Government Employees Insurance v. Terrelonge

In a proceeding pursuant to CPLR article 75 to permanently stay arbitration of an underinsured motorist claim, Paulette Terrelonge appeals from an order of the Supreme Court, Kings County (Silber, J.), dated February 6, 2013, which granted the petition to permanently stay arbitration.

Ordered that the order is affirmed, with costs.

On May 5, 2008, the appellant, driving a vehicle owned by her, collided with a vehicle driven and owned by Lesly Simonis. The appellant was insured by the petitioner, Government Employees Insurance Company (hereinafter GEICO). Her bodily injury policy limits were $100,000 per person and $300,000 per occurrence. She also carried supplementary uninsured/ underinsured motorist insurance (hereinafter SUM) with a policy limit of $25,000 per person, and $50,000 per occurrence. In the section entitled “exclusions,” the policy stated that the maximum payment under the SUM endorsement “shall be the difference between: (a) the SUM limits; and (b) the motor vehicle bodily injury liability insurance or bond payments received by the insured or the insured’s legal representative, from or on behalf of all persons that may be legally liable for the bodily injury sustained by the insured.”

Simonis was insured by Safety Insurance. His policy had a bodily insurance policy limit of $25,000 per person. Safety Insurance Company tendered its entire policy limit of $25,000 in settlement of the appellant’s claim.

On July 12, 2013, the appellant served, by certified mail,

CPLR 7503 (c) states, in pertinent part, that “[a]n application to stay arbitration must be made by the party served within twenty days after service upon him of the notice or demand.” Although the statutory provision indicates that the 20-day period begins to run when service is complete, case law indicates that the 20-day period beings to run only upon receipt of the notice of intention to arbitrate (see Matter of Knickerbocker Ins. Co. [Gilbert], 28 NY2d 57 , 65 [1971]; Matter of Eagle Ins. Co. v Pierre-Louis, 306 AD2d 344 [2003]). “[T]he timeliness of a proceeding for a stay of arbitration is measured with respect to the earlier filing of the petition, not with respect to its later service” (Matter of Government Empls. Ins. Co. v Morris, 83 AD3d 709 , 710 [2011]; see Matter of American Commerce Ins. Co. v Nowicki, 120 AD3d 670 [2014]; Matter of Auto One Ins. Co. v Lopez, 88 AD3d 701 [2011]). In the instant case, GEICO received the notice of intention to arbitrate on July 15, 2013, and commenced the instant proceeding to permanently stay arbitration by filing the notice of petition on August 1, 2013. Accordingly, the instant proceeding was timely commenced.

Based upon the bodily injury liability limits of the appellant’s policy of $100,000 for one person, and the bodily injury liability limits of Simonis’s policy of $25,000 for one person, Simonis was in fact underinsured (see Matter of Prudential Prop. & Cas. Co. v Szeli, 83 NY2d 681 , 685 [1994]; Insurance Law § 3420 [f] [2]). However, once Simonis’s insurance carrier tendered its $25,000 policy limits for one person, the exclusion

The appellant’s remaining contentions are without merit.

Since the exclusion applies, the Supreme Court properly granted the petition to permanently stay arbitration (see Matter of Graphic Arts Mut. Ins. Co. [Dunham], 303 AD2d 1038 [2003]).

Rivera, J.R, Miller, Hinds-Radix and Duffy, JJ., concur.