Key Takeaway
New York court rules on when statutory interest begins accruing on no-fault insurance claims - from filing or service of summons and complaint under CCA 412.
Parsons Med. Supply, Inc. v GEICO Gen. Ins. Co., 2013 NY Slip Op 52328(U)(App. Term 2d Dept. 2014)
“Based upon an assessment of damages submitted by plaintiff, a judgment was entered on March 12, 2011 awarding plaintiff the principal sum of $2,680 plus interest in the sum of $1,393.60, the interest being awarded from October 27, 2008, the date of the filing of the summons and complaint. Defendant thereafter moved to modify the judgment, arguing that, pursuant to CCA 412, the interest should have been awarded from January 26, 2009, the date of the service of the summons and complaint. The Civil Court denied defendant’s motion. We reverse.”
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“In this case, defendant timely denied the claims at issue and plaintiff did not commence the action within 30 days the of receipt of those denials. Thus, the interest did not begin to accrue until plaintiff commenced this action. New York City Civil Court Act 400 (1) provides that a Civil Court action is commenced by the filing of a summons and complaint. ”
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“Because the no-fault regulations provide that, in situations such as the one here, interest on a no-fault claim does not accrue until the date of the inception of the action, CCA 412 applies (see 65 Siegel’s Practice Review, The New § 412, on the Accrual of Interest, at 1 ; All Boro Psychological Servs., P.C. v GEICO Gen. Ins. Co., 38 Misc 3d 268 ). Therefore, the interest in this case should have been awarded from the date of the service of the summons and complaint, rather than from the date of the filing thereof.”
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Because the no-fault regulations provide that, in situations such as the one here, interest on a no-fault claim does not accrue until the date of the inception of the action, CCA 412 applies (see 65 Siegel’s Practice Review, The New § 412, on the Accrual of Interest, at 1 ; All Boro Psychological Servs., P.C. v GEICO Gen. Ins. Co., 38 Misc 3d 268 ). Therefore, the interest in this case should have been awarded from the date of the service of the summons and complaint, rather than from the date of the filing thereof.
Judge Levine’s theory on this has been affirmed. It makes sense when you think about it.
