Accord and satisfaction in unliquidated debt disputes under Washington law

Trial Brief: NLV v. Eco

NLV Laboratories, Inc. v. Eco Compliance Corporation

Whether an existing dispute over an agreement should have precluded summary judgment.

SUBSTANTIVE FACTS:

NLV appealed the summary judgment, claiming that no accord and satisfaction could have existed unless full payment was received.

NLV argued that the mere existence of a dispute should have precluded a summary judgment.

PROCEDURAL FACTS:

NLV Laboratories billed Eco Compliance $42,754.50 for services rendered

Eco Compliance sent a check for $13,531.19, stating in writing that this amount represented full and final payment and difference from the bill was deducted for overcharges and negligence on a different project.

NLV responded by depositing the check sent by Eco and then demanding the balance owed in writing.

Eco refused to pay any more and NLV sued.

Eco presented an accord and satisfaction defense and a request for summary judgment based on this defense was granted.

NLV appealed the summary judgment.

HOLDING: The Washington Court of Appeals concluded that an accord and satisfaction (fulfillment of the contract) did exist because NLV deposited a check for an unliquidated claim.

REASONING: The Court of Appeals relied on the same legal precedence the lower court used to draw a distinction between liquidated and unliquidated debt. A liquidated debt is defined in the accord (contract) and if the contract between NLV and Eco had defined the amount owed once services were rendered, then depositing the check would not have satisfied the agreement and summary judgment would have been reversed. Since Eco alleged in their letter that NLV overcharged for some services and was negligent on another job, these disputes rendered the debt unliquidated.