A No-Fault Insurance claimant's eligibility for coverage occasionally hinges upon his/her residence. For example, in addition to coverage being afforded to any passenger or pedestrian who is injured as a result of the use or operation of the insured vehicle, the No-Fault Regulations, 11 NYCRR 65-1, define an Eligible Injured Person (EIP) as, inter alia, “(a) the named insured and any relative who sustains personal injury arising out of the use or operation of any motor vehicle …” The term “relative” is defined as “a spouse, child, or other person related to the named insured by blood, marriage, or adoption (including a ward or foster child), who regularly resides in the insured's household, including any such person who regularly resides in the household, but is temporarily living elsewhere.” 11 NYCRR 65-1, “Other Definitions,” §G. This last definition is often referred to as a “resident-relative,” as the EIP must not only be a relative of the insured, but must also reside with the insured. Other states have similar residence requirements.

In the recent case of Sure Way NY v. Travelers Ins. Co., 63 Misc.3d 142(A) (App. Term 2d, 11th & 13th Jud. Dists. 2019), the defendant-insurer moved for summary judgment dismissal on the ground that the plaintiff's assignor was not a “family member” of the insured and therefore did not qualify as an EIP under the subject Florida policy. The court held: “Upon the record presented, we find that defendant sufficiently established that plaintiff's assignor did not reside in the household of the Florida policyholder, but, rather, in Brooklyn, and thus was not a “family member” of the insured as defined by the insurance policy at issue.”

In Ameriprise Ins. Co. v. Krutishinskiy, 2019 NY Slip Op 31014 (U) (Sup. Ct. Suff. Cty. 2019), the Supreme Court analyzed the evidence presented at a framed issue hearing regarding the claimant's residence. Although that matter concerned a claim for first party uninsured motorist benefits, the analysis and issue of fact is almost identical to that in an action to recover No-Fault benefits; to wit, whether the claimant was eligible for coverage under the subject automobile policy as a resident-relative of the insured.

The evidence presented included testimony from the insurer's investigator and the claimant/injured person, a transcript of the claimant's previous examination under oath and various automobile, personal, tax and medical records. The court found that the policy address was a Huntington, Suffolk County residence in which the insured, the claimant's mother, resided. Various documents indicated that the claimant's address was a Brooklyn residence owned by his stepfather and used by family members at various times. Moreover, the claimant resided at the Brooklyn address while attending college, but also resided at the Huntington address on holidays, and moved back to the Huntington address on a permanent basis after graduating from school. The court concluded that the claimant's “actions are consistent with that of a college student who designates the community in which his college is located as his temporary residence” and determined that he was a resident of the Huntington address, thus making him eligible for coverage as a resident relative of the insured. Insofar as the claimant was clearly an occupant of the insured vehicle, he would have qualified for No-Fault coverage anyway, regardless of his residence. Nevertheless, the finding in this case would presumably render the claimant eligible for No-Fault coverage as a resident relative of the insured, which includes, under the No-Fault Regulations, “any such person who regularly resides in the household, but is temporarily living elsewhere.”

Additional Attorney Fees

Generally speaking, for No-Fault claims resolved in arbitration or suit, the No-Fault Regulations provide that a prevailing applicant shall be entitled to attorney fees in the amount of “20 percent of the total amount of first-party benefits and any additional first-party benefits, plus interest thereon for each applicant per arbitration or court proceeding, subject to a maximum fee of $1,360.” 11 NYCRR 65-4.6(d). Note that for matters that were filed in suit or arbitration before Feb. 4, 2015, the date the sixth amendment to Regulation 68-D took effect, a minimum attorney fee of $60 and a maximum fee of $850 were applicable. Thus, in almost all matters resolved in arbitration or suit, whether by settlement or by award of the arbitrator or court, the attorney fee is calculated by adding the principal and interest amounts awarded or agreed upon, and then multiplying by 20%.

Other sections of the Regulations provide for additional attorney fees in certain circumstances. For example, 11 NYCRR 65-4.6(C) provides:

(c) For disputes subject to arbitration or court proceedings, where one of the issues involves a policy issue as enumerated on the prescribed denial of claim form (NYS form NF-10), subject to this section, the attorney's fee for the arbitration or litigation of all issues shall be limited to a fee of up to $70 per hour, subject to a maximum fee of $1,400. In addition, an attorney shall be entitled to receive a fee of up to $80 per hour for each personal appearance before the arbitration forum or court.

It should be noted that as between the 20% fee noted above and the hourly fee in subsection C, the successful applicant is entitled to the higher of the two.

Moreover, pursuant to subsection (e):

[I]f the arbitrator or a court determines that the issues in dispute were of such a novel or unique nature as to require extraordinary skills or services, the arbitrator or court may award an attorney's fee in excess of the limitations set forth in this section.

For appeals of arbitration awards to a master arbitrator, 11 NYCRR 65-4.10(J) provides additional fees as follows: (1) A minimum attorney fee of $60; (2) An hourly fee of up to $65 for preparatory services, subject to a maximum of $650; (3) An hourly fee of up to $80 for oral argument before a master arbitrator. Moreover, “if the master arbitrator determines that the issues in dispute were of such a novel or unique nature as to require extraordinary skills or services, the master arbitrator may award an attorney fee in excess of the limitations set forth above.” 11 NYCRR 65-4.10(J)(3). The fees in this section are in addition to the fees set forth above in §65-4.6 that were or should have been awarded to the successful applicant in the initial arbitration.

Finally, 11 NYCRR 65-4.10(J)(4) provides:

The attorney's fee for services rendered in connection with a court adjudication of a dispute de novo, as provided in section 5106(c) of the Insurance Law, or in a court appeal from a master arbitration award and any further appeals, shall be fixed by the court adjudicating the matter.

Two recent decisions addressed additional attorney fees to successful applicants. In Matter of Country-Wide Ins. Co. v. TC Acupuncture P.C., 2019 NY Slip Op 04087 (1st Dept. 2019), the insurer commenced a court action pursuant to CPLR Article 75 for review of a master arbitration award. The court held in favor of the applicant medical provider and, inter alia, calculated attorney fees in favor of the medical provider pursuant to 11 NYCRR 65-4.6 (the 20% calculation), which applies to attorney fee awards in an initial arbitration. On appeal, the medical provider argued that the court calculated its attorney fees incorrectly, and the Appellate Division agreed, holding, “Because this is an appeal from a master arbitration award, we remand the matter for a calculation of fees in accordance with 11 NYCRR 65-4.10(j)(4). See Matter of Country-Wide Ins. Co. v. Bay Needle Care Acupuncture, P.C., 162 A.D.3d 407, 408 (1st Dept. 2018). We note that the fees would only apply to this appeal.” Significantly, the court cited Matter of GEICO Ins. Co. v. AAAMG Leasing, 148 A.D.3d 703 (2d Dept. 2017), which recognized that the attorney fee provision in 11 NYCRR 65-4.10(J)(4) applies to a CPLR Article 75 proceeding to vacate a master arbitration award, and that such fees are in addition to any fees awarded in both the initial arbitration and the master arbitration.

In AEE Med. Diagnostic, P.C. v. Hereford Ins. Co., 2019 NY Slip Op 29102 (NY City Civ. Ct., NY Cty. 2019), the plaintiff medical provider prevailed at trial and was awarded principal and interest. A hearing was then held to determine the appropriate attorney fee to the plaintiff. The plaintiff argued that the provision for hourly fees in 11 NYCRR §65-4.6 (c) (“For disputes subject to … court proceedings, where one of the issues involves a policy issue”) applies to a case where the defense was an alleged failure of the injured party/assignor to appear for duly scheduled independent medical examinations (aka the IME no-show defense). The defendant insurer opposed and argued that such a defense does not concern a policy issue. The court agreed with the plaintiff and held that an IME no-show “is a breach of a condition precedent to coverage under the No-Fault policy …” The court then analyzed the plaintiff counsel's proofs as to hourly services and calculated the attorney fee to be $695. Of course, depending on the principal and interest amounts awarded and the documented amount of time spent in a particular case, the standard 20% fee calculated under §65-4.6(D) may actually be greater in certain cases than the hourly fees awarded.

Collateral Estoppel and Arbitration Awards

The doctrine of collateral estoppel may be invoked to preclude a party from litigating an issue that has already been determined in a prior proceeding. The requirements for collateral estoppel are (1) identity of issue (i.e., the issue in the second action must be identical to an issue raised, necessarily decided and material in the prior proceeding), and (2) the party to be precluded in the second action must have had a full and fair opportunity to litigate the issue in the prior proceeding. Kaufman v. Eli Lilly and Company, 65 N.Y.2d 449 (1985). Two recent decisions addressed the applicability of collateral estoppel in No-Fault insurance matters.

In Pain Mgt. Ctr. of N.J., P.C. v. Travelers Prop. & Cas. Ins. Co., 63 Misc.3d 142(A) (App. Term 2d, 11th & 13th Jud. Dists. 2019), the defendant-insurer moved for dismissal based on a prior arbitrator's award that found that the plaintiff medical provider was ineligible for No-Fault benefits because it was not a licensed professional medical corporation in the state of New York. The lower court granted the motion and the Appellate Term affirmed, holding, inter alia:

[P]laintiff's argument on appeal as to why the doctrine of collateral estoppel does not apply in the case at bar is, essentially, that it cannot be determined if the issues to be litigated were substantially similar because defendant failed to include in its motion the evidence and documents submitted by the parties at the arbitration. In view of the fact that plaintiff does not point to any ambiguity in the arbitrator's decision, or any distinction between the facts of this case and those underlying the arbitration, or any other meritorious argument, plaintiff has presented no basis to disturb so much of the order of the Civil Court as, upon amendment of the answer, granted the branch of defendant's motion seeking summary judgment dismissing the complaint.

Thus, where a court finds that identity of issue is established by the presumably unambiguous arbitration award, such award can have collateral estoppel effect on a subsequent court action.

Hereford Ins. Co. v. Iconic Wellness Surgical Servs., 2019 NY Slip Op 50801(U) (App. Term 1st Dept. 2019) was a Civil Court CPLR Article 75 proceeding in which the insurer sought to vacate a master arbitration award that was rendered in favor of the medical provider. After the subject master arbitration award was rendered, the insurer obtained a declaratory judgment from Supreme Court, which determined that the insurer was not liable for paying No-Fault benefits for the underlying claim. Thus, the insurer apparently argued that the issue decided in the declaratory action precluded the master arbitration award. The Civil Court granted the insurer's petition to vacate, and the medical provider appealed. The Appellate Term reversed, holding:

While the preclusive effect of a pre-arbitration judicial decision may be sufficient to vacate an arbitral award (see Matter of Tokio Mar. & Fire Ins. Co. v. Allstate Ins. Co., 8 AD3d 492 [2004]), a post-arbitration judicial determination concerning the insurer's liability is not one of the limited grounds for vacating an arbitration award (see Matter of Hirsch Constr. Corp. [Cooper], 181 AD2d 52 [1992], lv. denied 81 NY2d 701 [1992]). Indeed, if a motion to vacate an arbitration award on this ground could be entertained, “the arbitration award would be the beginning rather than the end of the controversy and the protracted litigation which arbitration is meant to avoid would be invited” (Matter of Mole [Queen Ins. Co. of Am.], 14 AD2d 1, 3 [1961]).

Thus, a contrary holding may have actually violated the very purpose of collateral estoppel, which is to prevent duplicative subsequent litigation of the same issues previously decided. Therefore, assuming the same issue was litigated in master arbitration as was litigated in the declaratory action, the master arbitration award could have actually precluded the declaratory action.

David M. Barshay is a member of Sanders Barshay Grossman in Garden City. Steven J. Neuwirth, a member of the firm, assisted in the preparation of this article.