Karen S. Runyon, Respondent, vs. Paul A. Sortland, Appellant.

Karen S. Runyon, Respondent, vs. Paul A. Sortland, Appellant. A04-1268, Court of Appeals Unpublished, May 17, 2005.

This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480 A. 08, subd. 3 (2004).

 

 

STATE OF MINNESOTA

IN COURT OF APPEALS

A04-1268

 

Karen S. Runyon,

Respondent,

 

vs.

 

Paul A. Sortland,

Appellant.

 

Filed May 17, 2005

Affirmed Hudson, Judge

 

Hennepin County District Court

File No. AC 03-019651

 

Emily Murphy, P.O. Box 2095, Stillwater, Minnesota 55082 (for respondent)

 

Paul A. Sortland, Sortland Law Office, 120 South Sixth Street, Suite 1510, Minneapolis, Minnesota 55402 (attorney pro se)

 

            Considered and decided by Hudson, Presiding Judge; Schumacher, Judge; and Halbrooks, Judge.

U N P U B L I S H E D   O P I N I O N

HUDSON, Judge

            Appellant asserted the affirmative defense of accord and satisfaction in response to respondent's claim for the remaining balance of an unpaid bill.  The district court concluded that there was no accord and satisfaction and additionally held that respondent explicitly reserved the right to sue for full payment.  Appellant argues that the district court erred by concluding there was no accord and satisfaction and that respondent reserved the right to sue.  Because we find no error, we affirm.

FACTS

            In October 2002, appellant-attorney Paul Sortland hired respondent Karen Runyon, a forensic document examiner, to examine medical records in a medical-malpractice case.  On April 2, 2003, appellant gave respondent the original medical records, and respondent examined the documents on April 4, 9, and 11.  Respondent met with appellant to discuss her findings and subsequently prepared corresponding exhibits.  On April 15, 2003, respondent closed her file, returned the original medical records, and billed appellant for $2,062.50 ($2,562.50 minus a $500 retainer fee).  The bill stated, "My billing practice is to await payment of one statement prior to further requests for casework." 

            On April 16, 2003, appellant sent respondent a letter stating, "The billing seems appropriate and we will see that that is paid in the near future."  Appellant also requested a written report from respondent in the April 16 letter.  On April 22, 2003, appellant phoned respondent and inquired when the written report would be finished.  Respondent reminded appellant that she required payment of the existing bill before doing further work.  On May 1, 2003, respondent received a phone message from appellant indicating that appellant's case was going to trial that day and requesting that respondent immediately fax a written report to his office.  Later that morning, appellant's secretary left another phone message with respondent indicating that the April 15 bill had been paid on April 22.  Respondent sent a letter by certified mail stating that she had not received the payment. 

            In August 2003, appellant sent respondent a letter stating that he had stopped payment on the April 22 check that he allegedly sent and enclosed a new $1,000 check marked "Payment in Full."  Appellant explained in the letter,

As you are aware, we were not able to utilize your testimony in this matter, because the report was not submitted on a timely basis.  Consequently, [my client] lost her lawsuit . . . .

 

I understand you did some work on this matter.  We did pay you $500.00.  Please keep in mind that none of your work did [my client] any good.  In an effort to resolve this, however, [my client] has authorized me to pay approximately half of the outstanding balance, or $1,000.00, as payment in full.  Otherwise, she has asked me to try to fight the outstanding bill for the reasons stated above.

 

Respondent sent appellant a certified letter, stating "While I appreciate the payment toward your outstanding balance, I do not agree with the argument concerning not paying the bill in full."  Respondent further indicated that her practice is to wait 120 days for payment on an account and then to file in conciliation court.  When respondent received the certified mail receipt indicating that her letter was received, she deposited the $1,000 check.

            Respondent subsequently filed a claim in conciliation court for the unpaid balance.  The conciliation court found for respondent, and appellant filed a notice of removal from conciliation court.  Following a court trial, the district court awarded respondent $1,167.50.  The district court denied appellant's motion for amended findings and a new trial.[1]  This appeal follows. 

D E C I S I O N

I

            Appellant argues that the district court erred by holding that appellant did not prove accord and satisfaction.  An accord is a contract in which a debtor offers a sum of money, or some other stated performance, in exchange for which a creditor promises to accept the performance in lieu of the original debt.  Webb Bus. Promotions, Inc., v. Am. Elecs. & Entm't Corp., 617 N.W.2d 67, 72 (Minn. 2000).  The satisfaction is the performance of the accord, generally the acceptance of money, that operates to discharge the debtor's duty as agreed to in the accord.  Id.  The purpose of accord and satisfaction is to allow parties to resolve disputes without judicial intervention by discharging all rights and duties under a contract in exchange for a stated performance, usually a payment of a sum of money.  Id. at 73.  Whether there has been an accord and satisfaction is a question of fact.  Id.  The findings of the trial court, as the trier of fact, will not be reversed on appeal unless they are "manifestly and palpably" contrary to the evidence.  Id. (quoting Butch Levy Plumbing & Heating, Inc. v. Sallblad, 267 Minn. 283, 293, 126 N.W.2d 380, 387 (1964).

The accord-and-satisfaction statute provides:

(a)       If a person against whom a claim is asserted proves that (i) that person in good faith tendered an instrument to the claimant as full satisfaction of the claim, (ii) the amount of the claim was unliquidated or subject to a bona fide dispute, and (iii) the claimant obtained payment of the instrument, the following subsections apply.

 

(b)       . . . [T]he claim is discharged if the person against whom the claim is asserted proves that the instrument or an accompanying written communication  contained a conspicuous statement to the effect that the instrument was tendered as full satisfaction of the claim.

 

Minn. Stat. § 336.3-311 (2004).  The focus of the good-faith inquiry is on the offer of the accord and not on the actions of the parties in performing the underlying contract.  Webb, 617 N.W.2d at 73. 

            The district court found that appellant failed to establish that the tender was made in good faith and in observance of reasonable commercial standards of fair dealing.  The district court further found that appellant attempted to take unfair advantage of respondent and that the tender was made in bad faith.  Additionally, the district court found that appellant failed to establish that the amount of the claim was unliquidated or subject to a bona fide dispute.

            Appellant argues that the district court erred in finding that he did not offer the accord in good faith because respondent's work was not helpful to appellant's client.  Additionally, appellant argues that there was a bona fide dispute as to the services rendered by respondent. 

Here, the evidence supports the district court's finding that appellant did not offer the accord in good faith under Minn. Stat. § 336.3-311(a)(i).  Appellant offered the accord following his client's unsuccessful outcome, even though he had already agreed that the April 15 bill was appropriate and would be paid.  Indeed, appellant insists that he tried to pay the bill.  Therefore, appellant's contention that he should not have to pay the entire balance of the bill because respondent did not produce a written report is inconsistent and unpersuasive. 

Moreover, the parties never agreed to a written report, and there is no evidence to support appellant's argument that respondent "should know" that a report is normally required in Minnesota.  The first written communication indicating that appellant wanted a written report was in his April 16 letter.  But respondent clearly stated in the letter accompanying the April 15 bill, "My billing practice is to await payment of one statement prior to further requests for casework."  Thus, appellant was informed that he was required to pay the outstanding bill for the document review before respondent would produce a written report or do additional work for him. 

Furthermore, the evidence supports the district court's finding that appellant failed to establish that the amount of the claim was unliquidated or subject to a bona fide dispute as required under Minn. Stat. § 336.3-311(a)(ii).  Appellant only argues that there was a bona fide dispute "about the services rendered" by respondent.  But the amount of the claim was not subject to a bona fide dispute because appellant agreed in writing on April 18 that the April 15 bill was appropriate and he continues to insist that he tried to pay it.  Appellant's argument that respondent had a limited expectation of payment because she did not attempt to collect payment for four months is unpersuasive; appellant told respondent the bill was reasonable and would be paid, and respondent had no reason or obligation to immediately pursue collection. 

The district court's findings that appellant tendered the accord in bad faith and that the amount of the claim was not subject to a bona fide dispute are supported by the evidence.

II

            Appellant also argues that the district court erred in holding that respondent explicitly reserved her right to sue for full payment in her August 26, 2003 letter, satisfying the requirements of Minn. Stat. § 336.1-207 (2002) (repealed 2004), and that respondent is therefore entitled to recover the outstanding balance.

            Appellant argues that the district court applied this statute in error by applying it to a case involving an accord and satisfaction as prohibited in subsection 2 of the statute.  See Minn. Stat. § 336.1-207(2) (2002).  Because respondent cashed appellant's check marked "Payment in Full," appellant argues that an accord and satisfaction was met.

            We have already concluded that the district court did not err in finding that appellant offered the accord in bad faith and that the amount of the claim was not subject to a bona fide dispute.  Therefore, as the district court properly determined, appellant failed to satisfy the preliminary elements of accord and satisfaction.  Accordingly, we do not need to reach appellant's argument that respondent's acceptance of the $1,000 check satisfied the final element of accord and satisfaction.  See Minn. Stat. § 336.3-311 (2004).

Affirmed.

[1] Respondent seeks $257 for the filing fee incurred by responding to appellant's motion for amended findings and a new trial.  But respondent did not file a notice of review under Minn. R. Civ. App. P. 106, and therefore has waived her right to appellate review of the judgment entered on the district court's order denying appellant's motion.  See City of Duluth v. Duluth Police Local, 690 N.W.2d 357, 35960 (Minn. App. 2004) (stating that a respondent must file a notice of review in order to obtain review of a district court's adverse decision).