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Nelson v. American Family Insurance Group8/29/2002
2d 67, 72 (Minn. 2000). " atisfaction is the performance of the accord, generally the acceptance of money, which operates to discharge the debtor's duty as agreed to in the accord." Id. at 72-73 (citations omitted).
The purpose of accord and satisfaction is to allow parties to resolve disputes without judicial intervention by discharging all rights and duties under a contract in exchange for a stated performance, usually a payment of a sum of money.
An enforceable accord and satisfaction arises when a party against whom a claim of breach of contract is asserted proves that (1) the party, in good faith, tendered an instrument to the claimant as full satisfaction of the claim; (2) 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; (3) the amount of the claim was unliquidated or subject to a bona fide dispute; and (4) the claimant obtained payment of the instrument. Id. at 73 (citations omitted.).
To successfully raise the defense of accord and satisfaction, American Family must prove that it, in good faith, intended its satisfaction of judgment on the tort claim to be full satisfaction of Nelson's pending no-fault claim. Additionally, American Family must prove that the instrument with which it paid the judgment contained a statement to the effect that it was tendered in full satisfaction of Nelson's no-fault claim.
There is nothing in the record other than the official "Satisfaction of Judgment" signed by Nelson's attorney with respect to the South Dakota judgment. This document contains no indication that it, or the actual instrument of payment, was to be in satisfaction of anything more than Nelson's tort claim against the tortfeasor. Accord and satisfaction is an affirmative defense, and therefore its elements must be proved by American Family. We conclude that Nelson's claim is not barred by accord and satisfaction because American Family cannot prove the first or second elements of the defense on the record before this court.
As a matter of law, we hold that American Family's defenses of collateral estoppel, res judicata, and accord and satisfaction do not bar Nelson's recovery.
We reverse the court of appeals and remand to the district court for further proceedings in accordance with this opinion.
MEYER, J., not having been a member of this court at the time of the argument and submission, took no part in the consideration or decision of this case.
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