Supreme Court of the State of New York, Appellate Division, Second Judicial Department

Decided on July 8, 2026

2023-10833, 2023-10834, (Index No. 51439/23)

Angela G. Iannacci, J.P.

Paul Wooten

Deborah A. Dowling

James P. McCormack, JJ.

[*1]

DECISION & ORDER

In a proceeding pursuant to CPLR article 75, inter alia, to confirm a master arbitration award dated May 10, 2023, Country-Wide Ins. Co. appeals from (1) an order of the Supreme Court, Kings County (Rupert V. Barry, J.), dated October 23, 2023, and (2) a judgment of the same court dated November 15, 2023. The order granted the petition of 563 Grand Medical, P.C., inter alia, to confirm the master arbitration award and denied the cross-petition of Country-Wide Ins. Co. to stay this proceeding pending the determination of an appeal in a related proceeding, or to vacate the master arbitration award, or, alternatively, to modify so much of the master arbitration award as determined that 563 Grand Medical, P.C., was entitled to recover statutory compound interest from September 10, 2003. The judgment, upon the order, is in favor of 563 Grand Medical, P.C., and against Country-Wide Ins. Co. in the principal sum of $4,999, with statutory compound interest from September 10, 2003, in the sum of $597,733.63.

ORDERED that the appeal from the order is dismissed; and it is further,

ORDERED that the judgment is modified, on the law, by deleting the provision thereof in favor of 563 Grand Medical, P.C., and against Country-Wide Ins. Co. awarding statutory compound interest from September 10, 2003, in the sum of $597,733.63; as so modified, the judgment is affirmed, that branch of the petition which was to confirm so much of the master arbitration award dated May 10, 2023, as awarded statutory compound interest from September 10, 2003, is denied, that branch of the cross-petition which was to modify so much of the master arbitration award dated May 10, 2023, as awarded statutory compound interest from September 10, 2003, is granted to the extent that the master arbitration award is modified so as to exclude from the computation of statutory compound interest on the claims of 563 Grand Medical, P.C., the period of September 10, 2003, through November 6, 2018, the order dated October 23, 2023, is modified accordingly, and the matter is remitted to the Supreme Court, Kings County, for a recalculation of the statutory compound interest due on the master arbitration award, a determination of the appropriate amount to be awarded to 563 Grand Medical, P.C., as additional attorneys' fees for the litigation of this appeal, and the entry of an appropriate amended judgment thereafter; and it is further,

ORDERED that one bill of costs is awarded to 563 Grand Medical, P.C.

The appeal from the order must be dismissed because the right of direct appeal therefrom terminated with the entry of the judgment in the proceeding (see Matter of Aho, 39 NY2d 241, 248). The issues raised on the appeal from the order are brought up for review and have been considered on the appeal from the judgment (see CPLR 5501[a][1]).

563 Grand Medical, P.C. (hereinafter Grand Medical), commenced a no-fault arbitration proceeding to recover no-fault insurance benefits from Country-Wide Ins. Co. (hereinafter Country-Wide) for medical services provided to Grand Medical's assignee following a motor vehicle accident on August 3, 1999. On September 10, 2003, an arbitrator dismissed the proceeding, without prejudice. Grand Medical commenced an action in the Civil Court of the City of New York, Kings County, to recover no-fault insurance benefits for the August 3, 1999 accident (hereinafter the Civil Court action). In 2015, Country-Wide's motion for summary judgment dismissing the complaint in the Civil Court action was granted under Roggio v Nationwide Mut. Ins. Co. (66 NY2d 260, 263-264 [1985]) on the basis that Grand Medical had elected arbitration as the forum for resolution of its claims. The Civil Court's order granting Country-Wide's motion for summary judgment dismissing the complaint in the Civil Court action was affirmed by the Appellate Term of the Supreme Court for the Second, Eleventh, and Thirteenth Judicial Districts on November 2, 2018. Grand Medical then commenced an arbitration proceeding on November 6, 2018, to recover the same no-fault insurance benefits.

Ultimately, an arbitrator granted Grand Medical's claim for no-fault insurance benefits in the amount of $4,999. The arbitrator also determined that Grand Medical was entitled to compound interest at the statutory rate of 2% per month (see 11 NYCRR 65-3.9[a]) from September 10, 2003. The arbitrator's determination was affirmed by a master arbitrator in a master arbitration award dated May 10, 2023.

Grand Medical commenced this CPLR article 75 proceeding, inter alia, to confirm the master arbitration award dated May 10, 2023, and Country-Wide cross-petitioned to stay this proceeding pending the resolution of its appeal in a related proceeding, or to vacate the master arbitration award, or, alternatively, to modify so much of the master arbitration award as determined that Grand Medical was entitled to recover statutory compound interest from September 10, 2003, so as to limit the accrual of compound interest to simple interest accruing from November 6, 2018. In an order dated October 23, 2023, the Supreme Court granted the petition and denied the cross-petition. A judgment was issued, upon the order, in favor of Grand Medical and against Country-Wide in the principal sum of $4,999, with statutory compound interest from September 10, 2003, in the sum of $597,733.63. Country-Wide appeals.

Initially, Country-Wide's contention that the Supreme Court should have granted that branch of its cross-petition which was to stay the proceeding pending the determination of a related appeal has been rendered academic in light of our determination on that appeal (see Matter of 563 Grand Medical, P.C. v Country-Wide Ins. Co., ___ AD3d ___ [Appellate Division Docket No. 2021-03732; decided herewith]).

"Since arbitration under the no-fault law is compulsory, the scope of review of the master arbitrator's award is whether it 'was arbitrary and capricious, irrational or without a plausible basis'" (Matter of Bay Needle Care Acupuncture, P.C. v Country Wide Ins. Co., 176 AD3d 695, 696, quoting Matter of Farrell [Allstate Ins. Co.], 232 AD2d 934, 935; see Matter of Acuhealth Acupuncture, P.C. v Country-Wide Ins. Co., 176 AD3d 800, 802). Here, contrary to Country-Wide's contention, the master arbitration award affirming the arbitrator's determination that Grand Medical was entitled to payment on its claims for no-fault insurance benefits had evidentiary support and was not arbitrary and capricious (see Matter of American Tr. Ins. Co. v Big Apple Pain Mgt., PLLC, 242 AD3d 1198, 1199; Matter of V.S. Care Acupuncture, P.C. v Country-Wide Ins. Co., 176 AD3d 832, 833).

Furthermore, the master arbitrator's affirmance of the determination of the arbitrator to apply the former no-fault regulation providing for compound interest on Grand Medical's claims (see former 11 NYCRR 65.15[h]) was not arbitrary and capricious or irrational. The former [*2]regulation was in effect at the time of the underlying accident and Grand Medical's submission of its claims to Country-Wide (see Matter of B.Z. Chiropractic, P.C. v Allstate Ins. Co., 197 AD3d 144, 155; New Generation Wellness Chiropractic, P.C. v Country-Wide Ins. Co., 75 Misc 3d 54, 55 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists]).

However, under 11 NYCRR 65-3.9(d) interest will not accumulate if "the applicant unreasonably delays the arbitration or court proceeding" (id.). Under the circumstances of this case, the determination that Grand Medical did not unreasonably delay the arbitration proceeding during the period of September 10, 2003, through November 6, 2018, lacked evidentiary support and a rational basis, and this period should have been excluded from the calculation of interest on Grand Medical's claims (see Vitality Chiropractic, P.C. v Countrywide Ins., 59 Misc 3d 150[A] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists]; Kew Gardens Med & Rehab, P.C. v Country-Wide Ins. Co., 52 Misc 3d 143[A] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists]; Aminov v Country Wide Ins. Co., 43 Misc 3d 87 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists]).

Country-Wide's remaining contentions are without merit.

As Grand Medical correctly contends, it is entitled to an award of additional attorneys' fees for this appeal (see 11 NYCRR 65-4.10[j][4]; Acuhealth Acupuncture, P.C. v Country-Wide Ins. Co., 170 AD3d 1168).

Accordingly, we remit the matter to the Supreme Court, Kings County, for a recalculation of the statutory compound interest due on the master arbitration award in accordance herewith, a determination of the appropriate amount to be awarded to Grand Medical as additional attorneys' fees for the litigation of this appeal, and the entry of an appropriate amended judgment thereafter.

IANNACCI, J.P., WOOTEN, DOWLING and MCCORMACK, JJ., concur.

ENTER:

Darrell M. Joseph

Clerk of the Court