Orthotics & Professional Supply, Ltd. v Country-Wide Ins. Co. (2022 NY Slip Op 51221(U))

Thomas Torto, for appellant. Glinkenhouse Queen (Alan Queen of counsel), for respondent.

Appeal from an order of the Civil Court of the City of New York, Queens County (Laurentina McKetney Butler, J.), dated November 15, 2021. The order denied defendant’s motion to, in effect, recalculate a judgment of that court entered May 20, 2021 so as to exclude all statutory no-fault interest therein, and granted plaintiff’s cross motion to recalculate the May 20, 2021 judgment to include interest for the period from June 28, 2019 to May 20, 2021.

ORDERED that the order is modified by providing that defendant’s motion is granted to the extent of tolling statutory no-fault interest from March 14, 2002 to June 27, 2019; as so modified, the order is affirmed, without costs.

In 2000, plaintiff commenced this action to recover assigned first-party no-fault benefits for medical equipment provided to its assignor in connection with injuries allegedly sustained in a motor vehicle accident in July 1999. Defendant appeared and answered. Plaintiff moved for summary judgment and defendant failed to submit opposition. By order dated March 14, 2002, the Civil Court (James J. Golia, J.) granted plaintiff’s motion on default and awarded plaintiff judgment in the sum of $1,057 with interest from January 24, 2000. Approximately 17 years later, on June 27, 2019, plaintiff applied for the entry of judgment upon the Civil Court’s March 14, 2002 order. On May 20, 2021, judgment was entered in the sum of $107,441.02, including [*2]$105,862.22 in statutory no-fault interest from January 24, 2000 to June 27, 2019. Defendant moved for an order “vacating, re-settling and recalculating” the judgment to exclude all statutory no-fault interest based upon plaintiff’s delay in entering judgment. Plaintiff cross-moved pursuant to CPLR 5019 (a) to recalculate the judgment to include interest for the period from June 28, 2019, the day after plaintiff applied for entry of judgment, to May 20, 2021, the date the clerk entered judgment. By order entered November 15, 2021, the Civil Court (Laurentina McKetney Butler, J.) denied defendant’s motion and granted plaintiff’s cross motion.

Statutory no-fault interest (see Insurance Law § 5106 [a]), which is 2 percent per month, is meant to be a penalty for an insurer’s failure to pay a valid claim, and it applies to both pre- and post-judgment interest (Matter of B.Z. Chiropractic, P.C. v Allstate Ins. Co., 197 AD3d 144, 156 [2021]). However, the no-fault regulations provide that, “[i]f an applicant has submitted a dispute to arbitration or the courts, interest shall accumulate, unless the applicant unreasonably delays the arbitration or court proceeding” (former 11 NYCRR 65.15 [h] [now 11 NYCRR 65-3.9 (d)]). This court has rejected the argument that tolling should not apply simply “because [the] defendant could have attempted to move the case forward” (Aminov v Country Wide Ins. Co., 43 Misc 3d 87, 89 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2014]), and held instead that a no-fault plaintiff “should not be rewarded for . . . years of inaction by receiving a windfall of interest” (id.). Similarly, here, plaintiff should not be rewarded with a huge sum of interest for inordinate delay in entering a judgment.

Contrary to plaintiff’s argument, this case is not analogous to the cases holding that interest should not be tolled between a settlement and the entry of a judgment upon that settlement agreement (see e.g. Seaside Rehabilitation v Allstate Ins. Co., 63 Misc 3d 162[A], 2019 NY Slip Op 50918[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2019]). A settlement is the resolution of a case to which both parties have agreed; accordingly, CPLR 5003-a requires a settling defendant to pay that mutually agreed-upon amount within three weeks (see CPLR 5003-a [a] [“any settling defendant . . . shall pay all sums due to any settling plaintiff within twenty-one days of tender” of the required paperwork] [emphasis added]; Herman v Country-Wide Ins. Co., 76 Misc 3d 132[A], 2022 NY Slip Op 50916[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2022]). There is no such statutory mandate as to orders awarding summary judgment.

Therefore, the Civil Court should have granted defendant’s motion to the extent of tolling the accrual of statutory no-fault interest from March 14, 2002, the date of the order granting plaintiff summary judgment, to June 27, 2019, the date plaintiff applied to enter judgment based upon that order (see Herman, 2022 NY Slip Op 50916[U]). The Civil Court correctly declined to toll the accrual of interest from January 24, 2000 to March 13, 2002, which interest was awarded by the March 14, 2002 order, as there has been no finding that plaintiff unreasonably delayed this case during that period. For the same reason, the Civil Court correctly granted plaintiff’s cross motion to recalculate the judgment to include interest from June 28, 2019 to May 20, 2021, the time between plaintiff’s application for judgment and the clerk’s entry of judgment.

Accordingly, the order is modified by providing that defendant’s motion is granted to the extent of tolling statutory no-fault interest from March 14, 2002 to June 27, 2019.

WESTON, J.P., TOUSSAINT and BUGGS, JJ., concur.