Opinion
14051/05.
Decided April 10, 2006.
Petitioner seeks an order granting a permanent stay of arbitration or in the alternative a temporary stay pending a hearing on the issues of compliance with policy conditions precedent with coverage. Respondent opposes. Petitioner's motion permanently staying arbitration is granted for the following reasons.
Facts
On January 23, 1996, respondents were occupants of a motor vehicle owned by New Style Limousine, Inc. Their motor vehicle was struck in the rear during a four car accident. Allcity is a domestic insurer which provided supplemental uninsured motorist ("SUM") coverage with a single policy limit of $20,000.00. Pursuant to the terms of the SUM endorsement, Allcity would agree to pay certain benefits to injuries sustained. Notice of intention to make a claim for uninsured motorist benefits were made to Allcity Insurance Company under cover letter dated April 29, 1996. Allcity sent respondent's attorney a notice of disclaimer, dated June 7, 1996 based on "valid insurance of the offending vehicle" [Affirmation of Opposition, Paragraph 5].
Discussion
There is a six year statute of limitations for SUM claims; this is based on contract law — insurance falls under contract law. Respondent contends that his uninsured motorist claim should be barred by the statute of limitations because the date of the accident occurred on January 23, 1996 and petitioner wished to commence this proceeding after January 23, 2002, to wit, April 22, 2005. Petitioner contends that the statute of limitations did not run. Rather than choosing the date of accident as a starting date, petitioner instead notes that "[i]t was not until April 29, 1999, the date of the letter from American Transit Insurance Company to my office advising that only $5,000 of Mr. Lam's policy remained that the offending vehicle became underinsured. Thus it was not until April 29, 1999 that the claim for underinsured benefits accrued and concomitantly the movant claimants had a good faith basis of asserting underinsurance claims. [emphasis added] [Affirmation in Opposition, paragraph 11]
In Nationwide Insurance Company v. De Rose, 241 AD2d 607 (3rd Dept. 1997), following the dismissal of the personal injury action against Velazquez, respondent served a demand for arbitration upon petitioner seeking underinsured motorist coverage in the amount of $43,333.34. Supreme Court denied petitioner's ensuing application to stay arbitration and petitioner appeals.
The requirement in an insurance policy to provide written notice "as soon as practicable" means that "`[a]n insured must give notice to his insurance company within the time limit provided in the policy or within a reasonable time under all the circumstances'" Matter of Nationwide Mut. Ins Co., 219 AD2d 771, quoting Matter of Preferred Mut. Ins. Co., 199 AD2d 719, 720). The reasonableness of the notice depends upon the circumstances of each case ( see, Matter of Nationwide Mut. Ins. Co. v. Edgerson, 195 AD2d 560, 561).
Under the circumstances presented here, we find that respondent's delay of more than one year in serving upon petitioner written notice of her claim for underinsurance coverage was unreasonable. In the instant case, it was well over one year (six years) that respondent put his claim in.
It should be noted that, besides the statute of limitation argument, petitioner sounded strong arguments in support of staying the arbitration based upon the claim's timeliness and proof of accident and insurance of said vehicle. However, reliance of laches/statute of limitations as the centerpiece argument renders the other arguments moot.
For the aforementioned reasons, petitioner's motion permanently staying arbitration is granted.
This constitutes the decision and order of the court.