Judges

Attorneys and Parties

Brief Summary

Background

SCOB, LLC, a medical provider, sought no-fault benefits from American Transit Insurance Company. The insurer denied the claim asserting lack of medical necessity. SCOB prevailed in arbitration (May 21, 2022) on a substantial portion of the claim, and a master arbitrator confirmed the award (September 20, 2022). The insurer filed a CPLR article 75 [New York’s statutory framework governing arbitration-related court proceedings] petition to vacate. SCOB cross-petitioned to confirm and requested attorney’s fees for work in the court proceeding under 11 NYCRR 65-4.10(j)(4) [provides that the attorney’s fee for services in a CPLR article 75 court proceeding shall be fixed by the court]. The insurer argued fee recovery was capped by 11 NYCRR 65-4.6(d) [regulation limiting attorney’s fees in no-fault matters not controlling in CPLR article 75 court proceedings] and that repetitive no-fault issues warranted reduced time. The court denied the petition, granted the cross-petition, directed SCOB to submit a fee affirmation, and after SCOB requested $4,600, awarded only $1,000 without explanation.

Lower Court Decision

The Supreme Court, Kings County, denied the insurer’s petition to vacate and confirmed the master arbitration award. It invited SCOB’s fee submission for its court work, then awarded $1,000 under 11 NYCRR 65-4.10(j)(4) without stating the grounds, notwithstanding SCOB’s $4,600 request and the insurer’s opposition premised on 11 NYCRR 65-4.6(d).

Appellate Division Reversal

The Appellate Division held that fees for services in a CPLR article 75 proceeding are governed by 11 NYCRR 65-4.10(j)(4), not 11 NYCRR 65-4.6(d). It reiterated that a reasonable attorney’s fee reflects the reasonable value of services considering factors such as time and labor, complexity, skill, experience and reputation, customary fees, and results obtained, and that the court may rely on its familiarity with such matters. Because the Supreme Court did not state the evidentiary basis for fixing the fee at $1,000 and the record did not reveal it, the court reversed the fee award and remitted for a new determination articulating the evidentiary basis.

Legal Significance

Clarifies that in no-fault cases, attorney’s fees for court work in CPLR article 75 proceedings are fixed by the court under 11 NYCRR 65-4.10(j)(4) and are not subject to the limits in 11 NYCRR 65-4.6(d). Trial courts must create an adequate record and explain the factors and evidence supporting the amount awarded, consistent with established fee-determination principles under New York law and Insurance Law § 5106(a) [entitles a claimant to recover reasonable attorney’s fees for overdue no-fault benefits, subject to superintendent’s regulations].