Interest.

Few issues in New York no-fault insurance litigation carry greater financial consequences than the applicable rate of post-judgment interest. The difference between the standard civil rate of 9% per year under CPLR 5004 and the no-fault statutory rate of 2% per month under Insurance Law § 5106(a) is enormous — and as this case demonstrates, it can transform a modest judgment into a staggering liability for the insurer.

The question of which interest rate applies after judgment has been the subject of significant litigation in New York. Insurers have consistently argued that once a judgment is entered, the general CPLR 5004 rate of 9% per annum should govern, treating the no-fault claim as no different from any other civil judgment. Providers and their attorneys counter that the Legislature specifically enacted Insurance Law § 5106(a) and the Department of Financial Services promulgated regulations including former 11 NYCRR 65.15(h) to impose a higher interest rate as a deterrent against insurers who delay payment. The Second Department’s ruling in Matter of B.Z. Chiropractic, P.C. v Allstate Ins. Co. (197 AD3d 144) definitively resolved this question in favor of the higher no-fault rate, and the Appellate Term applied that holding in the case below.

Case Background

In Pro-Med Med., P.C. v MVAIC, the underlying no-fault judgment totaled $19,893.34. After the judgment was entered, MVAIC moved by order to show cause pursuant to CPLR 5021(a)(2) for an order directing the clerk to enter a satisfaction of judgment, claiming the judgment had been “fully paid and satisfied.” In the alternative, MVAIC sought to compel the plaintiff to file a satisfaction of judgment. The plaintiff opposed. The Civil Court denied MVAIC’s motion, and MVAIC appealed.

The crux of the dispute was the applicable interest rate. MVAIC had calculated its payment obligations using the CPLR 5004 rate of 9% per year. The plaintiff argued that the correct rate was 2% per month — compounded — under the no-fault-specific provisions of Insurance Law § 5106(a) and former 11 NYCRR 65.15(h). Because the underlying accident occurred in 2001, when the former regulation was still in effect, the compounding provision applied, magnifying the difference between the two rates exponentially over time.

Jason Tenenbaum’s Analysis:

Pro-Med Med., P.C. v MVAIC, 2022 NY Slip Op 50135(U)(App. Term 2d Dept. 2022)

“By order to show cause dated May 9, 2018, defendant moved, pursuant to CPLR 5021 (a) (2), for an order directing the clerk to enter a satisfaction of the $19,893.34 judgment, as the “judgment has been fully paid and satisfied.” In the alternative, defendant moved to compel plaintiff to file a satisfaction of judgment. Plaintiff opposed the motion. By order entered September 21, 2018, the Civil Court denied defendant’s motion.

Postjudgment interest accrues at the rate of 2% per month in a no-fault action, as “Insurance Law § 5106 (a) and former 11 NYCRR 65.15 (h), which specific directives, supersede the interest provisions contained in CPLR 5004, the more general statute” (Matter of B.Z. Chiropractic, P.C. v Allstate Ins. Co., 197 AD3d 144, 156 ). Consequently, defendant’s contention that the postjudgment interest accrued at the rate of 9% per year pursuant to CPLR 5004 is without merit (see id.). Additionally, since former 11 NYCRR 65.15 (h) was still in effect at the time of the underlying accident in 2001, the 2% per month interest rate is compounded (see id.).”

9% per year v. 2% per month…. I think this was a million dollar case.

The Court’s Reasoning

The Appellate Term’s decision rests on a well-established principle of statutory construction: when a specific statute and a general statute address the same subject, the specific statute controls. Insurance Law § 5106(a) was enacted as part of New York’s comprehensive no-fault insurance framework with the express purpose of ensuring prompt payment of first-party benefits. The 2% per month interest rate — far exceeding the standard civil rate — reflects the Legislature’s intent to penalize insurers who unjustifiably delay or deny claims.

The B.Z. Chiropractic decision from the Second Department, which the Appellate Term applied here, put to rest any argument that CPLR 5004 should apply post-judgment. The Second Department held that the no-fault interest provisions are “specific directives” that supersede the “more general statute” of CPLR 5004. This means that the 2% per month rate applies not only pre-judgment (as a penalty for late payment of claims) but also post-judgment (as continuing interest on the amount owed).

The compounding element adds another layer of financial consequence. Under former 11 NYCRR 65.15(h), applicable to accidents occurring before the regulation was amended, the 2% per month rate compounds — meaning interest accrues on previously accrued interest. For a judgment entered in 2001 and still outstanding years later, the compounding effect transforms the original $19,893.34 judgment into a liability that, as Jason notes, likely approached or exceeded one million dollars.

Practical Implications

For medical providers and their attorneys, this case underscores the critical importance of calculating interest correctly when negotiating settlements or moving for satisfaction of judgment. An insurer’s tender based on the 9% per year CPLR 5004 rate will almost certainly be insufficient to satisfy a no-fault judgment, and providers should not be pressured into filing a satisfaction based on underpayment.

For insurers and their counsel, the financial exposure created by the 2% per month compounding rate creates a powerful incentive to resolve no-fault claims quickly. Every month of delay adds 2% to the outstanding balance — compounded for older claims — which can rapidly eclipse the original amount in dispute. The decision in Pro-Med should serve as a reminder that litigating the interest rate issue is unlikely to succeed after B.Z. Chiropractic, and that prompt payment or settlement is the only reliable way to limit interest exposure.

Practitioners should also note the temporal dimension: whether the interest compounds depends on when the underlying accident occurred. Former 11 NYCRR 65.15(h) applied to pre-amendment accidents; for more recent claims, the applicable regulations may differ.

Key Takeaway

Post-judgment interest in New York no-fault actions accrues at 2% per month — not the standard CPLR 5004 rate of 9% per year. For accidents occurring when former 11 NYCRR 65.15(h) was in effect, that rate compounds monthly, creating exponential liability growth that can transform a modest judgment into a catastrophic financial obligation for the insurer.

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