Court Opinion

ID: 2962912
Source: CourtListenerOpinion
Date Created: 2015-09-21 21:03:36.699352+00
Date Added: 2024-06-11T11:37:19.605045
License: Public Domain

USCA1 Opinion

	

          November 8, 1994      [NOT FOR PUBLICATION]                            UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT                                 ____________________        No. 94-1364                            SCOTLAND GUARD SERVICES, INC.,                                Plaintiff, Appellant,                                          v.                        PUERTO RICO ELECTRIC POWER AUTHORITY,                                 Defendant, Appellee.                                 ____________________                     APPEAL FROM THE UNITED STATES DISTRICT COURT                           FOR THE DISTRICT OF PUERTO RICO                     [Hon. Carmen C. Cerezo, U.S. District Judge]
                                             ___________________                                 ____________________                                        Before                                Boudin, Circuit Judge,
                                        _____________                            Aldrich, Senior Circuit Judge,
                                     ____________________                             and Young,* District Judge.
                                         ______________                                 ____________________            Miriam  Deborah Salwen Acosta with whom Woods & Woods was on brief
            _____________________________           _____________        for appellant.            Lilliam Elisa Mendoza Toro on brief for appellee.
            __________________________                                 ____________________                                 ____________________                            
        ____________________        *Of the District of Massachusetts, sitting by designation.

                      Per Curiam.   This action  is before  us on  appeal
                      __________            from a decision of  the United States District Court  for the            District  of Puerto  Rico  affirming the  bankruptcy  court's            finding  that although  PREPA owes Scotland  Guard $42,859.77            representing (1) amounts it admits  are owed, (2) amounts for            which it provides no evidence of payment, and (3) unexplained            deductions from  payments for services rendered,  it does not            owe  an  additional  $645,893.38  claimed   by  Scotland  for            deductions from the contract price that  Scotland effectively            accepted  via  cashing  PREPA's  checks  or  for expenditures            incurred by  Scotland due  to an intervening  enactment of  a            federal minimum wage.  We affirm.                      Scotland's  first contention  is that  the district            court  incorrectly   applied  the  doctrine  of   accord  and            satisfaction to its cashing of PREPA's checks in  payment for            services rendered.  Scotland maintains that it accepted these            checks  as partial  payment  only, and  continued to  invoice            PREPA  for the  unpaid amounts.   PREPA  points first  to its            contract with Scotland,  which explicitly allowed  deductions            from  the contract price where Scotland failed to comply with            certain contract  terms, then to the  endorsements carried on            its checks to  Scotland which  state that they  are "in  full            payment of  the account  stated" on the  accompanying voucher            and  "payee by this endorsement accepts  it as such payment,"            in arguing that accord and satisfaction applies.                                         -2-

                      In  H.R. Electroplating,  Inc.  v.  Rodriguez,  114
                          __________________________      _________            D.P.R. 236  (1983),  the  court  makes  clear  that  a  claim            unliquidated,  or  involving  a  bona  fide  controversy,  is
                                             __________            satisfied  upon acceptance by the creditor of a sum less than            that it claims.  If it  is not agreeable to this  resolution,            it  "has  the  duty  of  returning  to  the  debtor  the  sum
                 ________________________________________________________            offered, . . . [and] cannot take advantage of the offer . . .
            _______            in  order, after receiving  the same, to  claim the balance."            Id., at 244, quoting Lopez v. South P.R. Sugar Co., 62 P.R.R.
            ___                  _____    ____________________            227, (1943) (emphasis in original).                        The  district  court applied  Puerto  Rican law  in            determining that the requisites of the doctrine of accord and            satisfaction had been met, absolving PREPA of the duty to pay            the bulk  of the sum Scotland  claims is due.2   Not only did            Scotland cash  PREPA's checks, but  there is  no evidence  to            suggest  that  it registered  any  objection  to the  amounts            offered  at the time.   The checks  and accompanying vouchers            explicitly  drew Scotland's  attention to  the fact  that the            payments included deductions from the contract price and why,            that  PREPA intended  them to  be in  full payment,  and that            Scotland would  signal their acceptance as  such by endorsing                                
            ____________________            2.      The  bankruptcy  court   determined  that  $42,859.77            representing (1)  amounts PREPA admits are  owed, (2) amounts            for  which  PREPA provided  no evidence  of payment,  and (3)            unexplained deductions  by PREPA  from payments  for services            rendered  by   Scotland  were  not  covered   by  accord  and            satisfaction, and thus remained due and payable.                                           -3-

            and cashing  the checks.   It is not  enough for  Scotland to            say, "Appellant obviously did  not perceive PREPA's checks to            be  in total  payments  of debts  when  it continues  issuing            invoices to PREPA."                      Scotland contends next that  the doctrine of  rebus
                                                                    _____            sic sanctibus, or impossibility,  should have been applied to
            ___ _________            its  contract with PREPA to find that PREPA should absorb the            cost increase  that  resulted from  the  enactment of  a  new            federal minimum  wage law.   Puerto  Rican  law requires  the            modification  of  the terms  of  a  contract when  unforeseen            circumstances  render it  "impossible for  a party  to comply            with its  duties." Medina  & Medina  v. Country  Pride Foods,
                               ________________     _____________________            Ltd.,  631  F. Supp.  293, 298  (D.P.R.  1986).    This is  an
            ____            "extraordinary  remedy   to  be   applied  only   in  extreme            circumstances."   Id.  The  new minimum wage  law, which made
                              ___            the  federal minimum  wage mandatory  for the  first  time in            Puerto Rico, went into effect when approximately 10 months of            Scotland's  contract  with  PREPA  remained.   Not  only  did            Scotland continue  to perform,  no evidence was  presented to            suggest  that   it  made   any  objection  or   assertion  of            onerousness  or impracticability  at  any time  prior to  the            termination  of the contract period.  This falls far short of            impossibility.                      Affirmed.
                      ________                                         -4-