Collection Professionals, Inc. v. Logan

• Citation: 231 Ill.Dec. 225,695 N.E.2d 1344,296 Ill.App.3d 959
• Decision Date: 27 May 1998
• Docket Number: No. 4-97-0842,4-97-0842
• Parties: , 231 Ill.Dec. 225 COLLECTION PROFESSIONALS, INC., Plaintiff-Appellee, v. Robert LOGAN, Defendant-Appellant (Mary Logan, Defendant, Putnam County Bank, Garnishee).
• Court: United States Appellate Court of Illinois

Page 1344

695 N.E.2d 1344

296 Ill.App.3d 959, 231 Ill.Dec. 225

COLLECTION PROFESSIONALS, INC., Plaintiff-Appellee, v. Robert LOGAN, Defendant-Appellant (Mary Logan, Defendant,

Putnam County Bank, Garnishee).

No. 4-97-0842.

Appellate Court of Illinois,

Third District.

May 27, 1998.

Robert B. Steele and Melinda G. Sammons (argued), Aplington, Kaufman, McClintock, Steele & Barry, LaSalle, for Collection Professionals, Inc.

Presiding Justice HOMER delivered the opinion of the court:

Judgment-debtor, Robert Logan, appeals the trial court's decision to permit execution of a nonwage garnishment against his accounts with Putnam County Bank in favor of judgment-creditor, Collection Professionals, Inc. Robert contends that an agreed order executed by Collection Professionals and his cojudgment-debtor constituted an accord and satisfaction of the entire judgment which precluded the garnishment of his accounts. He also challenges the constitutionality of the nonwage garnishment statute (735 ILCS 5/12-701 et seq. (West 1996)). Following our review, we affirm.

FACTS

Collection Professionals sued Robert Logan and his former wife, Mary Logan, to collect on various outstanding medical bills incurred during their marriage. When Robert and Mary divorced in 1996, they agreed that Mary would assume responsibility for paying those bills as a part of the settlement; although, Robert acknowledges that he remained jointly and severally liable for the debt pursuant to section 15 of the Rights of Married Persons Act (750 ILCS 65/15 (West 1996)).

On June 6, 1996, Collection Professionals obtained judgment in the amount of $4,756.30 plus costs against Robert and Mary. Judgment against Robert was entered by default. Judgment against Mary was entered by consent in a separate order which established Mary's monthly payment schedule for the satisfaction of the judgment, costs, and statutory interest. The order provided that if Mary failed to make payments as scheduled, Collection Professionals would file other postjudgment enforcement action, including garnishment.

Because Mary failed to meet the payment schedule in July 1996, Collection Professionals commenced nonwage garnishment proceedings against her naming Putnam County Bank (the Bank) as garnishee. Collection Professionals discovered that the Bank held no garnishable assets of Mary because her only account with the Bank was an overdrawn checking account. Despite Mary's default, it appears from the record that Mary subsequently made an indeterminate number of payments toward the judgment.

In March 1997, Collection Professionals instigated the instant nonwage garnishment action against Robert's accounts to collect $3,575.70, the amount remaining due on judgment including costs and interest. The Bank, again named as garnishee, declared that it held deposit accounts totalling $15,572.86 belonging to Robert.

Robert filed objections to the garnishment and a motion to quash arguing: (1) Collection Professionals was barred from enforcing the judgment against him because its agreement with Mary constituted an accord and satisfaction of the judgment, or alternatively, a compromise and settlement, and (2) the nonwage garnishment statute is unconstitutional because it failed to provide him with pre-seizure notice. After a hearing, the trial court denied Robert's objections and motion to quash. The court also denied Robert's subsequent motion to stay the garnishment pending appeal. The court ordered the Bank to turn over $3,084.00 from Robert's accounts which represented the judgment balance. Robert appeals.

ANALYSIS

I. Propriety of the Nonwage Garnishment

The instant appeal arises out of a garnishment proceeding which is a purely statutory remedy for the enforcement of a judgment. In re Marriage of Schomburg, 269 Ill.App.3d 13, 17, 206 Ill.Dec. 753, 755, 645 N.E.2d 1005, 1007 (1995). To maintain a garnishment action, there must be a valid judgment and the garnishor must meet all of the requirements set forth in the garnishment statute. Seidmon v. Harris, 172 Ill.App.3d 352, 356-57, 122 Ill.Dec. 284, 286, 526 N.E.2d 543, 545 (1988).

Robert does not dispute that Collection Professionals obtained a valid default judgment against him. Nor does he dispute that Collection Professionals followed the procedures set forth in the nonwage garnishment statute (735 ILCS 5/12-701 et seq. (West 1996)). He contends, however, that the garnishment of his accounts was improper because the agreed order between Mary and Collection Professionals constituted an accord and satisfaction of the entire obligation. He argues that Collection Professionals was precluded from taking any enforcement action against him because Mary, his cojudgment-debtor, had already satisfied the obligation by agreeing to pay it in full.

Because there is no dispute as to the facts upon which Robert's claim of accord and satisfaction is based, the issue presented to this court raises a question of law. See A.F.P. Enterprises, Inc. v. Crescent Pork, Inc., 243 Ill.App.3d 905, 912, 183 Ill.Dec. 356, 361, 611 N.E.2d 619, 624 (1993). As with all questions of law, we will conduct de novo review. Joel R. v. Board of Education of Mannheim School District 83, 292 Ill.App.3d 607, 613, 226 Ill.Dec. 867, 872, 686 N.E.2d 650, 655 (1997).

"Accord and satisfaction" is a method of discharging a claim whereby the parties agree to give and accept something other than that which is due in settlement of a claim. 1 Am.Jur.2d Accord & Satisfaction § 1 (1994). The accord is the agreement settling the existing dispute which presupposes a disagreement as to the amount due, and the satisfaction is the execution of the accord. Professional Therapy Services, Inc. v. Signature Corp., 223 Ill.App.3d 902, 916, 166 Ill.Dec. 269, 278, 585 N.E.2d 1291, 1300 (1992). A valid accord and satisfaction completely discharges the debtor's existing duties and constitutes a defense to any attempt to enforce claims based on those duties. 1 Am.Jur.2d Accord & Satisfaction § 1 (1994). Further, an accord and satisfaction between the creditor and one debtor will discharge all other jointly and severally liable debtors from further liability on the claim. 1 Am.Jur.2d Accord & Satisfaction § 12 (1994).

Ordinarily, an accord and satisfaction requires: (1) a bona fide dispute; (2) an unliquidated claim; (3) consideration; and (4) a shared and mutual intent to compromise the claim. Grove v. Winter, 197 Ill.App.3d 406, 413, 143 Ill.Dec. 787, 791, 554 N.E.2d 722, 726 (1990). The instant facts do not support Robert's claim of accord and satisfaction. The record reveals that neither Robert nor Mary disputed the amount claimed in the complaint. The claim was certain and not unliquidated. Evidence of consideration and mutual intent to compromise the claim is lacking.

Nevertheless, Robert points out that an undisputed claim may, in some instances be fulfilled through accord and satisfaction. See 1 Am.Jur.2d Accord & Satisfaction § 6 (1994). He argues that the agreed order between Collection Professionals and Mary constituted an executory accord which was fully satisfied by Mary's promise to pay the undisputed claim according to a payment plan. We disagree.

An "executory accord" is an agreement to accept at some future time a stipulated performance as satisfaction of an obligation. Black's Law Dictionary 570 (6th ed.1990). However, an executory accord is unenforceable and will not bar enforcement of the original obligation unless: (1) the creditor has clearly accepted the new promise of future performance, itself, and not the ultimate performance of it, as satisfaction, and (2) the new promise is based upon new consideration. 1 Am.Jur.2d Accord & Satisfaction § 51 (1994).

In this case there is nothing in the record demonstrating that Collection Professionals intended to accept the payment plan with Mary as satisfaction of the entire joint obligation. To the contrary, Collection Professionals sought and obtained judgment against both Mary and Robert. The judgment against Robert provided that "execution may issue;" and although Mary was granted the opportunity to fulfill her obligation over time, Collection Professionals expressly retained the right to enforce the judgment through alternative methods of enforcement. Further, there is nothing in the record to suggest that any new consideration was tendered in conjunction with the consent judgment. Therefore, because there was no enforceable executory accord and no satisfaction of this joint and several obligation, the fact that Collection Professionals assented to a payment plan for Mary in no way suspended Robert's joint liability for the obligation under the default judgment.

Defendant argues, in the alternative, that the agreed order constituted a compromise and settlement of the entire obligation. Again, we disagree.

A compromise is an agreement to terminate, by means of mutual concessions, a claim which is disputed in good faith or unliquidated. 15A Am.Jur.2d Compromise & Settlement § 1 (1976). "It involves an agreement that a substituted performance is acceptable instead of what was previously claimed to be due; thus, each party yields something and agrees to eliminate both the hope of gaining as much as he previously claimed and the risk of losing as much as the other party preciously claimed." 15A Am.Jur.2d Compromise & Settlement § 1 (1976). There is no compromise where, as in the instant case, the claim is undisputed and no concessions are made by the judgment-creditor. Although the agreed order did allow Mary to pay the judgment over time, she was required to pay statutory interest, and Collection Professionals expressly retained its right to enforce the judgment through alternative means.

We also find unpersuasive Robert's argument that Collection Professionals was improperly seeking a double recovery by enforcing the default judgment against him. There is nothing in the record to suggest that Collection...