Format: missing paragraph tags for first item after Category label

Shame on me. I forgot to Preview and did not catch that I needed the code tags for you to see the HTML. Here it is again.

Currently used format code...

<p>Activities -Calendar<a href=" " rel="nofollow">Item #1</a></p>
<p><a href="..." rel="nofollow">Item #2</a></p>
<p><a href="..." rel="nofollow">Item #3</a></p>

Should be paragraph or heading tags around the Category.

<p>Activities -Calendar</p>
<p><a href=" " rel="nofollow">Item #1</a></p>
<p><a href="..." rel="nofollow">Item #2</a></p>
<p><a href="..." rel="nofollow">Item #3</a></p>

I delete the old pages after 1-2 weeks. If it has not been deleted, you can see the formatting error on the screen.

http://heartwoodtmn.org/subscriber_news/heartwood-edigest

http://heartwoodtmn.org/subscriber_news/heartwood-edigest-3

I am using the default Garland theme. The page displays as if the H3 tag does not create a break in this usage on the screen view or in the email. The H3 tag does work on other pages.

  // $newsletter['body'] created here
  $output = '';
  // Sort content by type
  foreach($output_by_type as $type => $content) {
    $new_name = check_plain(variable_get('simplenews_digest_content_rename_' . $type, node_get_types('name', $type))); 
    $output .= "<h3>$new_name</h3>" . $content . "\n";
  }

  return $output;
}