Trump Physical Therapy, P.C. v State Farm Mut. Auto. Ins. Co. (2008 NY Slip Op 50101(U))

District Court of Suffolk County, Third District

HUC 3646-05

Baker, Sanders, Barshay, Grossman,

Fass, Muhlstock & Neuwirth

150 Herricks Road

Mineola, New York 11501

Attorneys for the Plaintiff

Bruno, Gerbino & Soriano, LLP

445 Broad Hollow Road, Suite 220

Melville, New York 11747

Attorneys for the Defendant

C. Stephen Hackeling, J.

Plaintiff’s complaint dated May 27, 2005, seeks recovery on fifteen separate no-fault medical provider insurance claims, together with statutory interest and statutory N.Y.S. Insurance Law Article 51attorney’s fees. Each claim is identified via its own independent cause of action and designated as the odd number causes of action detailed in the complaint. Each of these fifteen causes of action represents an individual bill/claim for services.

Issue Presented

On the October 25, 2007 trial date herein, the parties’ attorneys settled the above causes of action for first party benefits by agreeing that the plaintiff would recover a determined percentage of the principle sued for, together with interest and costs. The parties seek judicial intervention solely on the issue of the proper method of calculating statutory attorney’s fees to be awarded to the plaintiff.

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Relying upon a NY State Insurance Department opinion the defendant argues that the Court should aggregate the plaintiff’s fifteen cause of action/claims, and award attorney’s fees in the amount of 20% of the aggregate amount of the bills encompassed in plaintiff’s complaint, with a maximum award of [*2]attorney’s fees capped at $850. The plaintiff argues that it is entitled to separate attorney’s fees for each bill submitted and overdue; in this case on each of the fifteen separate causes of action, which correspond to fifteen separate bills of a single provider for services rendered to a single assignor.

Legal Discussion

Regulation 11 NYCRR §65-4.6 (e) of the Insurance Law governs attorney’s fees in no-fault actions. It states that “….Subject to the provisions of subdivisions (a) and (c) of this section, the attorney’s fee shall be limited as follows: twenty percent of the amount of first-party benefits, plus interest thereon, awarded by an arbitrator in Court, subject to a maximum fee of $850”. The statute “requires payment of counsel fees on a per claim basis“. LMK Psychological Servs., P.C. v. State Farm Mut. Auto Ins. Co., 2007 NY Slip Op. 10443. (NYAD 3d Dept. 1994). See also Smithtown General Hospital v. State Farm Mut. Auto Ins. Co., 207 AD2d 338 (NYAD 2d 1994), interpreted a predecessor statute (11 NYCRR 65.17 (b) (6), awarded attorney’s fees on a “per claim” basis and rectified its lower Court’s imposition of a $850 ceiling on attorney’s fees in the entire action. As noted by the Court in Valley Stream Medical & Rehab., P.C. v. Allstate Insurance Co., 15 Misc 3d 576 (Civ. Ct. Queens, 2007), “the per claim’ calculation of attorney’s fees laid out in Smithtown General Hospital decision are properly calculated for each separate claim form submitted to an insurer… has been accepted as the proper approach.

In Alpha Chiropractic, PC. v. State Farm Mut. Auto Ins. Co.,14 Misc 3d 673 ( NY City Civ. Ct., 2006), the Court awarded attorney’s fees to plaintiff “as to each proof of claim form submitted pertaining to the assignor, equal to twenty percent of the amount set forth in each claim…” and explained that each “proof of claim” form refers to “an NF-3 (or its functional equivalent), which while often enumerating a number of medical services provided over more than one date, (and) relates to a single bill”. See also, Spineamericare Medical, PC. v. Liberty Mutual Ins. Co., 2002 NY Slip Op. 50511U ( District, Nassau, 2002), which awarded plaintiff’s attorneys’ fees in the amount of twenty percent of the total of each of two claims, “…subject to a cap of $850, separately applicable to each claim.”

This Court regards and agrees with the discussion of the Hon. Diane A. Lebedeff, in Valley Stream Medical & Rehab., PC. v. Allstate Insurance Co.(citation supra), which declines to adopt the reasoning of an Insurance Department opinion letter under its consideration and which aptly discusses the doctrine of stare decisis. By similar reasoning, this Court rejects any interpretation which relies on the Insurance Department opinion letter in question and which seeks to cap “no-fault” attorney fees at $850 per claim. Inasmuch as the causes of action contained in the instant complaint correspond to individual claims of the plaintiff herein, the plaintiff is entitled to attorney’s fees on a per claim basis on each odd numbered cause of action, at the rate of twenty percent of the amount settled to for each claim, with a maximum of $850 per claim.

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The plaintiff shall submit the stipulation of the parties (as to principle, interest and costs) along with a proposed judgment, which shall include attorneys fees calculated in amanor consistent with this [*3]decision.

Dated: January 10, 2008

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J.D.C.

Decision to be published_____yes_____no.