Seidler v. Vaughn Oil Co.

• Decision Date: 26 February 1991
• Docket Number: No. 90-235,90-235
• Citation: 468 N.W.2d 474
• Parties: Frank SEIDLER, Appellant, v. VAUGHN OIL COMPANY, Appellee.
• Court: Iowa Court of Appeals

Page 474

468 N.W.2d 474

Frank SEIDLER, Appellant, v. VAUGHN OIL COMPANY, Appellee.

No. 90-235.

Court of Appeals of Iowa.

Feb. 26, 1991.

Lyle A. Rodenberg, Council Bluffs, for appellant.

David F. McCann of Dippel & McCann, Council Bluffs, for appellee.

Considered by DONIELSON, P.J., and HAYDEN and SACKETT, JJ.

HAYDEN, Judge.

Vaughn Oil Company delivered fuel to Seidler's farm. Vaughn Oil mistakenly put gasoline in Seidler's diesel fuel barrels. Seidler then unknowingly used the improper fuel mixture in his six diesel tractors, causing damages to the tractors. Seidler had to rent two tractors while his were being repaired.

Seidler and Vaughn Oil's insurance adjuster began negotiations to settle the damages. Vaughn Oil agreed to pay all of the repairs on five of the tractors and the rental tractor cost. Vaughn Oil issued a draft to pay for these items. Seidler cashed the draft. The parties disputed the costs of repairs on one of the tractors. After further negotiations, Vaughn Oil issued another draft to pay for the repairs on the remaining tractor. On the face of the draft, it stated "Full, Final Settlement for Damage to Tractor." Seidler cashed the draft. However, he refused to sign a separate release.

Seidler then sued Vaughn Oil for damages resulting from the fuel delivery. Vaughn Oil moved for summary judgment, claiming there had been an accord and satisfaction. The district court agreed and dismissed Seidler's petition.

Seidler appeals. He contends there are genuine issues of material fact concerning damages for loss of use and Vaughn's agreement to cancel a fuel bill. Seidler further contends these damages were not a part of the alleged accord and satisfaction. He also claims there was no consideration for the accord and satisfaction because there was no dispute over the cost of repairs. Seidler argues Vaughn Oil should be estopped from claiming an accord and satisfaction because it would be fraudulent in view of its inconsistent statements. Finally, he asserts even if there was consideration for the accord and satisfaction, it is not enforceable because Vaughn Oil breached the agreement when it failed to cancel the fuel bill.

Our scope of review is on assigned errors of law. Iowa R.App.P. 4. Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and that the moving party is entitled to a judgment as a matter of law." Iowa R.Civ.P. 237(c); see Farm Bureau Mut. Ins. Co. v. Milne, 424 N.W.2d 422, 423 (Iowa 1988). The moving party has the burden to show the nonexistence of a material fact, Milne, 424 N.W.2d at 423, and the evidence must be viewed in the light most favorable to the resisting party, Thorp Credit, Inc. v. Gott, 387 N.W.2d 342, 343 (Iowa 1986). The procedure is functionally akin to a directed verdict, and every legitimate inference that reasonably can be deduced from the evidence should be afforded the resisting party. Id.; Sherwood v. Nissen, 179 N.W.2d 336, 339 (Iowa 1970). A fact issue is generated if reasonable minds can differ on how the issue should be resolved, but if the conflict in the record consists only of the legal consequences flowing from undisputed facts, entry of summary judgment is proper. Gott, 387 N.W.2d at 343; Milne, 424 N.W.2d at 423. If the motion is properly supported, however, the resisting party "must set forth specific facts showing that there is a genuine issue for trial." Iowa R.Civ.P. 237(e). The language of our rule and case law are substantially similar or identical to that of rule 56 of the Federal Rules of Civil Procedure, see, e.g., Matsushita Elec. Indust. Co. v. Zenith Radio Corp., 475 U.S. 574, 585-88, 106 S.Ct. 1348, 1355-57, 89 L.Ed.2d 538 (1986), from which we may draw for guidance in interpreting our own rule, Sherwood, 179 N.W.2d at 339. We now turn to the law as applied to the facts, viewing the facts in a light most favorable to the party resisting the motion for summary judgment.

The main question here is whether the check for $3,269.77, sent by Vaughn Oil's insurance carrier, with "Full, Final Settlement for Damages to Tractor" written on the front, constituted an accord and satisfaction. To determine this question, we examine the law concerning accord and satisfaction. The Iowa Supreme Court has set out the pertinent rules in the leading case of Olson v. Wilson & Co.

The law looks with favor on the adjustment and settlement of controversies without resorting to court action. Settlement by accord and satisfaction involves essentially a new contract or agreement, and the elements of a new contract must be found in the settlement to make it valid. Obviously each case must be determined upon its own facts and circumstances. However, there are certain rules and decisions which guide and control transactions of this kind, such as those affecting liquidated and unliquidated claims, and the acts of the parties relating to intention, consideration, necessary implications, and bona fide disputes....

There are many definitions of accord and satisfaction. "Accord and satisfaction is a method of discharging a contract or cause of action, whereby the parties agree to give and accept something in settlement of the claim or demand of the one against the other, and perform such agreement, the 'accord' being the agreement, and the 'satisfaction' its execution or performance." 1 C.J.S. Accord and Satisfaction, § 1, p. 462.

In an early Iowa case, Perin v. Cathcart, 115 Iowa 553, 557, 89 N.W. 12, 13 [ (1902) ], Judge Deemer said: "But as an accord and satisfaction is an executed agreement whereby one of the parties undertakes to give, and the other to accept, in satisfaction of a claim arising either from contract or tort, something other or different from what he is or considers himself entitled to, no invariable rule can be laid down, with any degree of certainty, as to what constitutes such an agreement. Each case must be determined largely on its peculiar facts. To constitute a valid accord and satisfaction, not only must it be shown that the debtor gave the amount in satisfaction, but that it was accepted by the creditor as such. The agreement need not be express, but may be implied from circumstances, as shown in the cases just cited. Where an offer of accord is made on condition that it is to be taken in full of demands, the creditor, doubtless, has no alternative but to refuse it or accept it upon such conditions.

* * * * * *

According to Webster's New International Dictionary, a claim for debt or damage is "liquidated" in law when the precise amount thereof is fixed, or has been agreed upon. In Williston 1, on Contracts, Rev.Ed., Sec. 128, "An unliquidated claim is one, the amount of which has not been fixed by agreement or cannot be exactly determined by the rules of arithmetic or of law."

... We have said, "If it is admitted that one of two sums is due, but there is a dispute as to which is the proper amount, the demand is unliquidated within the meaning of accord and satisfaction."

... "As related to the subject of accord and satisfaction, the term 'liquidated' * * * means one where the amount due has been ascertained and agreed upon by the parties, or is fixed by operation of law. * * * When not so determined, it is the subject of compromise.... "A demand is not liquidated even if it appears that something is due, unless it appears how much is due; and when it is admitted that one of two specific sums is due, but there is genuine dispute as to which is the proper amount, the demand is regarded as 'unliquidated,' within the meaning of that term as applied to the subject of accord and satisfaction."

It may be well here to point out what is meant by the term one of two specific sums. It does not mean sums that can be exactly determined by the rules of arithmetic or law. It refers to sums claimed by each of the respective parties in the dispute; one contending for one sum and one for the other. Neither sum is the fixed or liquidated sum. True, the rule is that one cannot secure an accord and satisfaction of a liquidated or sum certain debt by the payment of a lesser amount for the reason that then there is no consideration upon which to base the accord and satisfaction. It is on this point most of the confusion has arisen in cases involving accord and satisfaction and which gives rise to the so-called creditor and debtor doctrine referred to by plaintiff as discussed in the case of Kellogg v. Iowa State Traveling Men's Ass'n [239 Iowa 196, 29 N.W.2d 559 (1947) ].

... If the amount claimed by the creditor is determined, definite and fixed, payment by the debtor of a lesser sum, no matter what his contention may be will not result in accord and satisfaction, as the claim is liquidated, and requires further...