Acton Const. Co., Inc. v. State, C6-84-1596

Citation363 N.W.2d 130
Decision Date19 February 1985
Docket NumberNo. C6-84-1596,C6-84-1596
PartiesACTON CONSTRUCTION COMPANY, INC., Appellant, v. STATE of Minnesota, Respondent.
CourtCourt of Appeals of Minnesota

Syllabus by the Court

1. The trial court erred in finding an accord and satisfaction where there was no mutual agreement to discharge the contract or the cause of action.

2. Retention by a creditor of an amount certain that is owed and not in dispute is not the additional consideration needed to support a compromise settlement whereby creditor waives further claims.

3. The State is bound by the findings of the trial court on the amount of damages because it did not file a notice of review.

David B. Sand, Minneapolis, for appellant.

Hubert H. Humphrey, III, Atty. Gen., R. Clark DeVeau, Asst. Atty. Gen., St. Paul, for respondent.

Considered and decided by POPOVICH, C.J., and RANDALL and CRIPPEN, JJ., with oral argument waived.

OPINION

RANDALL, Judge.

Acton Construction Company appeals from a judgment that accord and satisfaction bars recovery of its claim for additional compensation incurred on the construction of a bridge and related highway work. Acton contends that the evidence does not support the trial court's determination that an accord and satisfaction resulted when it signed a Department of Transportation certificate of final acceptance and negotiated a check in the amount set forth in the certificate. The State contends that the evidence supports the trial court's finding of an accord and satisfaction. If this court concludes that Acton's claim is not barred by accord and satisfaction, the State in the alternative claims: (1) Acton assumed the risk of the unexpected cost, (2) most of the claims made are for work expressly required in the contract, and (3) damages should be reduced. We reverse and remand.

FACTS

In April of 1978 Acton and the State entered into a contract. Acton agreed to construct a bridge and complete the related highway work within 120 working days. The State agreed to pay Acton $1,367,734.80. Liquidated damages were set at $2,000 a day if the work was not substantially completed within the time limit.

Acton began work on April 19, 1978. The State began charging working days on April 28. There was a cement shortage during the summer of 1978. In both August and September Acton wrote to the State informing it of potential delay because of the shortage and said that when it knew the duration of the delay it would request an equitable extension of time on the contract. On October 10, the day before it was scheduled to pour the bridge deck, Acton's concrete supplier notified it that concrete was not available. It received the necessary concrete on October 19 but paid a premium. Acton informed the State about the premium and delay and said it would be filing claims. In a later letter, Acton protested the State's assessment of working days which did not take into account the delay due to the shortage, and asked the State to consider alternative methods of construction or to compensate it for the extra costs of cold weather protection of the concrete. The State did not respond to the latter request. Acton found it necessary to pay a premium for the additional concrete it needed. Delays required it to incur additional expenses for protecting the concrete from cold.

The State allowed the bridge to be partially opened on December 6. In May of 1979 the State officially waived liquidated damages.

After the project was complete in July of 1979 Acton submitted a claim for additional expenses. In October the State concluded that the work performed was within the scope of the agreement and denied the claim. In January of 1980 Acton requested the State to release the remaining contract monies on the project. The State replied by sending a final voucher which set forth in detail the payments that the State believed due under the contract. A cover letter advised Acton that the certificate of final acceptance should be signed and that any claims for additional compensation would not be considered unless a detailed statement was submitted so that a settlement or denial of the additional claims could be made within 90 days.

The executive vice-president, the secretary, and the general manager of Acton signed a certificate of final acceptance which contained the following:

The undersigned contractor does hereby certify that he has performed and completed all the work described herein in accordance with, and pursuant to, the terms of his contract, and does hereby accept this final voucher as being correct, full and complete and does make claim in the amount of $33,666.01 for final payment on this contract in accordance with this final voucher.

Acton returned the duly executed certificate to the State. It attached a letter signed by the general manager with a "Notice of Reservation of Rights" which read:

"Please take notice that this Final Contract Voucher No. 13 on S.P. 2758-34, Glory Hole By Pass and Construct Bridge 27062, Contract No. 16991, is being signed with full reservation by Acton Construction Company, Inc., as Contractor, of its rights to assert claims and defenses for changes, changed conditions, quantity adjustments, extra work, delays, disruptions and damages for breach of contract including, but not limited to, those set forth in Acton's letter of claim dated August 28, 1979 and documents submitted therewith."

The State issued a check to Acton for $33,666.01. Acton negotiated it.

Acton then brought this action seeking recovery of $26,694.68 in additional compensation. The action was tried to the court, which concluded that an accord and satisfaction resulted when Acton executed the certificate and thereafter negotiated the check for $33,666.01. The court further concluded that the "Notice of Reservation of Rights" was of no effect and ordered that judgment be entered in favor of the State.

ISSUES

1. Did the trial court err in concluding that accord and satisfaction resulted when Acton executed the certificate and negotiated the check of $33,666.01?

2. Is the State barred from challenging the findings of the trial court on the amount of damages because it failed to file a notice of review?

ANALYSIS
I.

Accord and satisfaction

An accord and satisfaction acts to discharge a contract or cause of action. "It is itself an executed contract, and it may be expressed or implied from circumstances which clearly and unequivocally indicate the intention of the parties." Roaderick v. Lull Engineering Co., Inc., 296 Minn. 385, 389, 208 N.W.2d 761, 764 (1973). The supreme court has not held that an accord and satisfaction has been reached in any case where mutual agreement was lacking. See Butch Levy Plumbing and Heating, Inc. v. Sallblad, 267 Minn. 283, 290, 126 N.W.2d 380, 385 (1964). However, if an accord constitutes a binding contract and is fully performed, the original liability is then discharged. Roaderick, 296 Minn. at 389, 208 N.W.2d at 764.

If there is an honest dispute between the parties, a tender...

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9 cases
  • RMP Industries, Ltd. v. Linen Center
    • United States
    • Court of Appeals of Iowa
    • 29 Enero 1986
    ...the demand is unliquidated within the meaning of accord and satisfaction." (citations omitted)). RMP cites Acton Construction Co. v. State, 363 N.W.2d 130 (Minn.Ct.App.1985), as authority for the proposition that when a check is negotiated which is for less than the total disputed amount wi......
  • Hagerman v. Yukon Energy Corp.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (8th Circuit)
    • 23 Marzo 1988
    ...with knowledge of all the facts, constitutes an acceptance of the offer to settle the indebtedness * * *." Acton Constr. Co., Inc. v. State, 363 N.W.2d 130, 133-34 (Minn.App.1985) (quoting Butch Levy Plumbing & Heating, Inc. v. Sallblad, 267 Minn. 283, 290, 126 N.W.2d 380, 385 (1964) (empha......
  • Kolby v. Northwest Produce Co., Inc., No. C3-93-493
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    • 14 Septiembre 1993
    ...respondents' challenges to parts of the order or judgment appealed when no notice of review has been filed. See Acton Constr. Co. v. State, 363 N.W.2d 130, 135 (Minn.App.1985); Smoliak v. Myhr, 361 N.W.2d 153, 157 (Minn.App.1985). Respondents' claim of coverage under clause c is not properl......
  • In re Schirber v. Blenkush, No. A03-270 (Minn. App. 12/9/2003)
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    ...Hoyt Inv. Co. v. Bloomington Commerce & Trade Ctr. Ass., 418 N.W.2d 173, 175 (Minn. 1988); see also Acton Constr. Co. v. State, 363 N.W.2d 130, 134-35 (Minn. App. 1985), review denied (Minn. May 22, 1986). We also note Blenkush did not challenge the constitutionality of the provision at the......
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