March 20, 2023
American Tr. Ins. Co. v North Shore Family Chiropractic PC (2023 NY Slip Op 50208(U))
Headnote
Reported in New York Official Reports at American Tr. Ins. Co. v North Shore Family Chiropractic PC (2023 NY Slip Op 50208(U))
American
Transit Insurance Company, Petitioner,
against North Shore Family Chiropractic PC, A/A/O ALBERTO CARPINTEYRO, Respondent. |
Index No. 535468/2022
Larkin Farrell LLC (David Fair of counsel), for petitioner.
Aaron D. Maslow, J.
The following numbered papers were read on this petition and cross-petition:
Petition (NYSCEF Doc No. 1)Notice of Petition (NYSCEF Doc No. 2)
Exhibit A – Arbitration Award (NYSCEF Doc No. 3)
Exhibit B – Master Arbitration Award (NYSCEF Doc No. 4)
Exhibit C – Respondent North Shore Family Chiropractic PC’s Arbitration Request Form and Arbitration Submission (NYSCEF Doc No. 5)
Exhibit D – Petitioner American Transit Insurance Company’s Arbitration Submission and Master Arbitration Brief (NYSCEF Doc No. 6)
Statement of Authorization for Electronic Filing (NYSCEF Doc No. 7)
Request for Judicial Intervention (NYSCEF Doc No. 8)
Affidavit of Service (NYSCEF Doc No. 9)
Statement of Authorization for Electronic Filing Affidavit of Service (NYSCEF Doc No. 10)
Affidavit of Service (NYSCEF Doc No. 11)
Answer (NYSCEF Doc No. 12)
Notice of Cross-Petition (NYSCEF Doc No. 13)
Affirmation in Opposition to Motion and in Support of Cross-Petition (NYSCEF Doc No. 14)
Exhibit A – Affirmation as to Attorney’s Fees (NYSCEF Doc No. 15)
Affirmation in Opposition to Cross-Petition and in Further Support of Petition (NYSCEF Doc No. 16)
Issue Presented
Case law holds that where a health service provider’s bills for treating an injured for-hire vehicle driver are submitted to the No-Fault insurer and the latter denies payment on the asserted ground that the driver was injured in the course of employment, adjudication of that defense in court or arbitration must be held in abeyance pending its resolution by the Workers’ Compensation Board. Considering this, is it arbitrary and capricious, without rational basis, and incorrect as matter of law for a No-Fault insurance arbitrator to reject the course-of-employment defense — and not defer resolution of it to the Workers’ Compensation Board — where the No-Fault insurer’s only evidence is a police report establishing that the driver was operating a vehicle which bore “TC” plates and lacked passengers?
Background
Petitioner American Transit Insurance Company (“ATIC”) commenced this CPLR Article 75 proceeding by notice of petition, seeking an order and judgment vacating a No-Fault Insurance master arbitration award of Robyn D. Weisman, Esq. (dated September 29, 2022), which affirmed the arbitration award of Mitchell Lustig, Esq. (dated July 10, 2022) granting Respondent North Shore Family Chiropractic PC’s (“North Shore”) claim for No-Fault insurance compensation for health service expenses.[FN1] ,[FN2] Arbitrator Lustig awarded $2,104.48 to North Shore as compensation for treating Alberto Carpinteyro, its assignor [FN3] (“Assignor”), who claimed [*2]to have been injured in a motor vehicle accident on July 29, 2019.
Respondent North Shore has opposed ATIC’s petition to vacate the master arbitration award, and it cross-petitioned for a judgment confirming the master arbitration award and awarding $2,173.14 as principal, statutory interest, the $40.00 arbitration filing fee, attorney’s fees, and costs and disbursements. ATIC opposed North Shore’s cross-petition and filed a reply in support of its petition.
The petition and cross-petition came before the undersigned for oral argument on March 8, 2023. At that time, ATIC appeared by counsel. North Shore did not appear.
The underlying arbitration which is the subject of this proceeding was organized by the American Arbitration Association (“AAA”), which assigned Case No. 17-21-1223-5155 [FN4] to it. The AAA has been designated by the New York State Department of Financial Services to coordinate the mandatory arbitration provisions of Insurance Law § 5106 [b], which provides:
Every insurer shall provide a claimant with the option of submitting any dispute involving the insurer’s liability to pay first party [“No-Fault insurance”] benefits, or additional first party benefits, the amount thereof or any other matter which may arise pursuant to subsection (a) of this section to arbitration pursuant to simplified procedures to be promulgated or approved by the superintendent.
Insurance Law article 51 provides for the payment of basic economic loss incurred by persons injured in motor vehicle accidents. Included within basic economic loss are first-party benefits for medical and other professional health services.[FN5] First-party benefits are more commonly known as “No-Fault benefits.”[FN6] Notably, and relevant in the instant case, is that first-party benefits are reduced by, among other things, Workers’ Compensation benefits where an injured person in a motor vehicle accident was acting in the course of employment (Insurance Law § 5102 [b] [2]).
In furtherance of the statutory scheme, a comprehensive set of No-Fault Regulations were promulgated by the Superintendent of Insurance (presently Financial Services). They are contained at 11 NYCRR part 65. Said part is subdivided into five subparts which encompass the [*3]following topics: prescribed insurance policy endorsements, rights and liabilities of self-insurers, claims for benefits, arbitration, and unauthorized providers of health services. Part 65 is also known as Insurance Regulation 83.
Generally, the claims process for health service bills [FN7] for No-Fault compensation begins with the submission by a health service provider of a claim form (usually, but not always, a Form NF-3 verification of treatment by attending physician or other provider of health service).[FN8] Besides providing information regarding the injured person, diagnoses, projected treatment, etc., the claim form includes a bill for services performed. The claim form can be submitted directly by the injured person to the No-Fault insurer but over many decades a practice developed by which the health service providers submit the claim forms. As noted in footnote 3, they possess standing to do so by virtue of having received signed assignments of benefits from the injured persons.[FN9] ,[FN10] The insurer must either pay or deny the bill within 30 days, or seek additional verification within 15 business days. If it denies payment, it must issue a Form NF-10 denial of claim [FN11] identifying why the bill was not paid. (See Insurance Law § 5106 [a]; Viviane Etienne Medical Care, P.C. v Country-Wide Ins. Co., 25 NY3d 498, 505 [2015].)
The record evidence submitted in this Article 75 proceeding revealed that the underlying arbitration involved seven Form NF-3 claim forms (bills) submitted by North Shore to ATIC for payment. This was in accordance with the procedure outlined in the previous paragraph for the submission of claims for No-Fault compensation. For each of North Shore’s claim forms there was an appurtenant Form NF-10 denial form issued by ATIC. Pertinent details are as follows:
• Dates of service October 2, 2020 – October 23, 2020 ($343.30):
Bill received November 18, 2020, and timely denied on December 16, 2020. Grounds of denial: (1) Assignor was in the course of employment and therefore eligible for Workers’ Compensation, so the bill must be submitted to the Workers’ Compensation insurer [*4](“course-of-employment defense”), (2) excessive fees [FN12], and (3) untimely submission of proof of claim (45-day rule)[FN13].
• Dates of service November 6, 2020 – November 30, 2020 ($411.96):
Bill received December 18, 2020, and timely denied on January 14, 2021. Grounds of denial: (1) course-of-employment defense, (2) excessive fees.
• Dates of service December 7, 2020 – December 28, 2020 ($217.15):
Bill received January 19, 2021, and timely denied on December 16, 2021. Grounds of denial: (1) course-of-employment defense, (2) excessive fees.
• Dates of service January 3, 2021 – January 25, 2021 ($354.47):
Bill received February 16, 2021, and timely denied on March 12, 2021. Grounds of denial: (1) course-of-employment defense, (2) excessive fees, (3) no further treatment needed effective January 4, 2021 per Dr. Dennis Mann’s Dec. 10, 2020 independent medical examination (“IME defense”).
• Dates of service February 9, 2021 – February 26, 2021 ($285.81):
Bill received March 15, 2021, and timely denied on April 13, 2021. Grounds of denial: (1) course-of-employment defense, (2) excessive fees, (3) IME defense.
• Dates of service March 1, 2021 – March 29, 2021 ($343.30):
Bill received April 19, 2021, and timely denied on May 18, 2021. Grounds of denial: (1) course-of-employment defense, (2) excessive fees, (3) IME defense.
• Dates of service April 18, 2021 – April 30, 2021 ($217.15):
Bill received May 20, 2021, and timely denied on June 18, 2021. Grounds of denial: (1) course-of-employment defense, (2) excessive fees, (3) IME defense.
The record evidence reveals further that on July 6, 2002, Arbitrator Lustig conducted a hearing at which Alex Beyenson, Esq., from The Beynenson Law Firm, P.C., appeared for North Shore, and Helen Cohen, Esq., appeared for ATIC.
Arbitrator Mitchell Lustig’s
Award
In his award, Arbitrator Lustig stated that his findings and conclusions were based upon the documents submitted by the parties in the AAA’s ADR Center [FN14] and the parties’ arguments at the hearing. He first found that North Shore established its prima facie case of entitlement to compensation “by submitting evidentiary proof that the prescribed statutory billing forms had been mailed and received and that payment of No-Fault benefits were overdue.” The arbitrator [*5]cited to Westchester Med. Ctr. v Lincoln Gen. Ins. Co. (60 AD3d 1045 [2d Dept 2009]) and Mary Immaculate Hosp. v Allstate Ins. Co. (5 AD3d 742 [2d Dept 2004]). (NYSCEF Doc No. 3, arbitration award, at numbered p 2.)
The arbitrator then reviewed the defenses asserted by ATIC in its Form NF-10 denials of claim. The first defense reviewed was the one concerning the timeliness of submission of the bill for dates of service October 2, 2020 – October 23, 2020. Given that this defense to payment of the bill was not raised in this Article 75 proceeding, it suffices to say that the arbitrator sustained it with respect to a date of service which was more than 45 days earlier than the bill was received by ATIC; other dates of service were within the 45-day period so the defense was denied as to them. (Id. at numbered pp 2-4.)
The arbitrator then reviewed ATIC’s IME defense. He found that North Shore’s contemporaneous and post-IME cutoff re-examination reports outweighed Dr. Mann’s IME report; that Assignor had documented complaints of pain in his neck and lower back and restrictions in motion in those locations. He found that North Shore had refuted Dr. Mann’s determination that further chiropractic treatment was not necessary. (Id. at numbered pp 4-5.) Arbitrator Lustig’s determination of this issue is not challenged in the within Article 75 proceeding.
That part of Arbitrator Lustig’s award which is at issue herein — the course-of-employment defense — will be assessed in more detail. As noted above, ATIC asserted in each of its Form NF-10 denials of claim that Assignor was in the course of employment and therefore eligible for Workers’ Compensation, so the bills had to be submitted to the Workers’ Compensation insurer. The arbitrator cited to Arvatz v Empire Mutual Ins. Co. (171 AD2d 262 [1st Dept 1991]), for the point of law that “[t]he Workers’ Compensation Board is the exclusive forum to determine whether an individual was in the course of his employment at the time of a motor vehicle accident” (NYSCEF Doc No. 3, arbitration award, at numbered p 5). Citing to a master arbitration award reported in 2000, the arbitrator continued by stating that “As long as there is ‘at least minimal proof of the indicia of employment from which an inference could be drawn to support the defense’ that the assignor is covered by the Workers’ Compensation Law . . . the claim must be denied without prejudice, pending the determination of the issue of employment by the Board.” The third statement of law by the arbitrator was a citation to A.B. Med. Servs. PLLC v American Transit Ins. Co. (8 Misc 3d 127[A], 2005 NY Slip Op. 50959[U] [App Term 2d & 11th Dists 2005]), for the proposition that “If, however, the insurer’s contention that the Assignor acted in the course of his or her employment at the time of the accident is ‘mere speculation’ that fails to establish the defense’s ‘potential merit’ so as to warrant the Board’s review of the facts, the issue need not be resolved by the Board” (NYSCEF Doc No. 3, arbitration award, at numbered p 5).
This was followed by Arbitrator Lustig’s review of the evidence submitted by ATIC concerning its course-of-employment defense: “In support of its Workers’ Compensation defense, [ATIC] submitted a copy of the Police Accident Report indicating that at the time of the accident the Assignor was operating a 2015 Nissan license plate number T751729C.[FN15] [¶] However, notably absent from the Respondent’s submission is any proof that the Assignor was acting in the course of his employment, such as an Affidavit from its underwriting manager [*6]indicating that the Respondent issued a livery or taxi policy to the Assignor for a ‘for hire vehicle.’ ” (Id.)
Arbitrator Lustig concluded his analysis of the course-of-employment defense as follows: “After careful consideration of the evidence, I find, as a matter of fact, that the Respondent has not submitted sufficient proof that the Assignor was acting in the course of his employment at the time of the accident. Accordingly, the Respondent’s denials premised upon Workers’ Compensation being primary are vacated.” (Id. at numbered p 6.) (emphasis added)
As a result of his analysis, Arbitrator Lustig awarded compensation to North Shore for all amounts billed except for the date of service concerning which the 45-day rule defense was sustained. A total of $2,104.48 was awarded to North Shore. (Id. at numbered pp 6-7.) Interest, an attorney’s fee, and return of the $40.00 arbitration filing fee were also awarded.
Master Arbitrator Robyn D. Weisman’s
Award
ATIC filed for master arbitration to appeal Arbitrator Lustig’s award. ATIC did not challenge Arbitrator Lustig’s determinations regarding the defenses of untimely proof of claim (45-day rule) and lack of necessity past an IME cutoff, which pertained to certain bills. The only issue raised in master arbitration was Arbitrator Lustig’s not having deferred to the Workers’ Compensation Board on ATIC’s course-of-employment defense — that he determined it himself. (NYSCEF Doc No. 6, ATIC’s arbitration submissions, at 60-72.)
In her award, Master Arbitrator Weisman set forth the issue in dispute as follows: “Whether [the] lower arbitrator acted in an arbitrary and capricious manner or in violation of a law in ruling that [North Shore] was entitled to reimbursement regardless of [ATIC]’s claim of Worker’s Compensation benefits” (NYSCEF Doc No. 4, master arbitration award, at numbered p 1).
Master Arbitrator Weisman cited to Arvatz (171 AD2d 262), as did Arbitrator Lustig. She also cited to Liss v Trans Auto Systems, Inc. (68 NY2d 15 [1986] [determination that worker did not sustain injuries in course of employment not binding in liability suit on those not parties to compensation proceeding], to the effect that the question of whether one was injured in the course of employment must be resolved by the Workers’ Compensation Board. (Id. at numbered p 2.)
Acknowledging that in arbitration there are many instances in which the possible existence of Workers’ Compensation coverage should be determined by the Workers’ Compensation Board, Master Arbitrator Weisman wrote that here the issue “came down to a question of fact. The issue of whether the accident occurred during the course of employment was a factual one.” (Id.) With respect to this issue of fact, the standard of review was whether the hearing arbitrator’s award was supported by the evidence, had a reasonable and plausible basis, and was rational, Master Arbitrator Weisman citing principally to Matter of Petrofsky v Allstate Ins. Co., 54 NY2d 207 [1981]. She found that Arbitrator Lustig’s decision “was based on the evidence submitted” (id. at numbered p 3). As for any issue of law, “The grounds of review also included wither the decision was incorrect as a matter of law, as provided for in 11 NYCRR 65-4.10 [a] [4]. I do not see a misapplication of law” (id.).
Arbitrator Lustig’s award was affirmed in its entirety by Master Arbitrator Weisman.
ATIC’s Petition to Vacate
ATIC’s petition to vacate asserted that “The arbitration decision was arbitrary and capricious, irrational and without a plausible basis” (NYSCEF Doc No. 1, petition, ¶ 35), in that “Arbitrator Lustig failed to follow well settled law” (id., ¶ 41). The petition proceeded to argue that ATIC had reason to believe that Assignor may have been in the course of his employment at the time of the motor vehicle accident, rendering Workers’ Compensation benefits primary to No-Fault (id., ¶ 42), and it was improper for Arbitrator Lustig to express an opinion whether Workers’ Compensation coverage existed (id., ¶ 54). The petition cited to case law concerning the Workers’ Compensation Board’s jurisdiction over the issue of whether one was in the course of employment when injured. That issue is the only one ATIC advanced in this Article 75 proceeding.
The petition concluded by asserting that Arbitrator Lustig’s decision was “arbitrary and capricious, without rational basis and incorrect as a matter of law because the arbitrator ignored [ATIC]’s evidence and/or well settled legal precedent in order to justify a determination in favor of [North Shore]” (id., ¶ 56). “As a result, [ATIC]’s rights were prejudiced by the partiality of the arbitrator and the arbitrator exceeded his/her power and failed to make a final and definite award and the decision must be vacated” (id., ¶ 57). ATIC was “entitled to a declaration that the arbitration decisions of Mitchell Lustig, Esq. and Robyn D. Weisman, Esq. in the matter designated AAA number 99-21-1223-5155 have no force or effect” (id., ¶ 58).
North Shore’s Cross-Petition to Confirm
North Shore argued in its cross-petition most significantly that the arbitration awards had to be confirmed if there was a colorable justification and a plausible basis for them, citing to Rose Castle Redevelopment II LLC v Franklin Realty Corp. (184 AD3d 230 [1st Dept 2020], and if they were neither arbitrary nor capricious, citing to Matter of Petrofsky v Allstate Ins. Co. (54 NY2d 207) ((NYSCEF Doc No. 14, cross-petition, ¶¶ 3, 6). North Shore pointed out that Arbitrator Lustig found that ATIC did not submit sufficient evidence to support its defense that Assignor was in the course of his employment and that Master Arbitrator Weisman found the finding to be neither arbitrary, capricious, nor contrary to law (id., ¶¶ 14, 15). There was no basis to vacate the awards, it insisted (id., ¶ 3).
North Shore added that it was entitled to an attorney’s fee of $1,650.00 in connection with the Article 75 proceeding as well as costs and disbursements (id. ¶ 23). The original principal amount of $2,173.14, as well as interest, attorney’s fees, and a return of the arbitration filing fee should likewise be awarded (id. at numbered pp 7-8).
No-Fault Insurance Arbitration
When the No-Fault Law was first enacted by the Legislature in Chapter 13 of the Laws of 1973 to take effect February 1, 1974, § 675 of the Insurance Law was added. In subdivision 2 thereof, insurers were required to provide claimants with an arbitration option for disputes involving liability for first-party benefits. This provision was amended in Chapter 892 of the [*7]Laws of 1977, when several changes were made to the 1973 version.[FN16] The provision regarding arbitration in § 675 was amended to add the following language:
An award by an arbitrator may be vacated or modified by a master arbitrator in accordance with simplified procedures to be promulgated or approved by the superintendent [of insurance]. The grounds for vacating or modifying an arbitrator’s decision by a master arbitrator shall not be limited to those grounds for review set forth in article seventy-five of the civil practice law and rules. The decision of a master arbitrator shall be binding except for the grounds for review set forth in article seventy-five of the civil practice law and rules, and provided further that where the amount of such master arbitrator’s award is five thousand dollars or greater, exclusive of interest and attorney’s fees, the insurer or the claimant may institute an action in a court of competent jurisdiction to adjudicate the dispute de novo.[FN17]
The provisions regarding No-Fault insurance arbitration remained in the recodification of the Insurance Law enacted in Chapters 367 and 805 of the Laws of 1984. The arbitration provisions were set forth in § 5106, and subdivisions (b) and (c) now read as follows:
(b) Every insurer shall provide a claimant with the option of submitting any dispute involving the insurer’s liability to pay first party benefits, or additional first party benefits, the amount thereof or any other matter which may arise pursuant to subsection (a) of this section to arbitration pursuant to simplified procedures to be promulgated or approved by the superintendent. Such simplified procedures shall include an expedited eligibility hearing option, when required, to designate the insurer for first party benefits pursuant to subsection (d) of this section. The expedited eligibility hearing option shall be a forum for eligibility disputes only, and shall not include the submission of any particular bill, payment or claim for any specific benefit for adjudication, nor shall it consider any other defense to payment.
(c) An award by an arbitrator shall be binding except where vacated or modified by a master arbitrator in accordance with simplified procedures to be promulgated or approved by the superintendent. The grounds for vacating or modifying an arbitrator’s award by a master arbitrator shall not be limited to those grounds for review set forth in article seventy-five of the civil practice law and rules. The award of a master arbitrator shall be binding except for the grounds for review set forth in article seventy-five of the civil practice law and rules, and provided further that where the amount of such master arbitrator’s award is five thousand dollars or greater, exclusive of interest and attorney’s [*8]fees, the insurer or the claimant may institute a court action to adjudicate the dispute de novo.
Insofar as is here relevant, the No-Fault Insurance Regulations promulgated by the Superintendent of Insurance provided that a master arbitrator may vacate or modify a hearing arbitrator’s award where it “was incorrect as a matter of law (procedural or factual errors committed in the arbitration below are not encompassed within this ground)” (11 NYCRR 65.18 [a] [4]). This regulatory language was carried over into the revised Regulations promulgated in 2002, in 11 NYCRR 65-4.10 (a) (4).[FN18] A master arbitrator may also vacate or modify a hearing arbitrator’s award under certain other grounds also (see 11 NYCRR 65-4.10 [a]).[FN19]
Discussion
The provision that a hearing arbitrator may vacate or modify a hearing arbitrator’s award due to an error of law is one of several grounds but is the main gravamen of ATIC’s objection to the arbitration outcome here. As noted above, ATIC has maintained that Arbitrator Lustig erred in not complying with “well settled legal precedent” concerning how to deal with a No-Fault insurer’s defense asserting that an injured person was in the course of employment when the motor vehicle accident occurred (NYSCEF Doc No. 1, petition, ¶ 41). ATIC has insisted that the Workers’ Compensation Board had to decide whether Assignor was injured in the course of employment — that Arbitrator Lustig should have never ventured into any sort of consideration of it.
The issue of the availability of Workers’ Compensation benefits as a first line source before No-Fault compensation is available derives from Insurance Law § 5102 [b] [2], where the No-Fault Law defines first-party benefits:
payments to reimburse a person for basic economic loss on account of personal injury arising out of the use or operation of a motor vehicle, less: . . .
(2) Amounts recovered or recoverable on account of such injury under state or federal laws providing social security disability benefits, or workers’ compensation benefits, or disability benefits under article nine of the workers’ compensation law, or medicare benefits, other than lifetime reserve days and provided further that the medicare benefits utilized herein do not result in a reduction of such person’s medicare benefits for a subsequent illness or injury. (emphasis added)
The No-Fault Regulations implement this at 11 NYCRR 65-3.16 (a) (9): “Pursuant to section 5102(b)(2) of the Insurance Law, when the applicant is entitled to workers’ compensation benefits due to the same accident, the workers’ compensation carrier shall be the sole source of reimbursement for medical expenses.”
Probably the first appellate decision on the issue of how to treat a No-Fault insurer’s defense that a court lacked jurisdiction to determine if motor vehicle accident injuries occurred while in the course of employment was Arvatz v Empire Mut Ins. Co., 171 AD2d 262 (1st Dept 1991], to which both arbitrators cited. This was a declaratory judgment action commenced by an injured driver against his vehicle’s No-Fault insurer. The latter had contended that the plaintiff operated his vehicle while being employed by a car service. The plaintiff maintained that the No-Fault insurer was required to make the mandated No-Fault payments to which he was entitled. The Supreme Court found at a framed issue hearing that the plaintiff was an independent contractor and not an employee. This was in error, held the Appellate Division, “since the matter should have been remanded to the Workers’ Compensation Board to determine the threshold issue of whether plaintiff is an employee or independent contractor” (id. at 267). This was a mixed question of law and fact, noted the court, and the Board has primary jurisdiction to resolve the question of coverage. The court cited to O’Rourke v Long (41 NY2d 219 [1976] and Liss v Trans Auto Systems, Inc. (68 NY2d 15 [1986]). The judgment of Supreme Court was reversed and a declaration was made that the Workers’ Compensation Board had to make the initial determination as to whether the alleged injuries were within the purview of the Workers’ Compensation Law.
Arvatz was a First Department decision. The Appellate Division, Second Department, in LMK Psychological Services, P.C. v American Transit Ins. Co. (64 AD3d 752 [2d Dept 2009]), [*9]held that it was improper for the Supreme Court to sustain a No-Fault insurer’s defense that the injured person was injured in the course of employment. Rather the determination had to be made by the Workers’ Compensation Board. Although the decision did not mention Arvatz, it placed the Second Department in conformity with the First Department.
Consistent with LMK Psychological Services, P.C. and citing to Arvatz, the Second Department wrote in Dunn v American Transit Ins. Co. (71 AD3d 629, 630 [2010]): “[I]t is therefore inappropriate for the courts to express views with respect thereto pending determination by the board. . . . In this case, the defendant’s motion presented factual questions as to the plaintiff’s ‘status as either an independent contractor, as he claims he is, or as an employee of’ a car service dispatch base, as the defendant claims. . . . Resolution of these questions ‘is best suited for determination by the [Workers’ Compensation] Board, given its expertise in the area’. . . . Accordingly, prior to rendering a determination on the motion, the Supreme Court should have referred the matter to the Workers’ Compensation Board for a hearing and determination as to whether the plaintiff is relegated to benefits under the Workers’ Compensation Law. . . .”
The first reported court decision to apply Arvatz in the context of No-Fault arbitration was JSI Expert Services Inc. v Fireman’s Fund Ins. Co. (10 Misc 3d 1060[A], 2005 NY Slip Op 52058[U] [Civ Ct, Kings County 2005]). At the arbitration, the No-Fault insurer raised the question as to whether the assignor was working at the time of the accident. The arbitrator determined that there was at least minimal proof of the indicia of employment and, therefore, the Workers’ Compensation Board — and not arbitration — was the proper forum for making the ultimate determination on the course-of-employment defense. The master arbitrator affirmed. The court held that the master arbitrator’s award was neither arbitrary, capricious, irrational, nor without a substantial or plausible basis.
In JSI Expert Services Inc. the course-of-employment defense was not asserted in a timely Form NF-10 denial of claim, yet the court sustained the arbitrator’s finding that there was an indicia of employment, warranting deferring a determination of the issue to the Workers’ Compensation Board. Subsequently, the Appellate Division, Second Department held that an insurer’s course-of-employment defense in a No-Fault insurance compensation case had to be timely asserted, i.e., within the statutory 30-day deadline for issuing denials (see Westchester Med. Ctr. v Lincoln Gen. Ins. Co., 60 AD3d 1045 [2d Dept 2009]).[FN20] Notwithstanding this, JSI Expert Services Inc. is still good law for the principle that just as a court must defer to the Workers’ Compensation Board if a course-of-employment defense is raised by the No-Fault insurer (albeit timely), so too should an arbitrator.
Strict compliance with Arvatz in No-Fault insurance compensation actions took a turn in A.B. Med. Servs. PLLC v American Transit Ins. Co. (8 Misc 3d 127[A], 2005 NY Slip Op. 50959[U] [App Term 2d & 11th Dists 2005]). The defendant No-Fault insurer timely rejected the claims on the sole ground that at the time of the accident the assignor was acting in the course of his employment, and ergo the plaintiff health service providers had to pursue their claims before the Workers’ Compensation Board. The Civil Court denied the motions of all parties for summary judgment. The Appellate Term modified the Civil Court’s order by granting the plaintiff health service providers’ motion for summary judgment. “In our view, the insurer [*10]failed to establish the defense’s ‘potential merit’ so as to warrant Board review of the facts” (id. at *1). The Appellate Term noted that the No-Fault insurer’s evidence on the issue consisted of a claim adjuster’s assertion that the claimant was eligible for Workers’ Compensation, and this determination was based solely on an employer’s unsworn statement dated 18 months before the accident and a police accident report. The police accident report was offered in evidence in support of the insurer’s motion for the first time in reply papers. In contrast, the health service providers submitted sworn statements by the assignor and his purported employer that the assignor was not working when the accident occurred. The court described the insurer’s claim that the assignor acted in the course of employment as “mere speculation,” and found that the insurer failed to establish any issues of fact that had to be resolved by the Workers’ Compensation Board. This case stands as a precedent for the principle that although the routine course would be to defer to the Workers’ Compensation Board, the No-Fault insurer must submit enough evidence of potential merit so as to create an issue of fact; it may not rely on mere speculation. Arbitrator Lustig relied on this Appellate Term decision.
In another Appellate Term decision it was found that the “defendant’s proof, including the police accident report, was sufficient to raise a question of fact as to whether [the injured person] was acting as an employee at the time of the accident, which issue must be resolved by the Workers’ Compensation Board” (Response Equipment, Inc. v American Transit Ins. Co., 15 Misc 3d 145[A], 2007 NY Slip Op. 51176[U] [App Term 2d & 11th Dists 2007]). The court did not elucidate on what evidence besides the police accident report was submitted.
There are various instances where court decisions have found the No-Fault insurer’s evidence sufficient to trigger deference to a determination by the Workers’ Compensation Board:
• A certified EUO transcript was submitted (see Active Care Med. Supply Corp. v Global Liberty Ins., 71 Misc 3d 129[A], 2021 NY Slip Op. 50257[U] [App Term 2d, 11th & 13th Dists. 2021] [error for trial court to deny admission of EUO transcript during trial]).
• The injured person’s statement was submitted (see AEE Med. Diagnostic, P.C. v Travelers Prop. Cas. Co. of America, 57 Misc 3d 131[A], 2017 NY Slip Op. 51209[U] (App Term 1st Dept 2017]).
• The injured person checked off on the Form NF-2 application for No-Fault benefits that he was employed at the time of the accident and the police report stated that the vehicle operated by him was a taxi (see Compas Med., P.C. v American Transit Ins. Co. (49 Misc 3d 146[A], 2015 NY Slip Op 51675[U] [App Term 2d, 11th & 13th Dists 2015]); Lenox Hill Radiology, P.C. v American Transit Ins. Co., 18 Misc 3d 1136[A], 2008 NY Slip Op. 50330[U] [Civ Ct, NY County 2008]).
• The police report indicated that the vehicle had a taxi license plate and two passengers were inside (see Clear Water Psychological Servs. PC v American Transit Ins. Co., 54 Misc 3d 915 [Civ Ct, Kings County 2016]).
• A cab company owned the vehicle involved in the accident and was named as the insured on the automobile policy (Chiropractic Testing Servs. of New York, P.C. v American Transit Ins. Co. (59 Misc 3d 250 [Civ Ct, Richmond County 2018]).
• The injured person drove a vehicle with TC plates which was owned by a livery company and insured under a livery policy (see RX Warehouse Pharm., Inc. v American Transit Ins. Co., Civ Ct, Kings County, Nov. 13, 2015, Montelione, J., index No. 51265/13).
Numerous decisions have held that the No-Fault insurer’s evidence was sufficient to raise a question of fact triggering the necessity for a Workers’ Compensation Board determination but did not describe the evidence (e.g. Madison Products of USA, Inc. v American Transit Ins. Co., 67 Misc 3d 144[A], 2020 NY Slip Op 50749[U] [App Term 2d, 11th & 13th Dists 2020]; A.B. Med. Servs., PLLC v American Transit Ins. Co., 34 Misc 3d 141[A], 2012 NY Slip Op 50076[U] [App Term 9th & 10th Dists 2012]; Jamaica Med. Supply, Inc. v American Transit Ins. Co., 34 Misc 3d 133[A], 2011 NY Slip Op 52371[U] [App Term 2d, 11th & 13th Dists 2011]; Devonshire Surgical Facility, L.L.C. v Hereford Ins. Co., 30 Misc 3d 129[A], 2010 NY Slip Op 52297[U] [App Term 1st Dept 2010]); AR Med. Rehabilitation, P.C. v American Transit Ins. Co., 27 Misc 3d 133[A], 2010 NY Slip Op 50708[U] [App Term 2d, 11th & 13th Dists 2010]; A.B. Med. Servs., PLLC v American Transit Ins. Co., 24 Misc 3d 75 [App Term 9th & 10th Dists 2009]).
On the other hand, there are holdings in a few decisions where the No-Fault insurer’s evidence was insufficient to create an issue of fact in support of a course-of-employment defense: The assignor, driving a livery car, had been issued his license from the Taxi and Limousine Commission (“TLC”) that day and the insurer submitted no evidence that the assignor was on duty or carrying a paying passenger at the time of the accident; the Supreme Court properly denied the No-Fault insurer’s petition to vacate the arbitration award granting compensation to the health service provider (by coincidence the provider herein) (see Matter of Global Liberty Ins. Co. of New York v North Shore Family Chiropractic, P.C., 178 AD3d 525 [1st Dept 2019]). A third-party claims administrator’s affidavit alleged in a conclusory manner that the assignor was injured in the course of employment without substantiating the assertion with any evidence (see Central Radiology Servs., P.C. v First America Ins., 40 Misc 3d 126[A], 2013 NY Slip Op 51031[U] [App Term 2d, 11th & 13th Dists 2013]). The police report listed TC plates for the vehicle, Katt Corporation as the registered owner, and an insurance policy number, and indicated that a report must be sent to the TLC, and the NF-3 claim form had “No” checked for whether the patient’s condition was due to an injury arising from employment (see Jing Huo Lac v American Transit Ins. Co., 19 Misc 3d 1146[A], 2008 NY Slip Op 51177[U] [Civ Ct, Richmond County 2008]).
Synthesizing all of the above decisions — both those involving actions commenced in court and those reviewing No-Fault arbitrations — the settled law on the subject issue is as follows: Generally, where a health service provider’s bills for treating an injured for-hire vehicle driver are submitted to the No-Fault insurer and the latter denies payment on the asserted ground that the driver was injured in the course of employment, adjudication of that defense in court or arbitration must be held in abeyance pending its resolution by the Workers’ Compensation Board.
However, the No-Fault insurer’s evidence must demonstrate potential merit sufficient to create an issue of fact in support of its defense; mere speculation does not suffice. Evidentiary indicia of potential merit include the injured person’s statement in one form or another that he was working; the vehicle had taxi plates and passengers; a cab company owned the vehicle and was named as the insured on the automobile policy; the injured person drove a vehicle which was owned by a livery company, had TC plates, and was insured under a livery policy; or there was a police accident report plus other supporting evidence. There is no potential merit to the course-of-employment defense where the insured person had been issued his TLC license that day and there were no paying passengers; the claims administrator’s affidavit was conclusory; [*11]the police report listed TC plates but the vehicle was owned by an ambiguously named company and the claim forms indicated the injured person’s injuries did not arise from employment; or the claim adjuster’s information was based on an unsworn employer’s statement predating the accident and a police report which was not properly in evidence.
Determination
In the instant case, ATIC’s sole evidence at the arbitration in support of its course-of-employment defense was the police report. Assignor was indicated to be driving a TC-plated vehicle owned by Edge Limo Inc. No insurance company code was listed. Nobody else besides Assignor was in the vehicle. No insurance policy for the vehicle was submitted so it is unknown whether the insurance policy was specific to liveries. The NF-3 claim forms had “No” checked off for whether Assignor’s injuries arose from employment. None of the decisions cited above dealt with this combination of evidence. However, Jing Huo Lac v American Transit Ins. Co. (19 Misc 3d 1146[A], 2008 NY Slip Op 51177[U]) comes closest. There, the police report listed TC plates for the vehicle, Katt Corporation as the registered owner, and an insurance policy number, and indicated that a report must be sent to the TLC, and the NF-3 claim form had “No” checked for whether the patient’s condition was due to an injury arising from employment. In fact, although the registered owner had the word “Limo” in it, the quantum of evidence in the instant case was less than that in Jing Huo Lac. Significantly there was no policy submitted by ATIC. The Jing Huo Lac court held that the insurer failed to show potential merit to its course-of-employment defense (id. *6). In fact, Arbitrator Lustig noted that absent from ATIC’s submission was evidence that it had issued a livery or taxi policy to Assignor for a for-hire vehicle (NYSCEF Doc No. 3, arbitration award, at numbered p 5).
The provision in 11 NYCRR 65-4.10 [a] [4] that a No-Fault insurance arbitration award may be vacated where it was incorrect as a matter of law refers to substantive issues — not issues of fact (see American Transit Ins. Co. v Right Choice Supply, Inc., — Misc 3d —, 2023 NY Slip Op 23039, *11 [Sup Ct, Kings County 2023]).
Arbitrator Lustig correctly applied the substantive law when he cited to Arvatz for the principle that “[t]he Workers’ Compensation Board is the exclusive forum to determine whether an individual was in the course of his employment at the time of a motor vehicle accident” (NYSCEF Doc No. 3, arbitration award, at numbered p 5). He correctly applied the law when he cited to A.B. Med. Servs. PLLC v American Transit Ins. Co. (8 Misc 3d 127[A], 2005 NY Slip Op. 50959[U]), for the proposition that “If, however, the insurer’s contention that the Assignor acted in the course of his or her employment at the time of the accident is ‘mere speculation’ that fails to establish the defense’s ‘potential merit’ so as to warrant the Board’s review of the facts, the issue need not be resolved by the Board” (id.).
At oral argument on the within Article 75 petition, ATIC’s counsel argued that the law was to the effect that a No-Fault insurer’s submission of a police report indicating that the vehicle operated by the injured person bore TC plates, without any other evidence — even without a claim examiner’s affidavit and even without a copy of the insurance policy — required the arbitrator to rule that a course-of-employment defense had to be determined by the Workers’ Compensation Board. This Court rejects said argument as it is not in accord with the settled law discussed above. Arbitrator Lustig’s award was not incorrect as a matter of law within the purview of 11 NYCRR 65-4.10 (a) (4).
This Court must next determine whether to sustain Master Arbitrator Weisman’s review of Arbitrator’s Lustig award for an error of law. The standard for such Article 75 court scrutiny is whether the master arbitration award was so irrational as to require vacatur (see Matter of Smith v Firemen’s Ins. Co., 55 NY2d 224, 232 [1982]; Matter of Acuhealth Acupuncture, PC v Country-Wide Ins. Co., 170 AD3d 1168 [2d Dept 2019]; Matter of Acuhealth Acupuncture, P.C. v New York City Transit Authority, 167 AD3d 314 [2d Dept 2018]; Matter of Acuhealth Acupuncture, P.C. v Country-Wide Ins. Co., 149 AD3d 828 [2d Dept 2017]). A master arbitrator’s review of a hearing arbitrator’s award where an error of a rule of substantive law is alleged must be upheld unless it is irrational (see Golden Earth Chiropractic & Acupuncture, PLLC v Global Liberty Ins. Co. of New York, 54 Misc 3d 31 [App Term, 2d Dept, 2d, 11th & 13th Dists 2016]).
Master Arbitrator Weisman held, “The grounds of review also include that the decision was incorrect as a matter of law. 11 NYCRR 65-4.10(a)(4). I do not see a misapplication of law.” (NYSCEF Doc No. 4, master arbitration award, at numbered p 3). In the case at bar, Master Arbitrator Weisman’s review of the legal issue presented by ATIC was not irrational. Hence, in terms of the legal issue, Master Arbitrator Weisman’s award was actually correct, let alone not irrational.
11 NYCRR 65-4.10 (a) (4) provides that “procedural or factual errors committed in the arbitration below are not encompassed within this ground,” i.e., the review by a master arbitrator for an error of law. It is an issue of fact as to whether submitted evidence rises to potential merit to support a course-of-employment defense and is not mere speculation. Did Arbitrator Lustig err as a matter of fact in finding that “the Respondent has not submitted sufficient proof that the Assignor was acting in the course of his employment at the time of the accident” (NYSCEF Doc No. 3, arbitration award, at numbered p 6)?
This Court takes into account the general proposition that the admissibility of evidence and the determination of issues of fact are left to the arbitrator’s discretion (see Wien & Malkin LLP v Helmsley-Spear, Inc., 6 NY3d 471, 483 [2006] [“Manifest disregard of the facts is not a permissible ground for vacatur of an award. . . .”]; Cent. Square Teachers Assn. v Board of Educ. of Cent. Sq. Cent. Sch. Dist., 52 NY2d 918, 919 [1981] [“The path of analysis, proof and persuasion by which the arbitrator reached this conclusion is beyond judicial scrutiny.”]; Matter of Lipson v Herman, 189 AD3d 440, 441 [1st Dept 2020] [“error of fact . . . will not result in the vacatur of an arbitrator’s award”]; Matter of Bernstein v On-Line Software Intl., Inc., 232 AD2d 336, 338 [1st Dept 1996] [“It is well established, however, that arbitrators are not bound by the rules of evidence and may admit or deny exhibits on an equitable basis.”]).
Considering that in no reported case did a court find that the mere submission of a police report listing TC plates ipso facto warranted referral to the Workers’ Compensation Board for a determination on a course-of-employment defense, this Court finds reasonable Arbitrator Lustig’s factual determination that there was insufficient proof submitted to support such defense. This Court notes that the police report reflected no passengers being in Assignor’s vehicle.
With respect to the factual issues reviewed by Master Arbitrator Weisman, the proper standard of her review was whether Arbitrator Lustig reached his decision in a rational manner, i.e., whether it was arbitrary and capricious, irrational, or without a plausible basis; the master arbitrator may not engage in an extensive factual review, which includes weighing the evidence, assessing the credibility of various medical reports, and making independent findings of fact [*12](Matter of Petrofsky v Allstate Ins. Co., 54 NY2d 207 [1981]). Here, Master Arbitrator Weisman correctly held that “The issue of whether the accident occurred during the course of employment was a factual one” (NYSCEF Doc No. 4, master arbitration award, at numbered p 3). She noted that Arbitrator Lustig “did discuss the findings in detail” and “the decision was based on the evidence submitted” (id.)
Judicial review of a master arbitrator’s authority to vacate a hearing arbitrator’s award derives from § 675 (presently § 5106 [c]) of the Insurance Law and involves the question of whether the master arbitrator exceeded his power (Matter of Smith v Firemen’s Ins. Co., 55 NY2d 224, 231 [1982]). Master Arbitrator Weisman did not exceed her power when she reviewed the factual findings of Arbitrator Lustig. She applied the correct standard of review, mentioning that it involved whether the award was supported by the evidence, arbitrary and capricious, irrational, or without plausible basis. She noted that she could not conduct a de novo review. Master Arbitrator Weisman was correct when she found that Arbitrator Lustig discussed his findings in detail and his decision was based on the evidence submitted. This Court finds that Master Arbitrator Weisman’s review of Arbitrator Lustig’s factual determination that the evidence was insufficient to sustain a course-of-employment defense was neither arbitrary, capricious, irrational, nor without a plausible basis (see Matter of Petrofsky v Allstate Ins. Co.).
ATIC’s petition in this Article 75 proceeding cited the four applicable grounds delineated in CPLR 7511 for vacating an arbitration award where a party participated in the arbitration:
if the court finds that the rights of that party were prejudiced by:
(i) corruption, fraud or misconduct in procuring the award; or
(ii) partiality of an arbitrator appointed as a neutral, except where the award was by confession; or
(iii) an arbitrator, or agency or person making the award exceeded his power or so imperfectly executed it that a final and definite award upon the subject matter submitted was not made; or
(iv) failure to follow the procedure of this article, unless the party applying to vacate the award continued with the arbitration with notice of the defect and without objection.(NYSCEF Doc No. 1, petition, ¶ 33)
This Court finds that ATIC failed to establish that there was corruption, fraud, or misconduct in procuring the award; that there was partiality on the part of either arbitrator; that either arbitrator exceeded his or her power or so imperfectly executed it that a final and definite award upon the subject matter submitted was not made; or that there was a failure to follow the procedure of Article 75.
Cross-Petition;
Interest, Attorney’s Fees, Return of Arbitration
Filing Fee, Costs, and Disbursements
As mentioned above, North Shore sought in its cross-petition to confirm Master Arbitrator Weisman’s award. Having found that no grounds exist to vacate it, it must be confirmed. North Shore’s cross-petition sought $2,173.14, whereas the amount awarded by Arbitrator Lustig was $2,104.48. The difference results from Arbitrator Lustig denying [*13]compensation for one date of service because of untimely submission of proof of claim (the 45-day rule). The cross-petition did not challenge this component of Arbitrator Lustig’s award so any challenge to it is deemed abandoned by North Shore. North Shore is entitled to No-Fault compensation for health services in the principal amount of $2,104.48.
North Shore also sought additional payments in the nature of interest, attorney’s fees, return of the arbitration filing fee, costs, and disbursements.
Interest:
Where a claim is timely denied, interest at two per cent per month shall begin to accrue as of the date arbitration was requested by the claimant, i.e., the date the AAA received the applicant’s arbitration request, unless arbitration was commenced within 30 days after receipt of the denial, in which event interest shall begin to accrues as of the 30th day after proof of claim was received by the insurer (see Insurance Law § 5106 [a]; 11 NYCRR 65-4.5 [(s] [3], 65-3.9 [c]; Canarsie Med. Health, P.C. v National Grange Mut. Ins. Co., 21 Misc 3d 791, 797 [Sup Ct, NY County 2008] [“The regulation provides that where the insurer timely denies, then the applicant is to seek redress within 30 days, after which interest will accrue.”]). The plaintiff health care provider in Canarsie Med. Health, P.C. argued that where a timely issued denial is later found to have been improper, the interest should not be stayed merely because the provider did not seek arbitration within 30 days after having received the denial. The court rejected this argument, finding that the regulation concerning interest was properly promulgated; this includes the provision staying interest until arbitration is commenced, where the claimant does not promptly take such action. North Shore presumptively received ATIC’s last-issued denial a few days after June 18, 2021, when it was issued. Applicant’s arbitration request was received by the AAA on October 19, 2021, which was certainly more than 30 days later. Thus, interest on all of the claims herein accrued from that date, not from the 30th day after proof of claim was received by ATIC. The end date for the calculation of the period of interest shall be the date of payment of the claims. In calculating interest, the date of accrual is excluded from the calculation (see General Construction Law § 20 [“The day from which any specified period of time is reckoned shall be excluded in making the reckoning.”]). Where a motor vehicle accident occurred after April 5, 2002, interest as calculated at the rate of two percent per month, simple, on a pro rata basis using a 30-day month (see 11 NYCRR 65-3.9 [a]; Gokey v Blue Ridge Ins. Co., 22 Misc 3d 1129[A], 2009 NY Slip Op 50361[U] [Sup Ct, Ulster County 2009]). CPLR 5004’s nine percent per annum is superseded by Insurance Law § 5106 [a]’s two percent per month (see Pro-Med Med., P.C. v MVAIC (74 Misc 3d 130[A], 2022 NY Slip Op 50135[U] [App Term 2d, 11th & 13th Dists 2022]).
Attorney’s Fees:
After calculating the sum total of the first-party benefits awarded in this arbitration plus interest thereon, ATIC shall pay North Shore an attorney’s fee equal to 20 percent of that sum total subject to a maximum fee of $1,360.00, as provided for in 11 NYCRR 65-4.6 [d].
Additionally, this Court sustains the $65.00 attorney’s fee for preparatory services in connection with the master arbitration. This is in accordance with 11 NYCRR 65-4.10 [j] [2] [*14][i].[FN21]
Moreover, pursuant to 11 NYCRR 65-4.10 [j] [4], having successfully prevailed in this Article 75 proceeding, North Shore is entitled to an additional attorney’s fee (see Global Liberty Ins. Co. of New York v North Shore Family Chiropractic, 178 AD3d 525 [1st Dept 2019]; GEICO Ins. Co. v AAAMG Leasing Corp., 148 AD3d 703 [2d Dept 2017]).
Alek Beynenson, Esq., submitted an affirmation in support of an attorney’s fee with regard to this Article 75 proceeding (NYSCEF Doc No. 15). In pertinent part, he wrote:
1. As the principal attorney at The Beynenson Law Firm, P.C., attorneys for Respondent, I provided valuable and necessary services on behalf of NORTH SHORE FAMILY CHIROPRACTIC PC, A/A/O ALBERTO CARPINTEYRO for which I am requesting compensation pursuant to 11 NYCRR 65—4.10(j)(4). . . .
3. I request the usual hour billing rate for my services which is $550.00 per hour. This figure takes into account over a decade of experience specializing primarily in no-fault litigation and arbitration.
4. The total time required to provide these legal services to the client was 3.0 hours including case review, research, drafting, exhibit preparation, and e-filing.
5. Based upon the above calculations, Respondent NORTH SHORE FAMILY CHIROPRACTIC PC, A/A/O ALBERTO CARPINTEYRO seeks an attorney’s fee of $1,650.00 ($550.00 x 3.0 hours) for the necessary time expended in this matter.
This Court notes that Attorney Beynenson did not attest to he himself having performed the work in connection with opposing the petition and preparing the cross-petition. He did not indicate whether a different attorney or perhaps a paralegal performed it. The affirmation in support of the cross-petition contains mostly boilerplate statements which could apply to most Article 75 proceedings to confirm No-Fault arbitration awards, with a few insertions specific to this particular claim. The amount of $550.00 per hour is excessive, especially considering that the attorney’s fee for policy issues litigated in arbitration or at the trial court level in court is $70.00 per hour (see 11 NYCRR 65-4.6 [c]). It is also excessive considering that North Shore’s papers for this case consisted of a two-page answer (NYSCEF Doc No. 12), a one-page notice of cross-petition (NYSCEF Doc No. 13), an eight-page affirmation in opposition to the petition and in support of the cross-petition (NYSCEF Doc No. 14), and a two-page affirmation in support of an attorney’s fee (NYSCEF Doc No. 15).[FN22] Mr. Beynenson did not even attend oral argument when the proceeding appeared on this Court’s calendar. Neither did Mr. Beynenson submit a timesheet as to when the work was performed and how much time was spent on each document.
In a Kings County No-Fault insurance case involving an appeal to the Court of Appeals, the court awarded $250.00 per hour but this was in connection with the litigation of a novel or unique issue (see Viviane Etienne Med. Care PC v Country-Wide Ins. Co., 59 Misc 3d 579 [Sup Ct, Kings County 2018]). The issue in the case at bar was neither novel nor unique, especially since there was already a plethora of case law on it.
Consdering the factors delineated herein, this Court awards $210.00 for work performed by North Shore’s counsel on this Article 75 proceeding. This Court applied the $70.00 per hour fee for policy issues litigated in arbitration or at the trial level.
Return of Arbitration Filing Fee:
ATIC shall also pay North Shore $40.00 as reimbursement for the fee paid to the AAA [see 11 NYCRR 65-4.5 [s] [1]).
Costs and Disbursements:
As the prevailing party, North Shore shall recover its costs and disbursements, to be taxed by the Clerk.
Other Requested Relief
Any requested relief not expressly addressed herein has nonetheless been considered and is hereby expressly rejected.
Notice to Superintendent of Financial Services
and the AAA
The Superintendent of Financial Services (formerly the Superintendent of Insurance) bears the statutory duty to promulgate procedures governing the No-Fault arbitration system (see Insurance Law § 5106 [b], [c], [d]). The AAA has been charged by the Superintendent with administering the No-Fault insurance arbitration program in New York, and “The superintendent shall oversee the operation procedures of the designated organization” (11 NYCRR 65-4.2 [a] [5]). The proper application of case law to No-Fault arbitration is in the public interest. Inasmuch as the underlying arbitration called for application of case law to the No-Fault insurance dispute between the parties, this Court finds that the Superintendent of Financial Services and the AAA be notified of the outcome of this judicial review of the arbitration.
Conclusion
Accordingly, it is hereby ORDERED, ADJUDGED, and DECREED that:
(1) ATIC’s petition to vacate the master arbitration award of Robyn D. Weisman in AAA Case No. 99-21-1223-5155 is dismissed.
(2) North Shore’s cross-petition to confirm said master arbitration award is granted.
(3) Said master arbitration award is confirmed in its entirety.
(4) North Shore is awarded the principal amount of $2,104.48 as No-Fault insurance health service benefits, along with simple interest thereon (i.e., not compounded) at two per cent [*15]per month on a pro rate basis using a 30-day month, computed from October 19, 2021 to the date of payment of the principal amount of $2,104.48, but excluding October 19, 2021 from being counted within the period of interest.
(5) After calculating the sum total of the principal amount of $2,104.48 plus the interest thereon, ATIC shall pay North Shore an attorney’s fee equal to 20 percent of that sum total, subject to a maximum fee of $1,360.00.
(6) ATIC shall pay North Shore an attorney’s fee of $65.00 for preparatory services in connection with the master arbitration.
(7) ATIC shall pay North Shore an attorney’s fee of $210.00 for work performed by counsel on this Article 75 proceeding.
(8) North Shore shall recover from ATIC costs and disbursements as allowed by law to be taxed by the Clerk.
E N T E R
Dated: Brooklyn, New York, March 20, 2023
______________________________
HON. AARON D. MASLOW
Justice of the Supreme Court of the
State of New York
Footnotes
Footnote 1: The notice of petition seeks vacatur of “the arbitration award issued by Arbitrator Mitchell Lustig, Esq. and/or Master Arbitrator Robyn D. Weisman, Esq.” (NYSCEF Doc No. 2, notice of petition), but it must be deemed to seek vacatur of just the master arbitration award inasmuch as the latter is the final determination of the arbitration process. The No-Fault Regulations provide that “court review pursuant to an article 75 proceeding” is from the “decision of a master arbitrator” (11 NYCRR 65-4.10 [h] [1] [i]). In fact, a party may not appeal from an arbitration award without first seeking master arbitration (see Matter of Staten Island Hospital v USAA, 103 AD2d 744 [2d Dept 1984]). Naturally, if the hearing arbitrator’s award is imperfect, this can impact judicial review of a master arbitration award affirming it.
Footnote 2:Rather than denote the parties here as “Petitioner” and “Respondent” in discussion, the parties’ names are used. This is to facilitate the reader’s understanding of the facts, arguments, analysis, and determination. This also minimizes confusion because the respondent in the underlying arbitration (ATIC) is not the respondent herein but rather is the petitioner herein. The respondent herein, North Shore, was not the respondent in the arbitration, but was the applicant.
Footnote 3:Health service providers obtain standing to pursue No-Fault insurance compensation in arbitration by virtue of having received an assignment of benefits from the respective person claiming to have been injured in a covered motor vehicle accident; such person is often denoted as an “assignor.”
Footnote 4:Paragraph 28 of the petition describes the AAA Case No. as 99-21-1223-5155, which was assigned to the master arbitration appeal. The original arbitration was assigned AAA Case No. 17-21-1223-5155.
Footnote 5:This statutory scheme was developed by New York’s legislature in 1973, as part of a tradeoff whereby lawsuits for pain and suffering sustained from personal injuries in such accidents were limited to instances of serious injury. (See generally Insurance Law art 51; L 1973, ch 13, as amended L 1977, ch 892; John R. Dunne, New York’s No-Fault Automobile Insurance Law—A Glimpse of the Past and a Glance at the Future, 50 NY St BJ 284 [June 1978]; J. Benedict, New York Adopts No-Fault: A Summary and Analysis, 37 Albany L Rev 662 [1973]).
Footnote 6:Although Insurance Law article 51 does not mention the term “No-Fault,” shortly after the post-motor vehicle accident economic loss compensation system was enacted in 1973, the appellation “No-Fault” was adopted in common parlance to describe it.
Footnote 7:This Court uses the term “health service bills” instead of “medical bills” because the No-Fault Law provides for reimbursement of “(i) medical, hospital . . . , surgical, nursing, dental, ambulance, x-ray, prescription drug and prosthetic services; (ii) psychiatric, physical therapy . . . and occupational therapy and rehabilitation . . . and (iv) any other professional heath services” (Insurance Law § 5102 [b] [1]). Hence, the No-Fault insurance system encompasses not just “medical” services. In the instant case, the services were chiropractic treatments.
Footnote 8:The prescribed claim forms are included within 11 NYCRR Part 65 (Regulation 68) Appendix 13. Besides Form NF-3 (verification of treatment by attending physician or other provider of health service), Appendix 13 contains Form NF-4 (verification of hospital treatment) and Form NF-5 (hospital facility form).
Footnote 9:There is a prescribed assignment of benefits form (Form NF-AOB) in 11 NYCRR Part 65 (Regulation 68) Appendix 13.
Footnote 10:The process of submitting a No-Fault claim to the insurer is governed by 11 NYCRR subpart 65-3, which contains §§ 65-3.1 et seq.
Footnote 11:Form NF-10 is also included within 11 NYCRR Part 65 (Regulation 68) Appendix 13.
Footnote 12:The defense of excessive fees asserted in each denial of claim appears to have been abandoned by ATIC, as Arbitrator Lustig did not refer to it.
Footnote 13:The 45-day rule is set forth within the No-Fault Regulations at 11 NYCRR 65-1.1 (d) (“Conditions”).
Footnote 14:This is the AAA’s electronic case management and filing platform maintained on the Internet; it is known as “Modria,” which was the name of the company which developed it for the AAA (see Liveblogging #ODR2014: The Developing Field of Online Dispute Resolution, https://civic.mit.edu/index.html%3Fp=1452.html [last accessed Mar. 19, 2023]; Welcome to the Modria Resolution Center for the American Arbitration Association, https://aaa-nynf.modria.com/ [last accessed Mar. 19, 2023]).
Footnote 15:TC license plates are indicative that the vehicle was registered for use as a for-hire vehicle.
Footnote 16:Among the more substantial changes in the 1977 legislation were the adoption of fee schedules to limit health service expenses and modifying the threshold categories to be able to sue for pain and suffering.
Footnote 17:Nothing in the
Governor’s Bill Jacket for Chapter 13 of the Laws of 1977 or other contemporary records
comments on the provision adopting master arbitration review of hearing arbitrators’
decisions, so it is not known why the master arbitration process was created.
Footnote 18:Most non-No-Fault insurance arbitration awards cannot be vacated due to an error of law (see Matter of Sprinzen v Nomberg, 46 NY2d 623, 629-630 [1979]). No-Fault insurance arbitrations are different; an error of law can be the basis for reversal — by a master arbitrator. In that sense, the master arbitrator’s review is broader than that of a court, since a court will not vacate an arbitration award due to an error of law (see Matter of Petrofsky v Allstate Ins. Co., 54 NY2d 207, 211-212 [1981]; Acuhealth Acupuncture, P.C. v Country-Wide Ins. Co., 176 AD3d 800, 802 [2d Dept 2019]).
Footnote 19:11 NYCRR 65-4.10 (a) provides as follows:
Footnote 20:There is no issue of timeliness of ATIC’s denial of claim forms in the case at bar.
Footnote 21:Master Arbitrator Weisman misstated the regulation under which an attorney’s fee is awarded for successfully prevailing at master arbitration. She cited to 11 NYCRR 65-4.6 [d], which is applicable to the hearing arbitration or a trial court adjudication.
Footnote 22:No compensation can be awarded for preparing the affirmation in support of an attorney’s fee (see Hempstead General Hospital v Allstate Ins. Co., 106 AD2d 429 [2d Dept 1984], aff’d 64 NY2d 958 [1985] [attorney’s fee for time spent in substantiating counsel fees is not authorized]).