Defendant appeals. Under CPLR article 75, "a court may involve itself in the arbitration process within the first 20 days . . . or following the conclusion of the arbitration proceeding," but "[t]here exists no authority for a court to become involved . . . between these periods" ( Matter of Nationwide Mut. Ins. Co. [Miller], 95 AD2d 961, 961; see Matter of Allstate Ins. Co. v Olsen, 222 AD2d 579, 580). "[W]here the parties have entered into an agreement to arbitrate their disputes, and the party desiring arbitration has served a proper notice of intention to arbitrate, the party seeking to avoid arbitration on the ground that the agreement is invalid or has not been complied with, must, under the statute's clear language, seek a stay of arbitration within 20 days of service" ( Matter of Matarasso [Continental Cas. Co.], 56 NY2d 264, 267). While a limited exception to the 20-day time frame applies when a party asserts there never was an agreement to arbitrate ( see id.), challenges regarding, among other things, the scope of an agreement or compliance with the terms of an agreement are precluded if asserted outside the 20-day period ( see Matter of Steck [State Farm Ins. Co.], 89 NY2d 1082, 1084; Matter of Colonial Coop. Ins. Co. [Muehlbauer], 46 AD3d 1012, 1013; Allstate Indent. Co. v Fernandez, 288 AD2d 42, 43). Here, a valid agreement to arbitrate underinsurance claims exists u
The Supreme Court erred in considering the issue of the maximum liability of Liberty Mutual Insurance Company (hereinafter Liberty Mutual). "In effect [Liberty Mutual] inserted an application for a declaratory judgment into the proceeding for a stay of arbitration, without statutory authorization" (Matter of Allstate Ins. Co. v. Olsen, 222 A.D.2d 579, 580). Pursuant to CPLR 7503, a court may stay arbitration, inter alia, on the ground that a valid agreement to arbitrate was not made or has not been complied with, or that the claim is untimely.
The arbitrators' apparent application of the 1992 amendment to the facts in this case was totally irrational and achieved an inequitable result. Since Liberty could not have sought a stay of arbitration on the ground that the damages sought under the policy were excessive, Liberty was required to await the outcome of the arbitration ( cf., Matter of Allstate Ins. Co. v Olsen, 222 AD2d 579; Matter of Nationwide Mut. Ins. Co. [Miller], 95 AD2d 961). Recognizing that the scope of judicial review of an arbitrator's award made in excess of his or her authority is limited ( see, CPLR 7511 [b] [1] [iii]; Rochester City School Dist. v RochesterTeachers Assn., 41 NY 2d 578, 582), and that arbitrators are not bound to abide by substantive rules of law ( Matter of Silverman [Benmor Coats], 61 NY2d 299, 308; Matter of Sprinzen [Nomberg], 46 NY2d 623, 629), I conclude that the arbitrators exceeded their power in awarding an amount in excess of the amount available under the uninsured coverage of the policy and for that reason the amount awarded, i.e. $300,000, should be reduced to $20,000, the policy limit for uninsured motorist coverage ( cf., Matter of Valente v Prudential Prop. Cas. Ins. Co., 77 NY2d 894; Matter of Allstate Ins. Co. v Silver, 225 AD2d 690; Matter of Mele v General Ace. Ins. Co., 198 AD2d 731).
They chose not to do so, but rather to include the request for a declaratory judgment in the article 75 petition. This is impermissible (see, Matter of Allstate Ins. Co. v. Olsen, 222 A.D.2d 579 [2d Dept 1995]), since an action for a declaratory judgment is separate and distinct from a special proceeding. (Cf., 873 Third Ave. Corp. v. 875 Third Assocs., 87 A.D.2d 518 [1st Dept 1982].)