Tuesday, October 14, 2008

"Delivery" Found to Mean Receipt for Purposes of CPLR 7511's 90-Day SOL

Matter of Lowe v. Erie Ins. Co.
(4th Dept., decided 10/10/2008)

CPLR 7511 requires that a special proceeding to vacate or modify an arbitration award must be made "within ninety days after its delivery" to the petitioner. The CPLR does not define "delivery," but CPLR 7507 provides that the arbitrator "shall deliver a copy of the award to each party in the manner provided in the agreement, or, if no provision is so made, personally or by registered or certified mail, return receipt requested." Regulation 68 concerning no-fault master arbitration procedures provides that "[t]he parties shall accept as delivery of the award the placing of the award or a true copy thereof in the mail, addressed to the parties or their designated representatives at their last known addresses, or by any other form of service permitted by law" (11 NYCRR § 65-4.10[e][3]).

Lowe commenced this special proceeding to vacate a no-fault master arbitration award 91 days after the American Arbitration Association mailed it to the parties, but 86 days after counsel for the petitioner received it. Erie Insurance Company moved to dismiss the petition based on CPLR 7511's 90-day statute of limitations, and Supreme Erie granted that motion.

In a case of first impression and relying on case law concerning labor arbitration awards, the Fourth Department REVERSED and held that, for purposes of 7511's use of the term "delivery", the 90-day limitations period runs from the petitioner's receipt of the no-fault master arbitration award, not its mailing. The Fourth Department noted that other New York courts had explicitly used the terms "receipt" and "received" in discussing the 90-day period set forth in CPLR 7511(a):
In attempting to distinguish the cases that use the word "received," respondent contends that those cases involved labor arbitration awards rather than no-fault master arbitration awards and thus are not governed by Insurance Department Regulation (11 NYCRR) § 65-4.10. We reject that contention, for two reasons. First, 11 NYCRR 65-4.10 (e) (3) simply sets forth the method of the delivery of the award to the parties. It does not define "delivery" as it is used in CPLR 7511 (a). Second, we agree with petitioner that, once a party commences a proceeding pursuant to CPLR article 75, the procedures set forth in that article control over those set forth in the Insurance Department Regulations. Thus, even if 11 NYCRR 65-4.10 (e) (3) constitutes an attempt to define "delivery" under CPLR 7511 (a), such an attempt would be improper. Were we to accept respondent's contention, the 90-day statute of limitations under CPLR 7511 (a) would have different measuring dates, depending on what type of arbitration was sought to be reviewed, and that would be an untenable distinction.
Back to court we go.

No comments: