Court Opinion

ID: 9588033
Source: CourtListenerOpinion
Date Created: 2023-08-21 23:29:05.101101+00
Date Added: 2024-06-11T12:47:52.105620
License: Public Domain

RABINO WITZ, Justice,
dissenting.
I disagree with the court’s holding that Keystone is entitled to summary judgment on the issue of accord and satisfaction. Here we must determine whether there exist any genuine issues of material fact which would render a grant of summary judgment improper. Civ.R. 56(c); Moore v. State, 553 P.2d 8 (Alaska 1976). A party opposing summary judgment need only show that issues of material fact exist. Totem Marine Tug & Barge v. Alyeska Pipeline, 584 P.2d 15 (Alaska 1978). Air Van Lines made such a showing. Specifically, it was inappropriate for the superior court to dispose summarily of the issue of whether there existed sufficient consideration for the alleged accord and satisfaction.
The enforceability of an accord and satisfaction is dependent upon a determination either that the debtor was disputing his obligation in good faith or that the creditor’s claim was in fact doubtful. As the court observed with regard to the good faith requirement in State Dept, of Fisheries v. J-Z Sales, 25 Wash.App. 671, 610 P.2d 390, 393 (1980):
For purposes of accord and satisfaction, the underlying dispute over the debt must be in good faith, i.e., the parties must have a bona fide belief in the validity of their positions with respect to the claim.
Comment d to the Restatement (Second) of Contracts § 281 (1981) specifically provides that the enforceability of an accord is dependent upon a finding that it is supported by adequate consideration, which may take several forms, those relevant here being a good faith belief on the part of the obligor that his original duty is doubtful or a finding that the belief is objectively justifiable. Id. 610 P.2d at 382-84. The comment refers to § 74, which states in relevant part that
(1) Forbearance to assert or the surrender of a claim or defense which proves to be invalid is not consideration unless
(a) the claim or defense is in fact doubtful because of uncertainty as to the facts or the law, or
(b) the forbearing or surrendering party believes that the claim or defense may be fairly determined to be valid.
Restatement (Second) of Contracts § 74, at 185 (1981).
After study of the affidavits and documentation in the record, I am persuaded that the issues of good faith and the objective validity of the dispute could not have been disposed of as a “matter of law,” particularly since all factual inferences should have been drawn in favor of Air Van Lines in disposing of this issue.1 The underlying question is whether Keystone could legitimately dispute Air Van Lines’ contention that it authorized Air Van Lines to pay workers overtime when its agent explicitly authorized the hiring of Anchorage laborers and asked that the work be completed “as soon as possible,” and when Air Van Lines determined that overtime pay was cheaper than flying them back to Anchorage. It would be reasonable to conclude from these “facts” that Keystone’s defense to the Air Van Lines’ bill is not being asserted in good faith and that it is not objectively reasonable. Thus, I would *781hold that the affirmative defense of accord and satisfaction should not be deemed valid as a matter of law.2
The majority addresses separately the issues of the presence of good faith and whether payment of an undisputed portion of an unliquidated claim discharges liability for the whole. This approach is misleading, as the proposition that the Air Van Lines’ claim was unliquidated presumes either that the issue of good faith has been resolved in favor of Keystone, or that it is irrelevant. However, both of these assumptions are questionable. The issue of whether Keystone acted in good faith remains an open question, for reasons discussed herein. Deeming good faith irrelevant would permit a debtor to pay an amount less than all agree he or she owes and completely escape liability for the disputed amount without any provision for an exchange of consideration. That is precisely the result which the approach taken in J-Z Sales and the Restatement § 281 seeks to avoid by requiring that such consideration take the form of avoidance of a bona fide dispute. Admittedly, Air Van Lines was less than cautious in cashing the check despite the clear restrictive endorsement. However, I believe the good faith requirement is too important a consideration to discard.

. In my view, the majority incorrectly places the burden on Air Van Lines of either producing “some direct evidence of bad faith”, or establishing “that at the time it ignored the restrictive endorsement and cashed the check no bona fide dispute existed as a matter of law.” It is Keystone which had the burden of establishing as a matter of law the absence of bad faith.

. See Restatement (Second) of Contracts § 74 comment b, at 185 (1981) (a mere assertion or denial of liability does not make a claim doubtful, and the fact that invalidity is obvious may indicate that it was known; in such cases Subsection (l)(b) requires a showing of good faith).