In Matter of Interboro Ins. Co. v. Coronel , Interboro Insurance Company petitioned to permanently stay arbitration of a number of uninsured motorist claims.
In 2001, Patricia Coronel was driving a vehicle owned by Manuel Coronel when she and three relatives were involved in an accident on the Grand Central Parkway with a vehicle operated by Katherine Langadakis. Both Coronel and Langadakis reported to police officers that Langadakis was forced to stop short after being cut off by another vehicle which was "allegedly uninsured." Unable to stop in time, Coronel rear-ended Langadakis. (Neither were hit by the "allegedly uninsured" driver.)
When Interboro Insurance 's "predecessor-in-interest" (Interboro Mutual Indemnity Insurance Company) was served with a demand for arbitration, that company was undergoing "rehabilitation" and there was a 2005 court order issued by the Nassau County Supreme Court restraining "all persons ... from commencing or prosecuting any actions, lawsuits, or proceedings against Interboro."
In February 2007, when the rehabilitation ended and the American Arbitration Association (AAA) sent a notice advising the company of a pre-hearing telephone conference, Interboro sought injunctive relief.
After the Queens County Supreme Court denied Interboro 's request and dismissed the case, Interboro appealed to the Appellate Division, Second Department.
The AD2 noted that an insurer who doesn't seek a stay within 20 days after being served with an arbitration notice is unable to object to that proceedings' continuation. In this instance, Interboro complied with that rule because it had been subject to that 2005 Nassau County order and sought relief within 20 days of the AAA 's February 2007 notice.
The AD2 also concluded the lower court should have granted Interboro 's request to stay arbitration because there was no proof the uninsured driver made "physical contact" with either of the two vehicles.
We're staying with that. 
To download a copy of the Appellate Division's decision, please use this link: Matter of Interboro Ins. Co. v. Coronel