Gary T day

Case #1

Matter of Bay Needle Care Acupuncture v Country-Wide Ins. Co., 2019 NY Slip Op 07249 (2d Dept. 2019)

(1) ”  The arbitrator stated that he found “no reasonable or credible evidence” establishing the defense, and he found in favor of Bay Needle. On Country-Wide’s appeal, a master arbitrator vacated the original arbitrator’s award and remitted the matter for a new hearing before a new arbitrator. The master arbitrator stated that the evidence of fraudulent incorporation presented by Country-Wide “was substantial.” Bay Needle commenced this proceeding pursuant to CPLR article 75 to vacate the master arbitrator’s award. The Supreme Court granted the petition, vacated the master arbitrator’s award, confirmed the original arbitrator’s award in favor of Bay Needle, and entered a judgment accordingly. Country-Wide appeals. “

(2) ” We agree with the Supreme Court that the master arbitrator exceeded his power in vacating the original arbitrator’s award after, in effect, weighing the evidence and coming to a different conclusion than the original arbitrator as to what that evidence proved (see Matter of Petrofsky , 54 NY2d 207, 212). As such, we agree with the court’s determination to vacate the master arbitrator’s award and to confirm the original arbitrator’s award in favor of Bay Needle “

(3) ” Moreover, as Bay Needle contends and Country-Wide concedes, Bay Needle is entitled to an attorney’s fee for this appeal pursuant to 11 NYCRR 65-4.10(j), to be fixed by the Supreme Court “

It is strange to see the Second Department wade into the no-fault arbitration realm. The master arbitrator found a lack of proof and remanded. Now, if the master arbitrator found as a matter of law that the evidence was insufficient and dismissed, then the outcome would be different. Well, it should be different.

Let us not forget about the attorney’s fees. Applicant is using the one remaining provision of the regulations that allows a non NY style PIP attorney fee.

Case #2

Matter of V.S. Care Acupuncture, P.C. v Country-Wide Ins. Co., 2019 NY Slip Op 07264 (2d Dept. 2019)

(1) “On appeal, a master arbitrator affirmed the original arbitrator’s award, finding that it was not arbitrary and capricious. V.S. then commenced this proceeding pursuant to CPLR article 75 to vacate the master arbitrator’s award. The Supreme Court granted the petition, vacated the master arbitrator’s award, and entered a judgment in favor of V.S. in the amount of the claim for no-fault benefits plus statutory interest, attorneys’ fees, and costs and disbursements. Country-Wide appeals.”

(2) Contrary to the Supreme Court’s determination, V.S. failed to demonstrate any grounds for vacating the master arbitrator’s award. A court reviewing the award of a master arbitrator is limited to the grounds set forth in CPLR article 75, which include, in this compulsory arbitration, the question of whether the determination had evidentiary support, was rational, or had a plausible basis .

(3)  “he determination of the master arbitrator affirming the original arbitrator’s award had evidentiary support and was not irrational, it is not subject to vacatur by the courts (see Matter of Motor Veh. Acc. Indem. Corp. v Aetna Cas. & Sur. Co., 89 NY2d 214, 223-224; Matter of Acuhealth Acupuncture, P.C. v New York City Tr. Auth., 167 AD3d 869), even if the master arbitrator committed an error of law

The Falzone standard is exacting and problematic. While we want arbitrations to be the end and now the beginning of a new round of litigation, the “mere error of law” test does not advance public policy. All it does is insulate bad PIP and UM arbitration decisions from further review. Real people get hurt when arbitrators make up the law as they go along.

Case #3

Matter of V.S. Care Acupuncture, P.C. v Country-Wide Ins. Co., 2019 NY Slip Op 07265 (2d Dept. 2019)

(1) “A master arbitrator’s review powers, however, do include reviewing the facts to determine “whether or not the evidence is sufficient, as a matter of law, to support the determination of the arbitrator” (id. at 212). Here, there is no rational basis for the determination of the master arbitrator that the original arbitrator committed an error of law in rejecting Country-Wide’s fraudulent incorporation defense “

(2) “Moreover, as V.S. contends and Country-Wide concedes, V.S. is entitled to an attorney’s fee for this appeal pursuant to 11 NYCRR 65-4.10(j), to be fixed by the Supreme Court.”

(1)  “The arbitrator, upon refusing to consider Country-Wide’s defenses on the ground that Country-Wide’s submissions to the arbitrator were late, with no excuse for their lateness, found in favor of Acuhealth. On Country-Wide’s appeal, the master arbitrator vacated the award and issued a new award in favor of Country-Wide based on the defense that Acuhealth was fraudulently incorporated, which the original arbitrator had refused to consider on the ground that it was untimely submitted. “

(2) ” Acuhealth then commenced this proceeding pursuant to CPLR article 75 to vacate the master arbitrator’s award. The Supreme Court granted Acuhealth’s petition, vacated the master arbitrator’s award in favor of Country-Wide, and confirmed the original arbitrator’s award in favor of Acuhealth. Country-Wide appeals.”

(3) ” An arbitrator acts within his or her discretionary authority by refusing to entertain late submissions (see Matter of Global Liberty Ins. Co. v Coastal Anesthesia Servs., LLC, 145 AD3d 644, 645; Matter of Mercury Cas. Co. v Healthmakers Med. Group, P.C., 67 AD3d 1017, 1017; Matter of Green v Liberty Mut. Ins. Co., 22 AD3d 755, 756). Here, in rejecting the original arbitrator’s proper exercise of his discretionary authority, and in passing, de novo, upon factual questions concerning the validity of Country-Wide’s defense that Acuhealth was fraudulently incorporated (see State Farm Mut. Auto. Ins. Co. v Mallela, 4 NY3d 313, 320-321), the master arbitrator exceeded his power .”

I highlighted the “with no excuse for their lateness” but if you read Coastal Anesthesia, you can have the best law office failure excuse and the Courts will show no mercy. Here, the Court invaded the arbitration system and said it was not proper to substitute your discretion for that of the lower arbitrator. The Second Department acts in strange ways as to the defects in the arbitration system it will stick its head out and invade and the ones it won’t.

For the earlier coding-materials dispute, see Jason’s original McMahon appeal note. It separates the incorporation ruling from the new-arbitration remedy.

Case #4: The grand finale

Matter of Acuhealth Acupuncture, P.C. v Country-Wide Ins. Co., 2019 NY Slip Op 07246 (2d Dept. 2019)

(1 “A court reviewing the award of a master arbitrator is limited to the grounds set forth in CPLR article 75, which include, in this compulsory arbitration, the question of whether the determination had evidentiary support, was rational, or had a plausible basis (see Matter of Petrofsky , 54 NY2d 207, 212). Notably, the master arbitrator’s review power is broader than that of the courts’ because it includes the power to review for errors of law (seeid. at 211-212; 11 NYCRR 65-4.10). In contrast, the courts “generally will not vacate an arbitrator’s award where the error claimed is the incorrect application of a rule of substantive law, unless it is so irrational as to require vacatur” (Matter of Smith , 55 NY2d 224, 232 ; see Matter of Liberty Mut. Ins. Co. v Spine Americare Med., 294 AD2d 574, 576 “

The original post compared this with the First Department’s incorporation analysis in Matter of Global Liberty Ins. Co. v McMahon, 172 AD3d 500, 501 (1st Dept 2019).

(2) “Here, since Country-Wide submitted evidence tending to support its fraudulent incorporation defense, it cannot be said that the determination of the master arbitrator affirming the original arbitrator’s award lacked evidentiary support. Nor can it be said that the determination to affirm the original arbitrator, who supported her determination with reasons based on the evidence, lacked a rational basis. Thus, even if it was an error of law to conclude that Country-Wide proved its defense as a matter of law (seeNationwide Affinity Ins. Co. of Am. v Acuhealth Acupuncture, P.C., 155 AD3d 885, 886-887), the master arbitrator’s determination is not subject to vacatur by the courts on the mere basis of that error of law “

(3) “Notably, this Court’s decision in Nationwide Affinity, which is contrary to the conclusion of the master arbitrator in this case, was not published until after the master arbitrator’s award was rendered. Moreover, Country-Wide submitted evidence in support of its defense which, while inadmissible, could be considered by the original arbitrator in this case, who, unlike a court deciding a summary judgment motion like that at issue in Nationwide Affinity, was not bound by the rules of evidence “

The original post questioned how these decisions fit together. McMahon required consideration of incorporated coding guidance; that specific holding should not be restated as a general transfer of master-arbitrator powers to courts.

For a separate record-specific result, see Medco Tech’s causation remand. Its new-hearing order is distinct from both reweighing evidence and deciding a final reimbursement amount.

Historical note (September 2026): this note reads a 2019 master-arbitrator decision. For the review standard that governs today see master arbitrator review standards, and for the 2024–2025 regulation changes see priority of payment and the no-force-arbitration rule.

Connect to the Encyclopedia

• Topic hub: Declaratory Judgments & Arbitration
• The failure to serve a demand for master arbitral review in the manner set forth in the regulations will foreclose review of the underlying award
• Good luck trying to vacate a no-fault arbitration award pursuant to Article 75
• Trial de novos and exhausting administrative remedies
• A default that is more than meets the eyes
• Car Accident Arbitration in New York: What Victims Need to Know

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Last reviewed: September 2026 — editorial cross-reference and scope correction. The dated commentary above is not a current, comprehensive account of Article 75 review standards.

Related: What “de novo” means in New York — trial de novo and de novo review, explained.