Matter of 563 Grand Medical, P.C. v Country-Wide Ins. Co.
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Attorneys and Parties
Brief Summary
This no-fault insurance dispute concerned whether a medical provider could recover additional attorneys' fees for a court challenge to a master arbitration award before any determination had been made that the provider's claim was actually valid and overdue.
The Supreme Court vacated the master arbitration award, denied the insurer's cross-petition to confirm it, sent the matter back to arbitration for further proceedings, and later granted the provider's motion for additional attorneys' fees.
The Appellate Division reversed the money judgment awarding 563 Grand Medical, P.C. $1,950 in additional attorneys' fees and denied the fee motion; it also dismissed the appeal from the intermediate order as superseded by the judgment.
Attorneys' fees under Insurance Law § 5106(a) [providing attorney's reasonable fee for services necessarily performed in securing payment of an overdue valid claim] and 11 NYCRR 65-4.10(j)(4) [regulation stating that the attorney's fee for services rendered in a court appeal from a master arbitration award and further appeals shall be fixed by the court] are available only when a valid claim or portion of a claim was denied or overdue. Here, the case had merely been remitted for further arbitration, and no finding had yet established that Grand Medical had a valid overdue claim.
Background
563 Grand Medical, P.C. commenced a proceeding under CPLR article 75 [special proceeding to confirm or vacate arbitration awards], seeking among other relief to vacate a February 18, 2020 master arbitration award that had affirmed an arbitration award denying its claims for no-fault insurance benefits against Country-Wide Ins. Co. The Supreme Court later ruled that the claims should not have been denied for failure to prove standing and referred the matter back to arbitration for further proceedings. After obtaining that remittal, Grand Medical moved for additional attorneys' fees related to the court appeal from the master arbitration award.
Lower Court Decision
In a December 21, 2020 order, the Supreme Court granted the branch of the petition seeking to vacate the master arbitration award, denied Country-Wide's cross-petition to confirm, and referred the matter to arbitration for further proceedings. In a November 10, 2021 order, the court granted Grand Medical's motion for additional attorneys' fees under 11 NYCRR 65-4.10(j)(4). A November 15, 2023 money judgment then awarded Grand Medical $1,950 plus costs and disbursements.
Appellate Division Reversal
The Appellate Division dismissed the appeal from the November 10, 2021 order because it was superseded by the November 15, 2023 money judgment. On the merits of the judgment appeal, the court reversed the money judgment, denied Grand Medical's motion for additional attorneys' fees, and modified the order accordingly. The court held that, because no determination had yet been made that Grand Medical possessed a valid claim that was denied or overdue, it was not entitled to fee recovery at that stage.
Legal Significance
The decision reinforces that success in vacating a master arbitration award and obtaining a remand for further arbitration does not by itself trigger fee entitlement in no-fault litigation. A provider must first establish that it had a valid claim or portion of a claim that was overdue or improperly denied before recovering court-awarded attorneys' fees under Insurance Law § 5106(a) and 11 NYCRR 65-4.10(j)(4).
A medical provider cannot recover additional attorneys' fees for a court appeal from a master arbitration award merely because it won a remand; fee recovery requires an actual determination that the underlying no-fault claim was valid and overdue or wrongly denied.