[*1]

Jaffe & Koumourdas, LLP, New York (Jean H. Kang of counsel), for appellant.

Gary Tsirelman, P.C., Brooklyn (Stefan Belinfanti of counsel), for respondent.

Judgment, Supreme Court, New York County (Geoffrey D. Wright, J.), entered on or about April 7, 2016, in respondent’s favor, unanimously affirmed, with costs.

Petitioner failed to establish any of the grounds for vacating an arbitration award (CPLR 7511 [b], [c]; see generally Azrielant v Azrielant, 301 AD2d 269, 275 [1st Dept 2002], lv denied 99 NY2d 509 [2003]).

Pursuant to Insurance Department Regulations (11 NYCRR) § 65-3.16 (a) (12), “insurance carriers may withhold payment for medical services provided by fraudulently incorporated enterprises to which patients have assigned their claims” (State Farm Mut. Auto. Ins. Co. v Mallela, 4 NY3d 313, 319 [2005]). Assuming without deciding that an insurer’s defense of fraudulent incorporation cannot be precluded (see AVA Acupuncture, P.C. v AutoOne Ins. Co., 28 Misc 3d 134[A], 2010 NY Slip Op 51350[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2010]; Bath Med. Supply, Inc. v Allstate Indem. Co., 27 Misc 3d 92, 95 [App Term, 2d Dept, 9th & 10th Jud Dists 2010]), we conclude that the master arbitrator properly confirmed the award of the arbitrator, who reviewed petitioner’s submissions relating to the plea of guilty to no-fault insurance fraud by a man married to the owner of respondent, found that respondent was not mentioned once in the “hundreds of pages” submitted, and rejected petitioner’s attempt to hold the owner “responsible by association.” Petitioner’s reliance on a subsequent arbitration (in 2014) is also misplaced; among other things, the later arbitration appears to have relied on documentation that was not submitted to the arbitrator in this case.

Contrary to petitioner’s contention, there was no default in this case. In any event, any delay in opposing the petition to vacate the arbitration award was short and quickly corrected, and the explanation given for it—law office failure—was detailed and specific, and, in view of the strong public policy favoring resolution of litigation on the merits, constituted “good cause” for the delay (see Lamar v City of New York, 68 AD3d 449 [1st Dept 2009]).

Respondent is entitled to attorneys’ fees for this appeal (11 NYCRR 65-4.10 [j] [4]), calculated, in accordance with 11 NYCRR 65-4.6 (b), as 20% of the no-fault benefits awarded. Concur—Acosta, P.J., Renwick, Mazzarelli, Andrias and Manzanet-Daniels, JJ.

[*1]

Law Office of Gregory A. Goodman, P.C., Hauppauge (Gregory A. Goodman of counsel), for appellant.

Rubin, Fiorella & Friedman LLP, New York (David F. Boucher, Jr. of counsel), for respondent.

Order and judgment (one paper), Supreme Court, New York County (Shlomo Hagler, J.), entered January 6, 2017, which denied defendant Star of N.Y. Chiropractic Diagnostic, P.C.’s (Star) motion for attorneys fees against plaintiff, unanimously affirmed, with costs.

“It is well settled in New York that a prevailing party may not recover attorneys’ fees from the losing party except where authorized by statute, agreement or court rule” (U.S. Underwriters Ins. Co. v City Club Hotel, LLC, 3 NY3d 592, 597 [2004]; see also Gotham Partners, L.P. v High Riv. Ltd. Partnership, 76 AD3d 203, 205 [1st Dept 2010], lv denied 17 NY3d 713 [2011]). While an insured party may recover attorneys’ fees where it successfully defends against its insurer’s action seeking a declaratory judgment that it has no duty to defend or indemnify its insured (see Underwriters Ins. Co., 3 NY3d at 597; Mighty Midgets v Centennial Ins. Co., 47 NY2d 12, 21 [1979]), “[t]he reasoning behind [the award of such attorneys’ fees] is that an insurer’s duty to defend an insured extends to the defense of any action arising out of the occurrence, including a defense against an insurer’s declaratory judgment action” (Underwriters Ins. Co., 3 NY3d at 597-598). Here, plaintiff owes defendant Star no duty to defend, as Star is merely seeking reimbursement for chiropractic services rendered to the claimant in this no-fault action. While Star was assigned the claimant’s rights for such reimbursement, the claimant was merely the injured party in the taxi at the time of the accident, and plaintiff owed no duty to defend the claimant. Star, as assignee of the claimant’s rights, could acquire no greater rights than its assignor (see New York & Presbyt. Hosp. v Country-Wide Ins. Co., 17 NY3d 586, 592 [2011]), and did not acquire any right to a defense from plaintiff. Thus, the court properly held that Star was not entitled to attorneys’ fees in this case.

[*2] We have examined Star’s remaining arguments, including its public policy argument, and find them to be unavailing. Concur—Sweeny, J.P., Renwick, Andrias, Feinman and Gesmer, JJ.

Decided on April 21, 2017

Decided on April 12, 2017

Decided on March 24, 2017

Decided on March 20, 2017

Decided on March 20, 2017

[*1]

The Law Office of Jason Tenenbaum, P.C., Garden City (Jason Tenenbaum of counsel), for appellant.

Costella & Gordon, LLP, Garden City (Matthew K. Viverito of counsel), for respondent.

Order, Supreme Court, Bronx County (Fernando Tapia, J.), entered October 24, 2016, which denied the petition seeking to vacate the award of a master arbitrator, dated August 12, 2016, to the extent it affirmed a lower arbitrator’s award of no-fault compensation to respondent in the unadjusted amount of $2,679.39, unanimously reversed, on the law, without costs, the petition granted to the extent of vacating that portion of the master arbitration award, and the matter remanded to a different arbitrator for arbitration of the fee schedule defense on the merits.

Respondent sought recovery for physical therapy services provided to its assignor before April 1, 2013, and petitioner insurer disclaimed parts of the claim on the ground that it had already reimbursed a different provider for “eight units” for services on some of the same dates. Respondent checked the box on the prescribed disclaimer form indicating that it was relying on a “fee schedule” defense, specifically the “eight unit rule.” The lower arbitrator held that respondent was precluded from asserting its defense because the disclaimer was insufficiently specific in that the other provider was not named. Respondent appealed to the master arbitrator, arguing that it adequately preserved its defense. The master arbitrator, without addressing the issue of preservation, incorrectly found that the lower arbitrator had “considered the fee schedule defense” and “determined that [r]espondent failed to provide evidence as to the other provider.”

The master arbitrator’s award was arbitrary, because it irrationally ignored the controlling law presented on the preservation issue (Matter of Global Liberty Ins. Co. v Professional Chiropractic Care, P.C., 139 AD3d 645, 646 [1st Dept 2016]; see generally Matter of Smith [Firemen’s Ins. Co.], 55 NY2d 224, 232 [1982])—namely, that an insurer adequately preserves its fee schedule defense “by checking box 18 on the NF-10 denial of claim form to assert that plaintiff’s fees [were] not in accordance with the fee schedule” (Megacure Acupuncture, P.C. v Lancer Ins. Co., 41 Misc 3d 139[A], 2013 NY Slip Op 51994[U] *3 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2013] [internal quotation marks omitted]; Surgicare Surgical v National Interstate Ins. Co., 46 Misc 3d 736, 745-746 [Civ Ct, Bronx County 2014], affd 50 Misc 3d 85 [App Term, 1st Dept 2015]). Accordingly, we remand the matter to the extent indicated. Concur—Sweeny, J.P., Renwick, Mazzarelli and Manzanet-Daniels, JJ.

[*1]

D’Agostino, Levine, Landesman & Lederman LLP, New York (Bruce H. Lederman of counsel), for appellant.

Bruno, Gerbino & Soriano, LLP, Melville (Nathan Shapiro of counsel), for respondent.

Order, Supreme Court, New York County (Manuel J. Mendez, J.), entered on or about July 14, 2016, which granted plaintiff’s motion for reargument of defendant’s motion to sever the breach of contract cause of action or, in the alternative, for a stay of the severance order pending appeal, only to the extent of extending plaintiff’s time to commence separate actions in Civil Court for the 198 claims asserted in the breach of contract cause of action, unanimously affirmed, with costs.

Although the order on reargument purported to deny plaintiff’s motion to reargue defendant’s severance motion, it is appealable, because the court addressed the merits of the motion, in effect, granting it and adhering to the original determination (see Jackson v Leung, 99 AD3d 489, 490 [1st Dept 2012]).

The court properly severed the breach of contract cause of action, since the 198 unrelated no-fault claims asserted therein raise no common issues of fact or law (see CPLR 603; Radiology Resource Network, P.C. v Fireman’s Fund Ins. Co., 12 AD3d 185 [1st Dept 2004]). Plaintiff’s contention that the defense of fraudulent incorporation presents common factual and legal issues that predominate is unavailing, since defendant has made clear that it does not intend to pursue that defense.

The court properly denied plaintiff’s motion for a stay, since adjudication of the separate breach of contract claims in Civil Court is not dependent on a determination of the declaratory judgment cause of action (see Hunter v Hunter, 10 AD2d 937 [1st Dept 1960]). Concur—Acosta, J.P., Renwick, Moskowitz, Feinman and Gesmer, JJ. [Prior Case History: 2016 NY Slip Op 31336(U).]

[*1]

Jaffe & Koumourdas, LLP, New York (Jean H. Kang of counsel), for appellant.

Frank S. Patruno Law Offices P.C., Montgomery (Frank S. Patruno of counsel), for respondent.

Order and judgment (one paper), Supreme Court, New York County (Manuel J. Mendez, J), entered August 11, 2015, denying the unopposed petition to vacate a master arbitration award, dated March 17, 2015, which affirmed an arbitrator’s award that had granted respondent no-fault insurance benefits, unanimously reversed, on the law, without costs, the petition granted, and the award vacated. The Clerk is directed to enter judgment accordingly.

The master arbitrator’s award was arbitrary because it irrationally ignored petitioner’s uncontroverted evidence establishing that the assignor failed to appear at the three scheduled examinations under oath (cf. Hertz Corp. v Active Care Med. Supply Corp., 124 AD3d 411 [1st Dept 2015]; Easy Care Acupuncture P.C. v Praetorian Ins. Co., 49 Misc 3d 137[A], 2015 NY Slip Op 51524[U] [App Term, 1st Dept 2015]). Concur—Friedman, J.P., Richter, Kapnick and Kahn, JJ.