Matter of Country-Wide Ins. Co. v Bay Needle Care Acupuncture, P.C., 2018 NY Slip Op 03929 (1st Dept. 2018)
“Respondent is entitled to reasonable attorney’s fees for this appeal. Supreme Court has authority to award attorneys fees as this is an appeal from a master arbitration award pursuant to 11 NYCRR 65-4.10(j)(4), which, in pertinent part, provides: “The attorney’s fee for services rendered in connection with … a court appeal from a master arbitration award and any further appeals, shall be fixed by the court adjudicating the matter” (see also Matter of GEICO Ins. Co. v AAAMG Leasing Corp., 148 AD3d 703 [2d Dept 2017], recalling and vacating Matter of GEICO Ins. Co. v AAAMG Leasing Corp., 139 AD3d 947 [2d Dept 2016]). Accordingly, we remand the matter to Supreme Court for a determination of respondent’s reasonable attorney’s [*2]fees for this appeal. To the extent Country-Wide Ins. Co. v Valdan Acupuncture, P.C. (150 AD3d 560, 561 [1st Dept 2017]) takes a different approach to calculating attorneys’ fees, we decline to follow it.”
Matter of Fast Care Med. Diagnostics, PLLC/PV v Government Employees Ins. Co., 2018 NY Slip Op 03831 (2d Dept. 2018)
“We agree with the Supreme Court that the arbitrator’s award was irrational and in conflict with CPLR 1209, which applies “only where an infant is a party” to an arbitration proceeding (Goldenberg v Goldenberg, 25 AD2d 670, 670, affd 19 NY2d 759; see Schneider v Schneider, 17 NY2d 123, 127). The infant patient was not a party to the arbitration; rather, Fast Care, as the infant’s assignee, was the party that brought the arbitration (see 11 NYCRR 65-3.11[a]). Therefore, we agree with the court that the arbitrator disregarded established law in determining that the requirements of CPLR 1209 applied here (Schneider v Schneider, 17 NY2d at 127; see Goldenberg v Goldenberg, 25 AD2d at 670). Furthermore, the master arbitrator’s determination that the assignment of benefits was not effective was not based on any requirement set forth in established law or regulations (see generally 11 NYCRR 65-2.4[c]).”
Bonus attorney fees: “Fast Care did not demonstrate its entitlement to an award of an attorney’s fee, as the arbitrator did not reach the issue of whether the subject claims were “overdue””
Hertz Vehs., LLC v Cepeda, 2017 NY Slip Op 08603 (1st Dept. 2017)
The question left unanswered in Fiduciary was what happens if the Assignor (or EIP) who succeeds on a DJ is a driver, owner or registered user of the vehicle? The Court here is clear.
“The insured in the circumstances described above may recover attorneys’ fees because “an insurer’s duty to defend an insured extends to the defense of any action arising out of the occurrence, including a defense against an insurer’s declaratory judgment action” (U.S. Underwriters, 3 NY3d at 597-598).
There is no such duty in this case, as Innovative is not an insured to which Hertz owes a duty to defend. Although Innovative was assigned the claimants’ rights for reimbursement of no-fault benefits, the claimants were only passengers in the insured vehicle at the time of the accident, and were not parties to whom Hertz owed a duty to defend (Fiduciary Ins. Co. Of Am. v Medical Diagnostic Servs., P.C., 150 AD3d 498 [1st Dept 2017] citing U.S. Underwriters, 3 NY3d at 597-598).”
The Court is sympathetic to the medical provider who must expend tens of thousands on a New York County DJ action for billing, often times less than $5,000.00. Therefore, an artificial distinction has been made between someone to whom a defense is owed in a third party action and to someone who a duty to defend and indemnify next exists.
I am learning that most states will award reasonable attorneys fees, regardless of who files a lawsuit, when a Claimant prevails in a coverage dispute adjudicated in the Courts. It appears New York is about 25 % of the way there,
A.B. Med. Servs., PLLC v Motor Veh. Acc. Indem. Corp., 2017 NY Slip Op 50676(U)(App. Term 2d Dept. 2017)
(1) “Assuming without deciding that 11 NYCRR 65-4.6 (f), a no-fault regulation, could properly be applied to postjudgment enforcement litigation, such as that involved herein, we nonetheless agree with the Civil Court’s finding that the issues in dispute here were not so novel or unique as to require extraordinary skills or services warranting attorney’s fees in excess of those provided for in the no-fault regulations, regardless of the outcome obtained”
(2) “Indeed, plaintiffs’ counsel’s own timesheets indicate that the attorneys involved spent less than two and a half hours on legal research on these allegedly “novel” issues.”
Country-Wide Ins. Co. v Valdan Acupuncture, P.C., 2017 NY Slip Op 04068 (1st Dept. 2017)
(1) Assuming without deciding that an insurer’s defense of fraudulent incorporation cannot be precluded (see AVA Acupuncture, P.C. v AutoOne Ins. Co., 28 Misc 3d 134[A], 2010 NY Slip Op 51350[U] [App Term 2d Dept 2010]; Bath Med. Supply, Inc. v Allstate Indem. Co., 27 Misc 3d 92, 95 [App Term 2d Dept 2010]), we conclude that the master arbitrator properly confirmed the award of the arbitrator, who reviewed petitioner’s submissions relating to the plea of guilty to no-fault insurance fraud by a man married to the owner of respondent, found that respondent was not mentioned once in the “hundreds of pages” submitted, and rejected petitioner’s attempt to hold the owner “responsible by association.”
(2) “Respondent is entitled to attorneys’ fees for this appeal (11 NYCRR 65-4.10(j)(4)), calculated, in accordance with 11 NYCRR 65-4.6(b), as 20% of the no-fault benefits awarded.”
This decision goes against Geico v. AAMG, which seems to imply an hourly fee for work in relation to an article 75. This decision does not touch upon a de-novo action, which may or may not be subjection to an attorney fee in accordance with 4.6(b) viz 4.10(j)(4).
Also, precludable Mallela? So much in a small case.
Fiduciary Ins. Co. of Am. v Medical Diagnostic Servs., P.C., 2017 NY Slip Op 03888 (1st Dept. 2017)
“While an insured party may recover attorneys’ fees where it successfully defends against its insurer’s action seeking a declaratory judgment that it has no duty to defend or indemnify its insured (see Underwriters Ins. Co., 3 NY3d at 597; Mighty Midgets v Centennial Ins. Co., 47 NY2d 12, 21 ), “[t]he reasoning behind [the award of such attorneys’ fees] is that an insurer’s duty to defend an insured extends to the defense of any action arising out of the occurrence, including a defense against an insurer’s declaratory judgment action” (Underwriters Ins. Co., 3 NY3d at 597-598). Here, plaintiff owes defendant Star no duty to defend, as Star is merely seeking reimbursement for chiropractic services rendered to the claimant in this no-fault action. While Star was assigned the claimant’s rights for such reimbursement, the claimant was merely the injured party in the taxi at the time of the accident, and plaintiff owed no duty to defend the claimant. Star, as assignee of the claimant’s rights, could acquire no greater rights than its assignor (see New York & Presbyt. Hosp. v Country-Wide Ins. Co., 17 NY3d 586, 592 ), and did not acquire any right to a defense from plaintiff. Thus, the court properly held that Star was not entitled to attorneys’ fees in this case.”
What if Plaintiff owed a duty to defend the Assignor, i.e., Assignor was the driver of the taxi. The record on appeal shows otherwise. Does that change the scenario notwithstanding the fact that “Star is merely seeking reimbursement for chiropractic services rendered to the claimant in this no-fault action”? I throw it out there because the decision is ambiguous. “[The court] speaks with a forked tongue.”
City Care Acupuncture, P.C. v Allstate Prop. & Cas. Ins. Co., 2016 NY Slip Op 51793(U)(App. Term 2d Dept. 2016)
(1) “Appeal, on the ground of inadequacy, from a decision after inquest of the City Court of Yonkers, Westchester County (Thomas R. Daly, J.), dated January 13, 2015, and from a judgment of the same court entered April 21, 2015.”
(2) “In the present case, as the City Court awarded a default judgment in favor of plaintiffs for first-party no-fault benefits in the principal sum of $4,491.47, plaintiffs are entitled to the maximum statutory attorney’s fees of $850 (cf. 11 NYCRR 65-4.6 [d] [effective July 23, 2014, the maximum possible award of attorney’s fees in this type of action was increased to $1,360]).”
What I find interesting about this case is there is a controversy regarding whether the July 23, 2014 amendment to the attorney fee, increasing it is retroactive. I always said “no”. This appears to support my thought.
Matter of GEICO Ins. Co. v AAAMG Leasing Corp., 2016 NY Slip Op 03879 (2d Dept. 2016)
“In a proceeding for judicial review of an award by a master arbitrator, an attorney’s fee shall be fixed by the court adjudicating the matter (see Insurance Department Regulations [11 NYCRR] § 65-4.10[j]; Matter of Hempstead Gen. Hosp. v National Grange Mut. Ins. Co. , 179 AD2d 645).”
“The limitations of an attorney’s fee recoverable in an appeal from a master arbitration award are set forth in Insurance Department Regulations (11 NYCRR) § 65-4.10(j). Insurance Department Regulations (11 NYCRR) § 65-4.10(j)(5) states: “No attorney shall demand, request or receive from the insurer any payment or fee in excess of the fees permitted by this subdivision for services rendered with respect to a no-fault master arbitration dispute.”
The Court has construed the above provision (4.10[j]) to refer to Article 75 proceedings and appeals from the proceedings. While the case does not refer to de novo actions, 4.10[j] refers to both types of proceedings.
I think the Court has probably gotten this wrong. As a carrier, it is great knowing that my liability for counsel fees is limited to $650 when I commence a trial de novo. But to be dragged through a de-novo action with a PC, CC and other attendants of a Supreme Court action when the provider chose to file an arbitration and to have an attorney fee limited to $650? This is nonsense.
I really do not think DFS meant for this interpretation of the regulation. I just do not read 4.10(j)(5) as a limitation on 4.10(j)(4). It is creative, I will say that.
EMA Acupuncture P.C. v Allstate Ins. Co., 2015 NY Slip Op 50348(U)(App. Term 1st Dept. 2015)
Good job James F. Sullivan and crew.
We sustain so much of the order under review as limited the amount of any recovery of attorneys’ fees to the sum of $850, the maximum allowable pursuant to Insurance Department Regulations [11 NYCRR] § 65-4.6(e). Since this provision provides that attorneys’ fees in a no-fault action are to be calculated based on the “aggregate of all bills for each insured” disputed in any action, up to a maximum of $850 (LMK Psychological Servs., P.C. v State Farm Mut. Auto. Ins. Co., 12 NY3d 217 ), the $850 limit was properly applied to the claims at issue in this consolidated action, all of which involve the same parties and assignor, and arise from the same accident.”
So assume that you have a typical multisuit involving three providers and one assignor. Can you now make the argument that the attorney fee should be on an aggregate basis? Therefore, $60 minimum and $850 maximum regardless of the amount of Assignee medical providers? With the new-new-new regs, I am unsure this will matter as the minimum has been removed and you need just north of $8100 in combined principle and interest to reach the attorney fee ceiling. Maybe with consolidated NJ surgery cases this can be relevant?
11 NYCRR 65-4.6
The following limitations shall apply to the payment by insurers of applicants’ attorney’s fees for services necessarily performed in the resolution of no-fault disputes:
(a) If an arbitration was initiated or a court action was commenced by an attorney on behalf of an applicant and the claim or portion thereof was not denied or overdue at the time the arbitration proceeding was initiated or the action was commenced, no attorney’s fees shall be granted.
(b) If the claim is resolved by the designated organization at any time prior to transmittal to an arbitrator and it was initially denied by the insurer or overdue, the payment of the applicant’s attorney’s fee by the insurer shall be limited to 20 percent of the total amount of first-party benefits and any additional first-party benefits, plus interest thereon, for each applicant with whom the respective parties have agreed and resolved disputes, subject to a maximum fee of $1,360.
(c) For disputes subject to arbitration or court proceedings, where one of the issues involves a policy issue as enumerated on the prescribed denial of claim form (NYS form NF-10), subject to this section, the attorney’s fee for the arbitration or litigation of all issues shall be limited to a fee of up to $70 per hour, subject to a maximum fee of $1,400. In addition, an attorney shall be entitled to receive a fee of up to $80 per hour for each personal appearance before the arbitration forum or court.
(d) For all other disputes subject to arbitration or court proceedings, subject to the provisions of subdivision (a) of this section, the attorney’s fee shall be limited as follows: 20 percent of the total amount of first-party benefits and any additional first-party benefits, plus interest thereon, for each applicant per arbitration or court proceeding, subject to a maximum fee of $1,360. If the nature of the dispute results in an attorney’s fee that could be computed in accordance with the limitations prescribed in both subdivision (c) and this subdivision, the higher attorney’s fee shall be payable.
(e) Notwithstanding the limitations specified in this section, if the arbitrator or a court determines that the issues in dispute were of such a novel or unique nature as to require extraordinary skills or services, the arbitrator or court may award an attorney’s fee in excess of the limitations set forth in this section. An excess fee award shall detail the specific novel or unique nature of the dispute that justifies the award. An excess award of an attorney’s fee by an arbitrator shall be appealable to a master arbitrator.
(f) If a dispute involving an overdue or denied claim is resolved by the parties after it has been forwarded to the conciliation center of the appropriate arbitration forum or after a court action has been commenced, the attorney for the applicant shall be entitled to a fee, which shall be computed in accordance with the limitations set forth in this section.
(g) No attorney shall demand, request or receive from the insurer any payment of fees not permitted by this section. [FN1]
(h) Notwithstanding any other provision of this section and with respect to billings on and after the effective date of this regulation, if the charges by a health care provider, who is an applicant for benefits, exceed the limitations contained in the schedules established pursuant to section 5108 of the Insurance Law, no attorney’s fee shall be payable by the insurer. This provision shall not be applicable to charges that involve interpretation of such schedules or inadvertent miscalculation or error.
filed Jan. 20, 2015 eff. Feb. 4, 2015.
[FN1] Attorneys should be aware of the Appellate Division Rules prohibiting fees in connection with the collection of first-party no-fault benefits (22 NYCRR sections 603.7(e)(7), 691.20(e)(7), 806.13(f) and 1022.31(f)).