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Appellate Term delves deeper into Mallela – and the plaintiff bar is plunging into ever so deeper water
Mallela issues

Appellate Term delves deeper into Mallela – and the plaintiff bar is plunging into ever so deeper water

By Jason Tenenbaum 8 min read

Key Takeaway

Appellate Term analyzes Mallela defense discovery standards, ruling preponderance of evidence sufficient for no-fault insurance licensing fraud claims in New York.

This article is part of our ongoing mallela issues coverage, with 32 published articles analyzing mallela issues issues across New York State. Attorney Jason Tenenbaum brings 24+ years of hands-on experience to this analysis, drawing from his work on more than 1,000 appeals, over 100,000 no-fault cases, and recovery of over $100 million for clients throughout Nassau County, Suffolk County, Queens, Brooklyn, Manhattan, and the Bronx. For personalized legal advice about how these principles apply to your specific situation, contact our Long Island office at (516) 750-0595 for a free consultation.

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” (Insurance Department Regulations 65-3.16 ) 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 ). 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 ). 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


Legal Update (February 2026): Since this 2011 post, Insurance Department Regulation 65 has undergone several amendments, and there have been significant developments in Mallela-based licensing defense jurisprudence through subsequent appellate decisions. The procedural requirements for asserting licensing defenses and discovery standards may have evolved since the Radiology Today decision. Practitioners should verify current provisions of Regulation 65-3.16 and review recent case law interpreting Mallela defense pleading and discovery requirements.

Legal Context

Why This Matters for Your Case

New York law is among the most complex and nuanced in the country, with distinct procedural rules, substantive doctrines, and court systems that differ significantly from other jurisdictions. The Civil Practice Law and Rules (CPLR) governs every stage of civil litigation, from service of process through trial and appeal. The Appellate Division, Appellate Term, and Court of Appeals create a rich and ever-evolving body of case law that practitioners must follow.

Attorney Jason Tenenbaum has practiced across these areas for over 24 years, writing more than 1,000 appellate briefs and publishing over 2,353 legal articles that attorneys and clients rely on for guidance. The analysis in this article reflects real courtroom experience — from motion practice in Civil Court and Supreme Court to oral arguments before the Appellate Division — and a deep understanding of how New York courts actually apply the law in practice.

About This Topic

Mallela Fraud Defense in No-Fault Insurance

The Mallela defense — named after the Court of Appeals decision in State Farm v. Mallela — allows insurers to deny no-fault claims by proving that a medical provider fraudulently incorporated to circumvent licensing requirements. Establishing a Mallela defense requires extensive investigation and evidence of corporate structure, ownership, and control. These articles analyze the Mallela doctrine, its procedural requirements, and the evolving case law that shapes how courts evaluate fraudulent incorporation claims in no-fault practice.

32 published articles in Mallela issues

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Common Questions

Frequently Asked Questions

What are Mallela issues in no-fault insurance?

Mallela issues refer to a defense based on State Farm v. Mallela (2006), where the Court of Appeals held that insurers can deny no-fault claims to medical providers who operate fraudulent enterprises. Under Mallela, if a provider is controlled by unlicensed individuals in violation of Business Corporation Law §1507 or Education Law, the provider is not eligible to receive no-fault reimbursement. Insurers use Mallela defenses in declaratory judgment actions and as affirmative defenses in collection actions.

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Attorney Jason Tenenbaum

About the Author

Jason Tenenbaum, Esq.

Jason Tenenbaum is the founding attorney of the Law Office of Jason Tenenbaum, P.C., headquartered at 326 Walt Whitman Road, Suite C, Huntington Station, New York 11746. With over 24 years of experience since founding the firm in 2002, Jason has written more than 1,000 appeals, handled over 100,000 no-fault insurance cases, and recovered over $100 million for clients across Long Island, Nassau County, Suffolk County, Queens, Brooklyn, Manhattan, the Bronx, and Staten Island. He is one of the few attorneys in the state who both writes his own appellate briefs and tries his own cases.

Jason is admitted to practice in New York, New Jersey, Florida, Texas, Georgia, and Michigan state courts, as well as multiple federal courts. His 2,353+ published legal articles analyzing New York case law, procedural developments, and litigation strategy make him one of the most prolific legal commentators in the state. He earned his Juris Doctor from Syracuse University College of Law.

24+ years in practice 1,000+ appeals written 100K+ no-fault cases $100M+ recovered

Disclaimer: This article is published by the Law Office of Jason Tenenbaum, P.C. for informational and educational purposes only. It does not constitute legal advice, and no attorney-client relationship is formed by reading this content. The legal principles discussed may not apply to your specific situation, and the law may have changed since this article was last updated.

New York law varies by jurisdiction — court decisions in one Appellate Division department may not be followed in another, and local court rules in Nassau County Supreme Court differ from those in Suffolk County Supreme Court, Kings County Civil Court, or Queens County Supreme Court. The Appellate Division, Second Department (which covers Long Island, Brooklyn, Queens, and Staten Island) and the Appellate Term (which hears appeals from lower courts) each have distinct procedural requirements and precedents that affect litigation strategy.

If you need legal help with a mallela issues matter, contact our office at (516) 750-0595 for a free consultation. We serve clients throughout Long Island (Huntington, Babylon, Islip, Brookhaven, Smithtown, Riverhead, Southampton, East Hampton), Nassau County (Hempstead, Garden City, Mineola, Great Neck, Manhasset, Freeport, Long Beach, Rockville Centre, Valley Stream, Westbury, Hicksville, Massapequa), Suffolk County (Hauppauge, Deer Park, Bay Shore, Central Islip, Patchogue, Brentwood), Queens, Brooklyn, Manhattan, the Bronx, Staten Island, and Westchester County. Prior results do not guarantee a similar outcome.

Filed under: Mallela issues
Jason Tenenbaum, Personal Injury Attorney serving Long Island, Nassau County and Suffolk County

About the Author

Jason Tenenbaum

Jason Tenenbaum is a personal injury attorney serving Long Island, Nassau & Suffolk Counties, and New York City. Admitted to practice in NY, NJ, FL, TX, GA, MI, and Federal courts, Jason is one of the few attorneys who writes his own appeals and tries his own cases. Since 2002, he has authored over 2,353 articles on no-fault insurance law, personal injury, and employment law — a resource other attorneys rely on to stay current on New York appellate decisions.

Education
Syracuse University College of Law
Experience
24+ Years
Articles
2,353+ Published
Licensed In
7 States + Federal

Discussion

Comments (3)

Archived from the original blog discussion.

RZ
Raymond Zuppa
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.
S
Sun
No link to case, rad today vs. geico, 2011 nyslipop 21161
RZ
Raymond Zuppa
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.

Legal Resources

Understanding New York Mallela issues Law

New York has a unique legal landscape that affects how mallela issues cases are litigated and resolved. The state's court system includes the Civil Court (for claims up to $25,000), the Supreme Court (the primary trial court for unlimited jurisdiction), the Appellate Term (which hears appeals from lower courts), the Appellate Division (divided into four Departments, with the Second Department covering Long Island, Brooklyn, Queens, Staten Island, and several upstate counties), and the Court of Appeals (the state's highest court). Each court has its own procedural requirements, local rules, and case-assignment practices that can significantly impact the outcome of your case.

For mallela issues matters on Long Island, cases are typically filed in Nassau County Supreme Court (at the courthouse in Mineola) or Suffolk County Supreme Court (in Riverhead). No-fault arbitrations are heard through the American Arbitration Association, which assigns arbitrators throughout the metropolitan area. Workers' compensation claims go to the Workers' Compensation Board, with hearings at district offices across the state. Understanding which forum is appropriate for your case — and the specific procedural rules that apply — is essential for a successful outcome.

The procedural landscape in New York also includes important timing requirements that can affect your case. Most civil actions are subject to statutes of limitations ranging from one year (for intentional torts and claims against municipalities) to six years (for contract actions). Personal injury cases generally have a three-year deadline under CPLR 214(5), while medical malpractice claims must be filed within two and a half years under CPLR 214-a. No-fault insurance claims have their own regulatory deadlines, including 30-day filing requirements for applications and 45-day deadlines for provider claims. Understanding and complying with these deadlines is critical — missing a filing deadline can permanently bar your claim, regardless of how strong your case may be on the merits.

Attorney Jason Tenenbaum regularly practices in all of these venues. His office at 326 Walt Whitman Road, Suite C, Huntington Station, NY 11746, is centrally located on Long Island, providing convenient access to courts and offices throughout Nassau County, Suffolk County, and New York City. Whether you need representation in a no-fault arbitration, a personal injury trial, an employment discrimination hearing, or an appeal to the Appellate Division, the Law Office of Jason Tenenbaum, P.C. brings $24+ years of real courtroom experience to your case. If you have questions about the legal issues discussed in this article, call (516) 750-0595 for a free, no-obligation consultation.

New York's substantive law also presents distinct challenges. In motor vehicle cases, the no-fault system under Insurance Law Article 51 provides first-party benefits regardless of fault, but limits the right to sue for non-economic damages unless the plaintiff establishes a "serious injury" under one of nine statutory categories. This threshold — codified at Insurance Law Section 5102(d) — requires medical evidence showing more than a minor or subjective injury, and courts have developed detailed standards for each category. Fractures must be documented through imaging studies. Claims of permanent consequential limitation or significant limitation of use require quantified range-of-motion testing with comparison to norms. The 90/180-day category demands proof that the plaintiff was unable to perform substantially all of their usual daily activities for at least 90 of the 180 days following the accident.

In employment discrimination cases, the legal standards vary depending on whether the claim arises under state or local law. The New York State Human Rights Law employs a burden-shifting framework: the plaintiff must first establish a prima facie case by showing membership in a protected class, qualification for the position, an adverse employment action, and circumstances giving rise to an inference of discrimination. The burden then shifts to the employer to articulate a legitimate, non-discriminatory reason for its decision. If the employer meets this burden, the plaintiff must demonstrate that the stated reason is pretextual. The New York City Human Rights Law, by contrast, applies a broader standard, asking whether the plaintiff was treated less well than other employees because of a protected characteristic.

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