Under an abuse of discretion standard, the Third DCA refuses to apply 65-4.6(e)
Advanced Physical Therapy v. Camrac, LLC, 3D20-1175 (Fla. 3d DCA 2021)
Someone asked – what happens when a Florida Appellate Court has to interpret a New York no-fault regulation? Here is the one word answer: “Duck”.
In this mammoth of a case, the Court luckily did not have to opine on the issue of coverage, out of state fee schedules, and Florida’s fee schedules as they apply 68.6(b). This was not a typical PIP case and the largest PIP outfit in Florida passed on dealing with these matters. So, I stepped in as I did not have any conflicts. Camrac (elrac/elco) eventually folded their tent on liability and later on damages.
The issue became bonus attorney fees. The case was unwieldy and complicated, so I sought them. Camrac opposed. The Circuit Court found this case did not pierce the 65-4.6(d) fee limitations. I disagreed and, of course, appealed.
In a land where 95 percent of cases end up with a PCA, I get a written opinion that made the top page of Florida Law Weekly. The opinion has two parts. The first involves a device called the proposal for settlement (“PFS”). That is a nuanced Fla specific issue and not relevant.
The second involved 65-4.6(e). Both parties agreed the issue was subject to a de novo review, which probably would have meant a remand. But the Court did the following:
Pursuant to the text of the applicable New York regulation, the fee cap is inapplicable only if the trial court determines the case is “of such a novel or unique nature as to require extraordinary skills or services.”
“We consider such a determination to be akin to the determination a Florida trial court must make when awarding fees to a prevailing party. Among the factors a trial court considers, particularly in determining the applicability of a multiplier, is the novelty, complexity or difficulty of the questions involved in the case... While this case may not present as the typical Florida PIP case, nothing in the record would allow us to conclude that the trial court abused its discretion by determining that the case was not of such a novel or unique nature so as to require extraordinary legal skills or services. Canakaris v. Canakaris, 382 So. 2d 1197, 1203 (Fla. 1980) (observing that an abuse of discretion does not occur if reasonable persons could differ about the view adopted by the trial court).”
My objection? How can a Florida Court applying a New York regulation 1) Never cite a NY Case; and 2) Decide to adjudicate 4.6(e) under a Florida standard? Neither party advocated for this approach. Insanity or, figuratively, ducking,
Mallela – or was it?
Matter of Country-Wide Ins. Co. v Bay Needle Acupuncture, P.C.2018 NY Slip Op 08238 (1st Dept. 2018)
This was an interesting case that discusses the distinction between the defenses of “Mallela” and “over-billing”.
“We find that petitioner’s defense is not a Mallela defense. It is based on the guilty plea of Andrey Anikeyev, who, according to petitioner, is respondent’s “de facto owner,” to conspiracy to commit health care fraud and mail fraud. Anikeyev pleaded guilty to billing insurance companies “for health care services for time periods in excess of the actual time period the patient spent with [the] acupuncturist.” This plea supports nothing more than “a defense that the billed-for services were never rendered,” which is “more like a normal’ exception from coverage (e.g., a policy exclusion) [than] a lack of coverage in the first instance” (Fair Price Med. Supply Corp. v Travelers Indem. Co., 10 NY3d 556, 565 [2008]), and therefore does not fall into the “settled law recognizing a narrow exception to the 30-day deadline for defenses based on lack of coverage”
And then comes the real nail in the coffin: “Respondent is entitled to reasonable attorneys’ fees for this appeal, to be determined by Supreme Court”
+Bonus attorneys fees
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.”
Infants compromise order not needed to proceed in arbitration in assignee case
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””
Attorneys fees on a DJ
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,
Extraordinary fee
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.”
Malella and Attorneys fees
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.
Attorneys fees on a DJ
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 [1979]), “[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 [2011]), 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.”
Attorney fee limitations
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.
Article 75 attorneys fees are now limited
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][4]; 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][5]) to refer to Article 75 proceedings and appeals from the proceedings. While the case does not refer to de novo actions, 4.10[j][4] 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.