October 9, 2019
Matter of Bay Needle Care Acupuncture v Country-Wide Ins. Co. (2019 NY Slip Op 07249)
https://www.beynensonlaw.com/case-law/matter-of-bay-needle-care-acupuncture-v-country-wide-ins-co-2019-ny-slip-op07249/
- Decided
- October 9, 2019
- Citation
- 2019 NY Slip Op 07249 · 176 AD3d 806
- Posture
- Article 75 petition
- Outcome
- Provider prevailed
- Later treatment
- Followed in 1 later decision (see Cited by)
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.
Reported in New York Official Reports at Matter of Bay Needle Care Acupuncture v Country-Wide Ins. Co. (2019 NY Slip Op 07249)
| Matter of Bay Needle Care Acupuncture v Country-Wide Ins. Co. |
| 2019 NY Slip Op 07249 [176 AD3d 806] |
| October 9, 2019 |
| Appellate Division, Second Department |
| Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. |
[*1]
| In the Matter of Bay Needle Care Acupuncture,
Respondent, v Country-Wide Ins. Co., Appellant. |
Jaffe & Koumourdas, LLP (Thomas Torto, New York, NY, of counsel), for appellant.
Gary Tsirelman, P.C., Brooklyn, NY (Stefan Belinfanti and David M. Gottlieb of counsel), for respondent.
In a proceeding pursuant to CPLR article 75 to vacate an award of a master arbitrator dated March 18, 2014, Country-Wide Ins. Co. appeals from a judgment of the Supreme Court, Kings County (Peter P. Sweeney, J.), dated July 31, 2015. The judgment, upon an order of the same court dated April 2, 2015, granting the petition, vacating the master arbitrator’s award dated March 18, 2014, and confirming the original arbitrator’s award dated December 13, 2013, is in favor of the petitioner and against Country-Wide Ins. Co. in the total sum of $1,318.91.
Ordered that the judgment is affirmed, with costs, and the matter is remitted to the Supreme Court, Kings County, for a determination of the amount of an additional attorney’s fee to be awarded to the petitioner pursuant to Insurance Department Regulations (see 11 NYCRR 65-4.10 [j] [4]).
Bay Needle Care Acupuncture (hereinafter Bay Needle) is the assignee of a claim for no-fault benefits for treatment it rendered to Kareem Edgar. The carrier, Country-Wide Ins. Co. (hereinafter Country-Wide), denied the claim, and Bay Needle submitted the claim to arbitration. As relevant to this appeal, the arbitrator rejected Country-Wide’s contention that Bay Needle was fraudulently incorporated (see State Farm Mut. Auto. Ins. Co. v Mallela, 4 NY3d 313 [2005]; Andrew Carothers, M.D., P.C. v Progressive Ins. Co., 150 AD3d 192 [2017], affd 33 NY3d 389 [2019]). The arbitrator stated that he found “no reasonable or credible evidence” establishing the defense, and he found in favor of Bay Needle. On Country-Wide’s appeal, a master arbitrator vacated the original arbitrator’s award and remitted the matter for a new hearing before a new arbitrator. The master arbitrator stated that the evidence of fraudulent incorporation presented by Country-Wide “was substantial.” Bay Needle commenced this proceeding pursuant to CPLR article 75 to vacate the master arbitrator’s award. The Supreme Court granted the petition, vacated the master arbitrator’s award, confirmed the original arbitrator’s award in favor of Bay Needle, and entered a judgment accordingly. Country-Wide appeals.
We agree with the Supreme Court that the master arbitrator exceeded his power in vacating the original arbitrator’s award after, in effect, weighing the evidence and coming to a different conclusion than the original arbitrator as to what that evidence proved (see Matter of Petrofsky [Allstate Ins. Co.], 54 NY2d 207, 212 [1981]). As such, we agree with the court’s determination to vacate the master arbitrator’s award and to confirm the original arbitrator’s award in favor of Bay Needle (see Matter of Jordan v Liberty Mut. Fire Ins. Co., 309 AD2d 803, 804 [2003]; cf. Matter of Jasser v Allstate Ins. Co., 77 AD3d 751, 752 [2010]).
Moreover, as Bay Needle contends and Country-Wide concedes, Bay Needle is entitled to an attorney’s fee for this appeal pursuant to 11 NYCRR 65-4.10 (j), to be fixed by the Supreme Court (see Matter of Country-Wide Ins. Co. v Bay Needle Acupuncture, P.C., 167 AD3d 404, 405 [2018]; Matter of Country-Wide Ins. Co. v Bay Needle Care Acupuncture, P.C., 162 AD3d 407, 408 [2018]; Matter of GEICO Ins. Co. v AAAMG Leasing Corp., 148 AD3d 703, 706 [2017]). The matter is therefore remitted to the Supreme Court, Kings County, for that purpose. Balkin, J.P., Roman, Brathwaite Nelson and Christopher, JJ., concur.
Legal questions (3)
Questions of no-fault law this decision rules on, from our Legal Questions pages. Bars count the decisions on the question by year and court, coloured by category; circles are this decision and the decisions on the question it cites or that cite it. Point at a bar or circle for details. The categories and summaries are Beynenson Law’s classification, made by a language model and checked by a second reading.
When does a court vacate, modify or confirm a no-fault arbitrator’s or master arbitrator’s award under CPLR article 75?
This decision: Master arbitrator's award vacated because the master arbitrator went beyond the limited review allowed by 11 NYCRR 65-4.10
Affirmed vacatur of the master arbitrator's award and confirmation of the original award because the master arbitrator, in effect, weighed the fraudulent incorporation evidence and reached a different conclusion, exceeding his power.
Of the 119 decisions on this question in the Second Department courts and the Court of Appeals, 4 (this one included) are in the same category. 2 decisions in other departments that cite or are cited by this one are on the full map.
On the merits, when may a no-fault insurer withhold payment because unlicensed persons own or control the provider (Mallela)?
This decision: Insurer's proof of unlicensed ownership/control insufficient (rules on the question, but another ground decided the case)
Held the master arbitrator exceeded his power by reweighing the evidence of fraudulent incorporation, so the arbitrator's award rejecting the defense for lack of credible evidence was confirmed.
Of the 61 decisions on this question in the Second Department courts and the Court of Appeals, 13 (this one included) are in the same category. 2 decisions in other departments that cite or are cited by this one are on the full map.
How is the applicant’s attorney’s fee fixed for no-fault article 75 proceedings, de novo actions and appeals?
This decision: Applicant is entitled to a court-fixed fee for the proceeding or appeal; granted, or remitted to set the amount (rules on the question, but another ground decided the case)
Held, as conceded, that the provider was entitled to an attorney's fee for the appeal under 65-4.10 (j), and remitted to Supreme Court to fix it.
Of the 58 decisions on this question in the Second Department courts and the Court of Appeals, 22 (this one included) are in the same category. 2 decisions in other departments that cite or are cited by this one are on the full map.
Cited in this decision
- State Farm Mut. Auto. Ins. Co. v Mallela (2005 NY Slip Op 02416)Fraudulently incorporated medical providers are ineligible for no-fault reimbursement under 11 NYCRR 65-3.16 (a) (12).
- Carothers v Progressive Ins. Co. (2017 NY Slip Op 02614)A fraudulent-incorporation defense does not require proof of common-law fraud or fraudulent intent when the provider was incorporated.
- Andrew Carothers, M.D., P.C. v Progressive Ins. Co. (2019 NY Slip Op 04643)An insurer need not prove common-law fraud to deny reimbursement to a medical corporation improperly controlled by nonphysicians.
- Matter of Country-Wide Ins. Co. v Bay Needle Acupuncture, P.C. (2018 NY Slip Op 08238)The insurer's billing-fraud evidence did not establish a Mallela defense exempt from the 30-day denial deadline.
- Matter of Country-Wide Ins. Co. v Bay Needle Care Acupuncture, P.C. (2018 NY Slip Op 03929)The insurer's Mallela challenge failed because it presented no evidence that the provider was fraudulently incorporated.
- Matter of GEICO Ins. Co. v AAAMG Leasing Corp. (2017 NY Slip Op 01552)A provider may recover an additional attorney's fee for an article 75 proceeding to confirm or vacate a master arbitration award.
Cited by
A label shows how the later decision treated this one.
- Matter of Lam Quan MD, P.C. v LM Gen. Ins. Co. (2025 NY Slip Op 03328) FollowedOverdue no-fault benefits accrue interest at 2% per month, calculated pro rata using a 30-day month.
- American Tr. Ins. Co. v Rutland Med., PC (2023 NY Slip Op 50814(U))A no-fault arbitrator need not require a formal rebuttal specifically addressing an insurer's peer review or IME report.
Similar decisions
- Matter of Acuhealth Acupuncture, P.C. v Country-Wide Ins. Co. (2019 NY Slip Op 07245)An arbitrator acts within discretionary authority by refusing to consider late submissions.
- Matter of V.S. Care Acupuncture, P.C. v Country-Wide Ins. Co. (2019 NY Slip Op 07265)A master arbitrator may assess legal sufficiency but may not weigh evidence or make independent factual findings.
- Matter of Bay Needle Care Acupuncture, P.C. v Country Wide Ins. Co. (2019 NY Slip Op 07061)The provider's challenge to its arbitration attorney fee failed because it submitted no documentation of hours worked.
- Matter of Country-Wide Ins. Co. v TC Acupuncture, P.C. (2021 NY Slip Op 01120)An alleged error in the burden of proof for a fraudulent incorporation defense does not alone warrant vacatur of an arbitration award.
- Matter of Country-Wide Ins. Co. v TC Acupuncture P.C. (2019 NY Slip Op 04087)Attorney fees for judicial review of a master arbitration award are fixed by the court under 11 NYCRR 65-4.10 (j) (4).