in this case state farm paid two hundred ninety six thousand dollars for two hundred ninety six thousand dollars for the chiropractor services the services were provided to state farm insurance who were injured in covered motor vehicle accidents the state promised obligated to pay those amounts percent coverage by statute and by insurance policies all of the services rendered reasonable or medically necessary and which caused related to the covered motor vehicle accident when you say they were obligated to pay if everybody had known all the facts in advance and they said we want you to pay this unlicensed clinic holding license doctors would be about obligated to pay under their policy yes your honor because the services were provided by duly license kentucky chiropractors are there any cases that would you know insurance route coverage cases of that sort that would say that no cases have been cited by either side on that specific point your honor but again the key to that question is that as the cases have consider these sorts of issues i mean there are suppose there were you know the medical board had had the clinic to shut ballen but there were still license  proctors on the premises they would still be obligated to pay b s because again the services were provided by duly license chiropractors but that's not really the question before the court because there's a huge difference in the case law between whether the money hasn't been paid to an unlicensed provider and the recipient is trying to resist payment and those cases where the money has been paid and the recipient is trying to get the money back those cases are governed by  case law on common law mistake even though state farm sued dr plan back under a number of different theories the only theory which survived the trial court and the only theory which is before this court is common law mistake and common mistake has been articulated by a number of different courts in kentucky i'm just going to quote the basic principles from supreme council versus fenwick whenever by law or fact essentially bearing upon an effect in the contract money has been paid with that consideration which in law on or a conscience was not doing payable and which an on or a good conscious ought to  not to be retained it may and ought to be recovered there are two components of that that i want to focus on the first is a mistake of law or fact essentially bearing upon an effect in the contract there  absolute failure of state farm's case here on that issue one is there's no proposition advanced by state farm that any particular contract provision was the subject of some the stake by state farm in pain the claims there is in fact amazingly notwithstanding the fact that this is a contract theory not a single contract in the record not a single contract in evidence there's no contract the state farm asserts we made a mistake but what about the reality that you know had everyone knowing this stuff each time they were there would have had to be a payment in other words had folks known at the time the chiropractic service was performed or requested that the owner of the clinic was not licensed that probably could have avoided paying at the time for each service seems to me the law probably supports that position and if that's true isn't it not that big a next step to say wolf that's true why can't they get all back it's a hypothetical it didn't occur here well that's true of all hypothetical reason and i don't mean to be tried about that or dismissing the court's question but the point is that's not what happened we have to address the facts that did mr you know bits of trying to think a way of thinking about the case that makes sense and the thing i get some of parts of your argument which is a four and a half years this seems like a pretty significant serious way to respond to this problem but the fact is that each incremental step it probably would have had to make the payment had they known that them that he you know he was unlicensed i don't i don't agree that that's true there certainly is nothing haunts you think if at the time the services were requested and state farm had you know found out they're just about to process the bill and that they're insured calls and says you know i just realized properly licensed the fact is that all of the services were provided by duly licensed kentucky care pronounce on my right i mean there's a bridge there cross appeals or other issues but at least in judge accept the computations it's right in the sense of the money was paid to the clinics but certainly that money went to pay a chiropractor salaries the chiropractor bonuses nobody's trying to get money back from dr smith i mean if you're right if the plan because to pay it out then whatever happens between him and the car proctors we have no idea but it wouldn't seem he's got any way to recover any loss that state farm following this that their theory was not we want your clients profit their theory was we want all of the payments back absolutely so presumably most of the payment did go to the each chiropractor that did the service because that's that's obviously the cost of the key cost in the business sure you have a sense for the percentages or i don't but the third was never profit the profit he your client got it was just everything that was paid one hundred percent of everything exactly right and this is one of those rare cases where the plight of literally suffer no injury well because they let me know in a sense when you say all services isn't the question and did you get you know people are manipulating your spine or did you get people operating in a lawful unlicensed way operating your spine if you say here's here's the really go on rice and clinic with an honest chiropractor in it and here is the completely legal and honest clinic there are not the same thing really they're not the same thing one might be cheaper than the other there even if you you went there but you know what you were getting state farm was obligated to pay the value of reasonable medical services that were necessary and relate to a covered motor vehicle accident there's nothing in first of all we don't have an insurance policy to look at but there's no contract that was subject of a mistake that said state farm only has to pay if the clinic is duly license regardless whether the person was injured the goddess whether the treatment is necessary and reasonable and regard you got to pay you got to pay for that it's a reasonable medical service you know appendix healed up pretty good there there are several differences from our case one is you pose the question do you have to pay for that state kind of did pay for it that the law's just diametrically opposed whether you're resisting the claim or whether you've already paid and get your money back and whether you get your money back after you've already paid it depends on two key factors that are not present here one is that states are made a mistake about a contract that they're obligated to pay for license chiropractic you know i don't want your release respond to judge boxer russian so let me try to help you respond to judge box question i wonder if it's just a question of competing analogies it is true right there is a difference between the two clinics one were everybody including the owners licensed in the other where the practitioners license but not the owner and i think that's a difference the question is how much of a difference that in porn it is i would say the better analogy for you is to compare clinics where one has paid all of its taxes in the other his not should that be a reason for not being able to keep the money or one has his  properly the other is not you know it's there in a residential or they shouldn't be in a residential area because it's only a law you're only allowed to operate these clinics in nonresidential zones and i don't know the answers to these but that strikes me as far as the issue that state farm is being that that state farms that doesn't involve state farm across appeal what the questioning for mr stein was about i think the the the feeling that the court is getting is the same feeling that that i got responding to these arguments and if it is what is the remedy then if the privity argument stands which i don't believe was raised in the initial dispute at the trial court level but if it stands it basically stands for the principle that state farm was required by law and contract to make these payments directly to doctor plan back first as a sole proprietor and then as in to that then to the p s sees as incorporated professional entities but if there was some mistake or problem with those payments that made them illegal or not do that the only recourse that is available then to state farm is to sue the insurance and then force the insureds to i guess seeking contribution action against the clinics that provided these services that while they were done by a licensed kentucky chiropractors were still done in violation of the law and let's just say you're right about this the mistake doctrine applies whether you have a direct contract or not and for you were in the or not category and let's just say the mistake doctrine can apply there you would agree there is a distinction between realizing someone's not licensed at the time of the service or at the time of paying for the service and that you know i think there's a little more leverage on your side in that setting then there might be you know four years worth of payments i mean do you think there's a do you deny that there's a difference between those settings the prospective i'm not going to pay having learned that i got something i didn't think i was getting service from a licensed properly licensed clinic first is four years after the fact collecting everything that's been done if you follow the district court's analysis on that and that's the one that i had that i adhere to there was no requirement for state farm to make that inquiry into whether those payments were valid or not at that time and if they can show that once they were on notice of the damage that was done to them that there were payments going back as far as they could find i believe that it wouldn't matter and all of those payments should have been discussed in the case law suggests there's a difference i'm not saying the case law means you lose but it does seem like the cases make it a lot easier to avoid paying at the time as opposed to having had you know a series of deals and here four years worth and then trying to discourage all of it it certainly seems that in the case law that deals with situations involving either an arm's length transaction or some supposition that that notice could have been obtained or should have been obtained is what i actually should say and here as long as the state farm is under no legal obligation to inquire as to every single payment me to every single medical provider in kentucky during this time period as long as there's no obligation to inquire into those i don't believe the time periods involved that the transactions took place l say you're let's just say you're right and judge simpson's affirmed would it be legitimate for every insurance company in the country to go back through all of its payments not just car park to clinics all of its payments to everyone and find any time there's been a lapse in license and then dischord job rethink was paid for that period i take it they would be allowed to do that wouldn't they they could certainly try well no but you have to believe they can write i mean you want to win that's the theory of victory here how would it not be that their theory of victory there because there would be there are fact questions that aren't present in the hypothetical involving potential notice of everybody else everything else is exactly the same in fact the only thing that gives them notice is this beautiful opinion that gets circulated to all the general counsels of the insurance companies in the country and like this is worth a lot of money that's their first notice and they send somebody out and they investigate and they start finding the negligence that invariably happens peoples licenses lapse in fact it's probably the easiest way to do this would be to go to the licensing boards and find all the people that had to let their license lapse had to get a request you know seek permission to get relicensed boom you've got the window if they were practicing without licenses in violation of the law i don't really see the problem with that i'm talking about ownership the ownership issue even the ownership interest because that is still in violation of the law and the law is not simply a revenue raising statute this is a public safety statute which says five hundred dollars penalty if you violate it right and but it does not say that there's not a civil penalty there that is available to the insurance companies to recoup those losses if the agro isn't a civil penalty this is a civil suit i mean you can't you're not a private attorney general in some kind of civil penalty situation room was a civil penalty that was provided under the statute for intentional misrepresentations that the court did find against assad to the court also found that that didn't preclude us from seeking a mistake cause of action under common law but might believe but so presumably though the same theory just stood just to that they'll be comfortable with that oh well five years you've got five hundred thousand and four years here of the that's correct that these guys rights are not is not as good as the rates of goodwill to correct the record actually on that that was the amount the aggregate amount again stock to plan back in individually state farm is also seeking to recoup against the corporations once they were incorporated and i believe that full amount is about one point when million that would be in play if the district court's decision on the p s c s was overturned which is what we're seeking in this appeal and i guess i can ship gears to that so i can at least address that before you do to help me just conceptualize exactly who was victimized and by what measure the state farm i think believes it was victimized state farm was victimized and the public was victimized and the measure of the book the measured but state farm you allege fundamentally paid for things but but it didn't that it or its previous did not receive no it paid for services that the individuals did receive as far as what is paid more by virtue of global ocean sing sniff who paid more than would otherwise have been do well we don't know that because that's not that wasn't an issue or originally was it is it your is it your general approach that that was likely done we are disputing that the charges at least in this appeal were not disputing that the charges were reasonable and necessary so there is no if you're going to if you would say that because of the of the lack of licensing they were sought we were somehow charged more that's not an issue before it's conceivable you were  is you know the back machines in the subway stations all were just exactly the same and whether growth clinic was license makes no difference at all that then that service that they got the treatment in an unlicensed clinic is a reasonable and necessary services that what i heard you say well i would say that regardless of the treatment quality itself what we're talking about here is is an argument of there was no harm this time so let it go and then the next time it happens maybe there will be harmony be there we won't there won't be but we we shouldn't let that happen we shouldn't let it get to the next that's really a kind of private attorney general argument isn't it that you're serving a public interest you're not that you have a contractual right there are numerous civil cases out there and i can't name all of them where there is a private interest in enforcing a that's kind of public policy argument on which this is not what it went to judgment on them and that was the statement of the other side and i think they're correct right i mean judge simpson at least ruled on this pure mistake of law theory mistake of common law mistake theory set right that's correct and nobody should profit from illegal activity though  so what tell me about this the criminal statute i hadn't realized about the civil fine component of it but the criminal finds his maximum of five hundred dollars does that provide elations so for example each time you paid really focus on the criminal statute itself i just was curious i'm just trying to figure out what the maximum financial criminal exposure was for this four years of misconduct i don't know and it's my understanding it's not in the record but a deal was issue of state farm's process of people would be the fact that the judge considered the corporations differently than dr plan back i don't think there is a distinction between the two under the licensing regime a properly licensed professional service corporation may have an outside licensed individual as a member are a shareholder depending on the enemy that doesn't mean though that that that enemy can then own or operate a kentucky chiropractic clinic and therefore escape the strictures of the licensing regime could leave my titles out thank you counsel counsel you have time for response to the appeal in rebuttal on your own appeal thank you i'll try to trim that in five minutes the best i can judge sutton's analogies were exactly apt at the close my opening are which is all those technical violations have nothing to the state farm had no impact on state farm as is the case here because all the services are reasonable necessary as conceded by state farm and rendered by license but you know one thing about a victory for them is you're going to have people being really careful about making sure your license is up to date isn't that a virtue it may be a laudable virtue but it's not a legal issue in this case we're governed by  policy doctrine we're dealing with now we're dealing with a private contract claim a private equitable claim for mistake this is an administrative agency trying to determine how to make an example of doctor plan back so other people will be license before the o this not on the record and i was on notice that he was licensed and several other states contemporaneously i mean basically he's running this business and he isn't doing the services themselves but he says what the heck that's he had that advice though twice pretty long they don't get  t and to answer the questions raised there are many states that don't require the owner of a chiropractor clinic to be licensed counsel for state farm raised a public safety issue there is none here there is no suggestion of any negligence there's no suggestion the malpractise or any injury to anybody in the public by these dozens of state farm insurers all kentucky requires the owner to be licensed for a reason i don't know what it is but i don't think it relates to public safety he's supposed to exercise ownership oversight supervision and so forth i mean same i suppose it's the same reason we don't allow we don't allow private corporations don't let firms only lawyers only license lawyers get to own law firms there may very well be those considerations that kentucky legislature was considering when actually starting a leslie if it's this ministry of rule or it's a statute but again there are other states that don't have that consideration so whether or not there is that in direct supervision certainly dr planned it was never physically the locations he wasn't ever directly supervised in these treating chiropractors they were trained in chiropractor school they were licensed they were on their own in these clinics the services so whatever doctor plant status was it had no money how does how does this case come out if not only was your client not license but there were two chiropractors there and it turns out they weren't licensed the whole time with how does the case come out to they stay farm in that setting because they were actually delivering the services they get the five hundred thousand dollars in that setting that would depend on facts that were developed here because again another one of the elements of this common law mistake claim is that for the money to be recoverable it had to have been paid without consideration here it was the money was paid for the services that  there in that scenario the question would be if the services had been provided by non license chiropractors would that be consideration under the applicable case law and so your answer would be don't know and it doesn't matter because these guys were licensed it doesn't matter it doesn't matter because that's not the facts here it's that it's not that it doesn't matter philosophically whether unlicensed chiropractors ought to be paid for their services or whether someone who paid for those services should get the money back it doesn't matter because that's not our facts are facts are that these are licensed chiropractors they provided consideration they provided undeniably undisputed valuable services for the money there's no dispute about that there's no question about the dollar amount there's no question about the services have your three minutes for for a so sorry bottle which he didn't attack i guess do we have any questions on that so really you're cross appeal you're focusing on the corporations part for which you did not prevail below and we have your briefs on it and obviously if you lose on the first point you're going to lose on that anyway but on the other hand we can look at that and question specifically on that point my colleagues thank you case will be submitted in the clerk may call the next case