Who among us, when embroiled
in a dispute with a landlord or merchant, has not been tempted to send our
adversary a check in the amount we think is fair, emblazoned with the words,
“Cashing this check constitutes a full and final settlement of all claims
between us”? Guess what—it can work.
Walker retained Bryant, a
lawyer, to get his child-support obligations terminated. After more than a year
of continuing to pay child support and with no apparent progress on his case,
Walker fired Bryant, demanded a refund of the fees he’d paid, and lamented
that, in addition to those fees, he’d had to continue paying support because
Bryant hadn’t gotten the obligations lifted. After some back and forth, Bryant
responded with a check for the full amount of the fees Walker had paid, but
included this on the memo line of that check: “CASH OF THIS CHECK REPRESENTS A
FULL & FINAL SETTLEMENT AND RELEASE OF ALL CLAIMS AGAINST [BRYANT] &
[THE BRYANT LAW FIRM] AND REFUND OF ALL ATTORNEY’S FEES ON [THIS MATTER].”
Bryant also included a release agreement with the check. Walker cashed the
check after crossing out the settlement language on its face. He
did not sign the release agreement. Then, after another attorney got his
child-support obligations terminated, Walker sued Bryant, asserting malpractice
and other claims. The trial court rendered judgment for Walker, awarding actual
and exemplary damages. The court denied Bryant’s motion for judgment
notwithstanding the verdict based on the affirmative defense of accord and
satisfaction. A divided panel of the 14th Court of Appeals affirmed.
But the Supreme Court
disagreed. The Court held that “[t]he evidence in this case conclusively
establishes the negotiable-instrument defense” embodied in Tex. Bus. & Com.
Code § 3.311. It explained that “Walker’s intentional strike-through of the
notation on the check does not relieve him of the legal consequence of
negotiating it and depositing it into his account.” “Under the
accord-and-satisfaction doctrine,” the Court held, “a claimant may not alter
the conditions under which a party tenders payment, accept the payment, and
continue to sue for claims covered by a release.” The Supreme Court therefore
reversed and rendered a take-nothing judgment for Bryant.
