Content Page

In Roselawn Chiropractic Center, Inc. v. Allstate Insurance Co., 160 Ohio App. 3d 297, 2005-Ohio-1327, Hamilton County Court of Appeals in Cincinnati, Ohio affirmed judgment in favor of Roselawn Chiropractic in its lawsuit against Allstate Insurance Company on the recovery of chiropractic expenses on behalf of an injured party who sought treatment through Roselawn Chiropractic. In this case, an Allstate insured negligently injured the claimant. The claimant sought care and treatment from Roselawn Chiropractic. The claimant signed an "Assignment." The claimant assigned to Roselawn any proceeds that she would receive from either Allstate or its insured.

Roselawn forwarded a copy of the Assignment, as well as some other documents, including an itemized statement of the claimant’s treatment, to Allstate. Allstate acknowledged the receipt of the documents. Allstate later settled the claim and forwarded all the proceeds to the claimant without paying anything to Roselawn Chiropractic. Roselawn Chiropractic eventually sued both Allstate and the claimant for reimbursement based upon the assignment of benefits. The trial court granted judgment in favor of Roselawn Chiropractic based upon the assignment.

Roselawn Chiropractic received an assignment from its patient/claimant to recover any and all proceeds from the settlement. As such, Roselawn Chiropractic was an assignee, and Roselawn Chiropractic asserted that Allstate was obligated to reimburse Roselawn Chiropractic for all of the expenses incurred in the treatment.

Allstate not only received the Notice of Assignment but also understood the assignment to be only for those expenses incurred as a result of the treatment of the claimant.

The Court of Appeals affirmed judgment in favor of Roselawn Chiropractic, stating the following:

The assignee is entitled to exercise collection rights against the account debtor as long as the account debtor, receives (1) an indication that the account has been assigned; (2) a specific direction that the payment is to be made to the assignee rather than the assignor; and (3) a reasonable identification of the rights assigned.

The court noted that Allstate clearly received the Notice of Assignment and clearly understood the assignment was for the services rendered by Roselawn Chiropractic to the claimant. Allstate, nonetheless, proceeded to pay all the proceeds to the claimant without taking into account the assignment.

Allstate argued that, because this matter was not in litigation and was just nothing but a mere settlement, there was no real claim. The Court of Appeals rejected this argument, suggesting that if it were to adopt a rule requiring that every matter be brought into litigation, efforts at settlement and claims resolution without litigation would be severely frustrated. The Court of Appeals held that the assignment was valid, was based upon notice, and was delivered and acknowledged to Allstate.

Insurers and claims professionals beware. When settling any claim, review the claims file to make sure that you check any and all correspondence and any other documents from medical care providers or otherwise. Carefully look for documents called "assignment," "notice of assignment," or other similar documents. Review these documents to make sure what the assignment is, how much the assignment is, and to whom payment is ultimately directed. Do not make any payments until you have verified the nature and extent of the assignment, the amount of the medical bills in question, and whether or not the law in your jurisdiction will uphold such an assignment.

The worst case scenario would involve settling a claim for an amount less than the assignment, and then only to find out that the assignment must be paid out in full.

If you feel that the claim is very questionable and that the treatment is neither necessary nor reasonable, you should communicate this fact directly to both the claimant and the medical care provider. There should be no question as to what you feel is an appropriate settlement and the questions you have with regard to the nature and extent of the treatment.

When settling the claim, you should notify both the claimant and the medical care provider what your offer will be, the reasons for the offer, and the fact that the settlement draft will be issued both to the claimant and the medical care provider. This clear line of communication will avoid any ambiguity and will remove the uncertainty of a medical care provider asserting its collection rights against both you and your insurer.

*Sam, a shareholder in our Akron, OH office, can be reached at (330) 255-0037 or scasolari@mdwcg.com.