Vil. of Floral Park, 262 AD2d 565 [1999]). Consequently, the petition to vacate the arbitration award was properly denied.”

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