• 347-746-6001
  • contact@beynensonlaw.com
Beynenson Law
Beynenson Law
    • No-Fault Collections
    • Billing and Collections
    • Provider Defense
  • How We Work
  • About
    • All Research & Data
    • Search Case Law & Regulations
    • New Decisions
    • Decisions by Court
    • Legal Questions
    • No-Fault Regulations
    • Claim Process & Deadlines
    • Arbitrator Scorecard
    • Arbitration Results by Provider
    • Ask No-Fault AI
  • Contact
  • East Hampton, New York

  • 347-746-6001
  • contact@beynensonlaw.com
    • No-Fault Collections
    • Billing and Collections
    • Provider Defense
  • How We Work
  • About
    • All Research & Data
    • Search Case Law & Regulations
    • New Decisions
    • Decisions by Court
    • Legal Questions
    • No-Fault Regulations
    • Claim Process & Deadlines
    • Arbitrator Scorecard
    • Arbitration Results by Provider
    • Ask No-Fault AI
  • Contact
July 26, 2006

Midborough Acupuncture P.C. v State Farm Ins. Co. (2006 NY Slip Op 26360)

https://www.beynensonlaw.com/case-law/midborough-acupuncture-p-c-v-state-farm-ins-co-2006-ny-slip-op-26360/

Court
Appellate Term, Second Department
Decided
July 26, 2006
Citation
2006 NY Slip Op 26360 · 13 Misc 3d 58
Posture
Summary judgment
Outcome
Insurer prevailed
Later treatment
Followed in 3 later decisions (see Cited by)
Issues
Fraudulent incorporation (Mallela) Discovery and procedure
Legal questions
Mallela defense: preclusion and discovery · Claimant's prima facie case on motions (see the maps)
Cite as
Midborough Acupuncture P.C. v State Farm Ins. Co., 13 Misc 3d 58 (App Term, 2d Dept 2006)

Posture, outcome, issues and treatment by other decisions are Beynenson Law’s classification. Treatment labels are assigned by a language model reading the citing decision; negative and appeal-history labels are checked by a second reader.

Summary

Editorial summary by Beynenson Law, not part of the court’s decision.

An insurer's fraudulent-incorporation defense survives an untimely denial, and discovery into provider ownership and licensing is material. Although the provider established its prima facie case and the insurer failed to prove timely denial or verification tolling, eligibility under Mallela remained contested. Under 11 NYCRR 65-3.16 (a) (12), Education Law § 8212 and Business Corporation Law §§ 1503 (b) and 1507, licensing information bore on reimbursement eligibility. The Appellate Term, Second Department, reversed, denied the provider summary judgment as premature under CPLR 3212 (f), and granted the insurer's dismissal cross motion only to compel material discovery under CPLR 3101 within 30 days of the resulting order or another reasonable period stipulated in writing; a separate concurrence agreed only with the result.

Reported in New York Official Reports at Midborough Acupuncture P.C. v State Farm Ins. Co. (2006 NY Slip Op 26360)

Midborough Acupuncture P.C. v State Farm Ins. Co.
2006 NY Slip Op 26360 [13 Misc 3d 58]
Accepted for Miscellaneous Reports Publication
AT2
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
As corrected through Wednesday, November 15, 2006

[*1]

Midborough Acupuncture P.C., as Assignee of Jose Nunez, Respondent,
v
State Farm Ins. Co., Appellant.

Supreme Court, Appellate Term, Second Department, July 26, 2006

APPEARANCES OF COUNSEL

McDonnell & Adels, P.C., Garden City (David S. Rubackin of counsel), for appellant. Gary Tsirelman, P.C., Brooklyn, for respondent.

{**13 Misc 3d at 59} OPINION OF THE COURT

Memorandum.

Order reversed, without costs, plaintiff’s motion for summary judgment denied and defendant’s cross motion to dismiss the complaint granted to the extent of directing that plaintiff shall respond to those discovery demands which seek information regarding whether plaintiff was fraudulently incorporated, within 30 days of the date of the order entered hereon or within such other reasonable time period as the parties stipulate to in writing.

In this action to recover $1,107.51 in first-party no-fault benefits for health care services rendered to its assignor, plaintiff established a prima facie entitlement to summary judgment by proof that it submitted claims, setting forth the fact and the amounts of the losses sustained, and that payment of no-fault benefits was overdue (see Insurance Law § 5106 [a]; Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742 [2004]; Amaze Med. Supply v Eagle Ins. Co., 2 Misc 3d 128[A], 2003 NY Slip Op 51701[U] [App Term, 2d & 11th Jud Dists 2003]). Defendant failed to deny the claims within the 30-day claim determination period and failed to establish that it tolled the statutory time period by mailing verification and follow-up requests to plaintiff (see e.g. Ocean Diagnostic Imaging P.C. v Travelers Indem. Co., 7 Misc 3d 133[A], 2005 NY Slip Op 50644[U] [App Term, 2d & 11th Jud Dists 2005]). Consequently, defendant is precluded from raising most defenses (see Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274, 282 [1997]). Nevertheless, the defense that plaintiff, a provider of health care services, is not eligible for reimbursement of no-fault benefits (see State Farm Mut. Auto. Ins. Co. v Mallela, 4 NY3d 313 [2005]) is not subject to preclusion (see A.B. Med. Servs. PLLC v Prudential Prop. & Cas. Ins. Co., 11 Misc 3d 137[A], 2006 NY Slip Op 50504[U] [App Term, 2d & 11th Jud Dists 2006]). Moreover, summary judgment should be denied where{**13 Misc 3d at 60} the opposition papers set forth that facts essential to justify opposition may exist but cannot then be stated (see CPLR 3212 [f]).

In Mallela (4 NY3d 313 [2005], supra), the Court of Appeals found that insurers may withhold payment of first-party no-fault benefits provided by fraudulently licensed medical service corporations to which patients have assigned their claims. Consequently, we find that discovery requests seeking information to determine whether the owners of a medical service corporation are improperly licensed are germane to the question of whether said corporation is eligible for reimbursement. Pursuant to 11 NYCRR 65-3.16 (a) (12),

“A provider of health care services is not eligible for reimbursement 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[s] in New York or meet any applicable licensing requirement necessary to perform such service in any other state in which such service is performed.”

The Education Law provides that only persons licensed or certified can practice acupuncture in the State of New York (see Education Law § 8212). The Business Corporation Law provides that each shareholder, director or officer of the corporation must be licensed to practice the profession for which the corporation was organized (see Business Corporation Law § 1503 [b]; § 1507).

We find that defendant’s papers establish that so much of defendant’s discovery requests as seek information regarding whether plaintiff was fraudulently incorporated are material and necessary (see CPLR 3101) and, thus, defendant’s papers set forth that facts essential to justify opposition may exist but cannot now be stated. Consequently, plaintiff’s motion for summary judgment is premature pending the completion of discovery (see CPLR 3212 [f]). It is noted that plaintiff did not oppose the cross motion in the court below. Accordingly, plaintiff’s motion for summary judgment is denied and defendant’s cross motion is granted to the extent of directing that plaintiff shall respond to defendant’s discovery demands which seek information regarding the ownership, control and licensing of plaintiff corporation within 30 days of the date of the order entered hereon.{**13 Misc 3d at 61}

Golia, J.P. (concurring with the result only). While I agree with the ultimate disposition in the decision reached by the majority, I wish to emphasize that I am constrained to agree with certain propositions of law set forth in cases cited therein which are inconsistent with my prior expressed positions and generally contrary to my views.

Rios and Belen, JJ., concur; Golia, J.P., concurs in a separate memorandum.

Legal questions (2)

Questions of no-fault law this decision rules on, from our Legal Questions pages. Bars count the decisions on the question by year and court, coloured by category; circles are this decision and the decisions on the question it cites or that cite it. Point at a bar or circle for details. The categories and summaries are Beynenson Law’s classification, made by a language model and checked by a second reading.

Mallela defense: preclusion and discovery

Open the full map

May the insurer raise and investigate a Mallela (fraudulent incorporation) defense, or is it precluded, waived or denied discovery?

This decision: Insurer may raise or investigate the Mallela defense here

Held the ineligibility defense was not precluded by the untimely denial and that discovery on ownership, control and licensing was material and necessary, so the provider's summary judgment was premature.

  • Court of AppealsCt App 1
  • Appellate DivisionApp Div 7
  • Appellate TermApp Term 72
  • Trial courtsTrial 56
2005, Court of Appeals: 1 decision (1 Defense may be pursued)2021, Appellate Division: 1 decision (1 Defense may be pursued)2019, Appellate Division: 2 decisions (1 Defense may be pursued, 1 Defense barred)2017, Appellate Division: 1 decision (1 Defense may be pursued)2016, Appellate Division: 1 decision (1 Defense may be pursued)2011, Appellate Division: 1 decision (1 Defense may be pursued)2008, Appellate Division: 1 decision (1 Defense may be pursued)2019, Appellate Term: 1 decision (1 Defense may be pursued)2018, Appellate Term: 2 decisions (2 Defense may be pursued)2017, Appellate Term: 2 decisions (2 Defense may be pursued)2014, Appellate Term: 2 decisions (2 Defense may be pursued)2013, Appellate Term: 5 decisions (5 Defense may be pursued)2012, Appellate Term: 8 decisions (8 Defense may be pursued)2011, Appellate Term: 8 decisions (7 Defense may be pursued, 1 Defense barred)2010, Appellate Term: 9 decisions (7 Defense may be pursued, 2 Defense barred)2009, Appellate Term: 7 decisions (7 Defense may be pursued)2008, Appellate Term: 8 decisions (7 Defense may be pursued, 1 Defense barred)2007, Appellate Term: 7 decisions (7 Defense may be pursued)2006, Appellate Term: 6 decisions (6 Defense may be pursued)2025, Appellate Term: 7 decisions (7 Defense may be pursued)2023, Trial courts: 2 decisions (2 Defense may be pursued)2021, Trial courts: 4 decisions (3 Defense may be pursued, 1 Defense barred)2019, Trial courts: 1 decision (1 Defense may be pursued)2017, Trial courts: 4 decisions (2 Defense may be pursued, 2 Defense barred)2015, Trial courts: 3 decisions (3 Defense may be pursued)2013, Trial courts: 2 decisions (1 Defense may be pursued, 1 Defense barred)2012, Trial courts: 6 decisions (1 Defense may be pursued, 5 Defense barred)2011, Trial courts: 1 decision (1 Defense barred)2010, Trial courts: 3 decisions (3 Defense barred)2009, Trial courts: 4 decisions (3 Defense may be pursued, 1 Defense barred)2008, Trial courts: 6 decisions (5 Defense may be pursued, 1 Defense barred)2007, Trial courts: 2 decisions (2 Defense may be pursued)2006, Trial courts: 5 decisions (5 Defense may be pursued)2005, Trial courts: 9 decisions (5 Defense may be pursued, 4 Defense barred)2025, Trial courts: 2 decisions (2 Defense may be pursued)2026, Trial courts: 2 decisions (2 Defense may be pursued)This decision
20052010201520202025
Defense may be pursuedDefense barredThis decisionCites it or cited by itCited or followed

Of the 136 decisions on this question in the Second Department courts and the Court of Appeals, 112 (this one included) are in the same category. One decision in other departments that cites or is cited by this one is on the full map.

Claimant's prima facie case on motions

Open the full map

On summary judgment or another pretrial motion, what must a no-fault claimant show to establish its prima facie case?

This decision: Claimant's proof held to make out its prima facie case (rules on the question, but another ground decided the case)

Held the provider established its prima facie case by proof that it submitted claims setting forth the fact and amount of loss and that payment was overdue.

  • Court of AppealsCt App 2
  • Appellate DivisionApp Div 81
  • Appellate TermApp Term 843
  • Trial courtsTrial 139
2015, Court of Appeals: 1 decision (1 Proof sufficient)2007, Court of Appeals: 1 decision (1 Proof sufficient)2022, Appellate Division: 1 decision (1 Proof sufficient)2019, Appellate Division: 1 decision (1 Proof sufficient)2014, Appellate Division: 10 decisions (9 Proof sufficient, 1 Overdue not shown)2013, Appellate Division: 2 decisions (2 Proof sufficient)2012, Appellate Division: 2 decisions (2 Proof sufficient)2011, Appellate Division: 11 decisions (11 Proof sufficient)2010, Appellate Division: 3 decisions (2 Proof sufficient, 1 Overdue not shown)2009, Appellate Division: 3 decisions (2 Proof sufficient, 1 Other element missing)2008, Appellate Division: 8 decisions (6 Proof sufficient, 1 Overdue not shown, 1 Business-record foundation lacking)2007, Appellate Division: 16 decisions (13 Proof sufficient, 2 Mailing/receipt not shown, 1 Overdue not shown)2006, Appellate Division: 5 decisions (3 Proof sufficient, 1 Mailing/receipt not shown, 1 Other element missing)2005, Appellate Division: 5 decisions (5 Proof sufficient)2004, Appellate Division: 11 decisions (10 Proof sufficient, 1 Overdue not shown)2026, Appellate Division: 1 decision (1 Proof sufficient)2003, Appellate Division: 2 decisions (1 Proof sufficient, 1 Overdue not shown)2022, Appellate Term: 14 decisions (2 Mailing/receipt not shown, 12 Overdue not shown)2021, Appellate Term: 5 decisions (1 Proof sufficient, 4 Overdue not shown)2020, Appellate Term: 13 decisions (13 Overdue not shown)2019, Appellate Term: 23 decisions (22 Overdue not shown, 1 Other element missing)2018, Appellate Term: 26 decisions (3 Proof sufficient, 1 Mailing/receipt not shown, 22 Overdue not shown)2017, Appellate Term: 38 decisions (3 Proof sufficient, 1 Mailing/receipt not shown, 34 Overdue not shown)2016, Appellate Term: 41 decisions (7 Proof sufficient, 34 Overdue not shown)2015, Appellate Term: 44 decisions (12 Proof sufficient, 1 Mailing/receipt not shown, 30 Overdue not shown, 1 Business-record foundation lacking)2014, Appellate Term: 22 decisions (10 Proof sufficient, 12 Overdue not shown)2013, Appellate Term: 34 decisions (17 Proof sufficient, 11 Overdue not shown, 6 Business-record foundation lacking)2012, Appellate Term: 32 decisions (3 Proof sufficient, 2 Mailing/receipt not shown, 11 Overdue not shown, 16 Business-record foundation lacking)2011, Appellate Term: 29 decisions (6 Proof sufficient, 1 Mailing/receipt not shown, 13 Overdue not shown, 9 Business-record foundation lacking)2010, Appellate Term: 36 decisions (22 Proof sufficient, 3 Mailing/receipt not shown, 10 Business-record foundation lacking, 1 Other element missing)2009, Appellate Term: 52 decisions (28 Proof sufficient, 3 Mailing/receipt not shown, 21 Business-record foundation lacking)2008, Appellate Term: 49 decisions (16 Proof sufficient, 1 Mailing/receipt not shown, 32 Business-record foundation lacking)2007, Appellate Term: 104 decisions (8 Proof sufficient, 2 Mailing/receipt not shown, 94 Business-record foundation lacking)2006, Appellate Term: 112 decisions (76 Proof sufficient, 26 Mailing/receipt not shown, 1 Overdue not shown, 6 Business-record foundation lacking, 3 Other element missing)2005, Appellate Term: 90 decisions (84 Proof sufficient, 5 Mailing/receipt not shown, 1 Overdue not shown)2004, Appellate Term: 57 decisions (43 Proof sufficient, 10 Mailing/receipt not shown, 4 Other element missing)2003, Appellate Term: 7 decisions (7 Proof sufficient)2023, Appellate Term: 3 decisions (3 Overdue not shown)2024, Appellate Term: 7 decisions (1 Mailing/receipt not shown, 6 Overdue not shown)2025, Appellate Term: 3 decisions (1 Proof sufficient, 1 Mailing/receipt not shown, 1 Overdue not shown)2026, Appellate Term: 2 decisions (2 Mailing/receipt not shown)2023, Trial courts: 2 decisions (2 Proof sufficient)2022, Trial courts: 4 decisions (2 Proof sufficient, 2 Overdue not shown)2021, Trial courts: 11 decisions (6 Proof sufficient, 2 Mailing/receipt not shown, 2 Overdue not shown, 1 Other element missing)2020, Trial courts: 5 decisions (3 Proof sufficient, 1 Overdue not shown, 1 Other element missing)2019, Trial courts: 6 decisions (5 Proof sufficient, 1 Mailing/receipt not shown)2018, Trial courts: 2 decisions (2 Overdue not shown)2017, Trial courts: 3 decisions (1 Proof sufficient, 1 Overdue not shown, 1 Other element missing)2016, Trial courts: 4 decisions (4 Proof sufficient)2013, Trial courts: 1 decision (1 Proof sufficient)2012, Trial courts: 5 decisions (4 Proof sufficient, 1 Business-record foundation lacking)2011, Trial courts: 3 decisions (2 Proof sufficient, 1 Business-record foundation lacking)2010, Trial courts: 3 decisions (2 Proof sufficient, 1 Business-record foundation lacking)2009, Trial courts: 7 decisions (7 Proof sufficient)2008, Trial courts: 14 decisions (8 Proof sufficient, 1 Mailing/receipt not shown, 1 Overdue not shown, 4 Business-record foundation lacking)2007, Trial courts: 7 decisions (5 Proof sufficient, 2 Business-record foundation lacking)2006, Trial courts: 16 decisions (13 Proof sufficient, 2 Overdue not shown, 1 Other element missing)2005, Trial courts: 22 decisions (14 Proof sufficient, 5 Mailing/receipt not shown, 3 Business-record foundation lacking)2004, Trial courts: 15 decisions (9 Proof sufficient, 2 Mailing/receipt not shown, 4 Other element missing)2025, Trial courts: 2 decisions (1 Proof sufficient, 1 Mailing/receipt not shown)2026, Trial courts: 4 decisions (3 Proof sufficient, 1 Mailing/receipt not shown)2014, Trial courts: 1 decision (1 Proof sufficient)2015, Trial courts: 1 decision (1 Proof sufficient)2024, Trial courts: 1 decision (1 Proof sufficient)This decision
20052010201520202025
Proof sufficientMailing/receipt not shownOverdue not shownBusiness-record foundation lackingOther element missingThis decisionCites it or cited by itCited or followed

Of the 1,065 decisions on this question in the Second Department courts and the Court of Appeals, 513 (this one included) are in the same category.

Cited in this decision

A label shows how this decision treated the case it cites.

  • Mary Immaculate Hosp. v Allstate Ins. Co. (2004 NY Slip Op 02359)The hospitals established entitlement to summary judgment by proving that statutory billing forms were mailed and received and payment was overdue.
  • Amaze Med. Supply v Eagle Ins. Co. (2003 NY Slip Op 51701(U))A provider's completed claim forms establish its prima facie case without additional medical proof when the insurer is precluded.
  • Ocean Diagnostic Imaging P.C. v Travelers Indem. Co. (2005 NY Slip Op 50644(U))The insurer's proof failed to establish a founded belief that the collision was part of an insurance fraud scheme.
  • State Farm Mut. Auto. Ins. Co. v Mallela (2005 NY Slip Op 02416) FollowedFraudulently incorporated medical providers are ineligible for no-fault reimbursement under 11 NYCRR 65-3.16 (a) (12).
  • A.B. Med. Servs. PLLC v Prudential Prop. & Cas. Ins. Co. (2006 NY Slip Op 50504(U)) FollowedThe providers obtained partial summary judgment because denials were untimely or defenses lacked evidentiary support.

Cited by (12)

A label shows how the later decision treated this one.

  • Matter of Andrew Carothers, M.D., P.C. v Insurance Cos. Represented by Bruno, Gerbino & Soriano LLP (2006 NY Slip Op 26372) FollowedAn insurer need not show conduct tantamount to fraud before obtaining litigation discovery on a provider's alleged fraudulent incorporation.
  • RLC Med., P.C. v Allstate Prop. & Cas. Ins. Co. (2009 NY Slip Op 52691(U)) FollowedThe medical provider's summary judgment motion was premature because discovery concerning fraudulent incorporation remained outstanding.
  • Okslen Acupuncture, PC v State Farm Mut. Auto. Ins. Co. (2021 NY Slip Op 50652(U)) FollowedThe provider's repeated discovery objections violated two orders compelling disclosure on the insurer's fraudulent-incorporation defense.
  • Lexington Acupuncture, P.C. v General Assur. Co. (2012 NY Slip Op 22047)An insurer may obtain Mallela discovery on sufficient allegations of fraudulent incorporation despite not pleading that defense.
  • St. Paul Travelers Ins. Co. v Nandi (2007 NY Slip Op 51154(U))An insurer obtained preliminary injunctions against acupuncture collection suits based on evidence of provider licensing defects.
  • Medical Polis, P.C. v Progressive Specialty Ins. Co. (2012 NY Slip Op 50342(U))An insurer may obtain discovery on an unpleaded Mallela defense when sufficient allegations of fraudulent incorporation support the request.
  • Quality Med. Care, P.C. v New York Cent. Mut. Fire Ins. Co. (2010 NY Slip Op 50262(U))A medical corporation solely owned by a physician uncertified in acupuncture cannot recover no-fault benefits for an employee's acupuncture services.
  • Cambridge Med., P.C. v Nationwide Prop. & Cas. Ins. Co. (2008 NY Slip Op 50629(U))An insurer must show good cause for corporate-eligibility verification, while litigation discovery requires materiality and necessity.
  • Apazidis, M.D., P.C. v State Farm Mut. Auto. Ins. Co. (2021 NY Slip Op 50498(U))The insurer's summary judgment motion failed on hearsay proof of good cause and verification notices naming a different provider.
  • PDG Psychological, P.C. v State Farm Mut. Ins. Co. (2007 NY Slip Op 51757(U))The insurer's unrefuted need for discovery on licensing defeated the provider's summary judgment motion.
Show all 12 citing decisions
  • Jiang Acupuncture PC v State Farm Ins. Co. (2023 NY Slip Op 50961(U))
  • Renelique v Foremost Signature Ins. Co. (2023 NY Slip Op 51226(U))

Similar decisions

  • Lexington Acupuncture, P.C. v State Farm Ins. Co. (2006 NY Slip Op 26251)The provider's summary judgment motion was premature because discovery could establish fraudulent incorporation and reimbursement ineligibility.
  • Midwood Acupuncture, P.C. v State Farm Mut. Auto. Ins. Co. (2007 NY Slip Op 50052(U))Fraudulent licensing under 11 NYCRR 65-3.16 (a) (12) is a nonwaivable defense outside the 30-day preclusion rule.
  • Crossbay Acupuncture, P.C. v State Farm Mut. Auto. Ins. Co. (2007 NY Slip Op 27135)The insurer raised issues concerning the provider's actual operation and control that required discovery before summary judgment.
  • First Help Acupuncture P.C. v State Farm Ins. Co. (2006 NY Slip Op 51043(U))Fraudulent licensing under 11 NYCRR 65-3.16 (a) (12) is a nonwaivable defense outside the 30-day preclusion rule.
  • Citywide Social Work & Psychological Servs., P.L.L.C. v State Farm Mut. Auto. Ins. Co. (2006 NY Slip Op 51831(U))An untimely denial does not preclude a defense that a provider is fraudulently licensed and ineligible for no-fault reimbursement.
Beynenson Law

No-fault collections for healthcare providers across New York State, with billing available together with collections.

Request a free claims review
About the firm

Contact

  • East Hampton, New York

  • 347-746-6001
  • contact@beynensonlaw.com
  • Contact form

Services

  • No-Fault Collections
  • Billing and Collections
  • Provider Defense

Research & Data

  • All Research & Data
  • Search Case Law & Regulations
  • New Decisions
  • Decisions by Court
  • Legal Questions
  • No-Fault Regulations
  • Claim Process & Deadlines
  • Arbitrator Scorecard
  • Arbitration Results by Provider
  • Ask No-Fault AI

©2026 The Beynenson Law Group, PC. Terms of Use Privacy Policy

Site by khrystev.dev

Attorney Advertising. Prior results do not guarantee a similar outcome. This website provides general information, not legal advice, and using it does not create an attorney-client relationship. Do not send confidential information through this site.