Chris Pickett Prevails On A Motion To Dismiss Under The Doctrine Of Accord And Satisfaction

On behalf of an insurer client, Chris Pickett filed a breach of contract suit against the client’s insured for unpaid insurance premiums. In response, the insured filed a counterclaim against the insurer, claiming that it was owed additional monies from a prior insurance claim it had submitted for weather damage to the roofs of two buildings on its property. Before conducting any formal discovery, LPP determined that the insurer had negotiated a fair sum for that insurance claim, had issued payment for that negotiated amount, and that the insured had cashed the check.

In light of these facts, LPP filed a motion to dismiss, arguing that the insured was barred from recovering any additional monies on that claim under the doctrine of accord and satisfaction. The motion further argued that the insurer presented the insured with a pre-suit offer on its claim, and explained the basis of that offer in detail, letting the insured know which damages were covered and how the insurer had arrived at the value of its settlement offer. The insured claimed that the motion to dismiss should be denied, because it had never explicitly agreed to accept that sum and it had never signed a release. LPP successfully argued that the Illinois statute governing accord and satisfaction did not require a signed release, if the insurer could show that there was sufficient notation on the check that payment was a final settlement amount.

The presiding judge agreed with LPP’s position that a notation on the check itself that referenced the prior settlement offer was sufficient to convey to the insured that the check represented a final settlement offer, which the insured had accepted by depositing the check. In light of the motion being granted, the insured was barred from seeking any further sums on its claim.