Twin City Pharmacy, Inc. v. Walnut Hill, No. Cv 98 049873 (Jan. 24, 2000)

2000 Conn. Super. Ct. 1299
CourtConnecticut Superior Court
DecidedJanuary 24, 2000
DocketNo. CV 98 049873
StatusUnpublished

This text of 2000 Conn. Super. Ct. 1299 (Twin City Pharmacy, Inc. v. Walnut Hill, No. Cv 98 049873 (Jan. 24, 2000)) is published on Counsel Stack Legal Research, covering Connecticut Superior Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Twin City Pharmacy, Inc. v. Walnut Hill, No. Cv 98 049873 (Jan. 24, 2000), 2000 Conn. Super. Ct. 1299 (Colo. Ct. App. 2000).

Opinion

[EDITOR'S NOTE: This case is unpublished as indicated by the issuing court.]

MEMORANDUM OF DECISION RE: DEFENDANTS' MOTION FOR SUMMARY JUDGMENT
The issue presently before the court is whether the defendants Walnut Hill, Inc. (Walnut Hill) and O'Connell, Flaherty Attmore, L.L.C. (OFA) are entitled to summary judgment as a matter of law on their special defense of accord and satisfaction, under these unusual circumstances. In sum, the law firm of OFA, on behalf of its client Walnut Hill, utilized a mortgage release provided by attorney Jason Pearl (Pearl), counsel for the plaintiff Twin City Pharmacy, Inc. (Twin City). A dispute arose over the amount owed from Walnut Hill to Twin City in connection with such release, resulting in Pearl initiating this lawsuit against defendants. After this suit was served, OFA tendered a client's fund account check in the amount of $200,000 CT Page 1300 intended as a settlement of the disputed debt and containing clear and conspicuous release language on the back of the check and in a letter of same date. Without defendants' consent, Pearl subsequently obliterated the release language on the back of the check and negotiated the check. The lawsuit has continued unabated.

This court holds that Pearl's negotiation of the check, on behalf of plaintiff Twin City, with knowledge that the check was issued in full settlement of the debt and lawsuit, constitutes an accord and satisfaction under both the Uniform Commercial Code and common law, entitling Walnut Hill and OFA to summary judgment as a matter of law.

The Undisputed Facts
A more detailed exposition of the undisputed and relevant facts is in order. They are as follows: Walnut Hill and Twin City are each commercial entities. The former is a nursing home and the latter, as its name implies, a pharmacy. In the summer of 1998, because of a refinancing by Walnut Hill, they entered into negotiations, through their attorneys, over the amount owed to Twin City on its mortgage upon Walnut Hill's realty. Twin City claimed Walnut Hill owed it in excess of $263,000 under the mortgage note, including principle and interest. After negotiations, the parties agreed to settle the mortgage debt in the amount of $200,000. As part of that agreement, OFA, on behalf of its client, Walnut Hill, was to forward payment to Pearl1 in return for Twin City's release of the mortgage. Pearl furnished that release in escrow to OFA, along with an extract of board minutes authorizing same, by letter of September 2, 1998.

After the passage of thirty days, Pearl informed OFA via letter dated October 2, 1998, and received at OFA on October 5, that the time for forwarding the $200,000 settlement check had lapsed and, therefore, the agreement was canceled. Twin City claims that the agreement was contingent on its receiving payment within thirty days from the date on which the release was forwarded. Twin City claims this thirty day time limit was contained in the extract of minutes of the annual meeting of directors, which was sent to OFA as an enclosure to the September 2, 1998 letter from Pearl. Walnut Hill and OFA insist that this original settlement agreement with Twin City did not contain a thirty day time limit.2 CT Page 1301

The refinancing closing took place after the receipt by OFA of the letter but before Attorney Adler, to whom it was addressed, saw it on October 7. The release was used.

In response to Attorney Pearl's letter of October 2, 1998, OFA sent Attorney Pearl a hand delivered letter. In the letter, OFA objected to the time limit as being part of their clients' agreement and enclosed a check for $200,000 from a title insurer. That check contained restrictive language on the back on the check in the endorsement area that read: "The negotiation of this check represents full and final settlement of all claims against Walnut Hill, Inc." Pearl attempted to negotiate such check but was unsuccessful.3

On October 8, 1998, Pearl issued and had served a writ, summons and complaint against both Walnut Hill and OFA, alleging that they breached the terms of the original settlement agreement regarding the mortgage note by utilizing the release after the thirty day period and without payment for it. In its complaint, Twin City alleges that Walnut Hill and OFA are now indebted to it for the whole amount of the mortgage note, an amount in excess of $263,000, including principle and interest.

On October 9, 1998, OFA telefaxed a letter to Pearl indicating, inter alia, receipt of the suit papers, that a client's account check for $200,000 would be hand delivered that day to Pearl and requesting a withdrawal of the suit. That check from OFA was delivered to Pearl on October 9 and contained on its reverse, in the endorsement area, the typed words: "The negotiation of this check represents acceptance of full and final settlement of all claims against Walnut Hill, Inc." The words are both clear and obvious.

Pearl, by telefax of October 9, indicated his receipt of this check, indicated that if he received a second check for the interest due of $33,799.94 he would "not return our Summons and Complaint to Court" and complained "[b]ecause of the unauthorized release language on the reverse side of the draft, I am unable to negotiate same without the other remaining [interest due] also being on hand."

By return telefax, also on October 9, OFA responded: "If you are refusing to deposit the check issued from our Clients' Funds as full and final settlement of this matter, you must return it immediately to this office otherwise you will be deemed to have CT Page 1302 converted it. If you refuse to accept our Clients' Fund check as full and final payment, you may return your Writ Summons and Complaint to the court and we will proceed appropriately. No further settlement offers will be made in this case." The case was returned to court on October 13, 1998. On that same date, Pearl negotiated the OFA check, after first altering it by obliterating the release language on the back of the check4

On July 22, 1999, Walnut Hill and OFA amended their answer to add a special defense that Twin City's claims are barred by the doctrine of accord and satisfaction. On August 10, 1999, Walnut Hill and OFA filed a motion for summary judgment with supporting memorandum of law and various exhibits. In their motion for summary judgment, Walnut Hill and OFA argue that the dispute over the debt from Walnut Hill to Twin City and the subsequent use of the release by OFA, which is the subject of the instant suit, was settled by an accord and satisfaction under the common law and pursuant to General Statutes § 42a-3-311. As such, they argue they are entitled to summary judgment as a matter of law.

On September 10, 1999, Twin City filed a brief, counter affidavit, and exhibits in opposition to the summary judgment motion filed by Walnut Hill and OFA. In response to the summary judgment motion, Twin City argues that genuine issues of material fact exist as evidenced in Pearl's affidavit. Twin City argues that issues of material fact exist as to: (1) the essential terms of the original escrow agreement; (2) the thirty day time limit in the original escrow agreement; (3) the form of payment under such original agreement; (4) the recording of the release prior to payment under the original agreement; and (5) whether a general release was a part of the original escrow agreement.

On September 17, 1999, in response to Twin City's opposition brief. Walnut Hill and OFA filed a reply brief and affidavit.

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Bluebook (online)
2000 Conn. Super. Ct. 1299, Counsel Stack Legal Research, https://law.counselstack.com/opinion/twin-city-pharmacy-inc-v-walnut-hill-no-cv-98-049873-jan-24-2000-connsuperct-2000.