Matter of American Transit Insurance Company v Allied Board Certified Physicians
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Attorneys and Parties
Brief Summary
New York no-fault insurance arbitration, specifically whether a master arbitration award had to be confirmed after the insurer's vacatur petition was denied and whether the medical provider could seek court-awarded appellate attorneys' fees.
The Supreme Court denied American Transit Insurance Company's petition to vacate the master arbitration award, finding no showing that the award was arbitrary and capricious, but it also denied Allied Board Certified Physicians' cross-petition and later motions to confirm the award and for attorneys' fees.
The Appellate Division reversed the judgment insofar as it denied confirmation of the master arbitration award and denied attorneys' fees, modified the related orders, confirmed the award, and remitted for a determination of reasonable attorneys' fees, if any.
Because under CPLR 7511(e) [requires a court to confirm an arbitration award when a motion to vacate or modify is denied], once the insurer's petition to vacate was denied, the court was required to confirm the award. The court also held that Insurance Law § 5106(a) [provides that when a valid no-fault claim is overdue, the claimant is entitled to a reasonable attorney's fee subject to regulations] and 11 NYCRR 65-4.10(j)(4) [provides that the attorney's fee for services on a court appeal from a master arbitration award shall be fixed by the court adjudicating the matter] required remittal to determine fees, while the insurer's fee-schedule argument was unpreserved because it was raised for the first time on appeal.
Background
American Transit Insurance Company commenced a CPLR article 75 proceeding in April 2022 to vacate a January 30, 2022 master arbitration award entered in favor of Allied Board Certified Physicians, which was pursuing no-fault benefits as assignee of Chong Sok So. Allied cross-petitioned to confirm the award and sought reasonable attorneys' fees for the court appeal. After the Supreme Court denied vacatur but also denied confirmation and later denied Allied's additional motions seeking confirmation and fees, Allied appealed from the resulting judgment.
Lower Court Decision
The Supreme Court, Kings County, held that American Transit failed to show that the master arbitration award was arbitrary and capricious and therefore denied the petition to vacate. Even so, it denied Allied's cross-petition to confirm the award and denied Allied's later motions to confirm the award and to recover attorneys' fees under 11 NYCRR 65-4.10(j)(4).
Appellate Division Reversal
The Appellate Division reversed the judgment insofar as appealed from, confirmed the master arbitration award, granted the branches of Allied's cross-petition and motions seeking confirmation, modified the prior orders accordingly, and remitted the matter to the Supreme Court, Kings County, to determine the amount of reasonable attorneys' fees, if any, and to enter an amended judgment. The court emphasized that once vacatur was denied, confirmation was mandatory, and it refused to consider American Transit's argument about an excessive fee-schedule claim because that issue was raised for the first time on appeal.
Legal Significance
This decision reinforces that in New York no-fault arbitration cases, a court cannot deny a petition to vacate and simultaneously refuse to confirm the award; confirmation is mandatory under CPLR 7511(e). It also confirms that a provider prevailing in a court proceeding involving a master arbitration award may seek court-fixed attorneys' fees under Insurance Law § 5106(a) and 11 NYCRR 65-4.10(j)(4), with the amount to be determined by the court. In addition, arguments not raised below, especially those involving factual matters such as fee-schedule compliance, will not be entertained for the first time on appeal.
If an insurer loses its effort to vacate a master arbitration award in a no-fault case, the court must confirm the award, and the provider may be entitled to appellate attorneys' fees, with any unpreserved defense arguments likely waived on appeal.