As most of you probably know, the New York Court of Appeals in State Farm Mut. Auto. Ins. Co. v. Mallela, earlier this year, determined that No-Fault insurers can withhold payment for medical services provided by fraudulently incorporated enterprises to which patients have assigned claims.  Notably, the Court did not expressly state whether this holding was to apply prospectively or retroactively; the issue was before the Court from a certified question from the United States Court of Appeals for the Second Circuit.

Judge Markey in Multiquest, P.L.L.C. v. Allstate Ins. Co. determined that the Court of Appeals did not intend for the Mallela decision to have retroactive effect.  He reasoned that the Court of Appeals likely knew the administrative difficulties it would create if the holding applied retroactively.  He also noted that applying the holding retroactively would raise property right issues.  The decision provides an excellent analysis of both sides of the issue.