Court Opinion

ID: 9954296
Source: CourtListenerOpinion
Date Created: 2024-03-25 21:10:44.463114+00
Date Added: 2024-06-11T08:12:01.237200
License: Public Domain

Country-Wide Ins. Co. v Arthur Ave. Med. Servs.,
                          P.C.
               2024 NY Slip Op 30944(U)
                     March 20, 2024
           Supreme Court, New York County
        Docket Number: Index No. 651573/2022
                  Judge: Arlene P. Bluth
Cases posted with a "30000" identifier, i.e., 2013 NY Slip
 Op 30001(U), are republished from various New York
 State and local government sources, including the New
   York State Unified Court System's eCourts Service.
 This opinion is uncorrected and not selected for official
                       publication.
  FILED: NEW YORK COUNTY CLERK 03/20/2024 04:34 PM                                                                   INDEX NO. 651573/2022
  NYSCEF DOC. NO. 51                                                                                           RECEIVED NYSCEF: 03/20/2024

                                   SUPREME COURT OF THE STATE OF NEW YORK
                                             NEW YORK COUNTY
            PRESENT:             HON. ARLENE P. BLUTH                                            PART                              14
                                                                                      Justice
            ---------------------------------------------------------------------------------X   INDEX NO.          651573/2022
                COUNTRY-WIDE INSURANCE COMPANY
                                                                                                 MOTION DATE        06/14/20221
                                                         Petitioner,
                                                                                                 MOTION SEQ. NO.         001
                                                 -v-
                ARTHUR AVENUE MEDICAL SERVICES, P.C., a/a/o
                                                                                                   DECISION + ORDER ON
                Shariff Hull
                                                                                                         MOTION
                                                         Respondent.
            ---------------------------------------------------------------------------------X

            The following e-filed documents, listed by NYSCEF document number (Motion 001) 1- 9, 10, 11, 12, 13,
            14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39, 40, 41,
            42, 43, 44, 45, 46, 47, 48
            were read on this motion to/for                                 VACATE - DECISION/ORDER/JUDGMENT/AWARD.

                      The cross-motion to confirm the subject arbitration awards is granted.

            Background

                      Petitioner brings this proceeding to vacate awards from a lower and master arbitrator. It

            explains that the injured party (Shariff Hull) was injured in a motor vehicle accident while

            driving a car insured by petitioner.

                      Respondent provided medical treatment to Mr. Hull, including neurological electro-

            diagnostic testing of the lower and upper extremities as well as trigger point injections.

            Petitioner then refused to pay the bills sent by respondent and an arbitration followed.

                      The lower arbitrator sided with respondent and awarded it $3,976.61, although the

            arbitrator reduced the amount sought by respondent (NYSCEF Doc. No. 3). The lower arbitrator

            1
             Although this proceeding was only recently transferred to this part, the Court apologizes, on behalf of the court
            system, for the lengthy delay in the resolution of this proceeding. Almost two years is far too long.
                651573/2022 COUNTRY-WIDE INSURANCE COMPANY vs. ARTHUR AVENUE MEDICAL                                 Page 1 of 4
                SERVICES, P.C.
                Motion No. 001

                                                                           1 of 4
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  FILED: NEW YORK COUNTY CLERK 03/20/2024 04:34 PM                                                    INDEX NO. 651573/2022
  NYSCEF DOC. NO. 51                                                                          RECEIVED NYSCEF: 03/20/2024

            observed that petitioner failed to comply with the requirements necessary to take an offset

            relating to disability benefits awarded to Mr. Hull and “that benefits for disability benefits may

            not be offset from the amounts paid to the assignor for loss [sic] earnings” (id. at 2). The lower

            arbitrator also rejected a policy exhaustion claim by petitioner, concluding that “On the above

            grounds I do not find that the policy is shown to be exhausted, as these offsets made by the

            [Petitioner] are more than the total claim herein” (id.).

                    The master arbitrator observed that petitioner’s submission before the master arbitrator

            did not discuss the lower arbitrator’s rejection of the policy exhaustion defense (NYSCEF Doc.

            No. 6 at 3). He adds that petitioner attempted to raise a lack of medical necessity defense and that

            the injured party was in the course of his employment for the first time in the master arbitration

            (id.). “It appears that at the time of the hearing of the dispute, . . . counsel for [petitioner] made

            the decision to limit [petitioner]’s defenses solely to a policy exhaustion defense as well as fee

            schedule violations” (id. at 4). The master arbitrator noted that “Given that the offset for

            disability benefits improperly taken by [petitioner] was more than the fee schedule value for the

            services awarded, there was a valid basis for the award’s finding that the policy had not been

            exhausted” (id. at 6).

                    Petitioner claims the policy is currently exhausted and submits an affidavit from a

            litigation supervisor, dated April 4, 2022, who swears the policy is exhausted (NYSCEF Doc.

            No. 7). It seeks vacatur of the awards or, in the alternative, that the dispute be remanded for a

            new hearing on the issue of policy exhaustion.

                    Respondent insists that petitioner failed to cite any sufficient basis to vacate these awards.

            It argues that both determinations were rational and that the policy was not exhausted.

             651573/2022 COUNTRY-WIDE INSURANCE COMPANY vs. ARTHUR AVENUE MEDICAL                     Page 2 of 4
             SERVICES, P.C.
             Motion No. 001

                                                            2 of 4
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  FILED: NEW YORK COUNTY CLERK 03/20/2024 04:34 PM                                                  INDEX NO. 651573/2022
  NYSCEF DOC. NO. 51                                                                        RECEIVED NYSCEF: 03/20/2024

            Discussion

                   CPLR 7511 provides just four grounds for vacating an arbitration award, including that

            the arbitrator exceeded his power, which “occurs only where the arbitrator's award violates a

            strong public policy, is irrational or clearly exceeds a specifically enumerated limitation on the

            arbitrator's power. Mere errors of fact or law are insufficient to vacate an arbitral award. Courts

            are obligated to give deference to the decision of the arbitrator, even if the arbitrator misapplied

            the substantive law in the area of the contract” (NRT New York LLC v Spell, 166 AD3d 438, 438-

            39, 88 NYS3d 34 [1st Dept 2018]).

                   As an initial matter, the Court observes that the only issues raised before the lower

            arbitrator were petitioner’s defenses of policy exhaustion and improper fees. It appears, as noted

            by the master arbitrator, that petitioner never raised the defenses of lack of medical necessity or

            that the injured party was in the course of his employment. Of course, it was rational for the

            master arbitrator to reject arguments not properly raised before the lower arbitrator and petitioner

            cannot raise those issues here.

                   The Court finds that the awards were rational with respect to their findings that the policy

            was not exhausted. The lower arbitrator issued a well-reasoned decision evaluating the policy

            limits and the additional issue of offsets an insurer could theoretically take for disability benefits

            issued to the injured party. The lower arbitrator concluded that petitioner failed to satisfy the

            requirements to take such an offset and this Court sees no reason to disturb that analysis.

                   The Court also denies petitioner’s request for a remand regarding the issue of policy

            exhaustion as that issue was already decided in the awards. To the extent that petitioner appears

            to argue that the policy is currently exhausted, that is not a basis for a remand. Petitioner cannot

            refuse to pay medical bills, force a medical provider to bring and win an arbitration, and then say

             651573/2022 COUNTRY-WIDE INSURANCE COMPANY vs. ARTHUR AVENUE MEDICAL                   Page 3 of 4
             SERVICES, P.C.
             Motion No. 001

                                                           3 of 4
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  FILED: NEW YORK COUNTY CLERK 03/20/2024 04:34 PM                                                    INDEX NO. 651573/2022
  NYSCEF DOC. NO. 51                                                                            RECEIVED NYSCEF: 03/20/2024

            “too late” to the medical provider. The fact is that the lower arbitrator and master arbitrator both

            found that the policy was not exhausted.

                    The Court also observes that respondent demands legal fees but did not attach any

            invoices or even make a demand for a specific amount. The Court therefore denies that request

            as respondent did not meet its burden to show it incurred any fees; this Court cannot speculate or

            guess as to how much should be awarded.

                    Accordingly, it is hereby

                    ADJUDGED that the petition to vacate the arbitral award is denied and, pursuant to

            CPLR 7511(e), the Court confirms the award and the Clerk is hereby directed to directed to enter

            judgment in favor of respondent and against petitioner in the amount of $3,976.61 plus statutory

            interest from June 22, 2020 at the rate of 2%/month pursuant to 11 NYCRR 65-3.9(a), plus the

            Arbitration filing fee of $40 pursuant to 11 NYCRR 65-4.5(s)(1) along with costs and

            disbursements upon presentation of proper papers therefor.

                    3/20/2024                                                           $SIG$
                      DATE                                                      ARLENE P. BLUTH, J.S.C.
             CHECK ONE:               X   CASE DISPOSED                 NON-FINAL DISPOSITION

                                                                                                    □
                                          GRANTED             DENIED    GRANTED IN PART              X     OTHER

             APPLICATION:                 SETTLE ORDER                  SUBMIT ORDER

                                                                                                    □
             CHECK IF APPROPRIATE:        INCLUDES TRANSFER/REASSIGN    FIDUCIARY APPOINTMENT              REFERENCE

             651573/2022 COUNTRY-WIDE INSURANCE COMPANY vs. ARTHUR AVENUE MEDICAL                        Page 4 of 4
             SERVICES, P.C.
             Motion No. 001

                                                            4 of 4
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