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different from the law of New York, on which we relied in the
Stoller case.
California Civil Code section 1526(c) (California Code
section 1526(c))(West Supp. 2002) provides that “the acceptance
of a check or draft by a creditor constitutes an accord and
satisfaction when the check or draft is issued pursuant to or in
conjunction with a release of a claim.” The reference to
“release” in California Code section 1526(c) “must therefore
contemplate a mutual understanding (not necessarily in writing)
that was reached before the debtor issued the check containing
the notation.” Dirs. Guild of Am. v. Harmony Pictures, Inc., 32
F. Supp. 2d 1184, 1189 (C.D. Cal. 1998) (emphasis added). In
Dirs. Guild of Am. the court stated that because the parties did
not reach a mutual understanding before the issuance of the
check, a letter that the debtor enclosed with the check stating
that the check was “full and final payment and settlement of any
and all contributions, interest, audit fees, and liquidated
damages” did not constitute a release within the meaning of
California Code section 1526(c). Id. at 1186, 1189.3
Here, although there was no mutual understanding of a
3In Dirs. Guild of Am. v. Harmony Pictures, Inc., 32 F.
Supp. 2d 1184, 1189 (C.D. Cal. 1998) the United States District
Court concluded that relevant portions of California Civil Code
sec. 1526 and California Commercial Code sec. 3311 are in
conflict, and the court gave effect to the later-enacted
Commercial Code sec. 3311.
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