DR. LYDIA SMITH

v.

CAPITAL ONE AUTO FINANCE, INC.

FORST, J.

Appellant Lydia Smith (“Buyer”) appeals the trial court’s entry of final summary judgment in favor of Appellee Capital One Auto Finance, Inc. (“Financer”) on Buyer’s accord and satisfaction claim. Because Buyer failed to establish a genuine issue of material fact as to each element of accord and satisfaction pursuant to section 673.3111, Florida Statutes (2020), we affirm.

Background

Buyer signed a retail installment contract with an automobile seller (“Seller”) to finance a vehicle purchase. Per the contract’s language, Seller assigned its interest to Financer, thus requiring Buyer to remit 72 monthly payments of equal installments to Financer. Shortly after Buyer took possession of the vehicle, she experienced ongoing vehicle maintenance issues. Despite communicating these issues to Seller, Buyer continued to send monthly payments due under the contract to Financer, which Financer applied to her account. Buyer did

not discuss the maintenance issues or any concerns regarding the contract with Financer. Buyer sent a check well into the contract period to Financer for her monthly payment amount, which indicated “PAID In Full” within the check’s memo field. Financer cashed the check and applied it to Buyer’s account—consistent with how Financer processed all prior monthly checks that Buyer remitted. At this point, Buyer still owed roughly $31,000 under the contract.

Buyer then initiated communication with Financer about the contract and argued that Financer’s act of cashing the check constituted accord and satisfaction. She demanded title to the vehicle and a zeroed-out loan balance. After Financer refused, Buyer sued Financer based on an accord and satisfaction theory.

Financer moved for summary judgment, contending that Buyer did not meet the elements of accord and satisfaction because: (1) no bona fide dispute existed with Financer; (2) Buyer did not act in good faith; and (3) Financer did not intend for the check to act as full satisfaction of the contract. Buyer responded that (1) a bona fide dispute existed because she informed Seller of vehicle maintenance issues; (2) she acted in good faith by informing Seller of these issues; and (3) she demonstrated mutual intent because Financer cashed the check bearing “PAID In Full” language.

The trial court found that Buyer failed to meet any of the accord and satisfaction elements and granted final summary judgment in Financer’s favor. This appeal followed.

Analysis

“We review the trial court’s order granting summary judgment de novo.” Roberson v. Enter. Leasing Co. of Fla., LLC, 364 So. 3d 1097, 1100 (Fla. 4th DCA 2023).

Bona Fide Dispute

The party asserting accord and satisfaction must prove that “the amount of the claim was unliquidated or subject to a bona fide dispute.” § 673.3111(1), Fla. Stat. (2020); see also St. Mary’s Hosp., Inc. v. Schocoff, 725 So. 2d 454, 455 (Fla. 4th DCA 1999). The dispute cannot arise after the party seeking accord and satisfaction tenders the payment instrument intended to satisfy or discharge the debt. See Brody Irrevocable Grantor Tr. No. 2 v. Brody, 322 So. 3d 150, 154 (Fla. 2d DCA 2021) (finding no

accord and satisfaction when no evidence of a dispute existed at the time when the party seeking accord and satisfaction tendered the checks).

Here, Buyer’s accord and satisfaction claim fails because no dispute with Financer existed when she tendered the check. See Brody, 322 So. 3d at 154. In fact, Buyer did not contact Financer about the contract loan until after she tendered the check to receive title and a zeroed-out loan balance. Instead, the record reflects that Buyer’s communications about the vehicle had been with Seller, not Financer. Good Faith

The party seeking accord and satisfaction must also tender the instrument in good faith. See § 673.3111(1), Fla. Stat. (2020). Because Florida caselaw regarding good faith in an accord and satisfaction context is relatively undeveloped, court decisions in other states with similar accord and satisfaction statutes are instructive. See United Auto Ins. Co. v. Rivero Diagnostic Ctr., Inc., 327 So. 3d 376, 380 (Fla. 3d DCA 2021).

In Miffin v. Selene Finance LP, No. 3:19-CV-64, 2019 WL 2437461 (E.D. Va. June 11, 2019), the court found an absence of good faith when the debtor mailed a money order marked “tendered as full satisfaction of the claim” to the mortgage servicer. The court noted no dispute existed, and the money order payment was only a small portion of the remaining balance. Id. at *5–6. The district court referred to the debtor’s act of tendering a small portion of an outstanding balance to discharge his mortgage as a “gimmick,” reasoning that it did “not remotely qualify” as an accord and satisfaction. Id. at *6.

Here, Buyer resorted to a similar “gimmick.” She disguised the check as a monthly payment due per the contract in an effort to obtain title to the vehicle and a zeroed-out balance; however, when Buyer tendered the check, she still owed at least $31,000. She also tendered the check when no dispute with Financer existed and after she historically sent similar monthly payments to Financer. Buyer did not act in good faith; therefore, her accord and satisfaction claim also fails on this ground.

We also comment that other courts have found accord and satisfaction lawsuits of the type Buyer filed to be frivolous, with some rising to the level of potentially sanctionable behavior. See, e.g., Szmania v. First Horizon Hom Loan Corp., No. 13-CV-5090, 2013 WL 812012, at *1 (W.D. Wash. Mar. 5, 2013) (characterizing plaintiff’s act of tendering a $5.00 check in full accord and satisfaction of a home equity loan with remaining balance of $221,581.68 as “spectacularly frivolous” and warning that the filing of similar suits would result in sanctions); Urquhart v. Vandyk Mortg. Corp.,

No. 22-CV-823, 2022 WL 3336433, at *1–2 (N.D. Ga. May 13, 2022) (describing plaintiff’s submission of $1,168.00 check marked “paid in full – all claims satisfied” to eliminate a $137,750.00 mortgage loan as frivolous).

Mutual Intent

“Accord and satisfaction is something that must be intended by the parties; it cannot happen by accident[.]” Brody, 322 So. 3d at 154. “In other words, there must be a superseding agreement to accept reduced payment in complete settlement of a dispute—a dispute that already existed at the time of the tender.” Id.

In addition to there being no preexisting dispute, Financer did not intend for the check to satisfy Buyer’s contract loan. Financer treated the check made out for the same amount as Buyer’s monthly installment payment in the same fashion as it did for all of Buyer’s previous payments. Thus, no superseding agreement or mutual intent existed. See Los Palacios II Condo. Ass’n, Inc. v. Aspen Specialty Ins. Co., No. 10-23375-CIV, 2011 WL 13100234, at *6 (S.D. Fla. Sept. 6, 2011).

Conclusion

Because no genuine dispute existed as to any material fact regarding Buyer’s accord and satisfaction claim, we affirm the final summary judgment in Financer’s favor. Affirmed.

WARNER and MAY, JJ., concur.