Viviane Etienne Med. Care PC v. Country-Wide Ins. Co.

• Citation: 59 Misc.3d 579,71 N.Y.S.3d 327
• Decision Date: 24 February 2018
• Docket Number: 120832/05
• Parties: VIVIANE ETIENNE MEDICAL CARE PC, a/a/o Alem Cardenas, Plaintiff, v. COUNTRY–WIDE INS. CO., Defendant.
• Court: New York Civil Court

59 Misc.3d 579

71 N.Y.S.3d 327

VIVIANE ETIENNE MEDICAL CARE PC, a/a/o Alem Cardenas, Plaintiff,

v.COUNTRY–WIDE INS. CO., Defendant.

120832/05

Civil Court, City of New York, Kings County.

Decided on February 24, 2018

For Plaintiff: Gary Tsirelman, P.C., by Gary Tsirelman, Esq., 129 Livingston Street, Second & Third Floors, Brooklyn NY 11201

For Defendant: Jaffe & Koumourdas & Mohavicka, LLP, by Thomas Torto, Esq., Of Counsel, 419 Park Avenue South, New York NY 10016

Richard J. Montelione, J.

Background/History

In this action by a provider to recover assigned first party no-fault benefits, plaintiff moved, inter alia , after a final appellate decision in its favor, for additional attorney's fees pursuant to 11 NYCRR 65–4.6 of "no less than $250,000.00."

The original order of the Honorable Carolyn Wade, dated March 6, 2009, denied plaintiff's motion for summary judgment based upon its failure to establish its prima facie case. Subsequently, the Decision and Order was appealed to the Appellate Term, for the Second, Eleventh and Thirteenth Districts, which affirmed ( 31 Misc.3d 21, 919 N.Y.S.2d 759 [2011]. Thereafter, the Appellate Division in Viviane Etienne Med. Care, P.C. v. Country–Wide Ins. Co. , 114 A.D.3d 33, 46, 977 N.Y.S.2d 292 [2d Dept. 2013], with two dissenting justices, reversed, holding,

(T)he plaintiff established, prima facie, its entitlement to judgment as a matter of law by demonstrating that its prescribed statutory billing forms used to establish proof of claim (see 11 NYCRR 65–1.1 ) were mailed to and received by the defendant and that the defendant failed to either timely pay or deny the claims (see Insurance Law § 5106 ; 11 NYCRR 65–3.8 [a] [1]; Westchester Med. Ctr. v. Progressive Cas. Ins. Co. , 89 A.D.3d [1081] at 1082 ; Westchester Med. Ctr. v. GMAC Ins. Co. Online, Inc. , 80 A.D.3d [603] at 604 ).¹

The Court of Appeals affirmed. See Viviane Etienne Med. Care v. Country–Wide Ins. Co. , 25 N.Y.3d 498, 35 N.E.3d 451, 14 N.Y.S.3d 283.

Arguments of the Parties Regarding Additional Attorney's Fees

For context, the court incorporates by reference its prior interim decision and order dated June 2, 2017 and restates relevant portions summarizing the arguments of respective counsel.

Plaintiff argued, inter alia , that as the legal issue of a medical provider's prima facie showing was an issue that was considered by the Court of Appeals, the same was novel and unique and therefore warrants additional legal fees.

In opposition, defendant contended, inter alia , that plaintiff's application for attorney's fees of "no less than $250,000" is beyond this court's jurisdictional limit, and that nonetheless, plaintiff is not entitled to excess attorney's fees because the issues in this no-fault action were not novel or complex. For example, in support of its appeal to the Appellate Term, plaintiff's counsel served and filed a four-page appellant's brief and when the matter reached the Court of Appeals upon defendant's appeal of the order of the Appellate Division, the Court of Appeals decision began with established principles encompassing a plaintiff medical provider's prima facie case and concluded by predicating its conclusion on the admissibility of an affidavit. In short, defendant argued that the issue of evidentiary proof on a summary judgment motion is not novel or unique and that even if plaintiff's counsel "expended a great deal of 'time, money and effort' on this case it is not enough by itself to warrant the award of additional attorney's fees."

As to additional attorney's fees in matters involving a claim for first-party no-fault benefits, Section 65–4.6 of Insurance Regulation 68–D governs the limitations of the same. The applicable sections read as follows² :

(e) the attorney's fee shall be limited as follows: 20 percent of the amount of first-party benefits, plus interest thereon, awarded by the arbitrator or court, subject to a maximum fee of $850.

(f) Notwithstanding the limitations listed in this section , if 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 . An excess fee award shall detail the specific novel or unique nature of the dispute which justifies the award. (Emphasis added).

As was observed in Maxwell v. State Farm Mut. Auto. Ins. Co. , 115 A.D.2d 190, 495 N.Y.S.2d 259 (App. Div. 3rd Dept. 1985) :

The focus on the excess award determination is not necessarily on the results achieved but on the issues presented, i.e., whether they are novel and/or unique and necessitate extraordinary efforts on the attorney's behalf .... [In this case] the primary issues were settled on well-established rules of contract law and statutory construction. While counsel is to be commended for his efforts, the fact remains that the issues were not so novel or unique as to justify an excess fee award.

In Dumlao v. State Farm Ins. Co. , 173 A.D.2d 517, 570 N.Y.S.2d 119 (App. Div. 2nd Dept. 1991), the Court held that the issue of whether the injury was caused by an accident covered under the policy or whether it resulted from preexisting arthritic condition, was not sufficiently unique to warrant departure from the maximum attorney fee provided for under the insurance regulation.

In the instant matter, the issue of whether an affidavit of service from a third-party billing company is sufficient to establish plaintiff-medical provider's prima facie case—i.e., entitlement to reimbursement for assigned first-party no-fault benefits-was ultimately certified by the Appellate Division to the Court of Appeals. Inasmuch as the Court of Appeals accepted the certified question, this court found that the issue presented is sufficiently novel so as to warrant consideration of additional attorney's fees in accordance with 11 NYCRR 65–4.6.³

As such, a hearing was warranted to determine additional attorney's fees. Parenthetically, plaintiff's counsel's contention that an attorney fee comparatively large for a modest principal award is appropriate based upon In re Hempstead Gen. Hosp. v. Nat'l Grange Mut. Ins. Co. , 179 A.D.2d 645, 578 N.Y.S.2d 593 (2nd Dept. 1992) is misplaced. The appropriateness of an increased attorney's fee in excess of $850 will be determined based upon applicable considerations of a reasonable attorney's fee (see RMP Capital Corp. v. Victory Jet, LLC , 139 A.D.3d 836, 32 N.Y.S.3d 231 [App. Div. 2016]"the award of attorney's fees, whether pursuant to agreement or statute, must be reasonable and not excessive").

In Rahmey v. Blum , 95 A.D.2d 294, 466 N.Y.S.2d 350 (2d Dept. 1983) which is a seminal case on the calculation of a reasonable attorney's fee, the Court laid out an "analytical framework to aid the courts in computing a reasonable attorney's fee." (See also Law Office of Thaniel J. Beinert v. Litinskaya , 43 Misc.3d 1205[A], 990 N.Y.S.2d 437 [Civ. Ct. 2014] ).

The court in Ousmane v. City of New York , 22 Misc.3d 1136(A), 880 N.Y.S.2d 874, 2009 N.Y. Misc. LEXIS 574, 2009 N.Y. Slip Op. 50468(U); 241 N.Y.L.J. 62 (N.Y. Cty. Supt. Ct. 2009), which utilized the lodestar method, as elaborated in Rahmey , of determining the reasonableness of awarding attorney's fees and that methodology is expressed as follows:

A. Hours Reasonably Expended

The first step to be taken in arriving at a fair and appropriate award of attorneys' fees under the lodestar method is to determine whether the number of hours claimed were reasonably 'expended from contemporaneous time sheets.' Becker v. Empire of America Federal Savings Bank , 177 A.D.2d 958, 577 N.Y.S.2d 1001 (4th Dept. 1991) ; see alsoRahmey , 95 A.D.2d at 300–301 . The court need not automatically accept inadequately documented hours or those hours which reflect 'padding, i.e., hours that are excessive or otherwise unnecessary.' Rahmey , 95 A.D.2d at 301 . The following factors are also to be considered in assessing the reasonable hours worked: the extent to which the hours reflect inefficiency or duplicative work; legal work versus non-legal work, investigations, and other work performed by non-lawyers; time spent in court differentiated from out-of-court efforts; and the court's own knowledge, experience and expertise as to the time required to complete a similar task. Id. ; see also Matter of Spingarn , 164 Misc.2d 891, 894, 626 N.Y.S.2d 650 (Sup. Ct., N.Y. County 1995).

Regarding the hourly fee charged by counsel making the application for attorney's fees, the court in Carroll v. Weill , 2008 N.Y. Misc. LEXIS 9409, 2008 N.Y. Slip Op. 32512(U) (Supt. Ct. N.Y. Cty., Ramos, J.S.C. 2008), stated,

To determine the reasonable hourly billing rate, the 'prevailing market rate' or the rate 'prevailing in the community for similar services by lawyers of reasonably comparable skill, experience, and reputation' applies ( Blum v. Stenson , 465 U.S. 886, 896, 104 S.Ct. 1541, 79 L.Ed. 2d 891 [1984] ); Farbotko v. Clinton County , 433 F.3d 204 [2d Cir. 2005] ).

While it is well established that "[t]he focus on the excess award determination is not necessarily on the results achieved but on the issues presented, i.e., whether they are novel and/or unique and necessitate extraordinary efforts on the attorney's behalf" ( Maxwell , 115 A.D.2d 190, 495 N.Y.S.2d 259 at 260 ), there is scarcely any case law on the determination of an appropriate attorney fee award in this specialized field of no-fault law.

In Liebman v. New Jersey Mfrs. Ins Co. , 123 Misc.2d 697, 474 N.Y.S.2d 669 (Civ. Ct. Bronx Cty. 1984), the court granted an excess fee award based upon the court granting an hourly rate that was found within the regulations while allowing the jury to determine the number of hours. At the time, the court held that the attorney's compensation should be $75 per hour for "out of court time" and $150 per hour for "in court time" ( Liebman , 123 Misc.2d 697, 474 N.Y.S.2d 669 ). Prior to the...