Opinion
A01A1900.
DECIDED: DECEMBER 4, 2001
Accord and satisfaction. Cherokee State Court. Before Judge Gober.
Anthony J. Morgese, for appellant.
Brock, Clay, Calhoun, Wilson Rogers, Richard W. Calhoun, John K. Wells, for appellee.
Hawthorne Grading and Hauling appeals the trial court's order granting summary judgment in favor of Mike Rampley d/b/a Rampley Development in this suit for payment on an oral contract. Finding no error, we affirm.
Summary judgment is appropriate "when there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law." (Punctuation omitted.) Dover v. Mathis, 249 Ga. App. 753 ( 549 S.E.2d 541) (2001). We apply a de novo standard of appellate review and "view the evidence, and all reasonable conclusions and inferences drawn from it, in the light most favorable to the nonmovant." (Punctuation omitted.) Id.
Viewed in the light most favorable to Hawthorne, the evidence showed the following: Hawthorne orally agreed to clear the rights of way for Phase III of Rampley's Whispering Hills residential real estate development. Hawthorne began work in October or November 1998. Hawthorne stopped work in March 1999 without completing the project. On April 30, 1999, Hawthorne billed Rampley for clearing and burning 12 acres for a total of $26,400. On June 23, 1999, Hawthorne filed a materialman's lien against Rampley's property. On September 15, 1999, Rampley, through counsel, sent a letter to Hawthorne, stating that Hawthorne had cleared only about 4.5 acres and therefore payment of $10,000 represented "full payment of all sums owed to Hawthorne." The letter stated he intended "to compromise" "a disputed matter." Rampley enclosed a check for $10,000 marked "payment in full WH III." Hawthorne endorsed the check "with reservations" and deposited it.
The trial court granted summary judgment based on an accord and satisfaction. Hawthorne contends there was no accord and satisfaction as a matter of law because there was no independent agreement to compromise the debt and because no bona fide dispute as to the amount due existed before Rampley tendered a partial payment. O.C.G.A. § 13-4-103 (b) provides:
(b) Acceptance by a creditor of a check, draft, or money order marked "payment in full" or with language of equivalent condition, in an amount less than the total indebtedness, shall not constitute an accord and satisfaction unless: (1) A bona fide dispute or controversy exists as to the amount due; or (2) Such payment is made pursuant to an independent agreement between the creditor and debtor that such payment shall satisfy the debt.
See O.C.G.A. § 13-4-101.
Hawthorne argues that an accord and satisfaction defense under O.C.G.A. § 13-4-103 (b) (1) requires proof that the debtor communicated to the creditor that he disputed the amount owed before he tendered an amount less than the total due under the parties' agreement. Hawthorne contends, therefore, the trial court erred in granting Rampley's motion for summary judgment because Rampley first communicated that he disputed the amount Hawthorne claimed due contemporaneously with his tender of a lesser amount. We have described O.C.G.A. § 13-4-103 (b) as a codification of the following pronouncement in Sylvania Elec. Products v. Electrical Wholesalers, 198 Ga. 870 ( 33 S.E.2d 5) (1945):
In the absence of an independent agreement by a creditor, that the acceptance of an amount less than the indebtedness will be taken, or is taken, in full satisfaction thereof, the mere acceptance by a creditor of a check for a less sum than the amount of an unliquidated debt, remitted by the debtor with notice that it is in full satisfaction of the debt, will not amount to an accord and satisfaction unless there existed previously to the tender a bona fide dispute by the debtor as to the correctness of the amount of the debt.
Id. at 870 (1). See Treadwell v. Treadwell, 218 Ga. App. 823, 826 (1) ( 463 S.E.2d 497) (1995) ; Lewis v. Alfred L. Simpson Co., 183 Ga. App. 166 (1) ( 358 S.E.2d 262) (1987); Sunbelt Life Ins. Co. v. Bank of Alapaha, 176 Ga. App. 628, 630 ( 337 S.E.2d 410) (1985) (physical precedent only). In many subsequent opinions, we have reiterated the requirement that the dispute exist prior to the debtor's tender of any amount less than that due under the agreement.
See Withington v. Valuation Group, Inc., 249 Ga. App. 8, 12 ( 547 S.E.2d 594) (2001); Kendrick v. Kalmanson, 244 Ga. App. 363, 365 ( 534 S.E.2d 884) (2000); Gouldstone v. Life Investors Ins. Co., 236 Ga. App. 813, 818 (2) ( 514 S.E.2d 54) (1999); Quintanilla v. Rathur, 227 Ga. App. 788, 793 (3) ( 490 S.E.2d 471) (1997); Atlas Casing Co. Inc. v. Joyner, 192 Ga. App. 738, 741 (1) ( 386 S.E.2d 397) (1989).
In this case, Rampley, the debtor, disputed the amount of the debt and notified Hawthorne, the creditor, of the dispute in a letter in which he offered a lesser amount in full satisfaction of all sums owed under the parties' agreement. Hawthorne accepted the partial payment with actual knowledge that Rampley disputed the total amount due and tendered the payment in full satisfaction of the debt. We have found no authority requiring the denial of summary judgment under these circumstances merely because such a letter and the check tendering the final payment were delivered in the same envelope, and we decline to reach such an absurd result here. O.C.G.A. § 13-4-103 (b) does not provide a mechanism for a creditor, who understands that the debtor disputes the amount due, to accept a partial payment marked "payment in full" and later avoid the defense of accord and satisfaction. See O.C.G.A. § 13-4-101.
Cf. Withington, 249 Ga. App. at 12-13 (summary judgment inappropriate because evidence authorized finding that debtor's dispute was not in good faith); Gouldstone, 236 Ga. App. at 819 (2) (summary judgment inappropriate because claim was not the subject of the alleged accord and satisfaction); Quintanilla, 227 Ga. App. at 793 (3) (summary judgment inappropriate because debtor did not dispute the amount owed); Treadwell, 218 Ga. App. at 826-27 (1) (a) (summary judgment inappropriate because debtor did not dispute the amount owed); Sunbelt Life Ins. Co., 176 Ga. App. at 631-632 (2) (summary judgment inappropriate because debtor did not communicate substance of dispute but merely included conditional language on check).
Because no question of fact remained regarding whether a bona fide dispute as to the amount due existed between the parties when Hawthorne accepted the payment from Rampley, the trial court correctly granted Rampley's motion for summary judgment. Bridges v. Mann, 247 Ga. App. 730, 733 (2) (S.E.2d) (2001); Kendrick v. Kalmanson, 244 Ga. App. at 365-366 (1); Rabenstein v. Cannizzo, 244 Ga. App. 107, 109 ( 534 S.E.2d 847) (2000); Mitchell v. W.S. Badcock Corp., 230 Ga. App. 352, 356 (4) ( 496 S.E.2d 502) (1998); Habachy v. Ga. Health Group, 207 Ga. App. 288, 289 ( 427 S.E.2d 808) (1993); Hadson Gas Systems v. Atlanta Airlines c., 200 Ga. App. 363, 364 (1) ( 408 S.E.2d 454) (1991); Chrietzberg v. Kristopher Woods, Ltd., 162 Ga. App. 517, 518 ( 292 S.E.2d 100) (1982).
Judgment affirmed. Johnson, P.J., and Ruffin, J., concur.
DECIDED DECEMBER 4, 2001 — CERT. APPLIED FOR.