| LMK Psychological Servs., P.C. v State Farm Mut. Auto. Ins.Co. |
| 2007 NY Slip Op 10443 [46 AD3d 1290] |
| December 27, 2007 |
| Appellate Division, Third Department |
| LMK Psychological Services, P.C., et al., Respondents, v StateFarm Mutual Automobile Insurance Company, Appellant. |
—[*1] Law Office of Craig Meyerson, Latham (Craig Meyerson of counsel), forrespondents.
Mugglin, J. Appeals (1) from three orders of the Supreme Court (Pulver, Jr., J.), enteredJanuary 12, 2007, January 26, 2007 and April 16, 2007 in Greene County, which, among otherthings, granted plaintiffs' cross motion for summary judgment on certain causes of action, and (2)from the judgment entered thereon.
Plaintiffs, two psychological services providers, sued defendant to recover on no-fault claimsassigned to them by individuals insured by defendant who had been injured in automobileaccidents. At issue on this appeal is the grant of summary judgment to plaintiffs on certain causesof action, the computation of interest thereon and the award of counsel fees. With respect to thefirst issue, defendant argued that plaintiffs failed to establish standing to commence the action byreason of their failure to submit documentation establishing the assignment of the claims to them.Defendant's counsel has advised that, in light of the Court of Appeals decision in Hospital for Joint Diseases v TravelersProp. Cas. Ins. Co. (9 NY3d 312 [2007]), this issue has been withdrawn.
Turning to the remaining arguments, we first reject defendant's contention that SupremeCourt improperly awarded interest to plaintiffs by not tolling the interest for the period between30 days after plaintiffs received the claim denial until plaintiffs commenced this action. Since[*2]defendant failed to raise this challenge to the proposedjudgment before Supreme Court, the issue is unpreserved for our review (see Ferran vDwyer, 252 AD2d 758, 759 [1998]; Hopper v Lockey, 241 AD2d 892, 893-894[1997]). In any event, the argument is meritless. Interest on untimely paid no-fault claims iscalculated at the rate of 2% per month, compounded, commencing 30 days after properpresentment of the claim (see 11 NYCRR former 65.15 [h] [1]; Hempstead Gen. Hosp. vInsurance Co. of N. Am., 208 AD2d 501, 501 [1994]; Smithtown Gen. Hosp. v StateFarm Mut. Auto. Ins. Co., 207 AD2d 338, 339 [1994]). Interest will be stayed only in thosecircumstances where a claimant has failed to submit the claim to arbitration or to commence anaction within 30 days after receipt of the timely denial of the claim and does not,thereafter, begin to accrue until action is taken (see East Acupuncture, P.C. v Allstate Ins. Co., 15 Misc 3d 104, 106[2007]). Here, defendant did not issue a proper and timely denial to plaintiffs' no-fault claimsand, thus, defendant is not entitled to the benefit of the tolling provision. This interpretation ofthe regulatory scheme promotes the prompt resolution and compensation of claims and prohibitsany reward to a "dilatory insurance company" (Elmont Open MRI & Diagnostic Radiology, P.C. v Country-Wide Ins.Co., 15 Misc 3d 552, 558 [2007]). Thus, to avoid penalizing injured parties and toencourage the prompt resolution of claims, insurance companies are not entitled to a tolling ofthe accumulation of interest where they have failed to pay or properly deny a claim within therequired time limits (see Cardinell v Allstate Ins. Co., 302 AD2d 772, 774 [2003]).
Finally, Supreme Court did not err in awarding counsel fees on a per claim basis rather than aper assignor basis. When forced to commence an action to compel the payment of a properno-fault claim, a claimant is entitled to recover counsel fees in the sum of 20% of the amount offirst-party benefits, plus interest, subject to a maximum fee of $850 (see Insurance Law§ 5106 [a]; 11 NYCRR former 65.17 [b] [6] [v]; 65.18 [f] [5]). Notably, the Superintendent ofInsurance issued an opinion letter on October 8, 2003 that counsel fees are calculated on a perassignor basis (see Ops Gen Counsel NY Ins Dept No. 03-10-04 [Oct. 2003]; Marigliano v New York Cent. Mut. FireIns. Co., 13 Misc 3d 1079 [2006]). We conclude that such opinion letter is not anappropriate interpretation of the statute. Although we ordinarily give deference to the agency'sinterpretation of its own regulations, such deference need not be accorded where, as here, theinterpretation conflicts with the explicit language of the controlling statute (see Marigliano v New York Cent. Mut. FireIns. Co., 15 Misc 3d 766, 774 [2007]; Alpha Chiropractic P.C. v State Farm Mut. Auto. Ins. Co., 14 Misc 3d673, 678 [2006]).
The Superintendent's interpretation undermines the goal of the no-fault law to fullycompensate a claimant for economic loss resulting from the wrongful denial of a claim andwastes judicial assets by encouraging the commencement of multiple actions in order to recoverthe maximum available counsel fees (see Midwood Total Rehab. Med., P.C. v State Farm Mut. Auto. Ins.Co., 16 Misc 3d 480, 482 [2007]). Moreover, in spite of the Superintendent's opinionletter, the well-settled case law is that the statute requires payment of counsel fees on a per claimbasis (see Marigliano v New York Cent. Mut. Fire Ins. Co., 15 Misc 3d at 772; Valley Stream Med. & Rehab, P.C. vLiberty Mut. Ins. Co., 15 Misc 3d 576 [2007]; Alpha Chiropractic P.C. v State FarmMut. Auto. Ins. Co., 14 Misc 3d at 673; Willis Acupuncture, P.C. v Government Empls.Ins. Co., 6 Misc 3d 1002[A], 2004 NY Slip Op 51702[U] [2004]).
Mercure, J.P., Rose, Lahtinen and Kane, JJ., concur. Ordered that the orders and judgmentare affirmed, with costs.