A Texas appeals court ruled that United Healthcare must give up its pursuit of a more than $2 million refund sought from Low-T Physicians Service and affiliated entities after an audit showed that it had overpaid.
The Low-T groups and United Healthcare had been negotiating the claim when Low-T proposed a $24,665 settlement. Low-T sent six copies of the settlement proposal, including copies of the check, to the many addresses used during the negotiations and a seventh settlement proposal, with the real check, to a Wells Fargo lockbox.
As was customary for the lockbox personnel, they scanned the letter into the United Healthcare document-tracking system and deposited the check. In court, United Healthcare admitted that at least two copies of the proposal had been received on September 5, 2018, and that the lockbox received the check on September 11, 2018. After the check was deposited, United Healthcare emailed the group’s general counsel rejecting the settlement.
The Second Appellate District of Texas Court of Appeals agreed with the trial court, ruling that the cashed check bearing the words “full and final payment” and the claim number constituted accord and satisfaction under the Texas Uniform Commercial Code. The court noted that United Healthcare must accept the check as full payment because it should have known that the check was offered in full satisfaction if it had exercised due diligence. Since the proposed settlement letter should have been received six days before the check was cashed, United Healthcare had plenty of time to discover the proposal and reject the settlement beforehand.
Cashed check costs United Healthcare more than $2M, ABA Journal (January 11, 2023)
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