The following papers were read upon this motion: Notice of Motion/Order to Show Cause 1-22 Answering Papers 24 Reply 27 Briefs: Plaintiff’s/Petitioner’s Defendant’s/Respondent’s Decision/Order Petitioner makes an application to this Court, pursuant to CPLR §7503, requesting that Respondent be barred from SUM arbitration or a finding that Respondent is not entitled to SUM arbitration. In the alternative, Petitioner requests an Order compelling the arbitrator to determine such entitlement and to stay arbitration until Respondent is compelled to appear for an examination under oath and a physical examination and provide authorizations for various medical records. For the foregoing reasons Petitioner’s application is denied in part and granted in part. BACKGROUND This petition arises from an alleged motor vehicle accident which occurred on July 21, 2015, between Respondent and an underinsured/uninsured motorist, who is a non-party to the action here or the pending arbitration. Respondent at the time of the accident was an employee of Petitioner Laboratory Corporation of America (“Lab Corp.”) and was driving a vehicle leased to Lab Corp. Lab Corp. had a policy at the time of the accident that prohibited a driver of a vehicle leased to Lab Corp. from bringing any action or claim for indemnity or damages against Lab Corp. or its insurers in connection with injuries or damages resulting from the acts of an underinsured/uninsured motorist. Respondent signed an Automobile Responsibility Agreement that waived all claims against Lab Corp. and its insurer. Also, at the time of the accident the subject vehicle was insured through a commercial automobile policy with Petitioner Ace American Insurance Co. (“Ace”). The policy contained an uninsured motorist endorsement. This policy also contains an arbitration clause. On November 18, 2016 Respondent filed a Demand for Supplemental Underinsured Arbitration with the American Arbitration Association (“AAA”) pertaining to the accident against Ace. AAA advised of its limited ability to decide coverage issues, policy limits, and stacking of policy coverage. Petitioners elected to move forward with the arbitration. Petitioners did not file a motion to bar the arbitration within twenty (20) days but in fact almost seven (7) months later. At the preliminary conference issues arose regarding calls between the parties and the arbitrator, disagreements as to the application of the policy, and conflicts over the Automobile Responsibility Agreement and the uninsured motorist endorsement. The arbitrator was unsure whether he could decide such an issue as waiver. On May 10, 2017 a notice was sent to the parties that an arbitration hearing was to be held on August 23, 2017, and the AAA directed that all documents be submitted to the AAA on or before August 8, 2017. Petitioner brought this application on by Order to Show Cause which was granted on June 19, 2017 (Hudson, J.). The petition was transferred to this Part’s inventory on October 9, 2019 via Administrative Order No. 73-19 by the Administrative Judge of Suffolk County. Petitioners submit, inter alia, the policy, the Automobile Responsibility Agreement, and the commercial automobile policy with Ace. Respondent opposes the petition because it was untimely pursuant to CPLR §7503(c). LEGAL STANDARD A party who has grounds to oppose arbitration may preserve the right to litigate the underlying dispute in court by timely applying to the court for a stay of arbitration (CPLR §7503[b]). On such application, the threshold defenses to arbitration can be raised, i.e., the claim is not arbitrable and is made by means of a special proceeding (see CPLR §7501; CPLR §7502[a]). DISCUSSION CPLR 7503(c) requires a party, once served with a demand for arbitration, to move to stay such arbitration within 20 days of service of such demand, or else that party will be precluded from objecting. Courts treat the twenty-day time limit to apply for a stay under CPLR 7503(c) as a statute of limitations, meaning that if the demand is untimely, courts are generally powerless to entertain a late application addressed to the threshold questions. (see Aetna Life & Casualty Co. v. Stekardis, 34 N.Y.2d 182, 185-86, [1974]; Metropolitan Property and Liability Insurance Co. v. Hancock, 183 A.D.2d 831 [2d Dept 1992]). In Matter of Matarasso (Continental Cas. Co.), 56 N.Y.2d 264, the Court of Appeals addressed the issue of whether a motion to stay arbitration may ever properly be entertained outside the 20-day period. The insured in that case served a demand for arbitration upon the respondent. The respondent moved for a stay of arbitration after 60 days on the ground that the parties never agreed to arbitrate. Petitioner claimed that respondent’s failure to move within the 20-day period precluded the granting of a stay. The Court of Appeals articulated an exception to the 20-day period of CPLR 7503(c) concluding: “a motion [to stay arbitration] may be entertained when, as here, its basis is that the parties never agreed to arbitrate, as distinct from situations in which there is an arbitration agreement which is nevertheless claimed to be invalid or unenforceable because its conditions have not been complied with” (id., at 266). Here, Matarasso is not applicable. The commercial automobile policy Lab Corp. has with Ace contains an agreement to arbitrate. It is under that policy, and its UM endorsement that Respondent Walsh seeks arbitration. As such, the clear application of the statute and the case law require arbitration in this case. Petitioner’s argument that Respondent is not a party to the commercial automobile policy is unavailing. It is for this Court, not an arbitrator, to decide the threshold issue of whether Respondent is an “insured” under the commercial automobile policy and entitled to demand arbitration (see e.g. Matter of Continental Cas. Co. v. Lecei, 47 A.D.3d 509 [1st Dept. 2008]). Unlike the agreement in Matter of Monarch Consulting, Inc. v. National Union Fire Ins. Co. of Pittsburgh, PA, 26 N.Y.3d 659, 669 [2016], the arbitration clause in the subject policy does not say that the arbitrator will decide arbitrability. The commercial automobile policy defines an insured as “any other person while occupying…[a] motor vehicle owned by the named insured.” It is uncontroverted that Respondent was occupying a motor vehicle leased to Lab Corp at the time of the accident. Therefore, Respondent is an insured under the commercial automobile policy and may avail himself of the arbitration clause. Whether the parties have agreed to arbitrate is the issue here, and clearly the commercial automobile policy answers that question in the affirmative. As such, petitioner’s contention is outside the exception articulated in Matarasso and is barred by the CPLR 7503(c) 20-day period to object to arbitration. As to the remaining branches of Petitioners application staying arbitration pending discovery and compelling the arbitrator to determine whether the waiver in the Automobile Responsibility Agreement foreclose Respondent’s claims of SUM benefits were unopposed by Respondent. Accordingly, they are granted. CONCLUSION Because Respondent is an insured under Petitioners’ commercial automobile policy, he is covered by the arbitration clause therein. Petitioners’ contention is outside the exception articulated in Matarasso and is barred by the CPLR 7503(c) 20-day period to object to arbitration. Petitioners’ application (1) seeking to stay arbitration pending discovery and (2) seeking to compel the arbitrator is granted as both points are unopposed. As such, the application is denied in part and granted in part as ordered supra. ORDERED, that Petitioners’ application is denied in so much as to bar SUM arbitration and to find the Respondent is otherwise not entitled to SUM arbitration; and it is further, ORDERED, that the arbitration is temporarily stayed pending the complete exchange of discovery; and it is further, ORDERED, that the Respondent is compelled to appear for an Examination Under Oath and Physical Examination and provide authorizations to obtain the Respondent’s medical, radiological, collateral source, and other treatment records; and it is further, ORDERED, that upon the stay being lifted the parties return to arbitration and that the arbitrator is compelled to determine whether the waiver in the Automobile Responsibility Agreement forecloses Respondent’s claims of SUM benefits. The foregoing constitutes the Decision and Order of this Court. Dated: October 24, 2019 Riverhead, NY FINAL DTSPOSITION [ X ] NON-FINAL DTSPOSITION [ ]
