## Facts

- Frank L. Garrett & Sons, Inc. (Garrett) hired William F. Kibler (Kibler) to harvest Garrett’s wheat crop.
- The parties did not reach a definite agreement on price before the work began, and Kibler told Garrett that the charge could be affected by conditions encountered during the harvest.
- After completing the work, Kibler sent Garrett an invoice charging 25 cents per bushel.
- Kibler later sent a substitute invoice charging 20 cents per bushel, for a total of $876.20.
- Garrett responded with a letter and a check for $444.
- In the letter, Garrett stated that $444 was 50 percent more than what Garrett paid the previous year for the same work and 20 percent more than what Kibler agreed to, and characterized Kibler’s invoice as “ridiculous.”
- On the face of the check were notations identifying the transaction (including “Harvesting Wheat Washington Ranch”) and the drawer’s name.
- The check also contained a line of small, printed type stating: “By endorsement this check when paid is accepted in full payment of the following account.”
- Before depositing the check, Kibler called his attorney and asked if he could deposit it. The attorney instructed Kibler to read any notations on the check; Kibler read the typed and printed notations but did not see or read the small-type “full payment” language.
- With his attorney’s approval, Kibler deposited the check and then sued Garrett for the unpaid balance he claimed remained due.
- After Kibler presented his evidence, the trial judge dismissed the claim on the ground that Kibler had accepted an accord and satisfaction, even though Garrett had not pleaded accord and satisfaction as a defense.

## Issues

1. May a trial court dismiss a plaintiff’s claim on the basis of accord and satisfaction when the defendant did not plead accord and satisfaction as an affirmative defense and the issue was not tried by consent?
2. On the plaintiff’s evidence, did Kibler’s deposit of the $444 check establish accord and satisfaction as a matter of law, given the disputed bill and the “full payment” legend on the check?

## Decision

- The court reversed the dismissal and remanded for further proceedings.
- Accord and satisfaction is an affirmative defense that must be pleaded (or otherwise litigated with fair notice); it was error for the trial court to inject and decide that defense at the close of Kibler’s case when it had not been raised.
- The record did not compel a finding, as a matter of law, that Kibler knowingly accepted a conditional tender in full settlement; whether there was assent to an accord was for the factfinder on a proper record.

## Legal Principles

- Accord and satisfaction is an affirmative defense; the defendant generally must plead it and bears the burden of proving it.
- A court should not dispose of a case on an unpleaded affirmative defense unless the issue was tried by consent or the opposing party had fair notice and a meaningful opportunity to meet it.
- An accord and satisfaction requires a genuine dispute or unliquidated claim and an agreement that acceptance of a stated performance (often payment) will settle the dispute; acceptance must reflect assent to the condition.
- A “payment in full” or similar legend on a check can be evidence of a condition, but it is not automatically conclusive; the creditor’s knowledge of the condition and intent in accepting the payment remain central to whether an accord was formed.
- When evaluating dismissal at the close of the plaintiff’s evidence, the court must treat the plaintiff’s evidence and reasonable inferences in the light most favorable to the plaintiff; if reasonable factfinders could reach different conclusions, dismissal is improper.

## Conclusion

The court held that the trial court improperly dismissed Kibler’s claim based on accord and satisfaction because Garrett had not pleaded that affirmative defense and the evidence did not establish, as a matter of law, that Kibler knowingly accepted the $444 check as full settlement; the case was reversed and remanded for further proceedings.


Kibler v. Frank L. Garrett & Sons, Inc., 439 P.2d 416 (1968)