Radiology Today, P.C. v GEICO Gen. Ins. Co., 2011 NY Slip Op 21161 (App. Term 2d Dept. 2011)
Holding #1: “Plaintiff contends that the discovery order was improper because, in the answer and in support of its motion to compel discovery, defendant failed to “state[] in detail” the “circumstances constituting the wrong,” citing CPLR 3016 (b). There is no requirement that a defense predicated upon the failure to comply with “New York State or local licensing requirement[s]” (Insurance Department Regulations [11 NYCRR] 65-3.16 [a] [12]) be pleaded with particularity pursuant to CPLR 3016 (b) (see generally V.S. Med. Servs., P.C. v Allstate Ins. Co., 25 Misc 3d 39 [App Term, 2d, 11th & 13th Dists 2009]). In addition, while mere conclusory allegations are never sufficient to obtain discovery with respect to a Mallela-based defense, defendant’s motion papers were sufficient to demonstrate that a Mallela-based defense [*3]was potentially meritorious.”
Holding #2: “The defense that plaintiff is ineligible to receive no-fault benefits because it failed to comply with state or local licensing requirements “is not waived by the failure to assert it in a denial of claim form . . . nor is it precluded as a result of an untimely denial” (Multiquest, P.L.L.C. v Allstate Ins. Co., 17 Misc 3d 37, 39 [App Term, 2d & 11th Jud Dists 2007] [citations omitted]). No-fault benefits may not be paid to medical service corporations which submit “materially false filings with state regulators” (Mallela, 4 NY3d at 321)”
So we all got the answer we have waited for: Mallela based “fraud” need only be proved through a preponderance of the evidence. As a corollary, the evidence needed to obtain Mallela based discovery is sufficiently less than what could possibly be sought under a clear and convincing fraud standard. This is quite interesting to say the least.
Also, the Appellate Term seems to hold that a PHL 238 violation standard separate and apart from a true “Mallela” violation. The door has opened that much further. The better question, however, is why the heck can’t all of this information be obtained in EUO-verification, under penalty of the policy being void ab initio…
4 Responses
The issue is working its way through the Appellate Division Second Department right now. The Appeal has been perfected. The insurance company represented by one of the top insurance firms out there will put in its response brief and then the reply — and we wait and we see.
No link to case, rad today vs. geico, 2011 nyslipop 21161
Sorry………
Thanks Sun. I was thinking maybe it was another case that I lost but it can’t be since I do not rep the Plaintiff. At one point a full 11% of all App Term 2nd loses were on appeals authored by me or me using psuedonyms — whatever that word is … you know when Stephen King wrote books using the name Richard Bachman etc.