IN RE: NEW MILLENNIUM PAIN & SPINE MEDICINE (2024)

Order and judgment (one paper), Supreme Court, New York County (Erika M. Edwards, J.), entered July 3, 2023, which denied petitioner's application pursuant to CPLR article 75 to vacate a master arbitration award, dated January 12, 2023, affirming an arbitrator's award denying petitioner's claim for no-fault benefits for medical services rendered to the insured, unanimously affirmed, without costs.  Order, Supreme Court, New York County (Sabrina Kraus, J.), entered on or about May 12, 2023, which denied petitioner's application pursuant to CPLR article 75 to vacate a master arbitration award, dated February 1, 2023, affirming an arbitrator's award denying petitioner's claim for no-fault benefits for medical services rendered to the insured, unanimously affirmed, without costs.

Supreme Court correctly denied the petitions to vacate the master arbitration awards.  “Generally, a court will not set aside an arbitrator's award for errors of law or fact unless the award is so irrational as to require vacatur” (see New Millennium Pain & Spine Medicine, P.C. v. Progressive Casualty Insurance Company, 220 A.D.3d 578, 578, 198 N.Y.S.3d 317 [1st Dept. 2023], quoting Matter of Carty v. Nationwide Ins. Co., 212 A.D.2d 462, 462, 622 N.Y.S.2d 947 [1st Dept. 1995]), “The fact that the arbitrator[s] followed First Department precedent in (Harmonic Physical Therapy, P.C. v. Praetorian Ins. Co., 47 Misc.3d 137[A], 2015 N.Y. Slip Op. 50525[U], 2015 WL 1649002 [App. Term, 1st Dept. 2015]) rather than Second Department precedent in (Alleviation Med. Servs., P.C. v. Allstate Ins. Co., 55 Misc.3d 44, 49 N.Y.S.3d 814 [App. Term, 2d Dept. 2017], affd on other grounds 191 A.D.3d 934, 143 N.Y.S.3d 395 [2d Dept. 2021]) does not warrant reversal.  To the contrary, this Court has held that, in awarding a claim after a policy has been exhausted, an arbitrator exceeded his or her power since an insurer's duties cease upon the insurer's payment of the contractual limit on its no-fault policy (see Matter of DTR Country–Wide Ins. Co. v. Refill Rx Pharm., Inc., 212 A.D.3d 481, 181 N.Y.S.3d 252 [1st Dept. 2023], lv denied 40 N.Y.3d 904, 2023 WL 6153360 [2023])” (id.).

New Millennium was not precluded from arguing for the first time in its petitions that respondent insurer took the 20% wage offset twice, first, when issuing payment against gross wages, and second, when taken against the no-fault personal injury protection limit of liability (Insurance Law § 5102[b];  11 NYCRR 65–1.1;  Matter of DTR Country–Wide Ins. Co. v. Refill Rx Pharm., Inc., 212 A.D.3d at 481, 181 N.Y.S.3d 252).  However, the argument is unavailing because Insurance Law § 5102(b) allows an insurer to deduct from first-party benefits to reimburse a person for basic economic loss on account of personal injury arising out of the use or operation of a motor vehicle, 20% of lost earnings plus any other setoffs, such as amounts recovered or recoverable for Social Security disability or Worker Compensation benefits, or disability benefits under article 9 of the Workers Compensation Law (Matter of Lam Quan, MD, PC v. GEICO, ––– A.D.3d ––––, 201 N.Y.S.3d 402, 2024 N.Y. Slip Op. 00174 [1st Dept. 2024];  Normile v. Allstate Ins. Co., 87 A.D.2d 721, 448 N.Y.S.2d 907 [3d Dept. 1982], affd 60 N.Y.2d 1003, 471 N.Y.S.2d 550, 459 N.E.2d 843 [1983]).

New Millennium is not the prevailing party, therefore it is not entitled to attorneys’ fees pursuant to 11 NYCRR 65–4.10(j)(4) (see Matter of Country–Wide Ins. Co. v. TC Acupuncture P.C., 179 A.D.3d 414, 414–415, 113 N.Y.S.3d 534 [1st Dept. 2020]).