Jones v. Ortiz

OPINION

Dawn and Thomas Jones appeal the trial court's finding that their claim for personal injuries is barred by the affirmative defenses of accord and satisfaction or payment and release. The trial court conducted a bifurcated bench trial on the affirmative defenses and entered a take-nothing judgment in favor of appellee, Margarito Ortiz. The dispute centers upon an insurance company check bearing the notation on its face "all claims bodily injury."

Facts Dawn Jones was injured in an auto collision with Margarito Ortiz. She testified that after the collision she thought her injuries were minor and limited to her ankle. She and her husband negotiated their property damages with Mike Flynn, Ortiz's insurance adjuster, and accepted a check from him for those damages. The check apparently contained no release language.² During their conversations, Jones and Flynn discussed her injuries. She incurred medical expense for a single office visit and lost time from work. Jones' total "special damages" were less than $160 at the time she and Flynn discussed her injuries. Neither discussed any injury other than Jones' ankle. Flynn issued a $500 check for Jones' personal injuries. The check arrived with no cover letter with the notation "all claims bodily injury." There was no additional release language stamped on the back.

Ortiz contends that the $500 check constituted a release of all Jones' claims. Jones contends otherwise. In response to Jones' suit for personal injuries to her back, for which she first received treatment in January 1990, Ortiz claimed the affirmative defenses of accord and satisfaction and of release.

Points of Error Appellants complain that the evidence is legally and factually insufficient to support the trial court's findings of fact that the $500 check was to reimburse Jones for future medical and that Jones was aware of potential problems with her back at least a month before she accepted the check. Appellants also attack the trial court's conclusions of law. The trial court concluded that the check was a settlement of Jones' bodily injury claims, that the check constituted a release, that there was no mutual mistake, and that the Joneses are entitled to no further recovery from Ortiz.

Sufficiency of the Evidence A trial court's findings of fact, may be reviewed for both legal and factual sufficiency, just as we review jury findings.Southern States Transp., Inc. v. Texas, 774 S.W.2d 639, 640 (Tex. 1989); Thomas v. McNair, 882 S.W.2d 870, 881 (Tex.App. — Corpus Christi 1994, no writ);Blanco v. Gracia, 767 S.W.2d 896, 897 (Tex.App. — Corpus Christi 1989, no writ). In reviewing the legal sufficiency of the evidence, we consider only the evidence and inferences favorable to the findings. Larson v. CookConsultants, Inc., 690 S.W.2d 567, 568 (Tex. 1985);In re King's Estate, 244 S.W.2d 660, 661-62 (Tex. 1951). Our review for factual sufficiency of the evidence differs, we must consider and weigh all the evidence.Garza v. Alviar, 395 S.W.2d 821, 823 (Tex. 1965).

Release and accord and satisfaction are affirmative defenses. TEX.R.CIV.P. 94. When a party asserts an affirmative defense, it becomes his burden to plead and produce evidence to support that claim. Any deficiency in the proof of the affirmative defense is chargeable against the party asserting it. When a party pleads release, it becomes his burden to establish the existence of an effective and valid release.

Similarly, the defense of accord and satisfaction requires the party asserting the defense to prove a valid accord and satisfaction. In accord and satisfaction the parties create a new contract in which the existing obligation is discharged through performance of a specified new obligation.

The payment of a disputed or unliquidated claim may constitute an accord and satisfaction. The general rule regarding conditional tender of payment is that the "conditional tender must be expressed by acts or declarations with sufficient clarity that the creditor is bound to know that his acceptance of the tendered payment will constitute full payment of his claim." H.L. "Brownie" Choate, Inc. v.Southland Drilling Co., 447 S.W.2d 676, 678 (Tex. 1969);see also Jenkins v. Henry C. Beck Co., 449 S.W.2d 454, 455 (Tex. 1970). The Choate court reviewed the evidence to support the trial court's judgment of accord and satisfaction. The evidence, as here, consisted of a notation on a check and the testimony of the parties. The check stub applied credits to a balance and showed a sum due and owing. The testimony of the parties was similar to that here, one testified to his intent that the check be full and final settlement, and the other testified that he was not made aware that the check was intended as final settlement of the disputed amount. The court reversed the judgment and held that the notation on the check was no evidence that the payment was intended as a final payment of a disputed amount.

In Gracia v. RC Cola-7-Up Bottling Co., 667 S.W.2d 517, 520 (Tex. 1984), the court considered the effect of a final judgment and a notation on the check in determining whether a claimant had previously released her claims and was thus barred from asserting additional claims. Gracia involved the injury to a husband and child which was settled by an agreed judgment. The wife was a party to the judgment as next friend of the child. The wife later brought suit for loss of consortium arising out of her husband's injuries. The check bore the notation "Full; Final Settlement" and no more. The court found that the judgment in support of which the check was issued did not purport to release the wife's individual claim and the language on the face of the check did not constitute a release of any more than set out in the judgment. The court rejected the defendant's plea of accord and satisfaction.

This is the unusual case where the claim of release is unsupported by any written document that explicitly sets forth the terms of the agreement. In this case the only writing, the check, does not use the word "release." The only evidence that the check was intended to serve as a release is Flynn's testimony. He testified that he did not specifically recall what he told Jones but that it was his habit and practice to advise claimants that the check was intended as a release of all injuries, past and future, whether known or unknown. Flynn also testified that he later mailed Jones a written release form and that she did not sign it. Moreover, Flynn testified that it was his company's policy not to require a written release in claims for less than $1000. Jones denies that Flynn told her that the check was intended as a full and final release of any and all claims.

Although the defendants plead both accord and satisfaction and release, the proof of either is barely sufficient to withstand a legal sufficiency challenge. Considering all the evidence and the above cited case law, the trial court's finding that Jones intended to release all claims for future medical problems is so against the great weight and preponderance of the evidence as to be manifestly unjust. Ortiz proved the subjective intent of his adjuster to obtain a release, but the habit evidence relied on to prove that Flynn communicated his intent is no more than inference. That inference is outweighed by Flynn's other

testimony and Jones' controverting testimony.

Point one is overruled as to legal sufficiency of the evidence, it is sustained to the factual sufficiency of the evidence as to future claims for bodily injury.

Conclusions of Law We review the court's conclusions of law to determine their correctness. Mercer v. Bludworth, 715 S.W.2d 693, 697 (Tex.App. — Houston [1st Dist.] 1986, writ ref'd n.r.e.). Appellants challenge the trial court's conclusion that the check was a release of all future bodily injury claims. We consider that the trial court's conclusion was erroneous and not supported by the evidence. Since we conclude that the check was not itself a release nor does it constitute an accord and satisfaction, we also conclude that the trial court's conclusion that Jones' other claims are barred is also erroneous. Point five is sustained in part and overruled in part.

Conclusion Our disposition requires that the cause be remanded for a new trial on the issues of release and accord and satisfaction. We do not address the issue of mutual mistake. TEX.R.APP.P. 90(a).

The JUDGMENT is REVERSED and REMANDED.

² The original property damage payment was issued June 26, 1989; a later check was issued July 21, 1989 for rental reimbursement during the repair of the Jones automobile. Subsequent to the initial payment in November 1989, Flynn issued a supplemental check for additional property damage.

Dissenting opinion by WARREN WHITHAM, J. (Retired).