COMMONWEALTH OF KENTUCKY, DEPARTMENT OF AGRICULTURE v. DONALD R. VINSON; CHARLES ANDERSON; and ROBERT S. PETERS, Secretary of the Personnel Cabinet
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RENDERED:
February 5, 1999; 2:00 p.m.
TO BE PUBLISHED
C ommonwealth O f K entucky
C ourt O f A ppeals
NO. 1998-CA-000068-MR
IRVIN LIGGONS and SHEILA LIGGONS
APPELLANTS
APPEAL FROM JEFFERSON CIRCUIT COURT
HONORABLE F. KENNETH CONLIFFE, JUDGE
ACTION NO. 96-CI-06977
v.
HOUSE & ASSOCIATES INSURANCE
APPELLEE
OPINION
AFFIRMING IN PART
AND REVERSING AND REMANDING IN PART
** ** ** ** **
BEFORE:
COMBS, DYCHE, AND SCHRODER, JUDGES.
SCHRODER, JUDGE:
This is an appeal from a summary judgment
entered in favor of an insurance agency in an action against it
for failure to remit premium payments to the insurance carrier
for insurance on the appellants’ car which was subsequently
destroyed in a fire.
Appellants argue the trial court erred in
determining that payment for the damaged car by the agency
constituted a release of all claims and an accord and
satisfaction.
Upon reviewing the record and the applicable law,
we deem that the payment for the car operated to release the
claim for property damage to the car but did not release the
appellants’ claim for other damages.
Thus, we affirm in part and
reverse and remand in part.
From September 1995 through August 1996, appellants,
Irvin and Sheila Liggons, paid premiums to appellee, House &
Associates Insurance (“House”), for House to procure automobile
insurance coverage for their multiple vehicles utilized by them
for personal and business use.
It is not disputed that
appellants paid said premiums promptly on a quarterly basis.
On
July 27, 1996, one of the vehicles for which the Liggonses had
paid for insurance coverage was destroyed by fire.
When the
Liggonses thereafter attempted to collect for the loss from the
insurance carrier, Great American Insurance Company (“Great
American”), Great American notified the Liggonses that the check
that House had sent to Great American for payment of their
insurance policy had bounced due to insufficient funds on at
least two occasions.
Thus, Great American denied appellants’
claim.
Following the denial of their claim, the Liggonses,
without the assistance of counsel, contacted House and House
agreed to pay for the value of the Liggonses’ destroyed vehicle
and the cost of a rental car.
On September 16, 1996, upon
receipt of the $7,500 from House for the car, the Liggonses
signed a document which stated the following:
I Irvin Liggons agreed to accept $7,500.00
from House Associates Insurance Inc. for the
1984 Cadillac Eldorado which is considered a
total loss to a [sic] fire damage, which
accured [sic] on July 27, 1996.
I am to keep the above mentioned automobile
as salvage.
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In addition to being paid for the destroyed vehicle and the
rental car, House refunded the premiums which the Liggonses had
paid for coverage and reimbursed the Liggonses for the deductible
which would have been available under the policy had it been
issued.
Subsequently, Sue House of House Insurance met again
with the Liggonses at which time the Liggonses told House that
they felt they were entitled to $150,000 for the remaining
damages but that they would settle for $50,000.
House then
advised the Liggonses that they did not have that kind of money.
The Liggonses then filed a complaint with the Kentucky
Department of Insurance, to which House responded by letter.
After review of the matter, the Department of Insurance sent a
letter to the Liggonses stating that it felt that, given the
payment for the car, the rental car, and the deductible, a fair
settlement had been reached and that House had made adequate
restitution to the Liggonses.
On December 3, 1996, the Liggonses filed suit against
House alleging ordinary negligence and that House acted
intentionally, fraudulently, wantonly, or grossly negligently in
failing to promptly remit the premium payments to Great American.
Besides seeking damages for the loss of the vehicle, the
Liggonses alleged loss of income, mental anguish, and punitive
damages.
On September 12, 1997, the court entered summary
judgment in favor of House, finding, as a matter of law, that the
receipt of the payment for the destroyed vehicle was a release of
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all claims and an accord and satisfaction.
This appeal by the
Liggonses followed.
Appellants argue that the trial court erred in ruling
that, as a matter of law, the payment for the car released all
claims and operated as an accord and satisfaction.
Summary
judgment should only be used to terminate litigation when, as a
matter of law, it appears that it would be impossible for the
respondent to produce evidence at trial warranting a judgment in
his favor and against the movant.
Steelvest, Inc. v. Scansteel
Service Center, Inc., Ky., 807 S.W.2d 476 (1991).
The validity and scope of a release is determined by
the intent of the parties, which must be gathered from the terms
of the release in light of the particular facts and
circumstances.
(1949).
Leitner v. Hawkins, 311 Ky. 300, 223 S.W.2d 988
Under the doctrine of accord and satisfaction, “[a]n
offer in satisfaction of a claim must be accompanied by an
express condition that the acceptance is in full satisfaction of
the claim and that the offeree takes the money subject to such
condition.
In lieu of an express condition, the circumstances
must clearly indicate to the creditor that this condition is
present.”
Bruestle v. S & M Motors, Inc., Ky. App., 914 S.W.2d
353, 354 (1996) (quoting Rauch v. Shots, 533 N.E.2d 193, 194
(Ind.Ct.App. 1989)).
As stated previously, the receipt for payment for the
destroyed vehicle specifically stated that Irvin Liggons accepted
the $7,500 payment from House “for the 1984 Cadillac Eldorado
which is considered a total loss to a [sic] fire damage.”
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However, in the Liggonses’ complaint, they sought damages other
than compensatory damages for their destroyed vehicle.
They
sought damages for loss of income, mental anguish and punitive
damages, alleging that House acted fraudulently, intentionally,
wantonly, or grossly negligently in failing to remit their
premium payments to Great American.
Nowhere on the receipt does
it say that the money was accepted as full satisfaction of all
claims against House.
Nor do the facts and circumstances
surrounding the case clearly indicate that the parties agreed
that the money would be in full satisfaction of all claims.
It
is not disputed that Sue House met with the Liggonses after the
payment for the destroyed vehicle was received by the Liggonses
to discuss further remunerations from House that would satisfy
the Liggonses.
This certainly suggests that House was aware that
the Liggonses had further claims that had not been released.
It has been held that where money is given in
satisfaction of an entirely distinct claim, there is no
extinguishment of the claim sued upon.
Hubbard’s Adm’x v.
Louisville & N.R. Co., 267 Ky. 435, 102 S.W.2d 343 (1937).
In
Camp Taylor Development Co. v. Wimberg, 271 Ky. 635, 113 S.W.2d 9
(1938), it was held that a property owner’s acceptance of a
receipt for an amount paid to the water company was not a
compromise and settlement of all matters in controversy,
including a claim for damages for cutting off the owner’s water
supply, where the question of damages was not discussed and the
receipt showed that it was merely intended to cover the amount
due for water service up to the date of payment.
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Similarly, a
release regarding construction and grading of a road did not bar
the plaintiff’s related claim arising out of flooding allegedly
caused by defendant’s negligent failure to continue or extend the
curb along the road.
Commonwealth, Dept. Of Highways v. Smith,
Ky., 388 S.W.2d 362 (1965).
Generally, the issue of accord and satisfaction is a
question of fact.
Bruestle, 914 S.W.2d at 354.
However, the
issue becomes one of law if the requisite controlling facts are
undisputed and clear.
Id.
In the present case, we cannot say,
given the language in the receipt at issue and other evidence
suggesting that the parties were aware that the payment was not
in full satisfaction of all claims, that the controlling facts
are undisputed and clear.
We do, however, affirm the court’s
summary judgment as to any further claim for property damage as
to the car.
As to the other claims, we reverse the summary
judgment and remand for further proceedings consistent with this
opinion.
Accordingly, for the reasons stated above, we affirm in
part and reverse and remand in part.
ALL CONCUR.
BRIEF FOR APPELLANTS:
BRIEF FOR APPELLEE:
Lee E. Sitlinger
Louisville, Kentucky
William P. Swain
William B. Orberson
Louisville, Kentucky
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