Legislation Report
COMMITTEE
ON CIVIL PRACTICE LAW AND RULES
REPORT
NO. 135-A
June 8, 2000
S. 6672-D
By: Senator Skelos
A.9631-D
By: M. of A. Weprin
Senate Committee: Codes
Assembly Committee: Judiciary
Effective Date: Immediately
AN ACT to
amend the civil practice law and rules, in relation to the venue of an arbitrable
controversy; and to repeal subdivision (a) of section 7502 of the civil practice law and
rules
LAW AND
SECTIONS REFERRED TO: Subdivision (a) of section 7502 of the civil
practice law and rules and rules is repealed and a new subdivision (a) is added
THE
BILL IS APPROVED
Last year the legislature passed A5937
which was designed to ensure that multiple actions or proceedings are not brought in
respect to a single arbitration. The
legislation was invited by the Court of Appeals in Matter
of Solkav Solartechnik, G.m.b.H. (Besicorp Group Inc),
91 N.Y.2d
482, 672 N.Y.S2d 838,695 N.E2d 707 (1998), where the Court determined that, under the
present language of CPLR 7502(a), an application to confirm an arbitration award could not
be brought within the context of the same special proceeding that had sought to stay the
arbitration, since the dismissal of the petition to stay the arbitration was a "final
judgment." The bill (A5937) was intended to require parties to bring all applications
related to an arbitration under the same caption and index number so as to avoid the
possiblity of judicial forum shopping and conserve judicial time and resources.. This was
an affirmative legislation proposal of the NYSBA which originated in the Committee on
Civil Practice Law and Rules.
The
Committee`s original draft of A5937 was revised at the request of the New York State Trial
Lawyers Association in order to carve out an exception for applications to confirm
arbitration awards arising out of proceedings seeking relief under uninsured and
underinsured motorist endorsements of automobile insurance policies. The trial lawyers
were concerned that insurance carriers were initially bringing inappropriate motions to
stay arbitration in their home county and did not feel that motorists should be forced to
confirm the ultimate award in such county. The Governor, however, felt that no special
treatment should be afforded these cases and vetoed the legislation. In his veto message,
the Governor invited a revised bill that afforded no special treatment for uninsured and
underinsured motorist endorsements of automobile insurance cases.
The
revised bill is designed to address the concerns of the Governor. It revises CPLR 7502(a)
to require that a special proceeding arising out of an arbitrable controversy be venued
where specified in the arbitration agreement. If no such provisions are contained in the
agreement, then an application to stay or bar arbitration is to be brought in the county
where the party seeking arbitration resides or is doing business. Since stay applications
are disfavored, and impose additional costs over and above the arbitration, such an
application should be brought where it will not impose undue hardship on the party seeking
to arbitrate. This revision affords no
special treatment for the class of cases involving uninsured and underinsured motorist
endorsements of automobile insurance and is consisent with the general policy of the State
favoring arbitration.
Finally,
the bill requires that all subsequent proceedings be made by motion in the special
proceeding or action where the first application was made, thereby addressing the problems
of Solartechnik
court.
For the
above reasons the bill, an Affirmative Legislative Proposal of the New York State Bar
Association, is APPROVED.
Person
Who Prepared This Report: Paul H. Aloe, Esq.
Chair
of the Committee:
Steven M.
Critelli, Esq.