In the

Court of Appeals

Second Appellate District of Texas

at Fort Worth ___________________________

No. 02-22-00170-CV

___________________________

1

Appellants indicate that United Healthcare Insurance Company was 

erroneously sued as “United Healthcare, Inc., d/b/a United Healthcare Insurance 

Company,” but Appellants do not ask this court to revise the style of the case. For 

consistency, we retain the existing style as it was used by the trial court and by this 

court in a previous interlocutory appeal. Cf. United Healthcare of Tex., Inc. v. Low-T 

Physicians Serv., P.L.L.C., No. 02-20-00033-CV, 2021 WL 210846, at *1 (Tex. App.—

Fort Worth Jan. 21, 2021, no pet.) (mem. op.).

UNITED HEALTHCARE OF TEXAS, INC., OPTUM HEALTH CARE 

SOLUTIONS LLC D/B/A OPTUM HEALTHCARE SOLUTIONS, INC., UNITED 

HEALTHCARE, INC., D/B/A UNITED HEALTHCARE INSURANCE 

COMPANY,

1 UNITED HEALTHCARE COMMUNITY PLAN OF TEXAS, L.L.C.,

EVERCARE OF TEXAS, L.L.C., UNITED HEALTHCARE BENEFITS OF 

TEXAS, INC., UNITED HEALTHCARE SERVICES, INC., AND 

UNITEDHEALTH GROUP, INC., Appellants

V.

LOW-T PHYSICIANS SERVICE, P.L.L.C., LOW-T PHYSICIANS

PROFESSIONAL ASSOCIATION, AND LOW-T PHYSICIANS GROUP, P.L.L.C., 

Appellees
2 

On Appeal from the 342nd District Court

Tarrant County, Texas

Trial Court No. 342-303717-18

Before Sudderth, C.J.; Wallach and Walker, JJ.

Opinion by Chief Justice Sudderth
3

OPINION

After Appellant United Healthcare of Texas, Inc. (working with its affiliated 

entities)

2 determined that it had overpaid Appellee Low-T Physicians Service, P.L.L.C.

(and its affiliated entities)

3 for health-insurance claims, United requested a refund of 

more than $2 million, and Low-T attempted to settle the claim by mailing United a

check for approximately $24,000. Low-T also mailed a letter detailing its settlement 

proposal to many of the United addresses listed in the parties’ claim-related 

correspondence. When United’s check-processing contractor automatically cashed 

Low-T’s check, Low-T argued that it was an accord and satisfaction of United’s $2

million claim. The trial court agreed with Low-T, and it issued a declaratory judgment

confirming that the check was an accord and satisfaction under Section 3.311 of 

Texas’s codified version of the Uniform Commercial Code (UCC). See Tex. Bus. & 

Com. Code Ann. § 3.311.

In one broad issue, United claims that (1) the great weight and preponderance

of the evidence establishes the applicability of two statutory exceptions to accord and

2

We refer to Appellants—United Healthcare of Texas, Inc., Optum Health 

Care Solutions, LLC d/b/a Optum Healthcare Solutions, Inc., United Healthcare, 

Inc., d/b/a United Healthcare Insurance Company, United Healthcare Community 

Plan of Texas, L.L.C., Evercare of Texas, L.L.C., United Healthcare Benefits of Texas, 

Inc., United Healthcare Services, Inc., and UnitedHealth Group, Inc.—collectively as 

“United.”

3

We refer to Appellees—Low-T Physicians Service, P.L.L.C., Low-T Physicians 

Professional Association, and Low-T Physicians Group, P.L.L.C.—collectively as 

“Low-T.”
4

satisfaction and (2) the evidence is so weak that it would be manifestly unjust to apply

the due diligence statute that overrides the statutory accord and satisfaction

exceptions. Because the evidence supports application of the due diligence override

provision, and because this override renders the accord and satisfaction exceptions

unavailable, we will affirm. 

I. Accord and Satisfaction Under the Texas UCC

Section 3.311 of the Texas UCC codifies the common law doctrine of accord 

and satisfaction.

4

 See Flores v. Hansen, No. 2-09-465-CV, 2010 WL 3618737, at *3 n.5

(Tex. App.—Fort Worth Sept. 16, 2010, no pet.) (mem. op.); Milton M. Cooke Co. v. 

First Bank & Tr., 290 S.W.3d 297, 304–05 (Tex. App.—Houston [1st Dist.] 2009, no 

pet.). Generally, a claim that is subject to a bona fide dispute is extinguished by an

accord and satisfaction if the person against whom the claim is asserted tenders a

check5 to the claimant, the tendered check is in full satisfaction of the claim, the check 

(or accompanying correspondence) bears a conspicuous statement to that effect, the 

tender is in good faith, and the claimant cashes the check. See Tex. Bus. & Com. 

Code Ann. § 3.311(a), (b). Even when these elements are established, though, there 

are two statutory exceptions—set forth in Subsection (c) of Section 3.311—that allow 

4

Texas’s version of the UCC is codified in Title 1 of the Texas Business and 

Commerce Code. See Tex. Bus. & Com. Code Ann. tit. 1.

5

This statute applies to negotiable instruments. See Flores, 2010 WL 3618737, at 

*3; see also Tex. Bus. & Com. Code Ann. § 3.104(b) (defining “[i]nstrument” as “a 

negotiable instrument”).
5 

claimants to avoid inadvertent acceptance of an accord and satisfaction instrument.

6

 

Id. § 3.311(c), cmts. 5–6. But we need not detail those two exceptions because a 

claimant cannot rely on either of them if Subsection (d) applies, i.e., “within a 

reasonable time before collection of the instrument was initiated, the 

claimant . . . knew that the instrument was tendered in full satisfaction of the claim.” 

Id. § 3.311(d). As relevant here, for an organization, “knowledge . . . is

effective . . . from the time it would have been brought to the . . . attention [of the 

individual conducting the transaction] if the organization had exercised due diligence.” 

Id. § 1.202(f); see id. § 3.311 cmt. 7. This due diligence override forms the dispositive

issue in United’s appeal. 

II. Background

The due diligence issue turns on whether and when the United representatives 

handling Low-T’s claim should have known that Low-T was tendering its settlement

check in full satisfaction of that claim. See id. §§ 1.202(f), 3.311(d). But this question

is muddied by the numerous mailing addresses that United used throughout the 

parties’ correspondence. 

6

Generally, the Subsection (c) exceptions allow a claimant to avoid an accord 

and satisfaction if it either (1) conspicuously designates a person, office, or place to 

receive debt-related communications and settlement instruments and demonstrates

that the designated recipient did not receive the settlement or (2) promptly refunds 

the inadvertently accepted settlement to the person against whom the claim is 

asserted. Tex. Bus. & Com. Code Ann. § 3.311(c), cmts. 5–6. 
6

A. Claim & Correspondence

In December 2017, Michael Berger—an associate general counsel for United—

sent a letter from his Minnesota office to Low-T notifying Low-T that an audited 

sample of its United healthcare claims revealed7 that United had overpaid Low-T by 

approximately $2,359,902.33. The notice indicated that Low-T should “call the

investigator, Joni Stone at [her phone number] to let her know if you’d like to expand 

the audit.” If Low-T wanted to appeal the overpayment determination, it was 

directed to do so by submitting its written position and documentation to “United

Payment Integrity[,] Attn: Recovery Investigations” using a mailing address in Forest 

Park, Georgia.

Later that month, Low-T’s general counsel,

8 David Moraine, responded by 

sending a letter to Stone at the Forest Park address and to Berger at his Minnesota 

address. The letter expressed “a desire to settle” and effectively initiated United’s

appeals process. In January, Stone wrote back on United letterhead—specifically, 

letterhead for “United Payment Integrity[,] Attn: Recovery Investigations”—that 

7

United “contended it had identified coding ‘errors’ totaling less than 

$10,000.00 during [a] three-year period from ‘[a] sample of 11 UnitedHealthcare 

Employer and Individual records comprising 482 claim lines paid[,]’ . . . . then [it]

‘extrapolated’ an amount due across a ‘paid claims universe’ to come up with the $2.4 

million amount demanded.” United Healthcare, 2021 WL 210846, at *4.

8

Moraine’s correspondence listed his title as “[g]eneral [c]ounsel” on some 

communications and as “[c]hief [l]egal [o]fficer” on others. At trial, Moraine testified

that he was the “chief legal officer.” He confirmed that, although he has used

different titles during his time working for Low-T, his job duties have not changed.
7

contained an Atlanta P.O. Box address. She acknowledged receipt of Moraine’s 

letter—the letter that had been mailed to her at the Forest Park address—and she

directed Low-T to send its appeal documentation to the Forest Park address. 

After reviewing Low-T’s appeal documentation, in February 2018, Stone sent 

what she later described as “United’s final findings . . . after appeal.”9 As before, 

Stone’s letter was on United’s “Payment Integrity” letterhead bearing the company’s

Atlanta P.O. Box address. Stone indicated that United’s review of Low-T’s 

documentation had reduced the overpayment amount to $2,031,562.95, and she asked 

Low-T to “issue a refund check payable to UnitedHealthcare and [to] mail the check, 

along with a copy of this letter and the enclosed claim list” to a lockbox address in 

Hapeville, Georgia.

Stone then began exchanging emails with Moraine regarding United’s claim. 

Unlike her letters, Stone’s email signature block listed the Minnesota address that had 

been used in Berger’s correspondence. The following month, in March 2018,

Moraine followed up on the email exchanges with a formal letter addressed to Stone

in “United Payment Integrity[,] Attn: Recovery Investigations” at the Forest Park 

address. He asserted numerous legal challenges to United’s overpayment 

determination. Berger—rather than Stone—responded to these legal challenges, and 

he did so on letterhead that contained United’s Minnesota address. In his response, 

9

Stone later hedged by stating that the findings were “not necessarily final.”

But she acknowledged that she had described them as “final findings.”
8

Berger told Low-T to “contact Joni Stone at [phone number] to discuss 

settlement . . . or me if you have any questions about the content of this letter.”

More email exchanges ensued between Stone and Moraine, with Stone’s 

signature block consistently listing United’s Minnesota address. However, at one 

point in the correspondence, Stone indicated that she was having trouble opening

Moraine’s encrypted email, and she stated that he “may provide [his] communication 

via letter to the Forest Park, Georgia address unless [the] communication doesn’t 

contain PHI, in which case [he] c[ould] send [her] an unencrypted email.”

In June 2018, the parties had a teleconference to discuss settlement options, 

and both Berger and Stone participated. Later, at Low-T’s request, Stone mailed

Moraine hard-copy documentation for the “universe of [audited] claims.” The 

documentation was accompanied by a cover letter on United’s “Payment Integrity”

letterhead bearing the company’s Atlanta P.O. Box address, and at the end of the 

letter, Stone’s signature block listed her as part of the “United Payment Integrity”

division.

At no point in the parties’ correspondence did United expressly state Stone’s 

physical location or expressly identify Stone’s preferred mailing address.

B. Settlement Offer & Check

Finally, in a letter mailed August 31, 2018, Moraine offered to settle the dispute 

for $24,665.21. Given United’s numerous mailing addresses, Low-T mailed seven 

copies of its settlement proposal. It sent the settlement letter via certified mail to 
9

Stone at the Forest Park address, and it sent the letter via first-class mail to (1) Berger

at the Minnesota address, (2) United’s Atlanta P.O. Box address, and (3) three other 

United addresses—San Antonio, Richardson, and Salt Lake City—listed in Low-T’s 

provider agreements. Each settlement letter was accompanied by a copy of the 

settlement check. The check itself, meanwhile, was mailed (with the seventh copy of 

the settlement letter) to United’s Hapeville lockbox. The check bore the notation,

“[f]ull and final payment [claim number]” and was issued by “Low-T Shared Services, 

LLC”—a nonparty.

C. Delivery & Due Diligence

Low-T later produced a receipt from the United States Postal Service (USPS)

showing that the settlement letters had been mailed on August 31 and that, at the time 

of mailing, the USPS gave an “Expected Delivery Da[te]” of Tuesday, September 4. 

United admitted that it had received at least two of the copies of Low-T’s settlement

letter—the copy mailed to Salt Lake City and the copy mailed to Forest Park—on 

September 5. And USPS tracking information confirmed the delivery of Low-T’s 

certified letter to Forest Park on September 5.

10

Six days later, on September 11, the Hapeville lockbox received Low-T’s check. 

Berger explained at trial that the lockbox was overseen by Wells Fargo and was used 

10Two days later, Stone—seemingly unaware of the settlement offer—emailed

Moraine to schedule a time to discuss resolution of the case. Moraine did not 

respond. 
10

by United to streamline payment processing. The lockbox personnel followed their 

standard procedure by (1) depositing Low-T’s check and (2) scanning the check and 

accompanying settlement letter into United’s document-tracking system. Then, the 

following morning, they notified the relevant United representatives of the check and 

letter. When Stone received this notification, she emailed Moraine and rejected the 

settlement.

D. Refund

United promptly issued a refund check, but rather than paying the money to 

Low-T, United made the refund check payable to the entity that had issued the

settlement check: Low-T Shared Services.

11 At trial, Moraine testified that Low-T

Shared Services was the “paymaster” for Low-T’s offices; he equated the paymaster 

entity’s check with a cashier’s check.

12

E. Lawsuit & Trial

Low-T then filed suit against United seeking (among other things) a declaratory 

judgment that the settlement check was an accord and satisfaction of United’s claim. 

United counterclaimed for (among other things) declaratory judgment and breach of 

11Because United issued the refund check to the nonparty that had issued the 

settlement check rather than to the person against whom the claim was asserted, LowT argued that United did not qualify for the Subsection (c)(2) exception to accord and 

satisfaction. See Tex. Bus. & Com. Code Ann. § 3.311(c)(2). The Subsection (d) due

diligence override renders the Subsection (c) exceptions unavailable, though, so we 

need not address this issue to resolve the appeal. Id. § 3.311(d); Tex. R. App. P. 47.1.

12Low-T directed Low-T Shared Services to reject United’s refund check.
11

contract. Low-T responded with accord and satisfaction again, now as an affirmative 

defense. The accord and satisfaction issue was tried to the bench. Cf. United

Healthcare, 2021 WL 210846, at *9–10 (rejecting argument that accord and satisfaction

issue was subject to arbitration). 

Only three witnesses testified: Moraine, Stone, and Berger. Stone and Berger 

claimed that they did not know about the settlement offer until after the check had 

been deposited. They explained that the Hapeville lockbox personnel automatically 

cashed checks and that although the lockbox had procedures to notify the relevant 

United representative of a check, the notification occurred the following morning. 

Accordingly, Stone indicated that she was not aware of the settlement letter or 

check until she received the notification from the lockbox personnel on September

12. She officed in Minnesota—the same office address as Berger—and not in Forest 

Park. Stone insisted that the Forest Park address was only appropriate for appealrelated documents, not settlement letters or general correspondence.

Berger testified that the Forest Park address was a regional mail office

responsible for “intaking mail” related to specific job functions, including 

overpayment appeals. He confirmed that, before the settlement, the Forest Park mail 

center had routed Moraine’s letters to Stone. But like Stone, he insisted that this was 

not the proper address to use to correspond with her.

As for Berger’s copy of the settlement letter, Berger testified that he had 

received his own copy of the letter but not until after the settlement check had been
12

cashed. When Low-T impeached Berger with his deposition—in which he had 

testified that he did not recall receiving his own copy of the settlement letter and that 

if he had received it, he “probably” would not have kept it “since [he] saw that Ms. 

Stone was also addressed on the letter”—Berger explained that, after the deposition,

he had discovered a copy of the settlement letter in his files. He stated that he did not 

know the date on which he had received the letter, but he knew that it must have been

after the lockbox notification on September 12 because “if [he] had received the letter 

prior to September 12, [he] would have acted on it.” 

None of the witnesses described the procedures for routing information from 

the Forest Park mail office to the appropriate recipient. Nor did they explain what 

had happened to the other three settlement letters that Low-T had mailed to United at 

its Atlanta P.O. Box address and its Richardson and San Antonio addresses. 

F. Judgment & Findings

The trial court entered judgment for Low-T.13 In its accompanying (and 

commendably thorough) findings of fact and conclusions of law,14 it found that

13Although the accord and satisfaction judgment was interlocutory when it was 

entered, the parties subsequently nonsuited their remaining claims, making the 

judgment final and appealable.

14United emphasizes that the trial court adopted “verbatim, the findings and 

conclusions tendered by Low-T.” But “the Texas Supreme court has not adopted 

differing standards of review for findings of fact adopted verbatim from a prevailing 

party’s proposed findings of fact versus findings of fact not adopted verbatim or 

modified by the trial court.” Norstrud v. Cicur, No. 02-14-00364-CV, 2015 WL 

4878716, at *4 (Tex. App.—Fort Worth Aug. 13, 2015, no pet.) (mem. op.). 
13

United had not proved that it qualified for either of the two Subsection (c) exceptions

to accord and satisfaction,

15 but that even if United had so proved, the Subsection (d) 

due diligence override applied because “Defendants did not implement or, if they had 

them, did not follow, such routines or procedures for the settlement letter and copy 

of the settlement check addressed to Stone that was received at the Forest Park 

address on September 5, 2018”; and “Defendants received Plaintiffs’ letter on

15Specifically, the trial court found that: 

A reasonable time before the Plaintiffs’ tender, Defendants sent a

conspicuous statement . . . designat[ing] Joan Stone as a ‘person’

responsible for negotiating a settlement with Plaintiffs, and designat[ing]

the Forest Park address as the ‘office’ and ‘place’ for Plaintiffs to send 

communications to Stone and Defendants concerning the Overpayment 

Demand. [United] likewise clearly designated the Hapeville address as 

an ‘office’ or ‘place’ to receive instruments tendered as full satisfaction of 

the disputed debt. 

. . . Plaintiffs delivered the settlement offer and a copy of the 

check to the persons, offices, and places designated by

Defendants . . . and Defendants received those documents. . . .

. . . . 

. . . Because Defendants had previously sent Plaintiffs a statement 

[designating a recipient] in compliance with [Subsection (c)(1)], 

Defendants had no right under [Subsection (c)(2)] to avoid the accord 

and satisfaction by tendering repayment . . . .

. . . Defendants’ attempt to tender repayment under [Subsection 

(c)(2)] was also ineffective because the attempted repayment was not

tendered to ‘the person against whom the claim was asserted’ but rather, 

to ‘Low-T Shared Services, L.L.C.,’ against whom no Defendant has 

asserted a claim for repayment. [Internal citations omitted.]
14

September 5, 2018,” and they “either knew on September 5, 2018[,] that Plaintiffs 

were tendering . . . the settlement check in full satisfaction of the [claim], or had 

Defendants exercised due diligence, that fact would have been brought to the 

attention of Berger or Stone, the individuals conducting the transaction, before 

Defendants . . . negotiated the settlement check,” which occurred “six days 

later . . . on September 11, 2018.”

III. Discussion

United does not dispute that Low-T established the basic elements of statutory

accord and satisfaction under the Texas UCC.

16 See Tex. Bus. & Com. Code 

§ 3.311(a), (b). United argues, though, that the trial court erred by (1) failing to apply 

at least one of the two statutory exceptions to accord and satisfaction despite the great 

weight and preponderance of the evidence supporting the exceptions and (2) applying 

16United’s brief repeatedly hints at challenges to the trial court’s interpretation 

of Section 3.311, but it does not raise or brief those hints as separate issues. For 

example, United alleges that there is a “meeting of the minds” requirement for 

common law accord and satisfaction, but it concedes that “[t]he Texas UCC controls 

the issues addressed at trial,” and it does not assert that the “meeting of the minds”

requirement should have been applied as an element of statutory accord and 

satisfaction under the Texas UCC. Elsewhere in its brief, United argues that, if LowT Shared Services did not qualify as “the person against whom a claim was asserted”

for purposes of receiving United’s settlement refund, then the settlement check issued 

by Low-T Shared Services could not have satisfied the elements of accord and 

satisfaction in the first place. But again, United does not assert that the elements of 

accord and satisfaction were not satisfied; indeed, it argues that Low-T Shared 

Services was eligible to both issue the settlement check and receive the refund check

on behalf of Low-T. 
15

the Subsection (d) due diligence override despite weak, factually insufficient evidence.

The latter issue is dispositive. 

A. Standard of Review

When reviewing the factual sufficiency of a trial court’s factfindings,

17 we must

consider all the pertinent record evidence to determine if the challenged factfinding is 

so contrary to the great weight and preponderance of the evidence—or, put 

differently, if the credible evidence supporting the factfinding is so weak—that the 

factfinding must be set aside and a new trial ordered. Dow Chem. Co. v. Francis, 46

S.W.3d 237, 242 (Tex. 2001); Pool v. Ford Motor Co., 715 S.W.2d 629, 635 (Tex. 1986) 

(op. on reh’g). The factfinder is the sole judge of the witnesses’ credibility and the 

weight to be given to their testimony; we cannot substitute its judgment with our own. 

Golden Eagle Archery, Inc. v. Jackson, 116 S.W.3d 757, 761 (Tex. 2003). 

A trial court’s conclusions of law, though, are reviewed de novo. Hegar v. Am.

Multi-Cinema, Inc., 605 S.W.3d 35, 40 (Tex. 2020); Super Ventures, Inc. v. Chaudhry, 501 

S.W.3d 121, 127 (Tex. App.—Fort Worth 2016, no pet.). This includes matters of 

statutory construction. Hegar, 605 S.W.3d at 40. So, to the extent that United 

challenges the trial court’s interpretation of the due diligence override or another

17An appellant may challenge a trial court’s factfindings for evidentiary 

sufficiency just as it may challenge a jury’s answers for evidentiary sufficiency.

Catalina v. Blasdel, 881 S.W.2d 295, 297 (Tex. 1994).
16

provision of the Texas UCC,

18 the trial court’s interpretation is not binding on us, but

we will not reverse the judgment based on an incorrect conclusion of law as long as

the controlling factfindings support the judgment on a correct legal theory. Super 

Ventures, Inc., 501 S.W.3d at 127; Wise Elec. Coop., Inc. v. Am. Hat Co., 476 S.W.3d 671, 

679 (Tex. App.—Fort Worth 2015, no pet.). 

A uniform act such as the UCC “should be construed to promote uniformity 

with other jurisdictions.” 1/2 Price Checks Cashed v. United Auto. Ins. Co., 344 S.W.3d 

378, 391 (Tex. 2011); see Tex. Gov’t Code Ann. § 311.028 (“A uniform act included in 

a code shall be construed to effect its general purpose to make uniform the law of 

those states that enact it.”). “[I]n determining and applying the Texas version of the 

Uniform Commercial Code, we may consider and apply pertinent decisions from 

other jurisdictions.” Toshiba Mach. Co., Am. v. SPM Flow Control, Inc., 180 S.W.3d 761, 

773 n.2 (Tex. App.—Fort Worth 2005, pet. granted) (op. on reh’g). 

B. Subsection (d) Due Diligence Override

Even assuming—as United claims—that the great weight and preponderance 

of the evidence demonstrated United’s entitlement to one of the two statutory

18With two exceptions—two nondispositive issues we need not address—the 

substance of United’s arguments takes issue with the trial court’s factfindings rather

than with its interpretations of the UCC. And to the extent that the trial court’s 

factfindings are incorrectly designated as conclusions of law or vice versa, the trial 

court stated that “the incorrect designation shall be disregarded and the specified 

finding and/or conclusion of law shall be deemed to have been correctly designated 

herein.” We therefore construe United’s arguments as factual sufficiency challenges. 
17

exceptions to accord and satisfaction, the evidence is still factually sufficient to 

support entry of a judgment for Low-T based on the trial court’s Subsection (d) 

findings. 

As previously noted, Subsection (d) renders the two statutory exceptions

unavailable “if the person against whom the claim is asserted proves that within a 

reasonable time before collection of the instrument was initiated, the claimant, or an 

agent of the claimant having direct responsibility with respect to the disputed 

obligation, knew that the instrument was tendered in full satisfaction of the claim.” 

Tex. Bus. & Com. Code Ann. § 3.311(d). Although the Texas UCC defines

“[k]nowledge” as “actual knowledge,” see id. § 1.202(b), it further clarifies that, for an 

organization, “knowledge . . . is effective for a particular transaction from the time it is 

brought to the attention of the individual conducting that transaction and, in any 

event, from the time it would have been brought to the individual’s attention if the 

organization had exercised due diligence,” id. § 1.202(f); see id. § 3.103(d) (noting that 

the general definitions in Chapter 1 apply to Chapter 3), § 3.311 cmt. 7 (citing 

definition of knowledge previously codified at Section 1.201 and currently codified at 

Section 1.202). The First Circuit has analogized this due diligence standard to the 

negligence standard—the organization has knowledge if its point of contact knew or 

should have known. Cf. Jelmoli Holding, Inc. v. Raymond James Fin. Servs., Inc., 470 F.3d 

14, 20 (1st Cir. 2006) (quoting due diligence standard in Massachusetts UCC and 

noting that it “makes clear that it is what [the claimant’s representative] knew that 
18

centrally matters and that other information elsewhere in the company files is imputed 

to [the claimant’s representative] only if it was negligent of the company not to bring 

it to his attention”). 

Here, Low-T all but concedes that the United representatives involved in LowT’s case—Stone and Berger—had no subjective awareness of the settlement proposal

before the check was cashed. The question is whether they should have known, i.e., 

whether the settlement offer “would have [already] been brought to [their] attention if 

the organization had exercised due diligence.”19 Tex. Bus. & Com. Code Ann. 

§ 1.202(f). 

The Texas UCC provides that an organization “exercises due diligence if it 

maintains reasonable routines for communicating significant information to the 

person conducting the transaction and there is reasonable compliance with the

routines.” Id. However, due diligence does not “require an individual acting for the 

organization to communicate information unless the communication is part of the 

individual’s regular duties or the individual has reason to know of the transaction and 

that the transaction would be materially affected by the information.” Id. Based on 

these statutory descriptions of due diligence, United argues that there was factually 

19United’s brief repeatedly emphasizes that “actual knowledge” is required 

under Subsection (d), and it states that “[t]he text of Section 3.311(d) refers to 

‘knowledge’ and mentions nothing about due diligence or routines for communicating 

information.” But United concedes that the plain language of the Texas UCC defines 

organizational “knowledge” with reference to the due diligence inquiry.
19

insufficient evidence to impute knowledge to Stone or Berger because there was no 

testimony regarding (1) any routines for forwarding communications received at

United’s mailing addresses (other than the lockbox address) to the appropriate United 

representatives or (2) United’s compliance or noncompliance with those routines.

20

It is true that neither party presented evidence regarding the details of United’s 

procedures for routing information received at a non-lockbox mailing address. But 

while the Texas UCC provides that an organization “exercises due diligence if it 

maintains reasonable routines . . . and there is reasonable compliance with the 

routines,” the statute does not state that this is the only method of proving due 

diligence. Id. A lack of due diligence—or more accurately, a finding that the 

organization’s point of contact would have known had the organization exercised due 

diligence—can be supported by other evidence. And it is in this case.

1. Berger’s Letter

The trial court found that Berger was one of the “individual[s] conducting th[e]

transaction” with “direct responsibility with respect to the disputed obligation.” Tex. 

Bus. & Com. Code Ann. §§ 1.202(f), 3.311(d). In other words, what he knew or 

20United also alleges that the trial court’s Subsection (d) findings are “legally 

unsupported” because “the commentary to the Texas UCC expressly states that 

tendering a check to a lockbox does not impute knowledge to a claimant.” Cf. Tex. 

Bus. & Com. Code Ann. § 3.311 cmt. 7. But the trial court’s findings and conclusions 

do not indicate that its Subsection (d) findings were based on the lockbox personnel’s 

knowledge; rather, the Subsection (d) findings were based on the knowledge that 

Stone and Berger would have had if United had exercised due diligence.
20

should have known could be used to satisfy the due diligence standard. See id.

§§ 1.202(f), 3.311(d). 

And there was evidence that Berger was mailed his own copy of the settlement 

letter at his correct address in Minnesota, that the letter had an estimated delivery date

of September 4, that two other settlement letters mailed at the same time were 

successfully delivered to their destinations on September 5, and that Berger’s letter 

ultimately made its way into his files. Berger testified that he discovered the letter in

his files and did not know the date on which he had received it. Although he

surmised that “[i]t would have been after September 12th,” the trial court, as the 

factfinder, had the discretion to believe or disbelieve all or any of Berger’s testimony. 

See Golden Eagle Archery, Inc., 116 S.W.3d at 761, 774–75 (reiterating that “the jury [i.e.,

factfinder] is the sole judge of the credibility of witnesses and the weight to be given 

to their testimony” and that “the jury ‘could believe all or any part of the testimony of 

any witness and disregard all or any part of the testimony of any witness’” (quoting

Pilkington v. Kornell, 822 S.W.2d 223, 230 (Tex. App.—Dallas 1991, writ denied)). 

Exercising this discretion, the factfinder could have doubted Berger’s trial conjecture

and concluded—based on (1) Berger’s deposition testimony that he did not recall 

receiving the letter and would “[p]robably not” have kept it, (2) his ultimate discovery 

of the settlement letter in his files, and (3) the USPS evidence—that Berger, an

“individual conducting th[e] transaction,” had received his copy of the settlement 

letter up to six days before the check was cashed. Cf. Milton M. Cooke Co., 290 S.W.3d 
21

at 310–11 (applying UCC’s due diligence definition in accord and satisfaction case and

holding that claimant bank had no knowledge under Subsection (d) where trial court 

found that the debtor “delivered the Full Satisfaction Checks to [the claimant bank’s]

tellers” and not to anyone “with knowledge of the forgery dispute” or the authority to 

accept a settlement check). 

Six days’ notice provided an ample opportunity for United to intervene before 

Low-T’s settlement check was received, much less cashed. Tex. Bus. & Com. Code 

Ann. § 1.205(a) (“Whether a time for taking an action required by [the UCC] is 

reasonable depends on the nature, purpose, and circumstances of the action.”). 

Indeed, as Low-T points out, the Seventh Circuit has held that even three days’ notice 

of a settlement instrument qualifies as “a reasonable time” under the accord and

satisfaction statute in Illinois’s version of the UCC. IFC Credit Corp. v. Bulk Petroleum 

Corp., 403 F.3d 869, 873 (7th Cir. 2005) (holding case “f[ell] squarely within” 

Subsection (d) when designated point of contact received copy of letter and check

three days before check was cashed). The record thus supports the trial court’s 

finding that six days was “a reasonable time before collection of the instrument.” 

Tex. Bus. & Com. Code Ann. § 3.311(d). 

Putting these pieces together, there was factually sufficient evidence that, 

“within a reasonable time before collection of the instrument,” a copy of Low-T’s 

settlement letter and check—making plain “that the instrument was tendered in full 

satisfaction of the claim,” id.—was delivered to Berger’s Minnesota office and “would 
22

have been brought to [his] attention if the organization had exercised due diligence.” 

Id. § 1.202(f); see id. § 3.311 cmt. 7. 

United contends, though, that Berger’s imputed knowledge is inapposite

because the great weight and preponderance of the evidence showed that Stone was 

the only “individual conducting th[e] transaction.”21 But even if this were the case,

Berger’s imputed awareness of the settlement still supports a finding that Stone 

should have known of the settlement prior to the check’s cashing. 

As the associate general counsel involved in Low T’s claim, Berger “ha[d]

reason to know of the [Low-T] transaction and that the transaction would be 

materially affected by the [settlement] information.” Id. § 1.202(f). He sent Low-T 

the initial notification of United’s overpayment determination, he responded to LowT’s legal arguments in a May 2018 letter, he joined a settlement-focused conference

21United argues that, because it allegedly designated Stone as the point of 

contact for claim-related communications in compliance with Subsection (c)(1), Stone

was the only “individual conducting th[e] transaction” whose knowledge could satisfy 

Subsection (d). See Tex. Bus. & Com. Code Ann. §§ 1.202(f), 3.311(c), (d). But

Comment 7 to Section 3.311 rejects this interpretation of the “individual conducting 

the transaction”: 

[T]he “individual conducting that transaction” is an employee or other 

agent of the organization having direct responsibility with respect to the 

dispute. For example, if the check and communication are received by a 

collection agency acting for the claimant to collect the disputed claim, 

obtaining payment of the check will result in an accord and satisfaction 

even if the claimant gave notice, pursuant to subsection (c)(1), that full satisfaction 

checks be sent to some other office. 

Id. § 3.311 cmt. 7 (emphasis added). 
23

with Low-T, and he received or was copied on much of the correspondence between 

Stone and Moraine. As someone who knew of the transaction and the material effect 

of the settlement letter, due diligence required him to communicate the settlement

letter to Stone. Id. (“Due diligence does not require an individual acting for the 

organization to communicate information unless . . . the individual has reason to know 

of the transaction and that the transaction would be materially affected by the 

information.” (emphasis added)). And the trial court could have concluded that, if 

Berger had exercised due diligence and communicated the material settlement 

information to Stone, then the matter would have been brought to Stone’s attention

six days before the check was received, i.e., “within a reasonable time before 

collection of the instrument was initiated.” Id. § 3.311(d). 

Either way, Berger’s settlement letter satisfied the due diligence provision in 

Subsection (d). Id. §§ 1.202(f), 3.311(d).

2. Forest Park Letter

But Berger’s settlement letter did not stand alone. There was also evidence that 

the Forest Park office’s “regular duties” included communicating correspondence to 

Stone, and that had they done so, Stone would have known of the settlement proposal 

before Low-T’s check was cashed. See id. § 1.202(f).

Berger described the Forest Park address as a “regional mail office[]” 

responsible for “intaking mail” and “rout[ing] [it] to the appropriate location.” And 

although United insists that the Forest Park address was only intended for appeal-
24

related documentation and “was not a proper address to use to communicate with 

Stone,” the record supports a finding that United directed Low-T to send 

correspondence to the Forest Park address—both before and after its review of LowT’s appeal documentation had concluded—in a manner that implicitly associated that

address with Stone. 

In United’s initial letter notifying Low-T of its overpayment determination, it 

identified Stone as the “investigator,” and just a few lines later, the letter told Low-T 

that it could dispute the overpayment claim by mailing documentation to “United 

Payment Integrity[,] Attn: Recovery Investigations” using the Forest Park address. 

Logic dictates that “Investigations” likely involve “investigators” such as the one

United had identified: Stone. 

Then, several of Stone’s follow-up letters to Low-T indicated that she worked 

in the “United Payment Integrity” division—seemingly the same division as that 

referenced in the Forest Park address.22 And Stone herself repeatedly told Low-T to 

send mailings to the Forest Park address. After doing so in one letter—instructing

Low-T to submit “appeal documentation . . . to the [Forest Park] United Payment 

Integrity address”—Stone stated, “[w]e look forward to receipt of [your] appeal 

documentation,” implying by the royal “we” that she would be among those who

22We note, however, that there were two different addresses attributed to

“United Payment Integrity” in United’s letters or on its letterhead: the Forest Park 

address and the Atlanta P.O. Box address. 
25

would receive the documents sent to the Forest Park address. She later indicated that 

she was, as she told Low-T that “[w]e reviewed the documentation submitted” and 

that the overpayment amount had been adjusted. 

Stone used the Forest Park address again in May 2018, even though United had 

already concluded its review of Low-T’s appeal documentation. When Stone could 

not open an encrypted email from Moraine, she asked him to “provide [his] 

communication via letter to the Forest Park address,” implying that she could receive 

communications at that address as an alternative to email. 

Plus, both Stone and Berger confirmed that, prior to the settlement offer, the 

letters Low-T had mailed to the Forest Park address were ultimately received by 

Stone. 

Based on this evidence, the trial court could have concluded that the Forest 

Park “regional mail office[]”—a mail office responsible for “intaking” mail, an office 

that had successfully routed Low-T’s letters to Stone in the past, and an address that 

Stone had repeatedly told Low-T to use for claim-related correspondence—had been 

held out by United as a mailing address for Stone and could have been expected to

communicate correspondence to Stone as part of its “regular [job] duties.” Id.; cf. 

Bank of Salt Lake v. Corp. of President of Church of Jesus Christ of Latter-Day Saints, 534 P.2d 

887, 890–91 (Utah 1975) (holding that church did not have notice under due diligence 

definition in Utah’s codified UCC where clerical church employee received actual 
26

notice but had no duty to communicate information and no knowledge of the 

underlying transaction). 

It is undisputed that the Forest Park regional mail office received Low T’s 

settlement letter on September 5. It is undisputed that this letter was addressed to

Stone specifically. Cf. Old Kent Bank-Se. v. City of Detroit, 444 N.W.2d 162, 166 (Mich. 

Ct. App. 1989) (applying Michigan UCC’s due diligence definition and rejecting city’s

argument that it had no notice where city claimed letter was sent to wrong office but 

certified letter was “directed to the Treasurer’s Department” and it was reasonable to 

assume that “the city’s agent would send it to the Treasurer’s Department” when it

arrived at the city office); F.D.I.C. v. Heaton, No. 2:13-CV-219 TS, 2014 WL 2777601, 

at *6 (D. Utah June 19, 2014) (mem. op. and order) (holding Utah UCC’s version of

Subsection (d) inapplicable when debtor did not address his settlement offer to his 

point of contact but instead mailed his offer to a department that gathered and 

scanned debtors’ financial information). And it is undisputed that, when the

settlement check was cashed six days later, the Forest Park office still had not 

transmitted the settlement letter to Stone or notified her of its existence. Whatever 

procedures were or were not in place at Forest Park, the evidence supports the trial 

court’s finding that the Forest Park office—which, again, had been held out by United 

as having the responsibility to communicate information to Stone—inexplicably failed 

to communicate the settlement letter within six days of the letter’s receipt. 
27

This unexplained delay is even more striking in light of the procedures in place 

to quickly convey information received at another United address: the Hapeville 

lockbox. Berger testified that the “Wells Fargo staff will sweep the lockbox on a daily 

basis,” they “image any . . . checks and any documentation associated with the check,” 

and then they “enter [the images] into [United’s] document tracking systems.” The 

lockbox personnel were able to communicate the scanned check and documentation 

to the relevant United representative “the next day.” The lockbox procedures thus 

demonstrate United’s ability to quickly communicate information within the 

organization23 and United’s maintenance of a “document tracking system[].” If a 

lockbox dedicated to cashing checks—not “rout[ing]” mail—could log mailings into

United’s document tracking system and communicate those mailings to the 

appropriate United representative the next day, then absent evidence to the contrary, a 

United mailing center repeatedly referenced by Stone and dedicated to the task of

“intaking” and “rout[ing]” mail could have been reasonably expected to communicate 

certified mailings within six days of receiving them. The Forest Park mail center’s 

unexplained six-day delay supports an inference that Stone “would have [had the 

settlement letter] brought to [her] attention if the organization had exercised due 

diligence.” Tex. Bus. & Com. Code Ann. § 1.202(f). 

23Indeed, it demonstrates United’s ability to quickly communicate information 

even when that information is coming from a contractor such as Wells Fargo. 
28

In sum, the trial court was not manifestly unjust in concluding that, had United 

exercised due diligence, Low-T’s tendering of its check in full satisfaction of United’s

claim would have been brought to the attention of the individual (or individuals) 

conducting and directly responsible for the transaction multiple days before the check

was received or cashed. See id. §§ 1.202(f), 3.311(d). We overrule United’s challenge 

to the due diligence override.

24 

And this issue is dispositive; because the due diligence override applies, the 

Subsection (c) exceptions are unavailable as a matter of law. Id. § 3.311(c), (d), cmt. 7 

(“Subsection (c) is subject to subsection (d).”). 

IV. Conclusion

Having overruled United’s dispositive issue, we affirm the trial court’s 

judgment. Tex. R. App. P. 43.2(a). 

/s/ Bonnie Sudderth

Bonnie Sudderth

Chief Justice

Delivered: January 5, 2023

24United also argues that the trial court’s judgment will have a “chilling effect 

on large corporations that process thousands of checks a day.” It is unclear if United 

intends to raise this as a separate appellate issue. Regardless, our role is to interpret 

and apply the law—not to rewrite it or to second-guess the legislature’s balance of

competing policies. See Creative Oil & Gas, LLC v. Lona Hills Ranch, LLC, 591 S.W.3d 

127, 133 (Tex. 2019) (“It is not the Court’s task to choose between competing policies

addressed by legislative drafting. We apply the mandates in the statute as written.” 

(quoting In re Tex. Dep’t of Fam. & Protective Servs., 210 S.W.3d 609, 614 (Tex. 2006)

(op. on reh’g) (internal citations omitted))).