ACCORD AND SATISFACTION CASE STUDY BACKGROUND

THE HOLDING – NEW OWNER WINS… ASSOCIATIONS BEWARE! The Appellate Court reversed the trial court, holding that in spite of the Condominium Act’s specific allocation provisions, “[w]hen the Association negotiated the New Owner’s check that was tendered in full and final satisfaction of the Association’s disputed claim, an accord and satisfaction resulted.” The Appellate Court applied §673.3111 which provided in part: (1)  If a person against whom a claim is asserted proves that that person in good faith tendered an instrument to the claimant as full satisfaction of the claim, that the amount of the claim was unliquidated or subject to a bona fide dispute, and that the claimant obtained payment of the instrument, the following subsections apply. (2)  Unless subsection (3) applies, the claim is discharged if the person against whom the claim is asserted proves that the instrument or an accompanying written communication contained a conspicuous statement to the effect that the instrument was tendered as full satisfaction of the claim. The exceptions allowed by the statute did not apply in this instance. Thus, the Appellate Court held that by depositing the check after the New Owner’s offer to settle the unliquidated debt, the Association created an accord and satisfaction. The Appellate Court rejected what it referred to as the “discussion” of §718.116(3) in Ocean Two Condominium Association v. Kliger. Specifically, the Appellate Court stated that they did not believe that the legislature had intended that the language contained in Section 718.116(3) of the Condominium Act would amend Section 673.3111 tacitly or to otherwise alter the law of accord and satisfaction in favor of condominium associations when they accept payments for assessments and related charges. Moreover, the Appellate Court believed that the pertinent legislative history confirmed its interpretation of the statute. In reaching this conclusion, Appellate Court determined that the Condominium Act merely provided an allocation formula to invalidate restrictive endorsements that would mandate a contrary allocation of the payment, and did not override “the law of accord and satisfaction…”...