May 28, 2019

Matter of Country-Wide Ins. Co. v TC Acupuncture P.C. (2019 NY Slip Op 04087)

Headnote

The main issue in this case was the court's consideration of reasonable attorneys' fees in connection with securing payment of an overdue claim for no-fault benefits. The court held that the lower court erred in calculating the award of attorneys' fees, as it failed to consider the regulation applicable to an appeal of a master arbitration award, and instead applied the regulation applicable to attorneys' fees awards at an initial arbitration. Pursuant to Insurance Law § 5106 (a), if a valid claim for no-fault benefits is overdue, the claimant is entitled to recover reasonable attorney's fees, subject to limitations promulgated by the superintendent in regulations. In this case, as the matter was an appeal from a master arbitration award, the court remanded the matter for a calculation of fees in accordance with the proper regulation. Additionally, the court rejected the appellant's claims for further fees for the underlying arbitration, as they were not preserved.

Reported in New York Official Reports at Matter of Country-Wide Ins. Co. v TC Acupuncture P.C. (2019 NY Slip Op 04087)

Matter of Country-Wide Ins. Co. v TC Acupuncture P.C.

2019 NY Slip Op 04087 [172 AD3d 598]

May 28, 2019

Appellate Division, First Department

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

As corrected through Wednesday, July 3, 2019

[*1]

In the Matter of Country-Wide Insurance Company, Respondent,
v
TC Acupuncture P.C., as Assignee of Alexander Oneal, Respondent-Appellant.

Gary Tsirelman, P.C., Brooklyn (Gary Tsirelman of counsel), for appellant.

Thomas Torto, New York (Jason Levine of counsel), for respondent.

Order, Supreme Court, New York County (Erika M. Edwards, J.), entered June 22, 2017, which awarded attorneys’ fees in the amount of $749.38, unanimously reversed, on the law, without costs, the award vacated, and the matter remanded for a calculation of reasonable attorneys’ fees in accordance with 11 NYCRR 65-4.10 (j) (4).

The court failed to consider 11 NYCRR 65-4.10 (j) (4), which applies to this appeal of a master arbitration award. Instead, the court applied 11 NYCRR 65-4.6, the regulation applicable to attorneys’ fee awards at an initial arbitration, and calculated the award as 20% of the arbitration demand of $3,746, awarding $749.38.

Pursuant to Insurance Law § 5106 (a), if a valid claim or portion of a claim for no-fault benefits is overdue, “ ’the claimant shall also be entitled to recover his attorney’s reasonable fee, for services necessarily performed in connection with securing payment of the overdue claim, subject to [the] limitations promulgated by the superintendent in regulations’ ” (Matter of Unitrin Advantage Ins. Co. Kemper A. Unitrin Bus. v Professional Health Radiology, 143 AD3d 536, 537 [1st Dept 2016]). Here, in a proceeding for judicial review of an award by a master arbitrator, the attorneys’ fee award “shall be fixed by the court adjudicating the matter” (Matter of GEICO Ins. Co. v AAAMG Leasing Corp., 148 AD3d 703, 705 [2d Dept 2017], citing Insurance Department Regulations [11 NYCRR] § 65-10 [j] [4]).

Because this is an appeal from a master arbitration award, we remand the matter for a calculation of fees in accordance with 11 NYCRR 65-4.10 (j) (4) (see Matter of Country-Wide Ins. Co. v Bay Needle Care Acupuncture, P.C., 162 AD3d 407, 408 [1st Dept 2018]). We note that the fees would only apply to this appeal.

In addition, we reject as unpreserved appellant’s claims that it is entitled to further fees for the underlying arbitration under 11 NYCRR 65-4.6 (c) or (d). Concur—Friedman, J.P., Gische, Tom, Webber, Gesmer, JJ.