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 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.
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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…
Related Articles
- Understanding Mallela-Based Discovery in New York No-Fault Insurance Cases
- Interesting Mallela case from the Appellate Term, Second Department
- Why does a Malella defense survive an untimely disclaimer, while a workers compensation defense doesn’t?
- Professional Service LLC Dissolution in NY: When Medical Licenses Are Suspended
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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Ins Law 5109 and the failure to promulgate regulations thereto is not fatal to a Mallela defense
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Dec 1, 2010Was this article helpful?
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.
