American Tr. Ins. Co. v Brooklyn Med. Practice, PC (2025 NY Slip Op 50897(U) [86 Misc 3d 1208(A)])

Petitioner, American Transit Insurance Company, moves under CPLR article 75 to vacate a no-fault arbitration award in favor of respondent, Brooklyn Medical Practice, P.C. Respondent cross-moves to confirm and for an award of fees. The motion is denied. The cross-motion granted in part and denied in part.

1. On its motion, American Transit argues that the arbitrator (and the reviewing master [*2]arbitrator) failed to follow settled law, rendering the award subject to vacatur. This argument is unpersuasive.

The arbitrator held (and the master arbitrator agreed) that American Transit’s basis for denying the claim was foreclosed on issue-preclusion grounds. (See NYSCEF No. 3 at 2; NYSCEF No. 4 at 2-3.) In challenging this determination, American Transit contends that the arbitrator erred as a matter of law in (implicitly) concluding that the “issue previously litigated was necessary to support a valid and final judgment on the merits.” (NYSCEF No. 1 at ¶ 59.) In particular, American Transit says, the arbitral record does not reflect whether “the decision that the Arbitrator relied upon was confirmed in Court” or “converted into a judgment,” and, “therefore, necessary to support a valid and final judgment on the merits.” (Id. [internal quotation marks omitted].) But an arbitral award may be entitled to issue-preclusive effect in a later proceeding whether or not it has been judicially confirmed or converted into a judgment.^[FN1] (See Allstate Ins. Co. v Toussaint, 163 AD2d 444, 445 [2d Dept 1990].)

American Transit also argues that there is “no evidence to show that the Petitioner did not file a de novo action, which would render the prior award a nullity.” (NYSCEF No. 1 at ¶ 61.) This court disagrees with American Transit’s position that affording issue-preclusive effect to the prior award was error in these circumstances.

The party seeking the benefit of issue preclusion must meet an initial burden to show “that the decisive issue was necessarily decided in the prior action against a party, or one in privity with a party.” (Buechel v Bain, 97 NY2d 295, 304 [2001].) American Transit cites no authority for the proposition that the party seeking issue preclusion must then also provide evidence ruling out the possibility that the decision in the prior proceeding had been vacated. To the contrary, it makes much more sense to place the burden of showing that the prior determination was no longer in force on the party opposing preclusion—just as that party must “demonstrate[e] the absence of a full and fair opportunity to contest the prior determination.” (Id.; see American Transit Ins. Co. v U.S. Med Supply Corp., 2023 NY Slip Op 50560[U], at *11-12 [Sup Ct, Kings County 2023] [reaching the same conclusion].) That is particularly true in the no-fault context, where it is not difficult to ascertain whether a prior arbitral award has been vacated by a master arbitrator or upon a de novo action. Absent a showing that the prior arbitral determination had been vacated, the arbitrator did not err in affording that determination issue-preclusive effect.

American Transit’s motion to vacate is denied.

2. On respondent’s cross-motion, respondent seeks not only to confirm the arbitral decision, but also to obtain an additional award of attorney fees. For the reasons discussed above, the arbitral determination is confirmed. Respondent’s fee request is granted in part and denied in part.

In addition to the sums awarded by the arbitrator in principal, interest, and attorney fees, respondent also asks this court to award fees incurred in this proceeding, under 11 NYCRR 65-4.10 (j) (4). Under that provision, the amount to be awarded in fees to a party prevailing in a CPLR article 75 proceeding “shall be fixed by the court adjudicating the matter.” Respondent seeks to recover $850 in fees for 1.7 hours of attorney time billed at $500 an hour. (See NYSCEF No. 11 at ¶¶ 22-23.)

In opposition, American Transit contends that respondent’s attorney fee must be limited to the hourly rate (and maximum fee) permitted by 11 NYCRR 65-4.6 (d). (See NYSCEF No. 16 at ¶¶ 45-46.) This contention is without merit. Section 65-4.6 (d) governs only attorney fees incurred in the underlying arbitration, not also an ensuing CPLR article 75 proceeding to confirm (or vacate) an arbitral award. (See Country-Wide Ins. Co. v TC Acupuncture P.C., 172 AD3d 598, 598 [1st Dept 2019].) This court is also unpersuaded by American Transit’s alternative suggestion that § 65-4.6 (d)’s hourly-rate restrictions necessarily establish the normal billing rate for no-fault attorneys. (NYSCEF No. 16 at ¶ 47.) American Transit does not attempt to show that the capped rate corresponds to the typical no-fault billing rate (either as of the enactment of this regulation or today). And treating § 65-4.6 (d) as setting the maximum rate that a court may properly award under § 65-4.10 (j) (4) would significantly undermine the latter provision’s conferral on courts of discretion to fix a proper attorney fee for CPLR article 75 proceedings. (See Country-Wide Ins. Co. v Bay Needle Care Acupuncture, P.C., 220 AD3d 461, 462 [1st Dept 2023] [“[T]he amount of attorney’s fees awarded pursuant to 11 NYCRR 65—4.10(j)(4) is left to the court’s discretion.”].)

At the same time, respondent has not shown that it is entitled to $850 in fees. Respondent’s counsel’s fee affirmation states only that $500 an hour is his usual hourly billing rate; and that the total billable time spent on this proceeding was 1.7 hours. (See NYSCEF No. 12 at ¶¶ 4-5.) The affirmation does not offer any other information—such as the typical going rate for experienced no-fault attorneys, or what time was spent on which tasks. (Cf. Gamache v Steinhaus, 7 AD3d 525, 527 [2d Dept 2004] [describing criteria for determining hourly rates when awarding fees].) Additionally, some of the time billed is not compensable at all, because that time was spent on preparing respondent’s fee request itself. (See Matter of GEICO Ins. Co. v AAAMG Leasing Corp., 148 AD3d 703, 706 [2d Dept 2017] [holding that “fees on fees” are not available under 11 NYCRR 65-4.6 [j] [4]].) This court concludes that respondent is entitled to $345 in fees, representing 1.15 hours of attorney time at $300 an hour, rather than the $850 claimed.

Accordingly, it is

ORDERED AND ADJUDGED that American Transit Insurance Company’s petition to vacate the underlying arbitral award is denied, and the branch of Brooklyn Medical Practice, P.C.’s cross-petition to confirm the arbitral award is granted; and it is further

ORDERED AND ADJUDGED that the branch of Brooklyn Medical Practice, P.C.’s cross-petition for an award of attorney fees incurred in this proceeding is granted in part and denied in part; and it is further

ORDERED AND ADJUDGED that Brooklyn Medical Practice, P.C. is awarded a [*3]judgment against American Transit Insurance Company for (i) the principal amount owed in first-party benefits of $3,936, with interest on that sum running at the statutory rate of 2% monthly simple interest, from June 11, 2024; plus (ii) the $40 arbitral filing fee; plus (iii) $787.20 in attorney fees awarded in the underlying arbitral proceeding, with interest on that sum running at the statutory rate of 2% monthly simple interest, from June 11, 2024; plus (iv) additional attorney fees incurred in this proceeding of $345; plus (v) costs and disbursements as taxed by the Clerk upon the submission of an appropriate bill of costs; and it is further

ORDERED that respondent serve a copy of this order with notice of its entry on petitioner and on the office of the County Clerk (using the NYSCEF filing event “Notice to the County Clerk – CPLR § 8019 (c)”), which shall enter judgment accordingly.