Again, it is 2% per month on the judgment

Understanding Post-Judgment Interest Rates in No-Fault Insurance Cases: It’s 2% Per Month

A critical issue that directly affects the financial recovery of no-fault insurance claims on Long Island is the proper calculation of post-judgment interest. The Appellate Term’s decision in Health Value Med., P.C. v Country Wide Ins., 2022 NY Slip Op 51137(U)(App. Term 2d Dept. 2022), reaffirms a crucial principle that many enforcement agents unfortunately continue to ignore: post-judgment interest in no-fault cases runs at 2% per month, not the standard 9% per annum rate.

What is Post-Judgment Interest and Why Does It Matter?

Post-judgment interest is the additional money that accumulates on an unpaid court judgment from the date the judgment is entered until it’s fully paid. Think of it as compensation for the delay in payment—money that recognizes the time value of money and provides an incentive for prompt payment of court-ordered awards.

In most civil cases, post-judgment interest runs at 9% per year. However, no-fault insurance cases operate under different rules, and the difference is dramatic:

• Standard CPLR rate: 9% per year (0.75% per month)
• No-fault Insurance Law rate: 2% per month (24% per year)

This means that in no-fault cases, unpaid judgments accumulate interest nearly three times faster than in other civil matters. For a $10,000 judgment, the difference is substantial:

• At 9% annually: $900 in interest after one year
• At 2% monthly: $2,400 in interest after one year

The Legal Foundation: Insurance Law § 5106

The Health Value Med. case provides crystal-clear guidance on which law governs post-judgment interest in no-fault cases. The court stated: “We note that, contrary to the statement of the Civil Court, post-judgment interest in a no-fault action is governed by Insurance Law § 5106 and its implementing regulations, not the CPLR (see Matter of B.Z. Chiropractic, P.C. v Allstate Ins. Co., 197 AD3d 144).”

This ruling eliminates any ambiguity. Insurance Law § 5106 and its regulations, which establish the 2% monthly rate, specifically control post-judgment interest in no-fault matters. The general CPLR provisions that apply to other civil cases simply don’t apply here.

The B.Z. Chiropractic Precedent

The Health Value Med. decision builds upon the earlier B.Z. Chiropractic case, which firmly established this principle. These appellate decisions create binding precedent that should eliminate confusion about the applicable interest rate. Yet, as Attorney Jason Tenenbaum notes, practical enforcement problems persist.

The Enforcement Problem: Why Some Agents Refuse to Apply the Correct Rate

Despite clear appellate precedent, Attorney Tenenbaum observes a frustrating reality: “What is rather disappointing is that despite the Appellate Decision, which is as clear as the night is long that post-judgment PIP interest runs at 2% per month, certain enforcement agents refuse to calculate interest at more than 9% per annum.”

This refusal by some enforcement agents to properly calculate interest creates several problems:

• Underpayment of judgments: Creditors receive significantly less than they’re legally entitled to
• Additional legal costs: Motions for unpaid interest and additional attorney fees become necessary
• Delayed resolution: Cases that should be concluded drag on due to interest disputes
• Systemic inefficiency: Clear legal precedent is ignored, wasting judicial resources

What This Means for You

If You’re a Healthcare Provider

As a medical provider seeking payment for no-fault services, understanding post-judgment interest rates is crucial to protecting your financial interests. When insurance companies delay payment and you’re forced to obtain a judgment, that 2% monthly interest rate becomes a powerful tool for ensuring fair compensation.

Key considerations for providers include:

• Track interest carefully: Calculate interest from the judgment date using the correct 2% monthly rate
• Document underpayments: Keep detailed records when enforcement agents use incorrect rates
• Know your rights: You’re entitled to the full statutory interest rate, not a reduced amount
• Seek legal help: Don’t accept underpayment when agents refuse to apply correct rates

If You’re an Injured Party with an Attorney Fee Award

Injured parties who recover attorney fees as part of their personal injury case may also benefit from proper post-judgment interest calculation. If your attorney fee award isn’t paid promptly, the 2% monthly interest rate applies to that judgment as well.

This protection ensures that:

• Insurance companies can’t delay payment without significant cost
• Your legal team is properly compensated for their efforts
• You receive the full benefit of court-ordered awards
• Justice isn’t undermined by payment delays

The Strategic Implications of Proper Interest Calculation

The 2% monthly interest rate serves important policy purposes in New York’s no-fault system:

Incentivizing Prompt Payment

The high interest rate encourages insurance companies to pay legitimate claims promptly rather than dragging out litigation. A 24% annual rate makes delay expensive, aligning the interests of justice with the interests of efficiency.

Compensating for Delayed Payment

Medical providers and injured parties often wait months or years for payment while pursuing no-fault claims. The 2% monthly rate helps compensate for this delay and the lost opportunity to use those funds.

Enforcing System Integrity

When enforcement agents refuse to apply correct interest rates, they undermine the effectiveness of the statutory scheme. Proper enforcement ensures the system works as intended.

Practical Steps When Facing Interest Calculation Disputes

When enforcement agents refuse to calculate interest at the proper 2% monthly rate, several legal options are available:

Motion for Proper Interest Calculation

As Attorney Tenenbaum notes, the result of improper interest calculation is often “motions for unpaid interest and additional attorneys fees.” These motions serve to:

• Establish the correct amount owed under Insurance Law § 5106
• Recover the differential between what was paid and what was owed
• Seek attorney fees for having to bring the motion
• Create precedent for future enforcement actions

Contempt Proceedings

In extreme cases where enforcement agents persistently refuse to follow court orders regarding interest calculation, contempt proceedings may be appropriate to compel compliance with the law.

Alternative Enforcement Methods

When traditional enforcement mechanisms fail, other collection methods may be necessary to recover the full amount owed, including proper interest calculations.

The Broader Impact on No-Fault Practice

Proper post-judgment interest calculation affects the entire no-fault insurance ecosystem on Long Island and throughout New York:

For Medical Providers

Providers depend on timely payment for no-fault services. When judgments aren’t paid promptly with proper interest, it affects cash flow and business operations. The 2% monthly rate helps ensure that delays in payment don’t unfairly burden healthcare providers.

For Attorneys

Legal professionals representing providers and injured parties must understand these interest calculation rules to properly advise clients and calculate potential recoveries. Failure to account for proper interest rates can result in significant undervaluation of claims.

For the Court System

When enforcement agents ignore established precedent on interest rates, it creates additional litigation and wastes judicial resources. Proper compliance with Insurance Law § 5106 would eliminate much unnecessary motion practice.

Frequently Asked Questions About Post-Judgment Interest in No-Fault Cases

Why is the interest rate different in no-fault cases?

No-fault insurance operates under Insurance Law § 5106, which establishes a 2% monthly interest rate to ensure prompt payment of medical bills and other benefits. This rate is higher than the general CPLR rate because the Legislature wanted to incentivize quick payment in the no-fault system.

When does post-judgment interest begin to accrue?

Post-judgment interest begins accruing from the date the judgment is entered, not from the date of the underlying claim or bill. This interest continues until the judgment is fully satisfied.

What should I do if an enforcement agent refuses to apply the 2% monthly rate?

You should immediately contact an experienced no-fault attorney who can file a motion to compel proper interest calculation and seek attorney fees for the additional work required. Don’t accept underpayment when the law clearly entitles you to the higher rate.

Can the 2% monthly rate compound?

Yes, under Insurance Law § 5106, interest compounds monthly. This means you earn interest on previously accrued interest, which can significantly increase the amount owed over time.

Does the 2% rate apply to attorney fee judgments in no-fault cases?

Yes, attorney fee awards in no-fault cases are subject to the same 2% monthly post-judgment interest rate. This ensures that legal professionals are properly compensated even when insurance companies delay payment of fee awards.

The Bottom Line: Know Your Rights and Protect Your Interests

The Health Value Med. decision makes it unequivocally clear that post-judgment interest in no-fault cases runs at 2% per month under Insurance Law § 5106, not the 9% annual rate under the CPLR. This difference can amount to thousands of dollars on significant judgments.

Don’t let enforcement agents shortchange you by applying the wrong interest rate. The law is clear, the precedent is established, and you have the right to receive the full amount owed under the statute.

At the Law Office of Jason Tenenbaum, we understand the importance of proper post-judgment interest calculation in no-fault insurance matters. We’ve seen firsthand how improper interest calculations can cost our clients thousands of dollars in rightful compensation.

We know how to:

• Calculate interest properly under Insurance Law § 5106
• Challenge enforcement agents who refuse to apply correct rates
• File effective motions for unpaid interest and attorney fees
• Maximize recovery for our clients through proper legal advocacy

If you have a no-fault insurance judgment that isn’t being paid with proper 2% monthly post-judgment interest, don’t accept less than you’re legally entitled to receive. Call 516-750-0595 for a free consultation with an experienced Long Island attorney who will fight to ensure you receive every dollar you’re owed under the law.