May 16, 2017

Fiduciary Ins. Co. of Am. v Medical Diagnostic Servs., P.C. (2017 NY Slip Op 03888)

https://www.beynensonlaw.com/case-law/fiduciary-ins-co-of-am-v-medical-diagnostic-servs-p-c-2017-ny-slip-op03888/

Court
Appellate Division, First Department
Decided
May 16, 2017
Citation
2017 NY Slip Op 03888 · 150 AD3d 498
Posture
Other motion
Outcome
Insurer prevailed
Later treatment
Distinguished in 2 and followed in 1 later decisions (see Cited by)
Issues
Interest and attorney fees Assignments and standing
Cite as
Fiduciary Ins. Co. of Am. v Medical Diagnostic Servs., P.C., 150 AD3d 498 (1st Dept 2017)

Posture, outcome, issues and treatment by other decisions are Beynenson Law’s classification. Treatment labels are assigned by a language model reading the citing decision; negative and appeal-history labels are checked by a second reader.

Summary

Editorial summary by Beynenson Law, not part of the court’s decision.

A provider with no assigned right to a defense cannot recover attorney fees under the exception for an insurer's duty to defend. The Appellate Division, First Department, affirmed denial of the provider's fee motion in the insurer's no-fault declaratory judgment action. A prevailing party generally may recover fees only when authorized by statute, agreement, or court rule. The exception for successfully defending an insurer's coverage action rests on the insurer's duty to defend. Here, the insurer owed no such duty to the injured taxi claimant or the provider seeking chiropractic reimbursement. The assignment transferred no greater rights than the claimant possessed and therefore conveyed no right to a defense.

Reported in New York Official Reports at Fiduciary Ins. Co. of Am. v Medical Diagnostic Servs., P.C. (2017 NY Slip Op 03888)

Fiduciary Ins. Co. of Am. v Medical Diagnostic Servs., P.C.
2017 NY Slip Op 03888 [150 AD3d 498]
May 16, 2017
Appellate Division, First Department
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
As corrected through Wednesday, June 28, 2017

[*1]

 Fiduciary Insurance Company of America, Respondent,
v
Medical Diagnostic Services, P.C., et al., Defendants, and Star of N.Y. Chiropractic Diagnostic, P.C., Appellant.

Law Office of Gregory A. Goodman, P.C., Hauppauge (Gregory A. Goodman of counsel), for appellant.

Rubin, Fiorella & Friedman LLP, New York (David F. Boucher, Jr. of counsel), for respondent.

Order and judgment (one paper), Supreme Court, New York County (Shlomo Hagler, J.), entered January 6, 2017, which denied defendant Star of N.Y. Chiropractic Diagnostic, P.C.’s (Star) motion for attorneys fees against plaintiff, unanimously affirmed, with costs.

“It is well settled in New York that a prevailing party may not recover attorneys’ fees from the losing party except where authorized by statute, agreement or court rule” (U.S. Underwriters Ins. Co. v City Club Hotel, LLC, 3 NY3d 592, 597 [2004]; see also Gotham Partners, L.P. v High Riv. Ltd. Partnership, 76 AD3d 203, 205 [1st Dept 2010], lv denied 17 NY3d 713 [2011]). While an insured party may recover attorneys’ fees where it successfully defends against its insurer’s action seeking a declaratory judgment that it has no duty to defend or indemnify its insured (see Underwriters Ins. Co., 3 NY3d at 597; Mighty Midgets v Centennial Ins. Co., 47 NY2d 12, 21 [1979]), “[t]he reasoning behind [the award of such attorneys’ fees] is that an insurer’s duty to defend an insured extends to the defense of any action arising out of the occurrence, including a defense against an insurer’s declaratory judgment action” (Underwriters Ins. Co., 3 NY3d at 597-598). Here, plaintiff owes defendant Star no duty to defend, as Star is merely seeking reimbursement for chiropractic services rendered to the claimant in this no-fault action. While Star was assigned the claimant’s rights for such reimbursement, the claimant was merely the injured party in the taxi at the time of the accident, and plaintiff owed no duty to defend the claimant. Star, as assignee of the claimant’s rights, could acquire no greater rights than its assignor (see New York & Presbyt. Hosp. v Country-Wide Ins. Co., 17 NY3d 586, 592 [2011]), and did not acquire any right to a defense from plaintiff. Thus, the court properly held that Star was not entitled to attorneys’ fees in this case.

[*2] We have examined Star’s remaining arguments, including its public policy argument, and find them to be unavailing. Concur—Sweeny, J.P., Renwick, Andrias, Feinman and Gesmer, JJ.

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