IN RE: Allstate Insurance Company

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Supreme Court, Appellate Division, Second Department, New York.

IN RE: Allstate Insurance Company, appellant, v. Arjeta Marke, respondent.

2013–11458 (Index No. 3869/13)

Decided: October 29, 2014

RUTH C. BALKIN, J.P. JOHN M. LEVENTHAL CHERYL E. CHAMBERS SYLVIA O. HINDS–RADIX, JJ. Votto & Albee, PLLC, Staten Island, N.Y. (Christopher J. Albee of counsel), for appellant. Law Offices of Neil Kalra, P.C., Forest Hills, N.Y. (Nilay Shah of counsel), for respondent.

Argued—September 18, 2014

DECISION & ORDER

In a proceeding pursuant to CPLR article 75 to permanently stay arbitration of an underinsured motorist claim, the petitioner appeals from an order of the Supreme Court, Kings County (Schack, J.), dated November 4, 2013, which denied the petition as untimely.

ORDERED that the order is reversed, on the law, with costs, and the petition is granted.

On October 27, 2011, the respondent, a pedestrian, was hit by a vehicle insured by Farmers Insurance Company for $100,000 per person and $300,000 per accident.   The operator of the vehicle, Bilal A. Abowath, was insured by the petitioner Allstate Insurance Company (hereinafter Allstate) for $25,000 per person and $50,000 per accident.   The Allstate policy contained a supplemental uninsured/underinsured motorist (hereinafter SUM) endorsement.   The SUM endorsement contained an arbitration clause for claims made by an insured.   The respondent brought claims against both insurance carriers, and recovered $100,000 from Farmers Insurance Company.

The respondent served Allstate with a notice of intention to arbitrate her claim, dated November 30, 2012, which was delivered on December 3, 2012.   In a demand for arbitration filed with the American Arbitration Association, the respondent specified that her claim was for SUM benefits.

Allstate commenced this proceeding to permanently stay arbitration of the claim by filing a petition dated March 4, 2013.   The respondent asserted that the petition was untimely under CPLR 7503(c), because it was filed more than 20 days after Allstate was served with and received the notice of intention to arbitrate.   The Supreme Court denied the petition on the ground that the proceeding was commenced more than 20 days after Allstate received a demand for arbitration.

The Supreme Court erred in denying the petition as untimely.   Where there is no agreement to arbitrate, a petitioner seeking a stay of arbitration is not bound by the 20–day period of limitations set forth in CPLR 7503(c) (see Matter of Commerce & Indus.   Ins. Co. v Nester, 90 N.Y.2d 255, 262;  Matter of Matarasso [Continental Cas. Co.], 56 N.Y.2d 264, 267).   Here, there was no agreement to arbitrate because the respondent was not an insured within the meaning of the SUM endorsement (see Matter of Interboro Inc. Co. v Maragh, 51 AD3d 1024, 1025;  see also Matter of State Farm Mut. Auto. Ins. Co. v Waite, 68 AD3d 1006).   The SUM endorsement of the policy defines an insured, inter alia, as an occupant of a vehicle operated by the named insured (see 11 NYCRR 60–2.3[f] ).  Contrary to the respondent's contention, she could not be considered an insured under the SUM endorsement on the ground that she was “occupying” the vehicle operated by the named insured (see Matter of Rice v. Allstate Ins. Co., 32 N.Y.2d 6;  cf.  Rowell v. Utica Mut. Ins. Co., 77 N.Y.2d 636;  Rosado v. Hartford Fire Ins. Co., 71 AD3d 860;  Faragon v. American Home Assur.   Co., 52 AD3d 917;  Matthews v. Continental Cas. Co., 39 Misc.3d 1216[A], 2013 N.Y. Slip Op 50630[U] [Sup Ct, N.Y. County 2013] ).   Since the respondent was not an insured under the SUM endorsement of the policy, no agreement to arbitrate her claim existed, and the 20–day period of limitations set forth in CPLR 7503(c) did not apply (see generally Matter of Matarasso [Continental Cas. Co.], 56 N.Y.2d at 267;  Matter of State Farm Mut. Auto. Ins. Co. v Eastman, 10 AD3d 690, 691).

Moreover, since there was no agreement to arbitrate the respondent's claim, Allstate's petition to permanently stay of arbitration of the respondent's claim should have been granted (see Matter of Matarasso [Continental Cas. Co.], 56 N.Y.2d at 268;  Matter of Varsames v. DiMauro, 56 AD3d 681, 681).

The parties' remaining contentions either are without merit or need not be addressed in light of our determination.

BALKIN, J.P., LEVENTHAL, CHAMBERS and HINDS–RADIX, JJ., concur.

ENTER:

Aprilanne Agostino

Clerk of the Court

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