CENTRAL BRONX MEDICAL v. TRAVELERS INDEMNITY COMPANY (2005)

Plaintiff, a no-fault health provider, commenced this action seeking to recover the sum of $3,414.00, plus statutory 2% pre-judgment interest and attorneys fees, for health services allegedly rendered to its assignor, Luis Pellot.

Plaintiff now moves for summary judgment to recover statutory attorney fees for services necessarily performed in connection with securing payment of its claim.

Defendant cross-moves for summary judgment dismissing plaintiff's complaint.

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It is undisputed that on May 28, 2004 plaintiff forwarded a claim to defendant for $3,414.00, along with the required statutory no-fault verification forms.   Plaintiff contends that by operation of law the aforementioned claim became “overdue” on June 27, 2004, but that no denial was ever issued by defendant with respect to the instant claim.

It is also undisputed that defendant issued a draft in the amount of $3,332.88 payable to plaintiff on October 29, 2004.

Plaintiff commenced this action one month later on November 29, 2004 and concedes that defendant paid the claim “prior to the commencement of this action” [¶ 6 of moving affirmation].   Indeed, plaintiff's counsel informs the court that it “is noted that the lawsuit herein was commenced seeking only statutory attorney's fees [which] defendant owes on the overdue claim” of sixty dollars ($60.00), despite the allegations in the complaint [¶ 7].

Plaintiff presents that the controlling statutes are found in §§ 65-3.10 and 65.17(b)(6)(v) of Chapter 11 of the Codes, Rules and Regulations of the State of New York (“NYCRR”);  section 65-3.10(a) reads:

(a) An applicant or an assignee shall be entitled to recover their attorney's fees, for services necessarily performed in connection with securing payment, if a valid claim or portion thereof was denied or overdue.   If such a claim was initially denied and subsequently paid by the insurer, the attorney's fee shall be $80.   If such a claim was overdue but not denied, the attorney's fee shall be equal to 20 percent of the first-party benefits and any additional first-party benefits plus interest pursuant to section 65-3.9 of this Subpart, subject to a maximum fee of $60. [emphasis added]

Section 65.17(b)(6)(v) of 11 NYCRR essentially reiterates that attorneys' fees shall be limited to 20% of the amount of the first-party benefits.

The court further considers section 65.17(b)(6)(i) which provides:

(i) If ․ a court action was commenced by an attorney on behalf of an applicant and the claim or portion thereof was not denied or overdue at the time the ․ the action was commenced, no attorney's fees shall be granted․

11 N.YCRR 65.17(b)(6)(ii)[b] continues:

(b) If the resolved claim was overdue but not denied, the attorney's fee shall not exceed the amount of first-party benefits and any additional first-party benefits, plus interest thereon, which the insurer agreed to pay and the applicant agreed to accept in full settlement of the dispute submitted, subject to a maximum fee of $60.00.

The court agrees with plaintiff that the claim was overdue when it was paid by defendant on October 29, 2004.   However, for purposes of computing an attorney's fee, the court construes the meaning of “overdue claim” to mean an “unpaid claim” when commencing an action in the No-Fault-Medical-Provider Part.

Reading the aforementioned statutes in pari materia, they contemplate the award of attorney's fees secondary to a judgment of the underlying no-fault cause of action.  St. Vincent's Hospital & Medical Center v. Allstate Insurance Company, 294 A.D.2d 425, 742 N.Y.S.2d 350 (2d Dep't 2002).   Apparently, the regulations are silent as to the forum in which plaintiff may seek solely statutory attorneys' fees after defendant paid an overdue claim.   Concomitantly, where the underlying claim was paid, the court declines to deem the regulations as authority for the collection of attorney fees in the No-Fault Part of the Civil Court.

The cases cited by moving counsel are inapplicable because each case merely recites the principles that a claim is overdue if not paid within 30 days, and/or that statutory attorneys' fees are warranted once an action is commenced.   Notably, the scenario presented here, commencing suit after defendant paid the overdue claim, did not arise.   See Smithtown General Hosp. v. State Farm Mutual Automobile Insurance Company, 207 A.D.2d 338, 615 N.Y.S.2d 426 (2d Dep't 1994);  Deepdale General Hospital, a/a/o Rana et al. v. American Colonial Insurance Company, 142 Misc.2d 115, 535 N.Y.S.2d 876 (Dist.Ct.Nas.Co.1988) aff'd 144 Misc.2d 917, 550 N.Y.S.2d 526 (A.T.2d Dep't 1989).

For the foregoing reasons, plaintiff's motion for summary judgment is denied;  defendant's cross-motion for summary judgment dismissing plaintiff's complaint is granted, and therefore it is

ORDERED that the complaint is dismissed without prejudice for renewal in the proper forum.

JULIA I. RODRIGUEZ, J.