As I have written in the past, the New York Court of Appeals in State Farm Mut. Auto. Ins. Co. v. Mallela, just last 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 (see prior post).

Justic Moskowitz recently held in Allstate Ins. Co. v. Belt Parkway Imaging, P.C. that Mallela can be applied retroactively to cover those claims that matured prior to April 4, 2002 (the when the Superintendent of Insurance excluded from the meaning of "basic economic loss" payments made to unlicensed or fraudulently licensed providers).   Justice  Moskowitz cited three reasons for the retroactive application: (1) that Mallela involved claims that matured prior to the regulation’s effective date and, therefore, the Court of Appeals’ decision incorporated claims that matured priot to the effective date of the regulation; (2) the regulation at issue merely clarified the law rather than expressing a sharp change in the law; and (3) the holding comports with the Court of Appeals’ policy choce that it made in Mallela of protecting insurer from fraud.

Thank  you to Damin Toell of Bruno Gerbino & Soriano LLP for bringing my attention to this case.