Law School Case Brief
Consol. Edison Co. v. Arroll - 66 Misc. 2d 816, 322 N.Y.S.2d 420 (Civ. Ct. 1971)
Where an amount due is in dispute, and the debtor sends a check for less than the amount claimed, and clearly expresses his intention that the check has been sent as payment in full, and not on account or in part payment, the cashing or retention of the check by the creditor is deemed an acceptance by the creditor of the conditions stated, and operates as an accord and satisfaction of the claim.
Defendant Mark E. Arroll received electricity service from plaintiff Consolidated Edison Company of New York, Inc. ("Con Edison"). Arroll disputed the amounts of five electric bills for the summer periods of 1968, 1969, and 1970, claiming that they exceeded past bills for comparable periods and questioning the accuracy of the meter and/or the readings taken, as well as Con Edison's statements as to the amount of electricity consumed. Arroll later sent to Con Edison's president separate checks for each bill in an amount he chose—based on prior billing—along with a letter detailing his objections and intent to settle the disputed bills. Each check contained a statement that it was in full payment and satisfaction of that particular bill and that cashing it constituted a release of Con Edison's claim against him. Con Edison deposited the checks and later filed a lawsuit against Arroll in New York state court seeking to recover the balance alleged to be due on Arroll's bills. Arroll asserted the affirmative defense of accord and satisfaction.
Did Con Edison's acceptance of Arroll's checks operate as an accord and satisfaction of Con Edison's claim?
The court sustained Arroll's affirmative defense and rendered judgment for Arroll. The court first ruled that the meter and the readings taken by Con Edison were accurate, and that the electricity billed for was actually consumed, and thus the disputed bills reflected the proper charges for Arroll's use of electricity. The court held, however, that Arroll established an accord and satisfaction: Arroll honestly disputed the amount due, and there was no question that Con Edison was given sufficient notification that the checks were to be considered as payment in full. Thus, the retention of the proceeds of the checks by Con Edison bound the company to an accord and satisfaction.
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