## Facts

- Marton Remodeling performed residential remodeling for Mark Jensen under a time-and-materials arrangement.
- Marton submitted a final invoice for $6,538.12; Jensen disputed the hours billed and offered $5,000 as the job’s value.
- Jensen mailed a $5,000 check bearing a conspicuous condition that endorsement would constitute “full and final satisfaction” of all existing claims.
- Marton sent a letter rejecting the $5,000 as full payment and demanding the balance.
- Marton filed a mechanic’s lien for the disputed balance and then negotiated the check after writing “not full payment” on it.
- Marton sued to foreclose the mechanic’s lien and recover $1,538.12, plus punitive damages and attorney’s fees.
- A jury awarded Marton $1,538 in compensatory damages, $1,000 in punitive damages, and $5,950.24 in attorney’s fees; the trial court struck punitive damages and reduced fees by 50%.
- Jensen appealed, arguing accord and satisfaction barred further recovery; Marton cross-appealed seeking reinstatement of punitive damages and the full fee award.

## Issues

1. Whether Marton’s endorsement and negotiation of a check expressly conditioned as “full and final satisfaction” constituted an accord and satisfaction that discharged any remaining claim.
2. Whether a creditor can avoid accord and satisfaction by adding “not full payment” on the instrument or by otherwise protesting that the payment is not accepted in full.
3. Whether the Uniform Commercial Code alters Utah common-law rules governing accord and satisfaction by conditional check.

## Decision

- The Utah Supreme Court held that Marton’s negotiation of the $5,000 check constituted an accord and satisfaction as a matter of law.
- The court ruled that Marton’s “not full payment” notation and prior protest letter did not negate the check’s explicit settlement condition.
- The court held the UCC did not displace Utah’s common-law accord-and-satisfaction doctrine in this context.
- The judgment for Marton was reversed; Marton’s claims for the additional balance, punitive damages, and attorney’s fees were barred.

## Legal Principles

- Accord and satisfaction exists when (1) there is a bona fide dispute over the amount owed, (2) the debtor tenders payment on the express condition that it is in full satisfaction, and (3) the creditor knowingly accepts and retains the payment.
- A creditor who negotiates a clearly conditional “payment in full” check assents to the condition; unilateral notations or verbal/written protests cannot reserve a right to collect more while keeping the funds.
- Utah applies common-law accord-and-satisfaction rules to conditional checks; the UCC does not change the result absent a specific displacement.

## Conclusion

Because the parties had a genuine dispute and Jensen tendered a conspicuously conditional settlement check that Marton knowingly cashed, the cashing operated as an accord and satisfaction discharging the claim, requiring reversal of Marton’s recovery and mooting its requests for punitive damages and attorney’s fees.


Marton Remodeling v. Jensen, 706 P.2d 607 (Utah 1985)