Fox Consulting v. Spartan Warehouse & Distrib., Inc.
2016 Ohio 7621
| Ohio Ct. App. | 2016Background
- Fox Consulting (Schooley Mitchell) contracted with Spartan to identify telecom savings; Fox would receive 50% of realized savings for 36 months after implementation.
- Spartan implemented Recommendations 1 and 2 in 2011; dispute arose in 2014 when Spartan questioned the claimed savings and sought to terminate the contract.
- Fox invoiced $3,461.35 for the upcoming quarter and proposed a $27,439 buyout of remaining contract fees; Spartan rejected the buyout and claimed it had realized no savings.
- Spartan sent a $2,500 check dated April 8, 2014, with the memo “Final settlement and termination per attached” and an email stating that acceptance would terminate all past and future obligations; Fox deposited the check on April 15.
- Fox sued for breach of contract and unjust enrichment; Spartan counterclaimed seeking a declaratory judgment under R.C. 1303.40 (UCC 3-311) for accord and satisfaction and moved for summary judgment, which the trial court granted.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether R.C. 1303.40 requires an existing, liquidated claim (no future fees) | Fox: Accord and satisfaction cannot apply to future, not-yet-due fees | Spartan: Dispute existed about amounts (including future fees); R.C.1303.40 applies to disputed claims | Court: R.C.1303.40 can apply to disputed future amounts; defense available here |
| Whether the payment/communication contained a “conspicuous statement” of full satisfaction | Fox: Language was ambiguous and did not clearly identify the scope or period | Spartan: Check memo and accompanying email plainly stated final settlement and termination of all obligations | Court: Statement on check and email were sufficiently conspicuous and clear |
| Whether Fox’s April 9 rejection email or lack of mutual assent prevented accord and satisfaction | Fox: Rejection and lack of mutual assent preserved its claims | Spartan: Cashing the check with the attached conspicuous statement effected accord and satisfaction; Fox could have refused or returned payment | Court: Cashing the check accepted terms; protest did not avoid accord and satisfaction; Fox had statutory remedies it did not use |
| Whether a bona fide dispute existed | Fox: No bona fide dispute over entitlement | Spartan: Parties had genuine disagreement about whether savings were achieved and amounts owed | Court: There was a bona fide dispute; accord and satisfaction properly available |
Key Cases Cited
- Grafton v. Ohio Edison Co., 77 Ohio St.3d 102 (de novo review of summary judgment standard)
- Allen v. R.G. Indus. Supply, 66 Ohio St.3d 229 (accord and satisfaction elements)
- Milton M. Cooke Co. v. First Bank & Trust, 290 S.W.3d 297 (Tex. App.) (interpretation of UCC 3-311 when dispute scope differs)
- Dawson v. Anderson, 121 Ohio App.3d 9 (applying accord and satisfaction to disputed future amounts)
- Rhoades v. Rhoades, 40 Ohio App.2d 559 (partial payment without bona fide dispute is not satisfaction)
- CitiBank (South Dakota) N.A. v. Perez, 191 Ohio App.3d 575 (discussion on bona fide dispute protection for creditors)