In Matter of Allstate Ins. Co. (Twomey), 2021 NY Slip Op 05418, an insurer moved to stay arbitration of a SUM claim to compel discovery pursuant to CPLR 3102(c). The Supreme Court denied the petition and the insurer appealed.

New York’s Appellate Division, Fourth Department affirmed the Supreme Court’s decision, finding that the Supreme Court correctly found that the insurer “had ample time . . . to seek discovery of the respondent insured as provided for in the insurance policy, and unjustifiably failed to utilize that opportunity” to obtain the discovery. The Appellate Court also found that the insurer failed to establish any of the “extraordinary circumstances” necessary to warrant court-ordered disclosure in aid of arbitration under CPLR 3102 (c).

The court also rejected the insurer’s argument that the insured respondent’s demand for arbitration was premature in that he had not complied with the terms of the SUM endorsement in the policy. Not only did the insurer fail to properly raise the issue on appeal, but the insurer failed to show that the insured had failed to comply with the terms of the endorsement.

This decision reinforces the importance of promptly seeking discovery in SUM arbitration, as an insurer can lose the right to do so if the request is not made in a timely manner.