Inger Interiors v. Peralta

Citations: 506 N.E.2d 1199; 30 Ohio App. 3d 94; 30 Ohio B. 193; 3 U.C.C. Rep. Serv. 2d (West) 1317; 1986 Ohio App. LEXIS 10036Docket: No. 50014

Court: Ohio Court of Appeals; February 9, 1986; Ohio; State Appellate Court

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Defendant-customers appealed a judgment favoring the plaintiff-decorator for an unpaid account balance. The trial court determined that the customers had agreed to the balance, but evidence showed the decorator accepted a settlement from the customers. Consequently, the appellate court reversed the trial court's judgment and dismissed the decorator's claim. 

Key findings include that in December 1983, the decorator and customers discussed custom work, and a letter confirming the order was sent. A proposal on January 6, 1984, quoted a balance of $1,590, excluding stitching costs, which could only be estimated post-completion. On April 16, 1984, the decorator clarified the proposal regarding stitching costs. The customers sent a check for $652.50 on May 2, 1984, annotated as 'Paid in Full' in their correspondence, indicating a dispute over the total amount. The decorator, having received the check, amended this notation to 'partial payment' before cashing it.

The court received various evidentiary exhibits including letters and checks, noting that the decorator had cashed both checks without claiming material costs already covered by the customers. The decorator claimed additional amounts owed beyond the total paid for labor, including extra charges for quilting and sales tax, amounting to a claim of $412.

The trial court rejected the customers' arguments regarding the May 2 check settling the claim and awarded the decorator $412 minus a $75 credit, for which no evidence was provided but was not contested by the decorator. The customers also contested the trial court's finding that they owed any balance, asserting that the decorator only claimed these charges post-performance, but failed to present supporting evidence in the record.

The referee accepted the decorator's affidavit without customer objection, which indicated the decorator could not quote a price for special stitching until completed. The evidence did not clarify if the quoted price included special stitching charges, nor did it negate the customers' responsibility for freight or sales taxes. The customers are presumed to pay the reasonable value of the decorator's performance unless a contrary agreement exists. In non-jury trials, courts evaluate evidence and draw reasonable inferences, a decision upheld by appellate courts unless clearly unsupported by evidence. The trial court's interpretation of the agreement is presumed correct unless proven erroneous.

The customers contested the trial court's refusal to dismiss the decorator's claim as settled, which was upheld. The decorator’s negotiation of the customers’ check implied acceptance of its terms as full payment unless the customers withdrew their stipulation. The decorator's unilateral modification of this condition did not alter the payment's effect. The parties had a genuine dispute over any remaining debt, and the acceptance of the check under the stated condition constituted an accord and satisfaction, barring any further claims from the decorator. Consequently, the trial court's judgment was reversed, dismissing the decorator's claims.

A dissenting opinion argued that the decorator's conditional endorsement of the check preserved his rights, thus negating the accord and satisfaction.

In Seeds Grain Hay Co. v. Conger (1910), the Ohio Supreme Court established that if a debtor offers less than the disputed amount as full payment, the creditor must either accept it or return the check. However, in J.P. Burton Coal Co. v. John P. Gorman Coal Co. (1926), a court of appeals reached a conflicting conclusion on a similar issue without referencing Seeds Grain Hay Co. The Ohio Supreme Court later reaffirmed the Seeds Grain principle in Platt v. Penetryn System, Inc. (1949). Subsequent cases have largely followed Seeds Grain, often ignoring or distinguishing Burton Coal. 

In 1962, Ohio adopted Section 1-207 of the Uniform Commercial Code, allowing a party to perform under protest without waiving their rights. Other jurisdictions, like South Dakota in Scholl v. Tallman (1976), have interpreted this section to protect creditors who conditionally endorse checks marked 'Settlement in Full.' Scholl's interpretation suggests that creditors could reserve their rights without losing claims to remaining amounts owed, shifting the risk to debtors. This interpretation could prevent creditors from facing the dilemma of accepting partial payments. Consequently, the appellants' arguments were found to lack merit, and the judgment was affirmed.