NO. 88-389

INTHE SUPREMECOIJRTOF THE STATEOF MONTANA
1989

RRUNO ROYER, Plaintiff and Appellant,-vsJOHN RICHARD ETTELMAN, Defendant and Respondent.

APPEAL FROM: District Court of the Thirteenth JudicialDistrict, In and for the County ofYellowstone, The HonorableRussell K. Fillner,Judgepresiding.
COUNSEL OF RECORD:,
ForAppellant:
Dane C. Schofield;Peterson,Schofield & Leckie, Billings,Montana
For Respondent: William J. Gregoire;Smith,Walsh, Clarke & Gregoire, Great Falls,Montana Sherman 17. Lohn;Garlingtcn,Lohn & Robinson,Missoula, Montana

Submitted on Briefs: Dec. 2, 1988 Decided:January 6, 1989

ED SMITH ClerkMr. Justice 

### R. C. McDonough delivered the Opinion of the Court.

This appeal concerns an alleged accord and satisfaction in settlementof apersonal injury claim. The District Court of the Thirteenth Judicial District, Yellowstone Count!!, sat
as finder of fact and held that the parties reached an accord and that appellant's cashing of respondent's check constituted a satisfaction. We affirm.

Appellant Rruno Royer presents the following issues for review:



### (1) Whether the Court erred in concluding that the draft itself operated as a full and final release?

(2) Whether the Court erred in concluding that an accord and satisfaction resulted from the conduct between Boyer and Hartford?



### (3) Whether the findings

### of the Court are supportedby substantial evidence?

Respondent, Ettleman, and his insurer, Hartford Accident and Indemnity, (Hartford) 

## , complain that the issues should be changed to reflect the lower court's focus on determining the existence of an accord and satisfaction. 

### We agree and determine this appeal by reviewing Bruno Bover's issue (2): Whether the District Court erred in concluding an accord and satisfaction resulted from the parties' conduct?

TheDistrict Court's essential conclusion on accord and satisfactionreads:That the draft was tendered to the plaintiff under such circumstances that he is bound to know that it was tendered in full settlement of the claim resulting in an accord and satisfaction between the parties and a discharqe of the plaintiff's whole claim.

The following facts are relevant to reviewing this conclusion: Ettleman's car collided with a vehicle being driven by Rose Gonzales. Royer, Gonzales,and several other passengers inGonzales's carwere injured. Hartford admitted liability for the claims against Ettleman. Ettleman's insuranceprovided $55,000 in coverage. Hartford's employee Charles Gailey attempted to divide the $55,000 among the injured parties. Boyer

### 's father, Melvin Boyer,negotiatedwith Gailey for Bover's shareof the insurance. Attorneys representing other claimants also negotiated with Gailey. Melvin Royer demanded $35,000 for his son's claim. Gailey rejected the offer. Gailey settled with most of the other claimants, and informed Melvin Boyer that only $10,000 of the $55,000 in coverage remained. Gailey proposed that Bruno Boyer accept the $10,000 as a full settlement. Melvin and Bruno Boyermetwith Gailey todiscuss the offer. Melvin Boyer instructedhis son to rejectGailey'sproposal. Gailey told Bruno Boyer that as an adult,he could settle the claim without his father's authorization. Gailey then gave him a release instrument and a check for $10,000 to take home. Bruno Boyer accepted and negotiated the check but never signed the release. At trial Bruno Boyer testified that Gailey lead him to believe that the check was for coverage of his medical bills only, and that even if he accepted and cashed the check,hecould still pursue a claim forhis other damages. He relies principally on Gailey's statement during the meeting that if $10,000were not enough,Boyer would have to sue. According to Boyer, this statement reasonably lead him to believe he could cash the check, and sue for the rest of his damages. Boyer also claims that the following facts and contentions support his claim: Gailey never communicated the limits of the policy to Royers; Gailey told Boyers that either a judge would determine each claimant's share, or a meeting would be held and the claimants could attempt to determine shares; Gailey settled with other claimants prior to informing Royers that no meeting would occur; Boyers' demand for a $35,000 settlement separated medical damages from other damages; at the time of the settlement meeting, Rruno Royer's medical bills totaled $6,248, and Boyers told Gailey that at least $2,000 would be needed in the future; Gailey told Bovers at themeeting that the !$10,000should be used to pav medical bills; Gailey wrote to Bruno Rover shortly after the settlementmeeting and stated thatmedical bills shouldbe paid from the $10,000. Gailey testified that both Melvin and Bruno Boyer appeared to understand that the $10,000 could be retained 

### by Rruno Boyer only if he aqreed to accept the money in full settlement of the claim. He also testified that he told Bruno Boyer that ifhewanted to keep themoney,hemust sign the release and send it back to Hartford. Gailey admitted telling Rruno andMelvin Boyer that theywould have to sue to collect more than $10,000. However, Gailey claims Boyer mischaracterizeshis statement. According to Gailey,he told Royers if they refused the settlementoffer,he would tender the remainder of the coverage, that 

### is, $10,000, to the District Court, and they would have to sue to collect on their cl-aim. Gailey testified that he never lead Royers 

### tobelieve that he tendered the $10,000 for medical damages only. Hartford points out that beneath the names of the insurer and the claimant on the frontof the check inregular print Hartford typed inthewords "InFull Settlement of AllClaims". Harftord also contends that the following findings of the lower court are supported by substantial evidence and refuteBoyer's contentions:

19. That in August or September, 1982, Gailey contacted Boyer and his father.and informed them that there was Ten Thousand and no/100 Dollars ($10,000) of the policy proceeds

.remaining 'with which tosettleBoyer's case. 20. That Bruno and Me1 Boyer traveled to Great Falls, Montana topick up the check. A friend of theirs, Gerald Davidson, accompanied them on the trip. 21. That when Bruno and Me1 Boyer met with Gaily, Me1 tried to get Gailey to increase his $10,000 offer of settlement, which Gailey refused to do. Me1 Boyer then told Gailey that he would not sign anything. 22. That Gailey thenoffered a $10,000 draftand a release to Bruno Boyer and told him he could sign the release sincehe was now 18years old. 23. That Bruno Boyer took the $10,000 draft and the release from Gailey, saying he wanted tothink about it,and returned toBillings, Montana. 24. That Gailey told Bruno Boyer if he wanted to accept the $10,000 to sign the release and return it tohim. 25. That Bruno Royer cashed the draft, putting $4,000.00 inhis savings account and giving $6,000 tohisfather. 26. That Bruno Boyer believed he threw the release away, but later learned his father was in possession of therelease form. 27. That Gailey, subsequent to giving the draft and release form to Boyer, sent a letter and a separate release form to Boyer, asking that he review and execute the same. ThisBoyer refused to do.28. That Gailey would, as a standard course of business,when a claimantwas not surewhether they wanted to accept a check as full and finalpayment, send both the draft and a release with the claimant, with the instructions that if thev accepted thedraft thevwere to sign and return the release. 29. That theRoyersknewthat the $10,000.00 check was being tendered as full and final settlement of Bruno's claims. Me1 Boyer knew this at leastas of the September 8, 1982meeting with Gailey in Great Falls,and Bruno Boyer learned this from his father at least by the time he cashed the draft, if not before. He knew he was to sign and return the release to Gailey ifhe cashed the check. 30. The Boyers have retained the $10,000.00 they received and have not refunded or offered to refund the money or any part thereof to the Hartford. 31. The Boyers instituted this action a full twenty seven months after cashing the $10,000 draft

# .

The resolutionof this case in the lower courtdepended largely on choosing between conflicting evidence. Boyer argues for this Court to reweigh the conflicting evidence. Rule 52(a)

### ,M.R.Civ.P., constricts our review of findingsoF fact,and this Court affirms if substantialevidence supports the lower court

### 's findings

# . Price Bld. Service Inc. v. Christiansen (Mont. 1985), 697 P.2d 1344, 1347, 42 St.Rep.

Generally, a disputed, unliquidated obligation may he extinquishedwhere the obligated party offers to exchange an amount different from or less than the obligation in full settlement of the obligation. Section 28-1-1401, MCA. And the party owed the obligation agrees to accept and does accept the amount offered in full settlement of the obligation. Section 28-1-1402, MCA. See also Sawyer 77. Somers Lumber Co. (1929), 86 Mont. 169, 282 P. 852. he intent of the parties generally controls the issue.Rarbarich v. Chicago etc. 

### Ry. Co. (1932), 92Mont. 

### 1, 30, 9 P.2d 797, 799. This case hinges on whether Royer's acceptance and negotiation of the check from Hartford occurred under such circumstances that Boyer was bound "to know that the intention was to make the payment in full settlement of the claim

# ..." Sawyer, 282 P. at 854. Put differently, in the
case of a disputed and unliquidated obligation,the finder of fact properly concludes an accord and satisfaction occurred where the obligated partymakes:

an offer in full satisfaction of the obligation, accompanied by such acts and declarationsas amount to a condition that if it is accepted, it is to be in full satisfaction, and the condition must be such that the party to whom the offer is made is bound to understand that if he accepts it,he does so subject to the conditions imposed.

1Arn.Jur.2d Accord & Satisfaction

### 5 1 (1962). The District Court findings thoroughly set out the circumstances surrounding acceptance of the check, Substantial evidence supportsthe findings. For example, prior to the meeting, evidence demonstrated that both Boyers knew that Gailey wanted to settle the claim within the remaining amount of coverage. Bruno Boyer first denied thathe knew only $10,000 remained, and then admitted he may have communicated the policy limits to a friend,Gerald Davidson,prior to the meeting. Davidson testified that Bruno had discussed the $10,000 policy limit with him prior to the settlementmeeting. Bruno Boyer also claimed that he understood at the settlement meeting that the $10,000 would be a medical damages settlement only. However,he also testified he took the releasehome afterGaile.7 told him tn signand return therelease, and that he knew that the release purported a full and final settlement. Bruno also witnessed the argument at the settlement meeting between Melvin Boyer and Gailey over the adequacy of $10,000 as a complete settlement. Moreover, it is undisputed that at the time of the settlement meeting, medical bills totaled under $10,000. Boyer denied reading the face of the check except that he read his name, noted Gailey's signature, and the figure recited in payment. He testified that the full settlement notation escaped his attention. Nevertheless, the presence of the notation provides evidence for the District Court's conclusion. These facts and circumstances, when considered with Gailev's version of events,constitute sufficient evidence to sustain the District Court's decision. This Court "willnot overturn the holdings or findings of a trial court simply because the evidence Furnishes reasonable grounds for difFerent conclusions." Price, 69l P.?d at 1397. Thus,we affirm.