Prior to April 5, 2002, the No-Fault Regulations provided for interest to be paid on overdue claims at the rate of 2 percent compounded (11 NYCRR 65.15(h)(1)). For accidents occurring on or after April 5, 2002, interest is calculated at 2 percent per month, simple (11 NYCRR 65-3.9). Under the old regulations, then, interest on an unpaid claim will surpass the principal amount in under three years.
The recent case B.Z. Chiropractic, P.C. v. Allstate Ins. Co., 56 Misc 3d 139(A) (App. Term 2d, 11th & 13th Jud. Dists. 2017) presented a scenario wherein a judgement on a claim for no-fault benefits remained unpaid, at least partially, for approximately 15 years. In that case, the plaintiff medical provider obtained a default judgment against the defendant insurer in 2001 for the amount of $8,847.49 (combined principal, statutory interest, attorney fees and costs). In June 2015, the plaintiff’s counsel attempted to collect on the judgment and advised the defendant insurer that with statutory interest continuing to accrue on the claim, the interest had reached over $221,000. In July 2015, the defendant apparently paid the original judgment amount of $8,847.49 and moved, among other things, to toll the accrual of post-judgment interest, arguing that the plaintiff should not be rewarded with additional interest for failing to take any action to enforce the judgment for an extended period of time. The lower court granted the defendant’s motion to the extent of tolling interest for approximately 10 years, reducing post-judgment interest to approximately $14,000, which the defendant paid.
