In Kew Gardens Med & Rehab v. Country-Wide Ins. Co.1 the plaintiff medical provider commenced its lawsuit against the defendant insurer in April 2002 to recover unpaid no-fault medical benefits. Apparently, the case remained dormant for 11 years, after which, in August 2013, plaintiff served a motion to compel discovery. The plaintiff subsequently moved for summary judgment, which motion was granted, and plaintiff was awarded, inter alia, principal and statutory interest calculated from the time of commencement.2 Because of the significant lapse of time (14 years) between the commencement of suit and the granting of the motion, interest was awarded at over $15,000, three times the amount of the principal awarded.
The defendant appealed the award of interest, arguing that the plaintiff was not entitled to an award of interest from commencement of suit. The Appellate Term modified the judgment by significantly reducing interest, which, the court held, should have been computed from August 2013, the time the plaintiff served its motion to compel discovery. The authority for the court’s holding was 11 NYCRR 65-3.9(d), which provides, “If an applicant has submitted a dispute to arbitration or the courts, interest shall accumulate, unless the applicant unreasonably delays the arbitration or court proceeding.” Finding the 11-year gap between commencement of the action and the service of a motion to be excessive, the court held “plaintiff took no meaningful action to prosecute the case until it served a motion to compel discovery on Aug. 30, 2013. Plaintiff should not be rewarded for its years of inaction by receiving a windfall of interest.”
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