Optimal Well-Being Chiropractic, P.C. v MVAIC, 2014 NY Slip Op 51861(U)(App. Term 2d Dept. 2014)
“The judgment that was subsequently entered pursuant to the order entered April 20, 2012 awarded plaintiff, among other things, interest and attorneys’ fees. The interest awarded was calculated at the rate of two percent per month from July 6, 2010 through the date of entry of the judgment, July 16, 2012. However, these dates do not comport with the dates to be used for the calculation of interest as set forth in LMK Psychological Servs., P.C. v State Farm Mut. Auto. Ins. Co. (12 NY3d 217 ) and East Acupuncture, P.C. v Allstate Ins. Co. (61 AD3d 202). Consequently, the amount of interest awarded is excessive. Moreover, in this case, as the amount of attorneys’ fees is dependent upon the accrued interest awarded (11 NYCRR 65-4.6 [e]), the amount of attorneys’ fees awarded is likewise excessive.”
The interest toll and the concomitant attorney fee issue.
Medalliance Med. Health Servs. v Allstate Ins. Co., 2013 NY Slip Op 23156 (Civ. Ct. Queens Co. 2013)
A prompt letter reminding the carrier that it owes interest in an amount less than $5.00 moots the argument that collection of interest in an amount that is less than $5.00 is categorically prohibited.
The arguments raised in this case are questionable, but somebody had to raise them. In the end, Civil Court came to the inescapable conclusion that the provider was entitled to its interest and its attorney fee.
“On this motion and cross motion, as well as other motions that are pending, the issue is whether the plaintiff is entitled to recover overdue interest when it does not exceed the sum of five dollars indicated in 11 NYCRR 65-3.9 (a). The defendant contends that the regulation limits overdue interest to an amount exceeding five dollars that is to be paid, without demand, upon payment of the overdue claim. The plaintiff claims that the regulation does not preclude the applicant from demanding overdue interest below five dollars. There are prior orders in Civil Court, Queens County that have decided this issue in cases involving different parties. These orders, some of which are signed by this Court, have held that collection of overdue interest of less than five dollars is not precluded by regulation 11 NYCRR 65-3.9 (a).”
“The interest which accrues on overdue no-fault benefits at a rate of two percent per month is a statutory penalty designed to encourage prompt adjustments of claims and inflict a punitive economic sanction on those insurers who do not comply (citations omitted)” (East Acupuncture, P.C. v Allstate Ins. Co., 61 AD3d at 210). The construction of 11 NYCRR 65-3.9 (a), that is advocated by the defendant, would preclude overdue interest of less than five dollars. This would conflict with the statutory language of Insurance Law §5106(a) which imposes interest on “all overdue payments.” The change would also tend to increase the delay in compensating low cost medical benefits that accumulate minimal overdue interest. Such a construction of the statute [*5]conflicts with its primary aims and violates the legislative intent.
The legislature was entitled to enact a limitation on the overdue interest in Insurance Law §5601(a), as it did by expressly eliminating interest of “less then two dollars” in Insurance Law §3224-a (c) (1). However, the legislature did not exempt the overdue interest of less than five dollars, that is sought by the defendant. The Superintendent of Insurance also did not preclude the collection of overdue interest that is less than five dollars, if it is demanded. This Court will not now prevent the collection of such interest.
Accordingly, the plaintiff’s motion for summary judgment is granted and the plaintiff is awarded judgment, pursuant to Insurance Law §5106 (a), for the overdue interest and attorney fees alleged in the complaint. The defendant’s cross motion to dismiss the action is denied.”
By the way, as and for the attorney fee, is 65-4.6(b)(3) applicable? For disputes involving interest only, the attorney fee shall equal the amount of interest up to $60?
Cornell Med., P.C. v Mercury Cas. Co.
2009 NY Slip Op 29228 (App. Term 2d Dept. 2009)
This case is extremely complicated. There are two points of law that came from this case. The first point of law that came from this case, and it is significant, is that a prima facie demonstration of failure to bill in accordance with the fee schedule raises an inference that a plaintiff attorney is not entitled to an attorney fee. The plaintiff attorney must then prove the two exceptions that are set forth in 65-4.6(i). Secondly, a counterclaim for monies paid in excess of the fee schedule is untenable.
LMK Psychological Servs., P.C. v State Farm Mut. Auto. Ins. Co.
2009 NY Slip Op 02481 (2009)
Everybody now knows the LMK decision. Many people have posted and blogged about it. I could discuss it here at length, but it would be fruitless. I will share a few observations. First, the decision was poorly written. When I say poorly written, I mean this in the sense that modern no-fault jurisprudence is nuanced. Does anybody remember the entire line of cases which construed interest tolling based upon a definition of the word “Applicant”?
The Court of Appeals, in a cavalier fashion, used the words: “insured”, “claimant”, and “cause of action” all throughout their opinion. These phrases have created hundreds of court decisions from the lower courts up through the Appeals Courts. I will highlight the examples of the internally inconsistent language that the Court of Appeals used in this decision:
1) “the Superintendent stated
“[that provision] makes it clear that the amount of attorneys’ fees awarded will be based upon 20% of the total amount of first party benefits awarded. That total amount is derived from the total amount of individual bills disputed in either a court action or arbitration, regardless of whether one bill or multiple bills are presented as part of a total claim for benefits, based upon the health services rendered by a provider to the same eligible insured.”
2) “For purposes of calculating attorneys’ fees, the Superintendent has interpreted a claim to be the total medical expenses claimed in a cause of action pertaining to a single insured, and not — as the courts below held — each separate medical bill submitted by the provider.”
3) “Thus, this Court accepts the Insurance Department’s interpretation of its own regulation and, upon remittitur, directs Supreme Court to calculate attorneys’ fees based on the aggregate of all bills for each insured”
So now, we have different interpretations of this rule. Does the LMK rule involve each “cause of action” no matter how pleaded? Does this rule involve the “aggregate of all bills” for the insured? Or, does LMK stands for what it means: “Because this interpretation is neither irrational, unreasonable, nor runs counter to the clear wording of the statute, it is entitled to deference.”
I will take option #3. The Appellate Terms will inevitably clean this mess up, and hold that option #3 is the most logical path to follow. But LMK at all levels just goes to show how careful things need to be expressed, or else unintended consequences will be abound.