Summary
In Matter of Empire Mut. Ins. Co. (Levy) (35 A.D.2d 916), a notice to stay arbitration, served after the expiration of the time period, was held timely because the demand was served on movant's Long Island office when the demanding party knew the claim was being processed in the New York City office.
Summary of this case from Matter of Nationwide Ins. Co.Opinion
December 1, 1970
Order of the Supreme Court, New York County, entered on March 9, 1970, unanimously reversed on the law and the facts, without costs and without disbursements, motion granted, and application remanded for a hearing on the merits. The question presented is whether the petitioner is barred from contesting the application for arbitration by virtue of the 10-day limitation provided in CPLR 7503 (subd. [c]). Respondent complied with all the technical requirements, and according to the wording of the statute Special Term was justified in denying petitioner relief. However, the record clearly demonstrates that the accident happened in New York County and all parties reside there. Moreover, respondent's attorney had been in touch with petitioner's New York office, had communicated with that office by mail, and was well aware that the matter was being handled there. Nevertheless, he mailed the demand for arbitration to an outlying office in Rockville Centre. Being experienced in the field, he must have known that the matter was being handled in the New York office, that the demand would come to Rockville Centre as something entirely without background, and that investigation would be required among petitioner's various offices to discover where the demand actually belonged. Respondent's hopes were realized as this was not accomplished in time to initiate proceedings for a stay within the time limitation. This is not a new ploy. We have encountered it before ( Matter of Allstate Ins. Co. [ Kelly], 35 A.D.2d 778). In the reported instance the respondent sent the notice to an office in Chicago but outdid himself because that office had been closed. If this service is effective to bar contest to the arbitration, an insurer that did a nationwide business could be served anywhere, with the practical certainty that it would be precluded from opposing arbitration. Such practice should not be countenanced, on the principle that service not designed to give notice cannot be grounds for a default ( Mullane v. Central Hanover Trust Co., 339 U.S. 306). It should be understood that the holding herein is limited to the situation presented here where it is found that service of the demand on a particular office is made for the purpose of hindering or preventing a contest of the right to arbitration within the 10-day limitation.
Concur — Capozzoli, J.P., Nunez, Steuer and Macken, JJ.