Madden v. Deere Credit Services, Inc.

• Decision Date: 24 April 1992
• Citation: 598 So.2d 860
• Parties: 18 UCC Rep.Serv.2d 973 Willie Charles MADDEN v. DEERE CREDIT SERVICES, INC., and Rodney Warrick. 1901002.
• Court: Alabama Supreme Court

Page 860

598 So.2d 860

18 UCC Rep.Serv.2d 973

Willie Charles MADDEN v. DEERE CREDIT SERVICES, INC., and Rodney Warrick.

1901002.

Supreme Court of Alabama.

April 24, 1992.

J. Connor Owens, Jr. and Mollie P. Johnston of Owens, Benton & Simpson, Bay Minette, for appellant.

Von G. Memory, Montgomery, for appellees.

ON APPLICATION FOR REHEARING

ADAMS, Justice.

Our opinion of January 10, 1992, is withdrawn and the following is substituted therefor.

Willie Madden appeals from a summary judgment in favor of the defendants, Deere Credit Services, Inc. ("Deere"), and Rodney Warrick, in Madden's claim alleging conversion of an implement used in his logging business. We reverse and remand.

In June 1987, Mr. Madden was engaged in the business of cutting timber. On June 17, 1987, he purchased from Mid South Machinery Company, Inc., a "used cable skidder," an implement for use in his timber-cutting operation. He paid $8,971.10 of the purchase price and signed a note for the balance, which was secured by an agreement giving Deere an interest in the skidder. Under the note, a payment of $1,245.33 was due on July 20, 1987, and on the 20th day of 17 consecutive months thereafter.

Madden concedes that his payments on the note were made "on an irregular basis" and that he "was past due on monthly payments according to Deere records in the latter part of November 1988." Brief of Appellant, at 3. Indeed, Deere's "statement of account" shows that no payments were received during the months of September and October 1987 and May, August, and October 1988. Moreover, the payment received on July 7, 1988, was made by a check that was subsequently returned unpaid because of insufficient funds.

In early December 1988, Rodney Warrick, an "area collection manager" for Deere, visited Mr. Madden at his house regarding the delinquent account. The purpose of the visit, according to the defendants, was to collect $5,376.41, the amount of principal and interest that was overdue on the note. As evidence of the delinquency, the appellees contend, Warrick carried an "SAS" sheet, which contained only the names and addresses of customers and the amounts that were past due on each account. Madden informed Warrick that he had recently mailed a check to Deere in the amount of $3,000. He then tendered an additional check in the amount of $2,401.41. ¹ This $2,401.41 check carried the notation "paid in full."

Following the two payments made in December 1988, Madden, according to Deere's records, owed $1,309.37. After a number of unsuccessful attempts to collect the balance, Warrick met with Madden in the first week of August 1989. Again, Warrick was unable to collect the delinquent amount. ²

At the August meeting, Warrick asked to see the skidder. The following morning, Madden took Warrick to view the skidder at the site of his logging operation, which was on property owned by Container Corporation ("Container"). Several days later, at approximately 10:00 p.m. on the night of August 9, 1989, Warrick entered Container's property without the permission or knowledge of Madden or Container and repossessed the skidder. Because the site was deserted, the repossession was accomplished without physical or verbal altercations with anyone. Through deposition testimony, however, Madden alleged that when he arrived for work on the morning of August 10, a padlock, which he says had secured a gate blocking access to Container's property, had been broken. Warrick denies the existence of a fence or a gate.

On August 29, 1989, Madden sued Deere and Warrick for damages, alleging a conversion of the skidder. The defendants subsequently moved for a summary judgment, which was entered on February 19, 1991. Madden contends that the summary judgment in favor of the defendants was improper because, he says, the record reveals substantial evidence of a wrongful repossession. In particular, he insists that Deere's repossession was accomplished (1) after his obligation on the note had been extinguished through an accord reached by the parties regarding the amount due on the account; and (2) by a breach of the peace through a breaking and entering and a trespass on private property.

I. Accord and Satisfaction

Madden contends that when he tendered the check marked "paid in full" in the amount of $2,401.41, a bona fide dispute existed as to the amount due on the note. He insists that he and Warrick reached an accord as to the amount of the outstanding balance, and that the check, which was accepted by Warrick at the December 1988 meeting and which was unqualifiedly endorsed by Deere, extinguished any further liability on the note. Consequently, he insists, Deere's subsequent repossession of the skidder for nonpayment of the $1,309.37 Deere says was outstanding, was improper.

A contractual obligation may be extinguished or satisfied by the payment of an amount less than that contemplated under the original agreement, where the amount of the obligation is in dispute and the parties reach an accord as to the payment of a lesser sum. O'Neal v. O'Neal, 284 Ala. 661, 227 So.2d 430 (1969). For an accord to effect a satisfaction of an outstanding obligation, "there must be either a bona fide dispute as to the liability or its amount or it must be unliquidated, or the claim be not a moneyed demand." Wilson v. Monette, 224 Ala. 106, 109, 139 So. 264, 266 (1932).

A claim is defined as "liquidated" or "unliquidated" under the following conditions:

"When a debtor knows precisely how much he is to pay and to whom he is to pay it, his debt is a liquidated one. 22 Am.Jur.2d, Damages §§ 180, 184 (1965). An amount claimed to be due is a liquidated sum when it is 'susceptible of being made certain in amount by mathematical calculations from factors which are or ought to be in the possession or knowledge of the party to be charged.' Rifkin v. Safenovitz, 131 Conn. 411, 414, 40 A.2d 188 (1944) quoting Cochrane v. Forbes, 267 Mass. 417, 420, 166 N.E. 752 (1929); see Perri v. Cioffi, 141 Conn. 675, 678, 109 A.2d 355 (1954). It is sufficient for this purpose if the debt is measurable by a fixed or established external standard, or by a standard apparent from the documents upon which the plaintiff bases his claim. Ramada Development Co. v. United States Fidelity & Guaranty Co., 626 F.2d 517, 525 n. 11 (6th Cir.1980). Unliquidated damages, on the other hand, are those which are 'not yet reduced to a certainty in respect to amount, nothing more being established than the plaintiff's right to recover; or such as cannot be fixed by a mere mathematical calculation from ascertainable data in the case.' Black's Law Dictionary (4th Ed.1968)."

Costello v. Hartford Institute of Accounting, Inc., 193 Conn. 160, 475 A.2d 310, 314 (1984); see also E.D. Wesley Co. v. City of New Berlin, 62 Wis.2d 668, 215 N.W.2d 657 (1974); Henderson v. Lewis, 35 Ala.App. 267, 45 So.2d 716 (1950). Louisiana Lumber Co. v. J.W. Farrior Lumber Co., 9 Ala.App. 383, 63 So. 788 (1913).

Madden does not dispute his liability under the note and security agreement. He also concedes that as far as he was concerned, "there was no dispute or argument as to the amount due." Brief of Appellant, at 4. However, he purports to find the dispute upon which to base his accord and satisfaction argument in a statement contained in Warrick's affidavit regarding the circumstances surrounding Madden's tender of the $2,401.41. Regarding the alleged purpose of the payment, Madden gave the following account:

"In December of 1988, the date in which the final payment under the contract became due, Mr. Warrick came to my house. He had some book with him and from this paperwork he gave me a figure for the payoff of the note.... I asked him if we could write paid in full on the check and he said to go ahead and write that on the check because the payment would pay off the balance on the account."

(Emphasis added.)

Warrick's version of the transaction is somewhat different. By affidavit, Warrick stated as follows:

"In the month of December 1988, I traveled to the home of Willie C. Madden. At that time, my records revealed that Mr. Madden was in default and responsible for a past due balance in the amount of $5,376.41. However, my records only revealed past due balances and did not reveal if Mr. Madden had made his December 1988 payment or any other payments to be made in the future. During my visit, Mr. and Mrs. Madden indicated that they had previously paid, by check, $3,000 on Mr. Madden's account. They verified this by revealing an entry in their checkbook. Nevertheless, I then declared that I would have to collect the remaining balance that was past due. Mr. and Mrs. Madden went into an adjoining room and discussed this matter for, what seemed to me, a long period of time. When Mr. Madden emerged from the room he asked if he could mark his check paid in full because of his belief that the requested payment would pay his account in full. I indicated that he could do so; however, that if any balances were left due and owing or if any checks did not clear, the account or balance would have to be paid in full, that any designation would be disregarded."

(Emphasis in affidavit.)

Based on this testimony, it appears that any dispute that arose contemporaneously with Madden's tender of the check for $2,401.41, resulted from a mere mathematical or clerical error on Warrick's part. Thus, Warrick's acquiescence in the payment resulted, not from the compromise of a contemporaneous dispute, but from his miscalculation or ignorance of the balance outstanding. In this connection, Madden, in deposition, conceded:

"Question: The question is, is it more a case of their mistake as opposed to whether you owed the money or not?

"[Answer By Madden]: I guess you could say that. The only thing I asked for was for them to show me--for Mr. Warrick to show me where I owed the money.

"Question: I guess that's what I'm getting to. It's more a mistake in either their...