Key Takeaway
Analysis of attorney fee recovery in no-fault insurance declaratory judgment cases, examining when insureds can recover fees when defending against insurer DJ actions.
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 ), “he reasoning behind 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. “ speaks with a forked tongue.”
