Quality Care Nursing Services, Inc. v. Coleman

• Decision Date: 09 March 1987
• Docket Number: No. S,S
• Citation: 728 S.W.2d 1
• Parties: QUALITY CARE NURSING SERVICES, INC., Plaintiff/Appellant, v. C.B. COLEMAN, Defendant/Appellee. /C 219 728 S.W.2d 1
• Court: Tennessee Supreme Court

Page 1

728 S.W.2d 1

QUALITY CARE NURSING SERVICES, INC., Plaintiff/Appellant, v. C.B. COLEMAN, Defendant/Appellee.

No. S/C 219

728 S.W.2d 1

Supreme Court of Tennessee at Knoxville.

March 9, 1987.

Rehearing Denied April 14, 1987.

Harry Berke, Chattanooga, for plaintiff/appellant.

W. Frank Brown, Chattanooga, for defendant/appellee.

OPINION

HARBISON, Justice.

This is a suit upon a liquidated, undisputed account for services rendered. The debtor made a partial payment of less than one-third of the amount claimed, but marked his check "In full to date." ¹ The check was mailed from Chattanooga to an office of appellant in Baltimore, Maryland, where it was received and cashed in due course. There is no evidence of any prior discussions between the parties or of any questions made by appellee as to the manner or course of billing or concerning the services rendered.

Both the Chancellor and the Court of Appeals held that, as a matter of law, the cashing of the check by the creditor with the foregoing legend on it conclusively established the affirmative defense of accord and satisfaction. Accordingly they dismissed the suit. We reverse and remand for entry of judgment for appellant.

Appellant is engaged in the supplying of nursing assistance to individuals in need thereof, including nurses' aides, licensed practical nurses and registered nurses. The wife of appellee became seriously ill with cancer. From February 11, 1983, through the date of her death on April 15, 1983, he utilized the services of nursing personnel supplied by appellant for the care of his wife.

Two written contracts were entered into between the parties. The first was dated February 18, 1983, in which it was agreed by appellee as follows:

"I ... understand your billing procedure consists of a time slip which is presented to me by your employee when his/her assignment is completed or at the end of each week, whichever comes first. (The billing week is from Saturday at 12:00 a.m. to Friday midnight.)

"I understand that at the end of each week your employee will ask me to sign a time slip setting forth the number of hours of service during that week, and that the amount of hours indicated on the signed time slip will form the basis of my invoice which you will forward weekly."

The following sentence stated the hourly rate for services rendered. The agreement further provided that payment for services was due upon receipt of an invoice and that interest would accrue thereon after thirty days. The agreement also provided for reasonable attorney's fees for costs of collection.

An identical instrument was executed by appellee on March 4, 1983, showing a higher hourly rate for services. This was explained in the record as being the result of a deterioration in the condition of Mrs. Coleman, requiring the services of more highly skilled personnel on a more extensive basis.

Appellant is a corporation engaged in business in many states, having some 165 offices throughout the United States. The principal office is situated in Rockefeller Center, New York, and all billings to customers were sent from that office. The office at the location where the services were rendered sent its billings to the central office at the end of each week, and these were then invoiced to the customer. Remittances, however, were made to the receiving office of appellant in Baltimore, Maryland. The customer was instructed on the invoices to mail them there, and such payments as appellee made were sent to that office. Appellee does not contend that he made any other or different payments, or that he did not understand the instructions on the invoices.

The services rendered by personnel employed by appellant extended over ten weeks, or parts thereof, with invoices having been sent weekly beginning on February 11, 1983, through April 15, 1983. Appellee does not deny receipt of these invoices, nor is there any dispute as to their accuracy or amount. ²

Most of the original weekly time sheets or tickets submitted by nurses to appellant are in the record, and nearly all of them are either signed by him or initialled by him. In a few instances the initials or signatures of other persons appear, but we infer from the record that these were other family members or relatives who were authorized to sign for appellee. In all events no issue has been made concerning that point.

Appellee remitted on a sporadic basis and did not pay the invoices weekly as he had agreed to do. The first check which he sent to the Baltimore office of appellant was dated March 17, 1983 in the amount of $2,515.36. This was marked "In full to date" although in fact at that time the balance was over $5000. He sent another check on April 5, 1983 in the amount of $1958, marked "To date", although at that time the balance exceeded $8000. The amount remitted was the correct amount for an invoice covering the single week ended March 25, 1983.

The final payment made by appellee was on a check dated May 10, 1983 in the amount of $2,928.75, marked "In full to date", but at that time the balance due on the account was $9365.

The manager of the local office in Chattanooga wrote to appellee concerning his account on February 28, 1983, on April 5, 1983, on April 19, 1983 and on April 21, 1983. In each instance the amount then due and owing on the account was explained, and credit was given to appellee for each payment which he had made at the time the letter was sent.

There is no evidence that appellee replied to these letters orally or in writing, that he met with or discussed the matter with the local manager, or that he took any other action with respect to the weekly accruing invoices, except for making the payments above referred to.

Appellee testified that he was, of course, concerned about his wife's illness. He kept no records concerning his payments except the checks and apparently did not retain the weekly invoices. There is no evidence, however, that he remitted them to Baltimore with his checks. Indeed he testified that he customarily paid bills by checks and then threw the bills away. There is no evidence that he departed from this custom in his dealings with appellant.

Appellant sued for the unpaid balance together with interest and attorney's fees. Appellee interposed a general denial together with allegations of accord and satisfaction. The answer raised some issue as to the excessiveness of the charges, but this issue was apparently abandoned at trial. Both the trial court and the Court of Appeals found that the account was undisputed, and material evidence supports that concurrent finding. That matter is accordingly foreclosed here. See T.C.A. Sec. 27-1-113.

Appellee does not dispute the legal proposition that the burden of proving by a preponderance of all the evidence rested on him to establish the affirmative defense of accord and satisfaction.

The Tennessee Rules of Civil Procedure respecting affirmative defenses provide:

"In pleading to a preceding pleading, a party shall set forth affirmatively facts in short and plain terms relied upon to constitute accord and satisfaction ... and any other matter constituting an avoidance or affirmative defense." Rule 8.03.

The only facts stated in the defensive pleading of appellee were that he had paid a total of $7402.12 on the account over a three-month period, and that his checks had borne the legends previously quoted. It was alleged that these payments constituted payment in full and/or an accord and satisfaction of the debt claimed.

Appellee testified that it was his intention by the last check to cover all of the unpaid invoices. He did not, however, testify that the creditor was put upon notice, orally or otherwise, that it could accept the check only upon condition that it would be considered payment in full of the outstanding balance. The record contains no evidence that his last check, or any of the other checks, was accepted by appellant in full payment, or that appellant in any way intended to accept the three partial payments which were made in full settlement of the account. As stated previously, there is not even any evidence that the invoices which appellee had received and which he obviously had in front of him at the time he wrote his checks, were mailed back to the creditor with the checks. The account was ongoing during the months of February, March and April, and there is no legal theory upon which the first two payments could have been deemed to be any more than partial payments upon receipt by the creditor.

The third payment is in a somewhat different status, in that the check was sent over three weeks after the last services were rendered. It was in the exact amount of invoices for the last two weeks, these being dated April 8, 1983, in the amount of $1862 and the other April 15, 1983 in the amount of $1066.75.

Since appellee offered no proof, by discovery or otherwise, as to the practices or procedures of the receiving office of appellant in Baltimore, or with respect to the intentions of the creditor upon receipt of these checks, he must rely solely on the facts pleaded in his answer and established by the proof to make out his defense of accord and satisfaction. That is, it is his position that when a creditor receives a check marked as payment in full and cashes that check, an accord and satisfaction is automatically and conclusively established, even though the account is liquidated and not disputed.

We do not so understand the rule, nor have Tennessee cases generally so held, in the absence of a showing of some previous dispute between the parties or some agreement respecting a compromise.

The general law is well stated in a leading authority, as follows:

"It is not enough for the debtor merely to write on a voucher or on his check such words as 'in full payment' or 'to balance account' where there has been no such dispute or antecedent discussion as to give reasonable notice to the creditor that the...