American Tr. Ins. Co. v Bliss Acupuncture, P.C. (2026 NY Slip Op 06081)

Reported in New York Official Reports at American Tr. Ins. Co. v Bliss Acupuncture, P.C. (2026 NY Slip Op 06081)

Supreme Court of the State of New York, Appellate Division, Second Judicial Department

Decided on October 21, 2026

2024-09243, (Index No. 516656/22)

Angela G. Iannacci, J.P.

Valerie Brathwaite Nelson

Carl J. Landicino

Elena Goldberg Velazquez, JJ.

DECISION & ORDER

In an action pursuant to Insurance Law § 5106(c) for a de novo determination of claims for no-fault insurance benefits, the defendant appeals from an order of the Supreme Court, Kings County (Anne J. Swern, J.), dated June 20, 2024. The order, insofar as appealed from, denied those branches of the defendant’s motion which were to confirm a master arbitration award dated April 20, 2022, and pursuant to 11 NYCRR 65-4.10(j)(4) for an award of attorneys’ fees.

ORDERED that the order is reversed insofar as appealed from, on the law, with costs, those branches of the defendant’s motion which were to confirm a master arbitration award dated April 20, 2022, and pursuant to 11 NYCRR 65-4.10(j)(4) for an award of attorneys’ fees are granted, and the matter is remitted to the Supreme Court, Kings County, for a determination of the amount of reasonable attorneys’ fees pursuant to 11 NYCRR 65-4.10(j)(4) to be awarded to the defendant in accordance herewith.

After a master arbitrator affirmed an arbitration award in favor of the defendant on its claims for no-fault insurance benefits (hereinafter the master arbitration award), the plaintiff commenced this action pursuant to Insurance Law § 5106(c) for a de novo determination of the defendant’s claims. The defendant answered and, in the “WHEREFORE” clause, requested, inter alia, that the master arbitration award be confirmed and reasonable attorneys’ fees be awarded pursuant to 11 NYCRR 65-4.10(j)(4).

Thereafter, the complaint was stricken due to the plaintiff’s failure to comply with a conditional order arising from its noncompliance with discovery demands. Subsequently, the defendant moved, among other things, to confirm the master arbitration award and pursuant to 11 NYCRR 65-4.10(j)(4) for an award of attorneys’ fees. In an order dated June 20, 2024, the Supreme Court denied those branches of the motion. The defendant appeals.

Contrary to the plaintiff’s contention, the commencement of the de novo action did not eliminate the master arbitration award but only placed it in a dormant state. An award by an arbitrator shall be binding, except for the grounds for review set forth in CPLR article 75, and except where a de novo review is sought (see Insurance Law § 5106[c]). Under certain circumstances, an arbitration award is presumed to be dormant while the de novo action is pending (see Matter of Abadinsky v Aetna Cas. & Sur. Co., 250 AD2d 673, 673-674; Matter of Gersten v American Tr. Ins. Co., 161 Misc 2d 57, 63 [Sup Ct, NY County]). An arbitration award is revived when that action is dismissed for failure to prosecute or other similar basis not on the merits (see Matter of Gersten v American Tr. Ins. Co., 161 Misc 2d at 63). Here, the dismissal of the complaint in the instant [*2]action due to the plaintiff’s failure to comply with discovery demands revived the master arbitration award and made it binding on the parties. Thus, under the circumstances, the Supreme Court should have granted that branch of the defendant’s motion which was to confirm the master arbitration award (see Insurance Law § 5106[c]; Murzik Taxi, Inc. v Lutheran Med. Ctr., 193 AD3d 866, 869; Matter of Slater v Eagle Ins. Co., 294 AD2d 368, 369).

Further, the Supreme Court should have granted that branch of the defendant’s motion which was for an award of attorneys’ fees. Pursuant to Insurance Law § 5106(a), if a valid claim or a portion of a claim for no-fault benefits is overdue, “the claimant shall also be entitled to recover his [or her] attorney’s reasonable fee, for services necessarily performed in connection with securing payment of the overdue claim, subject to limitations promulgated by the superintendent in regulations.” The attorneys’ fees for services rendered in connection with a court adjudication of dispute de novo, as provided in section 5106(c) of the Insurance Law, or in a “court appeal from a master arbitration award and any further appeals, shall be fixed by the court adjudicating the matter” (11 NYCRR 65-4.10[j][4]; see Matter of American Tr. Ins. Co. v Baltic Supply Corp., 247 AD3d 873, 874; American Tr. Ins. Co. v Comfort Choice Chiropractic, P.C., 239 AD3d 1, 15-16).

Here, as the defendant sought payment of the overdue claims for no-fault insurance benefits, it was entitled to an award of attorneys’ fees for the services necessarily performed in connection with the de novo action and its request to confirm the master arbitration award as well as on the instant appeal (see Matter of Lam Quan MD, P.C. v LM Gen. Ins. Co., 239 AD3d 654, 656; Acuhealth Acupuncture, P.C. v Country-Wide Ins. Co., 170 AD3d 1168, 1168).

The plaintiff’s remaining contention is without merit.

Accordingly, the matter must be remitted to the Supreme Court, Kings County, for a determination of the amount of reasonable attorneys’ fees to which the defendant is entitled.

IANNACCI, J.P., BRATHWAITE NELSON, LANDICINO and GOLDBERG VELAZQUEZ, JJ., concur.

ENTER:

Darrell M. Joseph

Clerk of the Court