Justice Wayne Saitta
Insurer Lancer moved for a default judgment against Torres and Duran. It also sought dismissal of provider Utopia’s counterclaims for no-fault benefits and attorney fees incurred in defending the suit. The court denied Lancer’s motion for a default judgment as the order permitting service by publication did not comply with CPLR 316(a). It also stated the fact Lancer denied coverage for what it claimed was fraud did not affect Utopia’s right to attorney fees if it successfully defended against the declaratory judgment suit. Thus, while Utopia was not entitled to attorney fees unless it was successful, the court ruled it was not premature for Utopia to seek attorney fees as a counterclaim in the same action. It noted there appeared to be no reported cases involving attorney fees for successfully defending against a declaratory judgment action to deny first party benefits under no-fault, stating the right to such recovery was derived exclusively from the contractual relationship between the insured and insurer. Yet, as the policy was not provided, the court could not determine if Utopia’s defense of the action was covered under the terms of the policy, denying the motion to dismiss Utopia’s counterclaims for attorney fees.
