Odyssey Intern. Ltd. v. Reebok Intern. Ltd.
Citation | 716 F. Supp. 116 |
Decision Date | 27 July 1989 |
Docket Number | No. 87 Civ. 3195 (WK).,87 Civ. 3195 (WK). |
Parties | ODYSSEY INTERNATIONAL LIMITED, Plaintiff, v. REEBOK INTERNATIONAL LIMITED, Defendant. |
Court | United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York |
John K. Ford, Norwalk, Conn., and Aegis J. Frumento, New York City, for plaintiff.
Ralph F. Boyd, Jr., Ropes & Gray, Boston, Mass., and Ilissa Rothschild, Stillman, Friedman & Shaw, P.C., New York City, for defendant.
Plaintiff Odyssey International Limited ("Odyssey"), having supplied fabric and other items to Defendant Reebok International Limited, sues for breach of contract. Defendant Reebok International Limited ("Reebok"), asserting an affirmative defense of accord and satisfaction based on Plaintiff's deposit of a check tendered in "Settlement of outstanding invoices due Odyssey," moves for partial summary judgment.1 Plaintiff cross-moves for partial summary judgment striking this affirmative defense. For the reasons stated below, we grant Plaintiff's motion and deny Defendant's contrary motion.
Odyssey is a Hong Kong corporation with its principal place of business in Hong Kong, and Reebok is a domestic corporation and has its principal place of business in Massachusetts. During 1986 and 1987, Odyssey agreed to manufacture and deliver various items of clothing to Reebok. In November, 1986, officers of Reebok and Odyssey met to discuss Reebok's failure to pay certain fabric charges, quota charges, airline ticket fees, and money advanced to Reebok personnel in Hong Kong.2 These charges remained unpaid, and, on March 25, 1987, Odyssey sent Reebok a statement of outstanding invoices totaling $421,614.72. On April 28, John Ford, counsel to Odyssey, sent the chairman of Reebok a summary of past due invoices. The letter closed with the following statement:
On May 4, Douglas Arbetman, President of the Apparel Division of Reebok, prepared the following letter to William Simon, President of Odyssey:
The "enclosed" $66,062.95 check was not signed until May 8, upon which date Arbetman mailed both the May 4 letter and the check. The receipt stub attached to the check contained the notation: "Settlement of outstanding invoices due Odyssey." (emphasis supplied)
Also on May 8, Odyssey filed its complaint in the instant action for payment of the March 25 invoices, which, as we have noted, totalled $421,614.72. Reebok received a copy of the complaint on May 12.
On May 13, Ford sent a letter to Steve Goldstein, corporate counsel for Reebok, acknowledging receipt of Arbetman's letter and check, and stating that he did not have enough information to respond to the "defective garment/chargeback allegations" but asking that "the defective items be put aside for a joint survey in the immediate future, so that a settlement formula can be worked out." Shortly thereafter, Gordon Saggs, then President of Odyssey, New York, a sales representative of Odyssey, called Arbetman to express his dissatisfaction with the check as a response to the March 25 invoices. On May 19, Odyssey deposited the $66,062.95 check. After the check had been deposited, Simon called Paul Kozma, the vice president of Reebok's manufacturing division, to complain that the check was insufficient payment of Reebok's debts to Odyssey.3
Where a creditor accepts a check in a lesser amount than the debt he claims to be owed, accord and satisfaction only results where such acceptance would be "`tortious except on the assumption of a taking in full satisfaction.'" Hudson v. Yonkers Fruit Co. (1932) 258 N.Y. 168, 174, 179 N.E. 373 ( ). In other words, a creditor accepting such a check will not be found to have entered into an accord and satisfaction unless it has been presented to him in circumstances leaving no room for a reasonable belief that he is entitled to cash it without discharging the entire debt. Merrill Lynch Realty v. Skinner (1984) 63 N.Y.2d 590, 596, 597, 483 N.Y.S.2d 979, 982, 473 N.E.2d 229, 232.
Despite the clarity of this doctrine, cases rejecting claims of accord and satisfaction are difficult to categorize. There are, however, several fact patterns which seem frequently to result in such rejection. One such pattern involves an offer that, without...
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...leaving no room for a reasonable belief that the payment constitutes only partial satisfaction of a debt. Odyssey Int'l Ltd. v. Reebok Int'l Ltd., 716 F.Supp. 116, 118 (S.D.N.Y.1989). While there is little record evidence to support such an inference here, such a conclusion is for the jury.......
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