Matter of Knickerbocker Ins. Co. (Gilbert), 28 N.Y.2d 57 (1971): Proper Service Required for Staying Arbitration

28 N.Y.2d 57 (1971)

To properly move for a stay of arbitration under CPLR 7503(c), service of the notice of application must be made in the same manner as a summons or by registered or certified mail, return receipt requested, within the statutory 20-day time limit.

Summary

This case addresses the specific requirements for serving notice of an application to stay arbitration under New York’s CPLR 7503(c). Knickerbocker Insurance Company attempted to stay arbitration by sending a copy of the application via ordinary mail within the 20-day statutory period. The court held that this method of service was insufficient because CPLR 7503(c) mandates service in the same manner as a summons or by registered or certified mail, return receipt requested. The court distinguished its prior holding, emphasizing that strict compliance with the service requirements is necessary, and that failure to comply renders the proceeding jurisdictionally defective.

Facts

Knickerbocker Insurance Company sought to stay arbitration proceedings initiated against it. Within the 20-day period prescribed by CPLR 7503(c) for applying for a stay, Knickerbocker sent a copy of its application to stay arbitration to the respondent via ordinary mail. The respondent argued that this service was insufficient because it did not comply with the statute’s requirements for service.

Procedural History

The initial court found Knickerbocker’s service to be improper. This decision was appealed to the Appellate Division, which affirmed the lower court’s ruling. The case then reached the New York Court of Appeals.

Issue(s)

Whether sending a copy of an application to stay arbitration via ordinary mail, within the 20-day statutory period, constitutes proper service under CPLR 7503(c), which requires service in the same manner as a summons or by registered or certified mail, return receipt requested.

Holding

No, because CPLR 7503(c) explicitly requires service of the notice of application to stay arbitration to be made in the same manner as a summons or by registered or certified mail, return receipt requested; ordinary mail is insufficient to meet this statutory requirement.

Court’s Reasoning

The Court of Appeals emphasized the importance of strict compliance with the service requirements outlined in CPLR 7503(c). The court rejected Knickerbocker’s argument that its prior decision in Matter of Knickerbocker Ins. Co. [Gilbert] supported the attempted service. The court clarified that the prior case involved service of a notice to stay arbitration via certified mail, return receipt requested, which complied with the statute. The court noted that CPLR 7503(c) was later amended to allow service on the claimant’s attorney under certain circumstances, but the fundamental requirement for service “in the same manner as a summons or by registered or certified mail, return receipt requested” remained unchanged.

The court stated,