Court Opinion

ID: 9876632
Source: CourtListenerOpinion
Date Created: 2023-09-27 15:26:51.294635+00
Date Added: 2024-06-11T07:47:13.170360
License: Public Domain

Kapnick, J.,
dissents in part in a memorandum as follows: While I agree with the majority that defendant RLI Insurance Company (RLI) is obligated to indemnify plaintiff (Cohen Brothers) for its damages in the underlying personal injury action of Vasquez v Cohen Bros. Realty Corp. (105 AD3d 595 [1st Dept 2013]), I believe that the voluntary payment doctrine applies here, and therefore I would vacate the declaration that RLI is required to pay the extra attorneys’ fees incurred by Cohen Brothers in the defense of that action.
Nonparty New York State Insurance Fund (SIF) defended Cohen Brothers in the Vasquez action; however, Cohen Brothers used a different, more expensive law firm than the one SIF offered. Indeed, rather than accepting the law firm recommended by SIF, Cohen Brothers opted for the cash value — $150 per hour — and decided to go with a law firm of its own choosing, which charged $795 per hour, leaving Cohen Brothers to pay the difference.
The voluntary payment doctrine “bars recovery of payments voluntarily made with full knowledge of the facts, in the absence of fraud or mistake of material fact or law” (DRMAK Realty LLC v Progressive Credit Union, 133 AD3d 401, 403 [1st Dept 2015], citing Dillon v U-A Columbia Cablevision of Westchester, 100 NY2d 525 [2003]). Although Cohen Brothers’ decision to hire a lawyer to defend itself in Vasquez was not voluntary, its decision to use a more expensive law firm was. Therefore, the voluntary payment doctrine bars plaintiff from recovering $645 per hour ($795 minus $150) from RLI. Furthermore, Cohen Brothers does not claim that fraud or mistake played any part in its decision to select the more expensive law firm (see id.). Moreover, if RLI had defended Cohen Brothers in Vasquez, it would have been “entitled to control the defense of the action, including the selection of counsel” (American Home Assur. Co. v Weissman, 79 AD2d 923, 925 [1st Dept 1981]). If Cohen Brothers had then decided to use a more expensive law firm, it would not have been entitled to have RLI pay the extra cost.
The cases relied upon by the majority in reaching a different result are inapposite. Initially, none of the cases cited discusses *516or applies the voluntary payment doctrine. Although the majority is correct that a “non-breaching party in a breach of contract case can recover damages that are the natural and probable consequence of the breach” (Estate of Coppersmith v Blue Cross & Blue Shield of Greater N.Y., 177 AD2d 373, 374 [1st Dept 1991]),* it is also true that when one party (here, RLI) breaches a contract (the policy), the other party (Cohen Brothers) is entitled to be placed in the same — not a better— position than it would have been had no breach occurred (Brushton-Moira Cent. School Dist. v Thomas Assoc., 91 NY2d 256, 261-262 [1998]). To award Cohen Brothers the difference in attorneys’ fees would be to put it in a better position than if RLI had defended it in the Vasquez action.
Lastly, the allocation of defense costs between SIF and RLI, should either party be entitled to such, is not before us on this appeal and has no bearing on the question of whether the voluntary payment doctrine bars Cohen Brothers’ claim for recovery of attorneys’ fees over the $150 per hour cash value that it received from SIF.
Concur — Acosta, P.J., Renwick, Manzanet-Daniels, Kapnick and Webber, JJ.

 This case does not, contrary to the majority’s suggestion, stand for the proposition that Cohen Brothers is “entitled to recover attorneys’ fees incurred in defense of the underlying action.” Rather, Estate of Coppersmith involved an insurer’s refusal to pay the hospital expenses of an insured and the hospital’s subsequent action to obtain payment directly from the insured. This Court found that the attorneys’ fees incurred by the insured in defending his/herself in an action against the hospital were a “natural and probable consequence” of the insurer’s breach of the policy (177 AD2d at 374).