ENNIA GENERAL INSURANCE COMPANY, LTD., APPELLANT/CROSS APPELLEE,
v.
ALBERT W. AULD, M.D., APPELLEE/CROSS APPELLANT
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An insurance company issued a settlement draft for $75,000 with a release clause for all claims on a total loss dispute. The insured modified the release language to preserve his rights, cashed the draft, and then sued for the remaining $25,000. The court held that the insured could not modify the settlement condition and cash the draft while preserving his right to sue, reversing the jury verdict.
No. The court held that a payee of a draft tendered in full and final settlement of a disputed obligation cannot note a reservation of rights on the draft, cash it, and thereafter rely on that reservation to defeat the express written condition of full settlement inscribed on the draft by the debtor.
[1] A payee of a draft tendered in full settlement of a disputed obligation cannot unilaterally alter the release language to reserve rights and still defeat the express cond…
[2] Endorsing a draft with altered release language does not negate the drawer's condition that acceptance constitutes payment in full.
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Join FLexlaw to unlock all legal intelligence“[T]he payee of a check (the creditor) which is tendered in full and final performance of a disputed obligation may not, by noting on the check a reservation of rights, cash the check and thereafter successfully rely on that reservation of rights to defeat an express, written condition inscribed on the check by the debt- or that acceptance constitutes payment in full.”
Establishes the core legal principle that a creditor cannot modify settlement language, cash the instrument, and then use the modification to avoid the settlement condition.
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Join FLexlaw to unlock all legal intelligenceAlbert Auld owned a seventy-foot ocean-going vessel insured by Ennia General for an agreed value of $100,000. When the boat was grounded in the Bahama…
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PER CURIAM.
Appellee, Albert Auld, the owner of a seventy-foot, ocean-going vessel had an agreed-value insurance policy on the boat issued by appellant, Ennia General. When the boat was grounded in the Bahamas and became a total loss, Auld filed a claim with Ennia General for the agreed-value amount of $100,000. Ennia General refused to pay that amount, claiming that Auld breached certain policy provisions by not adequately protecting the boat from further damage after the grounding.
Ennia submitted a proof of loss to Auld which listed $75,000 as the loss and amount claimed. In satisfaction of this offer of settlement Ennia General sent Auld a company draft in the amount of $75,000. The draft had the following release language on the back:
By endorsing the draft the payees accept same in full settlement and release of all claims arising out of occurrence mentioned on the face hereof.
When Auld received the draft he changed the above language to read:
By endorsing the draft the payees do not accept same in full settlement and release of all claims arising out of occurrence mentioned on the face hereof.
(Emphasis added).
He then endorsed the draft and cashed it.
Subsequently, Auld brought suit against Ennia General for the remaining $25,000. The jury returned a verdict in his favor and awarded him the $25,000. Ennia General contends on appeal that the trial court erred in denying its motion for directed verdict on its defense of accord and satisfaction. We agree that the trial court so erred and hereby reverse the final judgment. We do so based upon our decision in Eder v. Yvette B. Gervey Interiors, Inc., 407 So. 2d 312, 313 (Fla. 4th DCA 1981), wherein we held that:
[T]he payee of a check (the creditor) which is tendered in full and final performance of a disputed obligation may not, by noting on the check a reservation of rights, cash the check and thereafter successfully rely on that reservation of rights to defeat an express, written condition inscribed on the check by the debt-or that acceptance constitutes payment in full.
Accord Yelen v. Cindy’s, Inc., 386 So. 2d 1234 (Fla. 3d DCA 1980). We find no reason to factually distinguish this matter from Eder and Yelen simply because Ennia General used a company draft rather than a check when it issued the $75,000 settlement amount to Auld.
We reverse and remand the cause for entry of judgment for Appellant Ennia General.
REVERSED and REMANDED.
GUNTHER and STONE, JJ., and POLEN, MARK E., Associate Judge, concur.
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Mortell v. Keith, 528 So. 2d 1362 (Fla. 3d DCA 1988)…er clearly demonstrating his position that the sum was in complete payment of the amounts due in an outstanding fee dispute between the two, effected an accord and satisfaction of the law firm’s claim as a matter of law. Ennia Gen. Ins. Co. v. Auld, 506 So. 2d 62 (Fla. 4th DCA 1987); Eder v. Yvette B. Gervey Interiors, Inc., 407 So. 2d 312 (Fla. 4th DCA 1981); Rudick v. Rudick, 403 So. 2d 1091 (Fla. 3d DCA 1981); Yelen v. Cindy’s, Inc., 386 So. 2d 1234 (Fla. 3d DCA 1980), pet. for review dismissed, 394 So. 2…
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United Auto. Ins. Co. v. Palm Chiropractic Ctr., Inc., 51 So. 3d 506 (Fla. 4th DCA 2010)…full payment of the debtor’s obligations creates an accord and satisfaction with regard to the claim for which payment was tendered. See Eder v. Yvette B. Gervey Interiors, Inc., 407 So. 2d 312 (Fla. 4th DCA 1981); Ennia Gen. Ins. Co., Ltd. v. Auld, 506 So. 2d 62 (Fla. 4th DCA 1987); see also Mortell v. Keith, Mack, Lewis & Allison, 528 So. 2d 1362 (Fla. 3d DCA 1988). At the time the check was tendered in this case, there were sessions for which United Auto was not offering to pay. The check and the cover le…
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ST. Mary's Hosp., Inc. v. Schocoff, 725 So. 2d 454 (Fla. 4th DCA 1999)…s a matter of law the parties’ mutual intent that St. Mary’s acceptance of the check settled the dispute. The trial court agreed with that position and entered summary judgment for the insurer, citing as authority Ennia Gen. Ins. Co., Ltd. v. Auld, 506 So. 2d 62 (Fla. 4th DCA [*456] 1987); Eder v. Yvette B. Gervey Interiors, Inc., 407 So. 2d 312 (Fla. 4th DCA 1981); Mortell v. Keith, Mack, Lewis & Allison, 528 So. 2d 1362 (Fla. 3d DCA 1988); Yelen v. Cindy’s, Inc., 386 So. 2d 1234 (Fla. 3d DCA 1980); and Pi…
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- Yelen v. Cindy's, Inc., 386 So. 2d 1234 (Fla. 3d DCA 1980)
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