Key Takeaway
Court grants summary judgment in Mallela case, ruling healthcare providers must meet licensing requirements for no-fault insurance reimbursement under NY Insurance Law.
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.
Summary Judgment Granted on Mallela Case
The Mallela defense has become a cornerstone strategy for insurance companies seeking to deny no-fault benefits to healthcare providers who fail to meet New York State licensing requirements. This defense, rooted in Insurance Law Section 5102(a)(1), requires that providers demonstrate proper licensing and corporate structure to be eligible for reimbursement. The recent decision in Physical Performance Testing of NY v New York Cent. Mut. Fire Ins. Co. provides another clear example of how courts apply these strict requirements.
Understanding the Mallela defense framework is crucial for both healthcare providers and insurance companies navigating no-fault disputes. While providers must ensure they meet all licensing requirements, insurance companies can use this defense when arbitration is demanded by applicants.
Jason Tenenbaum’s Analysis:
Physical Performance Testing of NY v New York Cent. Mut. Fire Ins. Co., 2013 NY Slip Op 50581(U)(App. Term 1st Dept. 2013)
The Court was clear: “It is well-settled that a provider of healthcare services is not eligible for reimbursement of assigned first-party no-fault benefits “under section 5102(a)(1) of the Insurance Law if the provider fails to meet any applicable New York State or local licensing requirement necessary to perform such service in New York”
…
“Applying these principles to the matter at bar, Mutual has made a prima facie showing of entitlement to summary judgment dismissing the complaints by demonstrating that the services rendered by Physical are not reimbursable expenses under the No-Fault Law. In opposition, Physical failed to raise a triable issue of fact with respect to its claims because they were not performed by a medical professional corporation, or a licensed health provider.”
Key Takeaway
This decision reinforces that healthcare providers must meet all licensing requirements to receive no-fault insurance reimbursement. Courts will grant summary judgment when insurance companies demonstrate that services were not performed by properly licensed entities or medical professional corporations. Provider compliance with licensing requirements is non-negotiable under New York’s no-fault law.
Legal Update (February 2026): Since this 2013 post, New York’s no-fault regulatory framework under Insurance Law Section 5102 has undergone several amendments affecting provider eligibility requirements and licensing standards. Additionally, Department of Financial Services regulations governing healthcare provider qualifications and corporate structure requirements may have been updated. Practitioners should verify current provisions of Section 5102(a)(1) and related DFS regulations when applying Mallela defense strategies or assessing provider eligibility for no-fault reimbursement.
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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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More Mallela issues Analysis
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Apr 30, 2019Dr. Andrew Carothers, we salute you.
Appellate Term affirms jury verdict against Dr. Carothers' medical practice in no-fault insurance case involving unlicensed ownership claims and regulatory compliance issues.
Jul 30, 2013Ins Law 5109 and the failure to promulgate regulations thereto is not fatal to a Mallela defense
First Department rejects argument that lack of regulations under Insurance Law 5109 prevents Mallela defenses, finding such a result would be absurd and contrary to fraud...
Dec 1, 2010Professional Service LLC Dissolution in NY: When Medical Licenses Are Suspended
Analysis of A.B. Med. Servs. v Travelers case on professional service LLC dissolution when medical licenses are suspended and asset recovery rights in New York.
Dec 20, 2009Carothers
Court examines fraudulent incorporation under Mallela standard, analyzing Business Corporation Law requirements for professional service corporations in no-fault insurance case.
Apr 6, 2017Common 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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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.
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.