State Farm Automobile Insurance Company v. Newburg Chiropractic, P.S.C.

741 F.3d 661 (6th Cir. 2013)

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Nature of the Case

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Facts

Plambeck (D) owned two chiropractic clinics in Kentucky that treated patients injured in car accidents, including some of State Farm's (P) customers. All of the treating chiropractors were licensed to practice in Kentucky. D was not. D assumed that he did not need to keep his Kentucky license because he was the owner of the facility and did not treat any patients in the State. P assumed that D had a license because Kentucky law required chiropractic practitioners and owners of chiropractic clinics to hold one. Eventually, the truth was discovered by both parties. Once P discovered that D's clinics were unlicensed, it stopped paying the clinics and sued D to recover all payments since 2000. P decided it wanted more than $500,000 paid to D's clinics over four years even though all of the patients received the chiropractic services they requested. The district court granted summary judgment to P in that P mistakenly believed that D had a Kentucky license and would not have paid the bills his clinics submitted had it known otherwise. The court awarded P $557,124.78 in damages. D appealed.