October 9, 2019
Matter of V.S. Care Acupuncture, P.C. v Country-Wide Ins. Co. (2019 NY Slip Op 07265)
https://www.beynensonlaw.com/case-law/matter-of-v-s-care-acupuncture-p-c-v-country-wide-ins-co-2019-ny-slip-op07265/
- Decided
- October 9, 2019
- Citation
- 2019 NY Slip Op 07265 · 176 AD3d 834
- Posture
- Article 75 petition
- Outcome
- Provider prevailed
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 V.S. Care Acupuncture, P.C. v Country-Wide Ins. Co. (2019 NY Slip Op 07265)
| Matter of V.S. Care Acupuncture, P.C. v Country-Wide Ins. Co. |
| 2019 NY Slip Op 07265 [176 AD3d 834] |
| 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 V.S. Care Acupuncture, P.C.,
Respondent, v Country-Wide Ins. Co., Appellant. |
Jaffe & Koumourdas, LLP (Thomas Torto and Jason Levine, 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 January 26, 2016, Country-Wide Ins. Co. appeals from a judgment of the Supreme Court, Kings County (Karen B. Rothenberg, J.), dated October 21, 2016. The judgment, upon an order of the same court dated October 20, 2016, granting the petition, vacating the master arbitrator’s award dated January 26, 2016, and confirming the original arbitrator’s award dated September 22, 2015, is in favor of the petitioner and against Country-Wide Ins. Co. in the total sum of $8,319.61.
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]).
V.S. Care Acupuncture, P.C. (hereinafter V.S.), is the assignee of a claim for no-fault benefits for treatment it rendered to Morris Collins. The carrier, Country-Wide Ins. Co. (hereinafter Country-Wide), denied the claim on several grounds. Country-Wide contended that Collins had not appeared at scheduled independent medical examinations and that V.S. had failed to appear at scheduled examinations under oath. Country-Wide also contended that V.S. was fraudulently incorporated (see State Farm Mut. Auto. Ins. Co. v Mallela, 4 NY3d 313 [2005]). V.S. submitted the claim to arbitration. The arbitrator accepted Country-Wide’s contention regarding Collins’s failure to appear at independent medical examinations, but rejected Country-Wide’s contention regarding V.S.’s failure to appear at examinations under oath. The arbitrator also rejected Country-Wide’s contention as to V.S.’s alleged fraudulent incorporation, finding that Country-Wide had not met its burden of proof. Accordingly, the arbitrator entered an award for the portion of the claim she found Country-Wide had improperly denied.
On Country-Wide’s appeal to a master arbitrator, the master arbitrator found, as relevant to this appeal, that the original arbitrator’s determination to reject the fraudulent incorporation defense was irrational, arbitrary, capricious, and incorrect as a matter of law. The master arbitrator vacated the original arbitrator’s award and remitted the matter to a new arbitrator on the issue of fraudulent incorporation. V.S. 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, and entered a judgment accordingly. Country-Wide appeals.
A master arbitrator may not review the facts by weighing the evidence, assessing the credibility of witnesses, or making independent findings of fact (see Matter of Petrofsky [Allstate Ins. Co.], 54 NY2d 207, 212 [1981]). A master arbitrator’s review powers, however, do include reviewing the facts to determine “whether or not the evidence is sufficient, as a matter of law, to support the determination of the arbitrator” (id. at 212). Here, there is no rational basis for the determination of the master arbitrator that the original arbitrator committed an error of law in rejecting Country-Wide’s fraudulent incorporation defense (cf. Matter of Country-Wide Ins. Co. v Bay Needle Care Acupuncture, P.C., 162 AD3d 407 [2018]; Nationwide Affinity Ins. Co. of Am. v Acuhealth Acupuncture, P.C., 155 AD3d 885, 886-887 [2017]). Accordingly, we agree with the Supreme Court that the master arbitrator’s award should be vacated and the original arbitrator’s award confirmed.
Moreover, as V.S. contends and Country-Wide concedes, V.S. 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 at 408; 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: Award vacated or modified because it was irrational, arbitrary and capricious, without evidentiary support or contrary to settled law
Affirmed vacatur of the master arbitrator's award and confirmation of the original award because the master arbitrator had no rational basis for holding that rejecting the fraudulent incorporation defense was an error of law.
Of the 119 decisions on this question in the Second Department courts and the Court of Appeals, 19 (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 had no rational basis to find legal error in the arbitrator's rejection of the fraudulent incorporation defense for failure of proof, so the original award for the provider 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 the amount.
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
A label shows how this decision treated the case it cites.
- 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).
- Matter of Country-Wide Ins. Co. v Bay Needle Care Acupuncture, P.C. (2018 NY Slip Op 03929) Contrasted (cf., but see)The insurer's Mallela challenge failed because it presented no evidence that the provider was fraudulently incorporated.
- Nationwide Affinity Ins. Co. of Am. v Acuhealth Acupuncture, P.C. (2017 NY Slip Op 08007) Contrasted (cf., but see)A nonphysician's guilty plea and forfeiture allegations did not establish that the providers were fraudulently incorporated.
- 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 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.
Similar decisions
- Matter of Bay Needle Care Acupuncture v Country-Wide Ins. Co. (2019 NY Slip Op 07249)A master arbitrator exceeds the permitted review power by reweighing evidence of fraudulent incorporation and reaching a different factual conclusion.
- 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 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 Metro Pain Specialist P.C. v Country-Wide Ins. Co. (2020 NY Slip Op 50014(U))A master arbitrator may not review factual issues de novo, weigh evidence, or resolve credibility when reviewing a no-fault award.
- 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.