Medalliance Medical Health Services v. Allstate Ins.

Insurance Law

New York Law Journal


Judge Carmen Velasquez

Medical provider sought to recover statutory interest and attorney fees on no-fault insurance claims that were overdue when insurer Allstate paid them. Allstate was required to pay or deny any claims within 30 days. Plaintiff submitted proof of claim. Overdue payments earned monthly interest of two percent and entitled claimant to reasonable attorney fees incurred in securing payment of a valid claim. Allstate noted the overdue interest on three of plaintiff's claims was less than five dollars, thus was not paid. The interest on a fourth claim exceed five dollars, but also was not paid, despite a demand from plaintiff. The issue was if plaintiff was entitled to recover overdue interest if it did not exceed five dollars as indicated in 11 NYCRR 65-3.9(a). The court noted collection of overdue interest of less than five dollars was not precluded by 11 NYCRR 65-3.9(a). It stated the construction of 11 NYCRR 65-3.9(a) advocated by Allstate would preclude overdue interest of less than five dollars, would conflict with the statutory language of Insurance Law §5106(a) imposing interest on "all overdue payments" and would violate legislative intent. Thus, plaintiff's motion for summary judgment on the interest was granted.

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