Carmen Gardner v. Geico General Insurance Company ( 2023 )

RENDERED: MAY 12, 2023; 10:00 A.M.
NOT TO BE PUBLISHED
Commonwealth of Kentucky
Court of Appeals
NO. 2022-CA-0306-ME
CARMEN GARDNER AND MARK
RUDOLPH APPELLANTS
APPEAL FROM JEFFERSON CIRCUIT COURT
v. HONORABLE CHARLES L. CUNNINGHAM, JR., JUDGE
ACTION NO. 18-CI-003420
GEICO GENERAL INSURANCE
COMPANY APPELLEE
OPINION
AFFIRMING
** ** ** ** **
BEFORE: THOMPSON, CHIEF JUDGE; JONES AND KAREM, JUDGES.
JONES, JUDGE: The Appellants, Carmen Gardner and Mark Rudolph, seek
review of the Jefferson Circuit Court’s February 11, 2022 order (1) granting
judgment in favor of the Appellee, GEICO General Insurance Company
(“GEICO”); and (2) denying Appellants’ motion to certify a class pursuant to CR1
23 as moot. For the reasons below, we affirm.
I. BACKGROUND
The basic facts are not disputed. Appellants each had separate motor
vehicle insurance policies with GEICO, which included basic reparation benefits
(“BRB”) of up to $10,000 per person per accident. Gardner was injured in a motor
vehicle accident that occurred on or about March 6, 2017; Rudolph was injured in
a motor vehicle accident that occurred on or about June 29, 2017.
Gardner and Rudolph each submitted timely notifications to GEICO
along with applications for BRB. Gardner sought BRB for medical care she
received in March and April 2017 from Exacta Care and Kentuckiana Pain
Associates totaling $10,197.30. Rudolph sought BRB for medical care he received
in September and October 2017 from Kort, LLC and Shannon S. Voor, PhD,
PLLC, totaling $2,718.00.
After receiving Appellants’ respective BRB applications, GEICO
tendered payment to Appellants’ medical providers along with Explanation of
Reviews (“EORs”). The EORs indicated that GEICO had reduced certain line-
item charges billed by the medical providers. For example, on March 8, 2017,
Exacta Care billed Gardner $400.00 for a thirty-minute, new-patient visit, but
1
Kentucky Rules of Civil Procedure.
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GEICO only tendered payment of $240.41 for the visit. (Record (“R.”) at 115.)
The EOR stated that the billed amount was reduced because the “service charge
exceeds an amount that is reasonable when compared to the charges of other
providers in the same geographic area.” (R. at 115-16.) The EOR further provided
in bold print that “[p]ursuant to KRS[2] 304.39-245, [GEICO is] offering the
enclosed check amount for medical charges that were reasonable and necessary in
relation to the covered automobile accident.”
In total, Gardner submitted medical bills to GEICO totaling
$10,197.30, but GEICO tendered only $5,632.66 to Gardner’s medical providers.
Similarly, Rudolph submitted medical bills totaling $2,718.00, but GEICO
tendered only $1,460.58 as payment for those bills.3 The medical providers
cashed the checks GEICO tendered them without any indication that they were
doing so under a reservation of right. Despite having provided affidavits as part of
this action that they have not written off the balances, none of the providers has
sought payment directly from either Gardner or Rudolph.
After learning that GEICO had reduced their bills, Appellants filed a
putative class action in Jefferson Circuit Court seeking to recover damages as a
2
Kentucky Revised Statutes.
3
While Gardner and Rudolph are the only named plaintiffs, their complaint included allegations
concerning the bills submitted by putative class member R. Abbas who submitted medical bills
to GEICO totaling $6,263.00 that were reduced to $4,376.84 by GEICO.
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result of GEICO “making a unilateral reduction in payment of its insureds’
incurred medical charges, leaving its insureds legally responsible for the balance
and subject to a lawsuit or collection efforts from the medical provider.” (R. at 1-
2.) As relief, Appellants demanded payment from GEICO for the difference
between the submitted bills and the reduced amounts actually paid, 18% interest on
those outstanding balances, and attorney fees. (R. at 18-19.) Additionally,
Appellants sought declaratory and injunctive relief, including the protection of a
release and indemnification from GEICO on all medical bills GEICO unilaterally
reduced and only partially paid to their medical providers. (R. at 18.)
After being served with Appellants’ complaint, GEICO moved the
trial court for an extension of time to answer or file a dispositive motion. In the
interim, on July 18, 2018, Appellants filed their motion for class certification
kicking off a multi-year period of motions and related briefings, including several
hearings before the trial court concerning class certification as well as the legal
viability of Appellants’ substantive claims against GEICO.4 Ultimately,
Appellants’ motions for class certification, for summary judgment, and for
4
During this period, the parties also unsuccessfully tried to reach a mediated class settlement.
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declaratory/injunctive relief,5 along with GEICO’s motion to dismiss, came before
the trial court for determination.6
On February 18, 2022, the trial court entered an order addressing the
pending motions. The trial court determined that Appellants had failed to allege
individually viable legal claims and granted judgment in favor of GEICO. It then
denied Appellants’ motion for class certification as moot. This appeal followed.
II. CLASS CERTIFICATION
Pursuant to CR 23.03(1), “the court must determine by order whether
to certify [an] action as a class action.” Jones v. Clark County, 635 S.W.3d 54, 56
n.3 (Ky. 2021). CR 23.06 allows an immediate, interlocutory appeal of “[a]n order
granting or denying class action certification . . . within 10 days after the order is
entered.” We review the circuit court’s determination as to class certification for
abuse of discretion. Hensley v. Haynes Trucking LLC, 549 S.W.3d 430, 444 (Ky.
2018). “The test for abuse of discretion is whether the trial judge’s decision was
arbitrary, unreasonable, unfair, or unsupported by sound legal principles.”
Commonwealth v. English, 993 S.W.2d 941, 945 (Ky. 1999).
5
Appellants admit that GEICO changed its billing practices effective November 1, 2018, so any
declaratory judgment would necessarily be limited to the period before the change.
6
GEICO attached materials to its motion to dismiss that went beyond the allegations contained
in Appellants’ motion to dismiss. Additionally, Appellants included affidavits from the medical
providers and other materials as part of their motion for summary judgment. Accordingly,
GEICO’s motion to dismiss is more properly considered a motion for summary judgment. Hoke
v. Cullinan, 914 S.W.2d 335, 338 (Ky. 1995).
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While CR 23.03(1) requires the trial court to decide “[a]t an early
practicable time . . . whether to certify the action as a class action[,]” there is no
rule that dictates the order in which the court must address the class certification
decision relative to the disposition of other motions. WILLIAM B. RUBENSTEIN,
NEWBERG AND RUBENSTEIN ON CLASS ACTIONS § 7:8 (6th ed. 2022). When a
defendant moves for dismissal or summary judgment before a ruling on class
certification, “courts view the defendant as deliberately waiving the possibility of a
victory against the whole class . . . [and] therefore permit such motions to go
forward so long as a defendant is willing to waive the ‘protections’ that
certification could offer.” Id. at § 7:10 (footnote omitted); Thompson v. County of
Medina, Oh., 29 F.3d 238, 241 (6th Cir. 1994)7 (quoting Wright v. Schock, 742
F.2d 541, 545-46 (9th Cir. 1984) (“Rule 23 clearly favors early determination of
the class issue, but where considerations of fairness and economy dictate
otherwise, and where the defendant consents to the procedure, it is within the
discretion of the district court to decide the motion for summary judgment first.”).
While it is true that Appellants’ motion for class certification was
pending for an unusually long period of time, we cannot conclude this was the
7
Given the similarity between CR 23 and its federal counterpart and in the absence of
controlling Kentucky precedent, we look to federal cases for guidance. “It is well established
that Kentucky courts rely upon Federal caselaw when interpreting a Kentucky rule of procedure
that is similar to its federal counterpart.” Nebraska Alliance Realty Co. v. Brewer, 529 S.W.3d
307, 311 (Ky. App. 2017); Curtis Green & Clay Green, Inc. v. Clark, 318 S.W.3d 98, 105 (Ky.
App. 2010).
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result of any abuse of discretion by the trial court. Appellants’ class certification
motion was filed about the same time as the dispositive motions. The briefing on
the motions was especially voluminous and protracted extending into the early part
of the COVID-19 pandemic. By the time all was said and done, the trial court had
the class certification motion along with several dispositive motions pending
before it as part of a record consisting of over a thousand pages. At various times
throughout the proceedings below, the parties pressed the trial court to rule on the
motions according to whatever sequence they believed was most beneficial to them
at the time. The trial court clearly put a great deal of thought into the most
expedient sequence in which to issue its rulings. After several hearings, the trial
court ultimately determined that deciding the pending dispositive motions relative
to the individual Appellants’ claims was the best way to procced.
The trial court then concluded that GEICO was entitled to summary
judgment on the individual claims. It was on this basis alone that it denied
Appellants’ motion for class certification as moot. In fact, in doing so, the trial
court noted that it would have certified a class had it determined that Appellants
alleged legally viable individual claims against GEICO. “As an aside, if the Court
were to conclude there was an actionable claim set out in Plaintiff’s Complaint and
subsequent pleadings, class certification would be appropriate.” (R. at 1186.)
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It is well established that where dismissal or summary judgment have
been properly granted to the defendant prior to certification, the trial court is free to
deny any pending certification motion as moot without further consideration. “If
the defendant prevails on the summary judgment motion, in most circumstances,
the court will be relieved of the need to rule on the issue of class certification.”
NEWBERG AND RUBENSTEIN ON CLASS ACTIONS § 7:10; Plotnick v. Computer
Sciences Corporation Deferred Compensation Plan for Key Executives, 875 F.3d
160, 164, (4th Cir. 2017) (“Because affirmance of the district court’s grant of
summary judgment disposes of Plotnick and Kennedy’s claims, we decline to
address the district court’s denial of class certification.”); McKinney v. Carlton
Manor Nursing & Rehabilitation Center, Inc., 868 F.3d 461, 463 (6th Cir. 2017)
(holding that the district court “granted summary judgment for [the defendant] and
thus had no need to rule on [the plaintiff’s] class certification motion”); In re
Wholesale Grocery Products Antitrust Litigation, 946 F.3d 995, 1004 (8th Cir.
2019) (“Having affirmed the district court’s grant of summary judgment in favor of
SuperValu, we need not address on appeal Village Market’s challenge to the
district court’s denial of its motion to reconsider class certification, as the question
is moot.”); Eller v. EquiTrust Life Ins. Co., 778 F.3d 1089, 1092 (9th Cir. 2015)
(noting that district court had granted defendant’s motion for summary judgment
and “denied class certification as moot,” then affirming grant of summary
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judgment); Telfair v. First Union Mortg. Corp., 216 F.3d 1333, 1343 (11th Cir.
2000) (denying plaintiff’s motion for class certification, finding that “[w]ith no
meritorious claims, certification of those claims as a class action is moot”); Garcia
v. Veneman, 211 F.R.D. 15, 19 n.2 (D.D.C. 2002) (“Once the court disposes of a
claim, the court need not consider the disposed-of claim as a basis for class
certification.”); Greenlee County, Ariz. v. United States, 487 F.3d 871, 880 (Fed.
Cir. 2007) (“[I]ssues related to class certification were moot in light of [a]
resolution against a plaintiff of a motion to dismiss or for summary judgment.”).
Thus, this appeal is not so much a review of whether the trial court
abused its discretion when it denied certification, as it is about whether the trial
court properly granted summary judgment to GEICO on Appellants’ individual
claims. If summary judgment was properly granted, there was no abuse of
discretion in denying the class certification motion as moot. If summary judgment
was improperly granted, then the class certification decision is clearly not moot
and must be addressed on remand. Accordingly, we now turn to substantive issues
with respect to the viability of Appellants’ individual claims.
III. SUMMARY JUDGMENT
“An appellate court’s role in reviewing a summary judgment is to
determine whether the trial court erred in finding no genuine issue of material fact
exist[ed] and the moving party was entitled to judgment as a matter of law.”
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Feltner v. PJ Operations, LLC, 568 S.W.3d 1, 3 (Ky. App. 2018). The standard of
review for an appellate court is de novo because only legal issues are involved.
Isaacs v. Sentinel Ins. Co. LTD., 607 S.W.3d 678, 681 (Ky. 2020).
Appellants assert that GEICO violated the Kentucky Motor Vehicle
Reparations Act (“MVRA”) by unilaterally reducing its payment of properly
submitted no-fault bills thereby impermissibly shifting the burden of proving the
reasonableness of medical bills and seeking payment of these bills onto the no-
fault claimants. They further assert that the no-fault claimants’ right to sue the
reparations obligor when benefits are not properly paid should, of itself, have
prevented dismissal by the trial court.
Before delving into the specifics of Appellants’ claims, it is necessary
to understand the parties’ basic rights and responsibilities under the MVRA. “By
enacting the MVRA, the legislature intended to create a comprehensive
compulsory insurance system that requires owners to provide vehicle security
covering basic reparation benefits and that imposes legal liability on vehicle
owners for damages or injuries arising out of ownership of or use of the vehicle.”
McGrew v. Stone, 998 S.W.2d 5, 6 (Ky. 1999). Central to accomplishing the
MVRA’s purpose is the statutory mandate that “if [an] accident causing injury
occurs in this Commonwealth every person suffering loss from injury arising out
of maintenance or use of a motor vehicle has a right to basic reparation benefits,
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unless he has rejected the limitation upon his tort rights as provided in KRS
304.39-060(4).” KRS 304.39-030(1) (emphasis added). “The maximum amount
of basic reparation benefits payable for all economic loss resulting from injury to
any one (1) person as the result of one (1) accident shall be ten thousand dollars
($10,000), regardless of the number of persons entitled to such benefits or the
number of providers of security obligated to pay such benefits.” KRS 304.39-
020(2) (emphasis added).
“Loss” under the MVRA is defined as “accrued economic loss
consisting only of medical expense, work loss, replacement services loss, and, if
injury causes death, survivor’s economic loss and survivor’s replacement services
loss.” KRS 304.39-020(5). This case involves the medical expense element of
loss. The MVRA defines “medical expense” as “reasonable charges incurred for
reasonably needed products, services, and accommodations, including those for
medical care, physical rehabilitation, rehabilitative occupational training, licensed
ambulance services, and other remedial treatment and care.” KRS 304.39-
020(5)(a) (emphasis added).
KRS 304.39-210 details how claims are to be presented to and paid
out by the obligor. It provides:
(1) Basic and added reparation benefits are payable
monthly as loss accrues. Loss accrues not when injury
occurs, but as work loss, replacement services loss, or
medical expense is incurred. Benefits are overdue if not
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paid within thirty (30) days after the reparation obligor
receives reasonable proof of the fact and amount of loss
realized, unless the reparation obligor elects to
accumulate claims for periods not exceeding thirty-one
(31) days after the reparation obligor receives reasonable
proof of the fact and amount of loss realized, and pays
them within fifteen (15) days after the period of
accumulation. Notwithstanding any provision of this
chapter to the contrary, benefits are not overdue if a
reparation obligor has not made payment to a provider of
services due to the request of a secured person when the
secured person is directing the payment of benefits
among the different elements of loss. If reasonable proof
is supplied as to only part of a claim, and the part totals
one hundred dollars ($100) or more, the part is overdue if
not paid within the time provided by this section.
Medical expense benefits may be paid by the reparation
obligor directly to persons supplying products, services,
or accommodations to the claimant, if the claimant so
designates.
(2) Overdue payments bear interest at the rate of twelve
percent (12%) per annum, except that if delay was
without reasonable foundation the rate of interest shall be
eighteen percent (18%) per annum.
(3) A claim for basic or added reparation benefits shall be
paid without deduction for the benefits which are to be
subtracted pursuant to the provisions on calculation of
net loss if these benefits have not been paid to the
claimant before the reparation benefits are overdue or the
claim is paid. The reparation obligor is entitled to
reimbursement from the person obligated to make the
payments or from the claimant who actually receives the
payments.
(4) A reparation obligor may bring an action to recover
benefits which are not payable, but are in fact paid,
because of an intentional misrepresentation of a material
fact, upon which the reparation obligor relies, by the
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insured or by a person providing an item of medical
expense. The action may be brought only against the
person providing the item of medical expense, unless the
insured has intentionally misrepresented the facts or
knows of the misrepresentation. An insurer may offset
amounts he is entitled to recover from the insured under
this subsection against any basic or added reparation
benefits otherwise due.
(5) A reparation obligor who rejects a claim for basic
reparation benefits shall give to the claimant prompt
written notice of the rejection, specifying the reason. If a
claim is rejected for a reason other than that the person is
not entitled to the basic reparation benefits claimed, the
written notice shall inform the claimant that he may file
his claim with the assigned claims bureau and shall give
the name and address of the bureau.
KRS 304.39-210.
Pursuant to KRS 304.39-020(5)(a) “[t]here shall be a presumption that
any medical bill submitted [to the obligor] is reasonable.” Id. However, effective
July 15, 1998, the MVRA allows the obligor to “request or negotiate a reduction or
modification of charges from a provider of services to a secured person.” KRS
304.39-245 (emphasis added). The MVRA prohibits a medical provider that
agrees to such a reduction or modification of the charges from billing the secured
person for the balance. Id. The MVRA does not indicate how the insurance
obligor is to conduct a negotiation with the medial provider or set forth what
constitutes acceptance by the medical provider.
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However, in 2014, the Department of Insurance (“Department”)
issued an advisory bulletin detailing how, in its opinion, insurance companies
should proceed when they wish to request a reduction of charges from a medical
provider pursuant to KRS 304.39-245.8 Sharon P. Clark, Kentucky Insurance
Bulletins and Related Materials, KY Bulletin No. 2013-4 (#2), 2014 WL 624668(Feb. 18, 2014). The bulletin is clear that “if the insurer reduces a provider billing
in reference to Kentucky No-Fault benefits, then the insurer must demonstrate to
the Department that a negotiation with the provider has been attempted.” Id. The
bulletin provides examples of evidence of negotiation that the Department believes
comply with KRS 304.39-245 such as:
a statement on the EOB indicating an OFFER of
payment; a documented phone call in the claim log
indicating an attempt by the insurer to negotiate with the
provider; a letter explaining the reduction and indicating
it is an OFFER of payment; or, a contract with a provider
which expressly states the reduction is agreed upon and
which includes reference to Kentucky No-Fault benefits.
KY Bulletin No. 2013-4 (#2), 2014 WL 624668.
8
We note the bulletin is an informal agency guidance not issued pursuant to the Department’s
rulemaking procedures. As such, we are not required to defer to the Department’s interpretation
of the statute. However, this does not mean, we should discount it entirely. “While not
controlling upon the courts by reason of [its] authority, [informal administrative materials like
the bulletin] do constitute a body of experience and informed judgment to which courts and
litigants may properly resort for guidance. The weight of such a judgment in a particular case
will depend upon the thoroughness evident in its consideration, the validity of its reasoning, its
consistency with earlier and later pronouncements, and all those factors which give it power to
persuade, if lacking power to control.” Skidmore v. Swift & Co., 323 U.S. 134, 140, 65 S. Ct.
161, 164, 89 L. Ed. 124 (1944).
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Turning to the facts at hand, GEICO maintains that its process
complied with KRS 304.39-245, and that it produced evidence of sufficient
negotiation such that Appellants’ claims against it must fail. Relying on
Government Employees Insurance Company v Sanders, 569 S.W.3d 923 (Ky.
2018), Appellants assert that GEICO’s actions were unlawful under the MVRA
insomuch as GEICO tried to force a unilateral acceptance of a negotiated sum on
the medical providers instead of having the courts decide the issue.
While the facts of Sanders are somewhat analogous, there are
important differences that make Sanders largely inapposite. The named plaintiffs
in Sanders, Anita Houchins and Jordan Sanders, sought chiropractic care for
injuries they sustained in an automobile accident and presented the bills to GEICO
for payment. After a paper review, GEICO denied BRB coverage, asserting that
the chiropractic care was not reasonably necessary to treat the injuries Houchins
and Sanders sustained in the automobile accident. Houchins and Sanders sued on
behalf of themselves and a putative class, claiming GEICO violated the MVRA by
unilaterally denying them BRB coverage based solely on a paper medical review.
The Kentucky Supreme Court agreed, holding that GEICO could not deny an
otherwise proper claim on the basis that it was not reasonably necessary. Rather,
GEICO was required to make prompt payment and could seek recovery of any
improper payment by filing an action in court against the party who made the
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misrepresentation of a material fact causing the improper payment, as set forth in
KRS 304.39-210(4).
As Sanders made clear, the only way an insurance obligor can rebut
the presumption of reasonableness for care provided is through litigation, using the
process set out in KRS 304.39-210(4). This process requires the obligor to first
pay the claim and then file suit against the party who misrepresented that the care
was necessary. The obligor cannot deny the claim based solely on a paper review.
However, Sanders did not address the situation here, in which the obligor accepts
the claim as related to the fact of care and takes issue only with the amount the
provider billed for that care.
Appellants argue that KRS 304.39-210(4) should apply equally to the
amount of medical bills. This argument overlooks that the fact that, in 1998, the
General Assembly enacted a separate provision, KRS 304.39-245, that governs the
amount of medical bills as distinct from the necessity of the care. The purpose of
this statute was clearly to create a process for obligors and medical providers to
negotiate a bill short of having to burden the courts with such disputes. If we were
to follow Sanders and require the obligor to pay the bill and then file suit to
accomplish any reduction, it would effectively nullify KRS 304.39-245. We
decline to interpret the statute in such a way that would render it meaningless.
The operative question then is whether GEICO complied with KRS 304.39-245.
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While Appellants make much out of what they characterize as
GEICO’s “unilateral” action, KRS 304.39-245 permits the reparations obligor to
take the first step by requesting or negotiating “a reduction or modification of
charges from a provider of services to a secured person.” The statute does not
require the reparations obligor to seek approval from either the courts or the
insured to do so.
Here, GEICO sent the medical providers detailed line-item EORs
listing: the date of service, procedure code, description, charge, reduction amount,
payment amount, and reduction explanation. As related to these claims, the reason
specified by GEICO in each instance was “the service charge exceeds an amount
that is reasonable when compared to other providers in the same geographic area.”
Finally, in bold face type the EORs state: “Pursuant to KRS 304.39-245, we are
offering the enclosed check amount for medical charges that were reasonable and
necessary in relation to the covered automobile accident.”
The Department of Insurance indicated in its bulletin that such a
process demonstrates action on the part of the insurer to negotiate a claim. While
the bulletin is not binding on this Court, we cannot appreciate why such action is
insufficient. In fact, such action has always been the customary manner to dispute
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a billed sum. Cunningham v. Standard Const. Co., 134 Ky. 198, 119 S.W. 765,
767 (1909).9
The EORs constitute a request by the insurance obligor to the medical
providers for a reduction in the amount of the bills. We cannot see any way that
such a procedure violates KRS 304.39-245; in fact, it appears to be exactly how the
General Assembly intended the statute to operate. The larger question is whether
the request was agreed to by the medical providers. If not, then GEICO would
have been required to pay the bills in full and then seek recourse in court as
provided in Sanders. In turn, GEICO’s failure to do so would provide Appellants
with a cause of action against it.
On this point, Weickert v. Alliant Health Systems, Inc., 954 S.W.2d
314, 317 (Ky. 1997), is instructive. Therein, the appellant, James Weickert,
received medical care from the appellee Alliant Health Systems. The care was
covered by Weickert’s insurance company, Indiana State Council of
Plasterers/Cement Masons (“ISCP”). Following its review of the bills, ISCP
determined the amount billed was too high. It sent payment for approximately
9
We note that the rules for accord and satisfaction are slightly different depending on whether
the amount due is liquidated or unliquidated. As between the patient and the medical provider, it
could be held that the sum is liquidated insomuch as there is a direct contractual relationship
between the two. However, the reparation obligor’s duty to pay BRB arises from the MVRA.
Under the MVRA, the obligor is responsible for reasonable charges for necessary medical care.
KRS 304.39-020(5)(a). Even though the bill is presumed reasonable, the presumption is
rebuttable. Therefore, we cannot conclude that the obligor owes a liquidated sum. A
“reasonable” charge cannot be considered liquidated. Warfield Nat. Gas Co. v. Allen, 261 Ky.
840, 88 S.W.2d 989, 991 (1935).
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84% of the total bill. The check tendered by ISCP stated it was a “full and final
settlement.” The check was deposited in Alliant’s account without a reservation of
right to seek the balance of the bill. Alliant then sued Weickert for the balance of
its bill. The Kentucky Supreme Court, however, held that Alliant was barred from
suing where it failed to take “steps to immediately and explicitly reserve its rights
to sue for the balance of the amount owed.” Id. at 316. By cashing the check
tendered by ISCP without the reservation of any right, Alliant had agreed to accept
ISCP’s check as payment in full. Id.
The notation on GEICO’s EORs cited KRS 304.39-245 and was
offered as payment for what it believed was the reasonable amount for the care
provided to Appellants. By cashing the checks without reserving their rights, the
medical providers agreed to accept the amount tendered as full payment cutting off
their right to pursue Appellants for the balances. Weickert, 954 S.W.2d at 317
(“[W]hen a claim is in dispute and the debtor delivers to his creditor a check which
he clearly states is in full payment of the claim, and the creditor collects the check
without objection, this constitutes a good accord and satisfaction.”); KRS 304.39-
245 (“In no event shall a provider of services which agrees to a reduction or
modification of the charges bill the secured person for the amount of the reduction
or modification.”). In turn then, Appellants have no right to sue GEICO for
payment of the remainder of the bills. There is nothing left to pay.
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We note that had the medical providers properly reserved their rights,
this would be a different case. They could have easily done so by making a
notation on the checks prior to deposit, sending the checks back, or even cashing
the checks and simultaneously sending a letter under separate cover reserving their
right to seek payment for the balance. They did none of these things. They simply
cashed checks that were explicitly sent pursuant to KRS 304.39-245 as full
payment of a reasonable amount for the provided care. Having accepted the
amount tendered without a reservation, they are precluded by statute from
collecting the balance from their patients.
Appellants’ complaint is clear that their claims are predicated on the
fact that GEICO’s actions left them “legally responsible for the balance and subject
to a lawsuit or collection efforts from the[ir] medical provider[s].” However, as
demonstrated above, the medical providers have no right to seek payment from
Appellants, meaning Appellants have no claim against GEICO. Accordingly, the
trial court properly granted summary judgment to GEICO.
IV. CONCLUSION
For the reasons set forth above, we affirm the Jefferson Circuit Court.
ALL CONCUR.
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BRIEFS FOR APPELLANTS: BRIEF FOR APPELLEE:
Damon B. Willis Edward H. Stopher
C. David Ewing Earl L. Martin, III
Louisville, Kentucky Louisville, Kentucky
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