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release between JTF and petitioners before the check was issued,
there may have been such a mutual understanding between JTF and
the Pellegris prior to the issuance of the check.4 Petitioners
reasonably could have believed that there was a mutual
understanding between JTF and the Pellegris before the issuance
of the checks to Pellegri Sr. and to petitioners and that the
mutual understanding would be imputed to petitioners, thereby
creating an accord and satisfaction under California Civil Code
section 1526(c).
Although we believe that California Commercial Code section
3311, discussed above, states the California law relevant to this
case, we note that the common law of California would govern if
no statute applied. Under the common law of California, the
elements of accord and satisfaction are: (1) A bona fide dispute
between the parties; (2) a clear expression by the debtor that
what he tendered was subject to the condition that it was to be
in full satisfaction of the creditor’s unliquidated claim; and
(3) a clear understanding by the creditor when accepting what was
4The release indicates that it was signed by Stephen
Pellegri on 11/02/99 and for JTF on 11/03/99. The check from JTF
to Pellegri is dated 11/02/99. The check from Pellegri to
Roseann Miller is dated 11/01/99. Neil Phillips’s letter
concerning the amount of the loss computation is undated, but a
page of supporting data indicates fax transmission on 11/05/99.
The record does not disclose the date of any oral agreement
between the Pellegris and JTF. The meeting between petitioners
and Pellegri Sr., when Pellegri Sr. presented his check to
petitioners and showed them Phillips’s report, took place on
11/12/99.
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