The Rabiner cases
I just saw this on No-Fault Paradise and thought it was an interesting decision for a few reasons. First, the court left open the issue as to whether a Mallela defense must be proven by clear and convincing evidence. See, State Farm Mut. Auto. Ins. Co. v. Robert Mallela 4 N.Y.3d 313 (2005)(“In the licensing context, carriers will be unable to show “good cause” unless they can demonstrate behavior tantamount to fraud. Technical violations will not do.”). Second, I found the following statement interesting: “To the extent that defendant sought to establish at trial that the management company hired by plaintiff was the entity that actually operated the plaintiff’s corporations, the record is devoid of facts establishing any of the indicia of ownership by one other than plaintiff’s licensed professional.“
I am curious what this “indicia” is that is necessary to substantiate a Mallela defense. It also looks like a Mallela defense is not as easy to substantiate at trial as many on the defense bar, who throw around the word Mallela, would like us all to believe.
I wonder how much compounded interest is out there in these cases since there was no toll. My guess is probably close to the one million dollar mark.
I also am curious to see what is now going to become of the rest of the Rabiner claims that are pending, e.g., Allstate v. Belt Parkway. While this decision is not res judicata against Allstate in the aforementioned case, it probably should have some bearing on how aggressive Allstate wants to be in prosecuting these pending actions. Good job to Dave Barshay on behalf of his client.
**Edit**
This case can be cited as: Parkway MRI, P.C. v State Wide Ins. Co, 2010 NY Slip Op 52232(U)(App. Term 2d Dept. 2010)
5 Responses
just for fun, i did a quick calculation of interest on the decision that we could see. 12 years of interest turns $4,000 and change into $70,000.
Term won’t allow all insurers to escape all their contractual obligations all the time.
Hang your hat on a hope, a dream and a technical argument, see the results.
Great work Dave. Nice write up J.T. The quality of counsel on both sides merits a thorough reading of all of the briefs.
Sun:
This was on the merits. This is what happens when a provider decides to fight. “Hopes, dreams and technical arguments” did not win the day. Dr. Rabiner’s gumption did.
The proposed Malella definition here was that a Malella defense would be established where it could be shown that 1) the layman had more of an economic interest in the pc than the licensed professional AND 2) the layman’s control over the pc resulted in a substantialy negative impact on patient care.
The argument was that this was established by the fact that layman Katz was convicted of causing the pc to pay 55M to shell companies he owned, and sytematically using portions of that money to pay kickbacks for MRI referals.
ps, Dave won this trial, not “rabiner’s gumption”