On appeal from the Superior Court of New Jersey, Bergen County.
Before Judges Havey, Kestin and Eichen. The opinion of the court was delivered by Eichen, J.A.D.
The opinion of the court was delivered by: Eichen
The opinion of the court was delivered by
On May 17, 1995, plaintiff Harriet Zeller filed a complaint against her former employer, defendant Markson Rosenthal & Company, alleging that defendant breached its obligation to pay her approximately $61,000 in sales commissions. *fn1 Defendant asserted a defense of accord and satisfaction based on plaintiff's having accepted its check in an amount less than her demand, and filed a motion for summary judgment. The trial Judge granted the motion and dismissed plaintiff's complaint. We reverse.
In Peterson v. Hartford Accident & Indem. Co., 32 N.J. Super. 23, 107 A.2d 668 (App. Div. 1954), we reviewed the principles governing accord and satisfaction. There, we ruled that payments made by an insurer had to be accepted by an insured with the intention they operate as satisfaction of the insurer's entire liability under the policy. In so ruling, we stated "to constitute an accord and satisfaction under the circumstances existing here it must appear that the defendant offered the partial disability payments and that the plaintiff accepted them with the intention that they operate as a satisfaction of the defendant's entire liability under its policy." Id. at 31. We also iterated the principles established by our former Court of Errors & Appeals in Rose v. American Paper Co., 83 N.J.L. 707, 85 A. 354 (E. & A. 1912) as to the nature of the tender required to support an accord and satisfaction.
To constitute an accord and satisfaction in law, dependent upon the offer of the payment of a less sum than that claimed, it is necessary that the money should be offered in full satisfaction of the demand and be accompanied by such acts or declarations as amount to a condition that if the money is accepted it is to be in full satisfaction, and be of such a character that the creditor is bound to understand such offer.
The party seeking to settle for a less sum than is claimed to be due must, by his words or conduct when making the offer, clearly inform the other of what is sought and expected. The transaction must be such that the condition is as plain as the tender, so that the acceptance of the tender will involve the acceptance of the condition. In other words, the tender and the condition must be incapable of severance; for otherwise the inference will not be drawn that the acceptance of the tender involves the acceptance of the condition.
[Peterson, (supra) , 32 N.J. Super. at 31 (quoting Rose, (supra) , 83 N.J.L. at 709 (citations omitted) (emphasis added).]
Hence, an accord and satisfaction requires a clear manifestation that both the debtor and the creditor intend the payment to be in full satisfaction of the entire indebtedness. In those cases in which a check bears a notation indicating that it is being tendered in full satisfaction of the disputed debt, we impute to the creditor an intent to be bound by the amount of the check if the creditor deposits the check for collection, notwithstanding the deposit is made "under protest." See Loizeaux Builders Supply Co. v. Donald B. Ludwig Co., 144 N.J. Super. 556, 366 A.2d 721 (Law Div. 1976); see also Chancellor, Inc. v. Hamilton Appliance Co., 175 N.J. Super. 345, 418 A.2d 1326 (Cty. Ct. 1980). See generally 15 Williston on Contracts § 1854 (Jaeger ed. 1972).
The facts in this case are not in dispute. The record discloses that in January 1994, after plaintiff left defendant's employ, she received a commission statement from defendant indicating that defendant acknowledged owing her $39,770.11 in sales commissions. According to plaintiff's calculations, defendant owed her $61,160.77. In June 1994, plaintiff advised defendant of her contrary calculations in writing. Six months later, defendant revised its previous calculations downward to $29,802.25, decreasing the amount it had determined it owed plaintiff by approximately $10,000. Thereafter, plaintiff and Michael H. Rosenthal, defendant's vice president, discussed their disparate approaches to the method of calculating plaintiff's commissions but were unable to resolve their differences. During that Discussion defendant did not mention to plaintiff the consequence, if any, of plaintiff's acceptance of defendant's tender of payment in an amount less than her demand.
Defendant sent plaintiff a check in the amount of $29,802.25. Neither the check nor the transmittal letter indicated that plaintiff's acceptance would constitute "full satisfaction" of plaintiff's claim for additional commissions. The accompanying letter stated as follows:
Celesta has finished reviewing your commission statements and your letter. She finds that the commissions due are $29,802.25, a ...