ACCORD AND SATISFACTION CASE STUDY BACKGROUND

ACCORD AND SATISFACTION CASE STUDY BACKGROUND

  • Posted: Feb 21, 2016
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ACCORD AND SATISFACTION CASE STUDY BACKGROUND The underlying dispute followed an association’s foreclosure of its assessment lien against a condominium unit. The St. Croix Lane Trust (the “New Owner”) was the third party purchaser of the unit at the Association foreclosure sale. After a certificate of title was issued to the New Owner, the Association demanded that the New Owner pay years of delinquent assessments and related interest, late fees and costs of collection of over $38,000 not paid by the prior, foreclosed, owner – a consistent practice in association collections in Florida. In response, the New Owner’s counsel tendered a check to the Association’s counsel for a small portion of the amount due, $840.00, together with correspondence that provided that “this check is tendered in full and final satisfaction of all claims made against the [New Owner] and the property for the amounts demanded… negotiation of the enclosed check shall be deemed an acceptance of the offer of settlement made herein, and shall be in full and final satisfaction of all claims against the [New Owner] and the property…” The Appellate Court considered this tender to be an “offer of settlement.” In response, the Association’s counsel advised that he had instructed his staff to apply the payment as a partial payment upon receipt (despite the restrictive endorsement). In advising the New Owner of the Association’s intent, the Association’s counsel relied upon the ruling of the Third District Court of Appeal of Florida in Ocean Two Condominium Association, Inc. v. Kliger. In that case the Third District Court of Appeals cited to Section 716.116(3) of the Florida Condominium Act which provides that payments tendered by unit owners shall be applied as specified in the statute notwithstanding any restrictive endorsement, designation or instruction placed on or accompanying a payment. As advised by the Association’s counsel, the Association deposited the $840.00 check, and threatened to sue the New Owner for the remainder the Association claimed due. The New Owner filed suit first, including claims for declaratory relief and lost rental income asserting that seeking lease approval would be futile. The trial court entered a summary judgment finding that the Association’s acceptance of the partial payment did not create an accord and satisfaction. The New Owner appealed this ruling to the Appellate Court….

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