Title: Ex Parte Meztista

State: alabama

Issuer: Alabama Supreme Court

Document:

845 So. 2d 795 (2001)
Ex parte Edward C. MEZTISTA.
(Re CeCe Hylton v. Edward C. Meztista, an individual, and Magic Media Division, a partnership, jointly and severally).
1991922.

Supreme Court of Alabama.
September 7, 2001.
Rehearing Denied December 28, 2001.
*796 Thomas R. Boller, Mobile, for petitioner.
Lynn C. Miller and Julie C. Glover of Glover & Miller, L.L.C., Mobile, for CeCe Hylton.
WOODALL, Justice.
CeCe Hylton sued Edward C. Meztista and Magic Media Division ("MMD"), a partnership, alleging breach of the partnership agreement and seeking a dissolution of the partnership and an accounting of the partnership profits. The Court of Civil Appeals stated the following relevant and undisputed facts:
Hylton v. Meztista, 845 So. 2d 792, 793 (Ala.Civ.App.2000).
Meztista and MMD moved for a summary judgment, contending that Hylton's cashing of the $17,617.84 check constituted an accord and satisfaction. The trial court entered a summary judgment in favor of *797 Meztista and MMD, stating the following conclusions of law:
Hylton appealed to this Court, and we transferred the case to the Court of Civil Appeals, pursuant to § 12-2-7(6), Ala. Code 1975. The Court of Civil Appeals, holding that the trial court had erred in entering the summary judgment for Meztista and MMD, reversed that judgment and remanded the case for further proceedings consistent with its opinion. After the Court of Civil Appeals overruled their application for rehearing, Meztista and MMD petitioned this Court for certiorari review, and we granted their petition. We reverse the judgment of the Court of Civil Appeals and remand the case for further proceedings consistent with this opinion.
In a well-reasoned dissent, Judge Crawley stated the applicable legal principles and the resulting legal conclusions:
Hylton v. Meztista, 845 So. 2d  at 795 (Crawley, J., dissenting) (emphasis supplied).
This Court has emphasized the contractual nature of an accord and satisfaction:
Leisure Am. Resorts v. Carbine Constr. Co., 577 So. 2d 409, 411 (Ala.1990) (emphasis supplied).
Applying these well-established principles to the facts of this case, the Court of Civil Appeals concluded that "Hylton presented substantial evidence tending to show that she and Meztista did not have a meeting of the minds." In reaching that conclusion, the Court of Civil Appeals relied on Hylton's apparently subjective intent to retain her right to seek an accounting and to ensure that she was paid all that she was owed. Hylton v. Meztista, 845 So. 2d  at 794. The Court of Civil Appeals erred in reaching this conclusion. When Hylton endorsed and deposited the check, she agreed to the condition upon which it was offered, and she is estopped to deny that agreement. Boohaker v. Trott, 274 Ala. 12, 145 So. 2d 179 (Ala. 1962); Public Nat'l Life Ins. Co. v. Highsmith, 47 Ala.App. 488, 256 So. 2d 912 (Ala.Civ.App.1971).
According to the Alabama Comment to § 7-3-311, Ala.Code 1975, that "section prescribes the rules that apply when an accord and satisfaction is asserted on the basis of a written notation on a negotiable instrument." That section provides in pertinent part:
(Emphasis supplied.) In holding that a jury issue existed concerning the good-faith-tender requirement, the Court of Civil Appeals stated:
Hylton v. Meztista, 845 So. 2d  at 794. The Court of Civil Appeals has misconstrued the good-faith-tender requirement in § 7-3-311(a)(i).
The Court of Civil Appeals looked to evidence that Meztista had not discharged his good-faith obligations with regard to the underlying contract, i.e., the partnership agreement. While this Court has never before interpreted the statutory good-faith-tender requirement, we note that the examples of bad-faith tender in paragraph 4 of the Official Comment to § 7-3-311 focus on the offer of the accord, and not on any conduct relating to the underlying contract. Those examples are:
(Emphasis supplied.) The Court of Civil Appeals erred in focusing on the conduct relating to the partnership, instead of on the offer of the accord. In reaching this conclusion, we find the reasoning of the Minnesota Supreme Court persuasive.
In Webb Business Promotions, Inc. v. American Electronics & Entertainment Corp., 617 N.W.2d 67 (Minn.2000), the Minnesota Supreme Court examined the good-faith-tender requirement of § 3-311 of the Uniform Commercial Code. After reviewing the language of that section and the comment to the section quoted above, the Minnesota Supreme Court stated:
617 N.W.2d  at 73 (citation omitted). That Court went on to state:
617 N.W.2d  at 74. The reasoning of the Minnesota Supreme Court is sound; it is also consistent with § 7-3-311 and our precedent.
Meztista provided Hylton with an accounting; that accounting showed that Hylton was owed $17,617.84 from the partnership. Hylton questioned the accounting and asked to review the partnership's books. Knowing that Hylton disputed certain expenses in the accounting and that she wanted to review the books, Meztista tendered to Hylton a check in the amount the accounting showed was owed her. No evidence was presented indicating that the check was not tendered in good faith in an attempt to resolve the dispute over the amount payable to Hylton. Both parties are sophisticated business people, who were aware of their rights and of the nature of their dispute. The check clearly stated that it was "final payment/payment in full." Hylton accepted the offer of the *800 check as a full satisfaction by depositing the check, thereby precluding any further claim against Meztista or MMD.
For the foregoing reasons, we reverse the judgment of the Court of Civil Appeals, and we remand this case for an order or proceedings consistent with this opinion.
REVERSED AND REMANDED.
MOORE, C.J., and HOUSTON, SEE, LYONS, BROWN, JOHNSTONE, HARWOOD, and STUART, JJ., concur.