Cass Const. Co., Inc. v. Brennan

• Decision Date: 28 February 1986
• Docket Number: No. 84-867,84-867
• Citation: 382 N.W.2d 313,222 Neb. 69
• Parties: , 42 UCC Rep.Serv. 1591 CASS CONSTRUCTION COMPANY, INC., a Nebraska Corporation, Appellant, v. Tim BRENNAN and Jim Asmussen, Appellees.
• Court: Nebraska Supreme Court

Page 313

382 N.W.2d 313

222 Neb. 69, 42 UCC Rep.Serv. 1591

CASS CONSTRUCTION COMPANY, INC., a Nebraska Corporation, Appellant, v. Tim BRENNAN and Jim Asmussen, Appellees.

No. 84-867.

Supreme Court of Nebraska.

Feb. 28, 1986.

Syllabus by the Court

1. Accord and Satisfaction: Pleadings. An answer sufficiently pleads accord and satisfaction when it contains or presents all of the elements of an accord and satisfaction, even if it does not use the terms accord and satisfaction and even if it could have been more technically or artfully drawn.

2. Uniform Commercial Code: Accord and Satisfaction. The language of Neb. U.C.C. § 1-207 (Reissue 1980) and its history, purpose, and policy do not alter the common-law principles of accord and satisfaction.

3. Statutes. We will, if possible, discover the legislative intent from the language of the statute and give it effect. We will not read a statute as if open to construction as a matter of course.

4. Summary Judgment. A party is entitled to summary judgment if the pleadings, depositions, and admissions on file, together with any affidavits, show that there is no genuine issue of material fact, that the ultimate inferences to be drawn from those facts are clear, and that the moving party is entitled to judgment as a matter of law.

5. Summary Judgment. The requirements to sustain the motion are the same whether one party or both parties have moved for summary judgment.

6. Accord and Satisfaction. An indispensable element of accord and satisfaction is an actual and substantial difference of opinion. One must assert the validity of his claim and the other must in good faith deny all or part of it. His denial cannot be fabricated for use as a pretext to evade the discharge of an obligation. Disclaimer must be bona fide and based upon real faith that the demand is not meritorious.

7. Summary Judgment. On a motion for summary judgment, the moving party bears the burden of proving that no genuine issue as to any material fact exists and that the movant is entitled to judgment as a matter of law. The movant may discharge this burden by showing that if the case proceeded to trial, the opponent could produce no competent evidence to support a contrary position.

Robert E. Wheeler, of Stowell & Wheeler, P.C., Ord, for appellant.

Donna M. Farrell, of Peebles, Smith & Farrell, Neligh, for appellee Asmussen.

John M. Gerrard, of Domina & Gerrard, P.C., Norfolk, for appellee Brennan.

William B. Brandt and Robert J. Hallstrom, of Brandt, Horan, Hallstrom & Sedlacek, Lincoln, for amicus curiae Retail Merchants Ass'n of Nebraska, Inc.

KRIVOSHA, C.J., and BOSLAUGH, WHITE, HASTINGS, CAPORALE, SHANAHAN, and GRANT, JJ.

PER CURIAM.

This appeal presents the question of whether Neb. U.C.C. § 1-207 (Reissue 1980) has altered the common-law doctrine of accord and satisfaction as applied to checks tendered in full payment of a disputed obligation. The issue was before the district court on cross-motions for summary judgment. The trial court sustained the defendants' motions for summary judgment and dismissed the plaintiff's petition.

On approximately March 1, 1980, Cass Construction Company, Inc. (Cass), and Tim Brennan and Jim Asmussen, acting on behalf of A & B Land Company, entered into an oral agreement in which Cass agreed to do certain dirt-moving work on the defendants' property in Antelope County, Nebraska, for $5,600.

During the time that Cass was performing the work, Brennan contacted John Hruby, an employee of Cass, concerning additional dirt-moving work not included in the $5,600 bid. Apparently, the parties orally agreed that the additional work would be billed on an hourly basis, depending upon the time spent and equipment used. Cass completed the additional work and subsequently submitted an itemized statement for $18,125.

On June 2, 1980, Cass received a check from A & B Land Company for $1,408.25, accompanied by a letter from defendant Asmussen expressing dissatisfaction with the work done and stating that the $1,408.25 was in "final settlement of the bill." In a letter to Asmussen dated June 2, 1980, counsel for Cass explained that while it accepted the $1,408.25 as partial payment on the debt, the defendants still owed $16,716.75 to Cass and that if the bill was not paid or a compromise settlement reached by June 16, 1980, a lien would be filed against the real estate and "appropriate legal action will be taken, if necessary." Cass then negotiated and deposited the check.

Cass sued for the remaining balance after A & B Land Company made no further payment. In its amended petition Cass asserted that it had fully performed its obligations under the oral agreement, entitling it to the remaining $16,716.75, plus interest since June 2, 1980. The defendants answered, claiming that the oral agreement was unenforceable as violative of the statute of frauds and that Cass had breached any contract that may have existed due to its failure to perform the work in an acceptable, workmanlike manner according to standard practices in the industry. The defendants also claimed that by cashing the check for $1,408.25, Cass had compromised any right it may have had to pursue the additional amount. In its reply Cass contended that it had performed the work in accordance with industry standards and that it had cashed the check with full reservation of rights, as indicated in the June 2 letter to Asmussen. The parties then moved for summary judgment.

In its order issued October 29, 1984, the Antelope County District Court sustained the defendants' motions for summary judgment, overruled the plaintiff's motion, and dismissed the plaintiff's petition. The court specifically found that the parties had reached an accord and satisfaction when Cass deposited the check for $1,408.25 which the defendants had tendered in full settlement of a bona fide dispute. Further, the court found that § 1-207 does not abolish or alter the common-law principle of accord and satisfaction. The court concluded that since Cass had accepted the check for $1,408.25, it accepted it on the defendants' terms, that is, that the payment was in full satisfaction of the defendants' debt to Cass. This appeal by Cass followed.

Cass first assigns as error the district court's implicit finding that the defendants sufficiently pled accord and satisfaction as an affirmative defense. Cass asserts that the defendants' answers do not adequately allege the affirmative defense of accord and satisfaction because they fail to plead facts constituting a bona fide dispute.

Neb.Rev.Stat. § 25-811(2) (Reissue 1979) requires that a defendant's answer contain "a statement of any new matter constituting a defense ... in ordinary and concise language...." Neb.Rev.Stat. § 25-812 (Reissue 1979) further provides that a defendant may set forth in its answer as many grounds of defense as it may have. Such defenses must be "separately stated and numbered, and they must refer in an intelligible manner to the cause of action which they are intended to answer."

If a party intends to plead accord and satisfaction as a defense, the answer must contain allegations showing such intent, and the facts relied upon to establish the defense must be pled. See, Long v. Weiler, 395 S.W.2d 234 (Mo.App.1965); 1 C.J.S. Accord and Satisfaction § 72 (1985). An answer sufficiently pleads accord and satisfaction when it contains or presents all of the elements of an accord and satisfaction, even if it does not use the terms accord and satisfaction and even if it could have been more technically or artfully drawn. Wood v. Yancey Brothers, 135 Ga.App. 720, 218 S.E.2d 698 (1975). At a minimum, the defense of accord and satisfaction requires nothing more be pled than the payment and acceptance, on a mutual agreement, express or implied, of a certain sum of money in full settlement of a preexisting and previously disputed obligation. B. & W. Engineering Co. v. Beam, 23 Cal.App. 164, 137 P. 624 (1913).

Brennan and Asmussen filed separate answers. In paragraph 3 of Brennan's answer, he alleges that Cass breached any contract that may have existed when it failed to perform the dirt-moving work in a timely and workmanlike manner. Brennan goes on in paragraph 4 to state that Cass settled any claims it may have had against the defendants when it cashed the conditional check. Asmussen's answer is essentially the same as Brennan's.

The defendants' answers sufficiently alleged the affirmative defense of accord and satisfaction as required by §§ 25-811 and 25-812. While it is true that the language in the answers does not incorporate the precise terminology of an accord and satisfaction, it is also true that parties are not required, and in fact are not encouraged, to plead legal conclusions. See Johnson v. Radio Station WOW, supp. op. 144 Neb. 432, 14 N.W.2d 666 (1944), rev'd on other grounds 326 U.S. 120, 65 S.Ct. 1475, 89 L.Ed. 2092 (1945). It is not necessary to state a defense in any particular form so long as the facts supporting the assertion are stated. Waite v. Samson Dev. Co., 217 Neb. 403, 348 N.W.2d 883 (1984).

Cass next contends that the district court erred when it determined that § 1-207 does not alter or abolish the doctrine of accord and satisfaction. At common law a debtor could tender to its creditor an amount less than that claimed by the creditor by a check that clearly indicates that it is in full settlement of a bona fide dispute. The tender is considered to be an offer by the debtor to compromise the disputed claim. The creditor may accept the conditioned offer by cashing the check or reject it by destroying the check or returning it to the debtor. See High-Plains Cooperative Assn. v. Stevens, 204 Neb. 664, 284 N.W.2d 846 (1979). The actual, subjective intent of the creditor does not matter. Les Schwab Tire Centers v. Ivory Ranch, 63 Or.App. 364, 664 P.2d 419 (1983). If the creditor cashes a "full payment check," the creditor is agreeing...