Filed 2/24/20 Seal v. Berkes Crane Robinson & Seal CA2/7

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION SEVEN

PATRICIA SHELLOGG SEAL,

Plaintiff and Appellant,

v.

BERKES CRANE ROBINSON & SEAL, et al.,

Defendants and Respondents. B284279

(Los Angeles County

Super. Ct. No. BC567367)
APPEAL from a judgment of the Superior Court of Los Angeles County, Barbara M. Scheper, Judge. Reversed and remanded with directions.

Law Offices of Edmund S. Schaffer and Edmund S. Schaffer for Plaintiff and Appellant.

The Kneafsey Firm and Sean M. Kneafsey for Defendants and Respondents.

__________________________

Following James Seal’s death, the law firm he co-founded began sending his widow Patricia Shellogg Seal (Shellogg) monthly checks towards a separation payment prescribed by the firm’s amended partnership agreement. Two years after Seal’s death, the firm attempted to renegotiate the balance of Seal’s separation payment with Shellogg. The firm claimed, and Shellogg disputed, that the parties subsequently entered into a binding oral settlement reducing Seal’s separation payment balance. The firm sent Shellogg 15 additional monthly checks, which she ultimately deposited.

Shellogg filed suit against the firm and its surviving founding partners (Defendants) to recover the balance of Seal’s separation payment. The court granted Defendants’ summary judgment. We conclude triable issues of material fact require reversal of the judgment, and remand for further proceedings.

FACTUAL AND PROCEDURAL HISTORY

A. James Seal’s Illness, Death, and Separation Payment
B.
Seal co-founded the law firm Berkes, Crane, Robinson & Seal, LLP (the Firm) with Robert Berkes, Steven Crane, and Ronald Robinson in 2001. Seal was diagnosed with Non-Hodgkin’s lymphoma in late 2006 and died on October 4, 2008.

The Firm’s amended partnership agreement provides for a separation payment upon a partner’s death “equal to the partner’s average yearly income from the firm during the preceding three completed fiscal years,” adjusted to reflect the length of the partner’s service with the Firm (the vesting period). This vesting period is deemed complete when a founding partner like Seal dies after having served the Firm for at least three years. The separation payment is intended to “compensate the estate of the deceased partner for his share of the firm’s accounts receivable, work in process, goodwill, prepaid expenses, furniture and equipment and other firm assets.”

During Seal’s illness, the founding partners prepared a memorandum of understanding (“Memorandum”) addressing Seal’s status in the Firm and his compensation. The Memorandum documented Seal’s change in status as of March 31, 2008 to a disabled partner on medical leave, who would not participate in the Firm’s profits or losses. The Memorandum explained that, should Seal die before his resignation or withdrawal from the Firm, his separation payment would total $449,333, payable in 36 equal monthly installments of $12,481. The Memorandum also stated that $60,000 of profit distributions made to Seal in early 2008 before his medical leave would be deducted from his separation payment across its last five payout months. The Memorandum was signed by Berkes, Crane, and Robinson, but not by Seal.

Seal’s widow Shellogg found the Memorandum at home a few weeks after Seal’s funeral. After reviewing the Memorandum, Shellogg called Robinson, who confirmed the Memorandum was an accurate statement of the separation payment Shellogg would receive from the Firm as Seal’s widow, heir, and trustee. Between January 2009 and March 2010, the Firm made 15 consecutive monthly payments of $12,481 to Shellogg. When Shellogg did not receive a payment in April 2010, she contacted Robinson, who explained that the Firm was in financial trouble and the Firm’s partners were passing on their draw payments until the Firm collected on outstanding client debts. Robinson requested, and Shellogg agreed, to suspend Seal’s separation payment installments until the Firm’s cash flow improved.

C. Shellogg’s and the Firm’s Renegotiation of Seal’s Separation Payment and Proposed Settlement Agreement
D.
Following six months in which she received no payments from the Firm, Shellogg called Robinson in October 2010 to ask when Seal’s separation payment installments would resume. Robinson requested a meeting with Shellogg and her attorney, Thomas Curtiss, Jr., to discuss Seal’s separation payment. At this October 12, 2010 meeting, Robinson claimed the Firm had the right under Paragraph 13 of the Firm’s amended partnership agreement to reduce the remainder of Seal’s separation payment because Seal had billed less than 1000 hours in 2007, yet had received his full partnership draw for the year. Robinson had prepared a spreadsheet of Seal’s 2007 billable hours and compensation detailing the Firm’s position that an additional $199,017.60 should be deducted from Seal’s remaining separation payment, reducing its remaining balance to $63,792.40 (to be paid in 15 monthly payments of $4,252.83). When Shellogg asked why the Firm’s position did not credit any hours Seal worked in 2007 as general counsel for the Firm, Robinson replied that he had not considered that issue and would discuss it with the other founding partners. At the meeting’s end, Shellogg requested that Robinson provide her with a written settlement agreement containing the Firm’s proposed terms and conditions, and a detailed explanation for why the proposed offset did not appear in the Memorandum or partnership agreement and went unmentioned for two years following Seal’s death. Shortly after this meeting, the Firm issued and mailed a $4,252.83 check to Shellogg.

All further communications between Shellogg and the Firm were made through Shellogg’s attorney. On Shellogg’s behalf, Curtiss spoke with Robinson on November 18, 2010 and suggested amending the Firm’s proposed separation payment offset to credit Seal’s 2007 non-billable general counsel hours. On behalf of the Firm, Robinson agreed to the suggested credit. Robinson then revised his spreadsheet of Seal’s 2007 work hours and compensation, reflecting $73,343.28 as the remaining balance of Seal’s separation payment. In an email, Robinson told Curtiss the Firm “accept[s] [Shellogg’s] offer; we have a deal.” Robinson stated the Firm would issue 14 additional installment payments to Shellogg, which, when combined with the Firm’s October check to Shellogg, would total $73,343.28. Robinson concluded his email by telling Curtiss he would, “as requested, draft the necessary mutual release and settlement document and forward it to you.” On November 20, 2010 Curtiss emailed Shellogg that he “finally spoke to Ron Robinson, and we have a ‘deal.’” Curtiss told Shellogg that Robinson was preparing a revised offer in the form of a written settlement agreement for her to consider.

In December 2010, Robinson emailed Curtiss the Firm’s proposed written settlement agreement. Curtiss responded with one suggested revision, including Shellogg on his reply email. On January 20, 2011, Curtiss mailed Shellogg (1) Robinson’s revised spreadsheet of Seal’s 2007 work hours and compensation and (2) the Firm’s written Settlement Agreement and Mutual General Release, signed by the Firm’s surviving founding partners and by Curtiss who approved the document as to form on Shellogg’s behalf. Curtiss requested Shellogg sign the originals and return them to Robinson. The proposed settlement agreement stated, in part:

1. [The Firm and Shellogg] hereby agree that the SETTLEMENT AMOUNT due and owing to [Shellogg] as of September 30, 2010 [], but as yet unpaid, is $73,743.28 and is due to [Shellogg] no later than December 31, 2011 (REMAINDER DUE).
2.
3. The REMAINDER DUE has been and will [be] paid to [Shellogg] as follows: $4252.83 was paid on October 31, 2010; $4960.10 was paid on November 30, 2010; and $4,963.87 will be paid on the last day of each month from December 31, 2010 through December 31, 2011. After the REMAINDER DUE has been fully paid, the entire SETTLEMENT AMOUNT due [Shellogg] under the SETTLEMENT will have been paid. All payments under this SETTLEMENT have been or will be made to the order of the TRUST.”
4.
On April 14, 2011, Curtiss mailed Shellogg a letter following up on the previously-mailed settlement agreement, stating: “Ron Robinson continues to inquire about the status of the settlement agreement, which you advised me several months ago you would sign and return to me when you were home from Ohio. . . . You will recall that we offered the compromise adjustment, and the firm accepted our offer. It is incumbent upon you to return the signed agreement immediately.”

Due to travel and her custom of rarely checking her email, Shellogg did not see Curtiss’s November and December 2010 emails until several months later. Shellogg had told Curtiss in late 2010 that she would review the Firm’s proposed settlement agreement when she was home and had time to do so. When Shellogg read the proposed settlement agreement, which Shellogg understood pertained to all matters between her and the Firm, she rejected and refused to sign the agreement because she had not been provided with a satisfactory explanation for why the Memorandum prepared before Seal’s death did not control, and why Seal’s separation payment should be reduced years later by about $190,000.

E. Shellogg’s Receipt and Deposit of Firm Checks
F.
In April 2011, Shellogg retained attorney Edmund Schaffer to represent her in place of Curtiss. Schaffer and Robinson spoke in spring and summer of 2011, in January 2012, and in June 2014 about Shellogg’s concerns about the Firm’s proposed separation payment deduction. Schaffer informed Robinson on several occasions that Shellogg had rejected the Firm’s proposed settlement agreement, and requested that the Firm resume its monthly $12,481 payments pursuant to the Memorandum. In May 2011, Robinson told Schaffer the Firm was taking the position that Robinson and Shellogg had entered into an enforceable oral agreement during their October 12, 2010 meeting.

Between October 2010 and December 2011, the Firm sent Shellogg 15 checks, totaling $73,343.28. None of these checks was accompanied by any transmittal letter or note explaining what the check represented, and none contained any statement or note on the check indicating that its endorsement and deposit would constitute acceptance of any agreement. Shellogg held on to these uncashed checks for months, hoping to negotiate with the Firm.

Between May and December 2011, Robinson did not make a single phone call regarding the status of the Firm’s proposed settlement with Shellogg. In December 2011, Robinson requested that a Firm employee call Shellogg to inquire about the Firm’s resumed checks, which remained uncashed. Because the Firm owed her money and it appeared that she would have to file a lawsuit in order to collect the balance, Shellogg endorsed and cashed 14 of the checks in January 2012 and the last check in June 2012.

G. Shellogg’s Complaint and Defendants’ Demurrer
H.
On December 19, 2014, Shellogg filed a complaint against Defendants for (1) breach of contract, (2) breach of contract by promissory and equitable estoppel, and (3) common counts for money had and received and unjust enrichment. Shellogg filed a first amended complaint on May 22, 2015, re-pleading the same causes of action but replacing “unjust enrichment” in the common counts cause of action with “work, labor and services.”

Defendants demurred to the first amended complaint’s second and third causes of action on grounds that each failed to state facts sufficient to constitute a cause of action. Shellogg filed an opposition. The trial court sustained Defendants’ demurrer to both causes of action without leave to amend.

Defendants answered the first (and only remaining) cause of action in Shellogg’s first amended complaint, denying all allegations and pleading in turn thirteen affirmative defenses. Defendants’ tenth affirmative defense of accord and satisfaction alleged that Shellogg’s claims were “barred by the doctrine of accord and satisfaction based on, among other things, the payment plan agreed upon in November 2010.”

I. Defendants’ Summary Judgment Motion
J.
Defendants then moved for summary judgment, arguing Shellogg’s breach of contract claim was barred as a matter of law by Defendants’ affirmative defense of accord and satisfaction. Defendants argued that no reasonable trier of fact could find in Shellogg’s favor on any element essential to Defendants’ accord and satisfaction defense: (1) that Shellogg and the Firm had a bona fide dispute; (2) that the Firm made clear to Shellogg her acceptance of the Firm’s resumed checks would fully satisfy Shellogg’s claim against the Firm; and (3) that Shellogg understood when depositing the Firm’s checks that the Firm intended such remittance to constitute full settlement of Shellogg’s claim.

Shellogg opposed the motion, arguing the terms of the Firm’s proposed accord were ambiguous, and that she did not understand her deposit of the Firm’s checks would extinguish her claim against the Firm regarding Seal’s separation payment. Shellogg also argued Labor Code provisions prohibited the Firm from conditioning Shellogg’s acceptance of concededly-owed payments on her waiver, through accord and satisfaction, of any wage claim she might have against the Firm; the parties’ relationship, and the Firm’s constructive fraud, vitiated any accord and satisfaction; and a fact finder could construe the parties’ continued discussions after the alleged accord and satisfaction had been effected as evidence the parties did not intend their actions to fully and finally settle their dispute.

K. The Trial Court’s Order Granting Defendants Summary Judgment
L.
The trial court granted Defendants’ motion, finding Defendants had made an unrebutted prima facie showing “of the nonexistence of any triable issue of material fact.” The court’s order cites the Firm’s proposed written settlement agreement, and that “[i]t is undisputed that [Shellogg] read the settlement agreement and understood that it pertained to all matters between her and [the Firm]. [Citation.]” Based on these facts, the order concludes Shellogg indisputably knew when depositing the Firm’s resumed checks that the Firm intended these payments to constitute full satisfaction of Seal’s separation payment “by virtue of her receipt of the [proposed] settlement agreement as well as Robinson’s repeated statements to both of her attorneys. The fact that Robinson allegedly asserted this position was based on his belief that [the Firm] had a binding agreement with [Shellogg] is not relevant to the issue before the court.”

The trial court entered judgment on June 9, 2017, and Shellogg timely appealed.

DISCUSSION

A. Standard of Review and Applicable Law
B.
1. We Review Summary Judgment De Novo
2.
“‘Summary judgment is appropriate “if all the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” [Citation.]’ [Citation.]” (Brown v. Goldstein (2019) 34 Cal.App.5th 418, 432 (Brown).) “. . . [T]he evidence must be incapable of supporting a judgment for the losing party in order to validate the summary judgment. Thus even though it may appear that a trial court took a ‘reasonable’ view of the evidence, a summary judgment cannot properly be affirmed unless a contrary view would be unreasonable as a matter of law in the circumstances presented.” (Binder v. Aetna Life Ins. Co. (1999) 75 Cal.App.4th 832, 838.)

A defendant may move for summary judgment on the ground that there is an affirmative defense to the action. (Code Civ. Proc., § 437c, subds. (o)(2), (p)(2).) Once the defendant meets the burden of establishing all the elements of the affirmative defense, the burden shifts to the plaintiff to show there are one or more triable issues of material fact regarding the defense. (Jessen v. Mentor Corp. (2008) 158 Cal.App.4th 1480, 1484-1485.) “‘“Despite the shifting burdens of production, the defendant, as the moving party, always bears the ultimate burden of persuasion as to whether summary judgment is warranted. [Citation.]” [Citation.]’ [Citation.]” (Multani v. Witkin & Neal (2013) 215 Cal.App.4th 1428, 1443.)

“‘We review a grant of summary judgment de novo and decide independently whether the facts not subject to triable dispute warrant judgment for the moving party as a matter of law. [Citation.]” (Chavez v. Glock, Inc. (2012) 207 Cal.App.4th 1283, 1301.) In making this assessment, “‘[w]e liberally construe the opposing party’s evidence and resolve all doubts in favor of the opposing party. [Citation.] We consider all evidence in the moving and opposition papers, except that to which objections were properly sustained.’ [Citation.]” (Brown, supra, 34 Cal.App.5th at p. 432.) We draw reasonable inferences in favor of the nonmoving party. “‘[S]ummary judgment cannot be granted when the facts are susceptible [to] more than one reasonable inference . . . .’ [Citation.]” (Soria v. Univision Radio Los Angeles, Inc. (2016) 5 Cal.App.5th 570, 583.)

3. Rules Governing an Accord and Satisfaction Affirmative Defense
4.
“An accord and satisfaction is the substitution of a new agreement for and in satisfaction of a preexisting agreement between the same parties. The usual purpose is to settle a claim at a lesser amount. [Citations.]” (In re Marriage of Thompson (1996) 41 Cal.App.4th 1049, 1058 (Marriage of Thompson); Civ. Code, §§ 1521, 1523.) “Defenses of release or accord and satisfaction may be decided by summary judgment. [Citation.]” (Thompson v. Williams (1989) 211 Cal.App.3d 566, 571 (Thompson).) “The general rule is that he who relies upon an accord and satisfaction must plead and prove both. [Citation.]” (Russell v. Riley & Peterson (1927) 82 Cal.App. 728, 735.)

“For the affirmative defense of accord and satisfaction to apply in disposition of an unliquidated claim, the defendant must establish: (1) that there was a ‘bona fide dispute’ between the parties, (2) that the debtor made it clear that acceptance of what he tendered was subject to the condition that it was to be in full satisfaction of the creditor’s unliquidated claim, and (3) that the creditor clearly understood when accepting what was tendered that the debtor intended such remittance to constitute payment in full of the particular claim in issue. [Citation.] A writing is not essential to an accord and satisfaction; it may be implied. [Citation.]” (Thompson, supra, 211 Cal.App.3d at p. 571.)

“Whether a transaction constitutes an accord and satisfaction depends on the intention of the parties as determined from the surrounding circumstances, including the conduct and statements of the parties, and notations on the instrument itself. [Citation.]” (Marriage of Thompson, supra, 41 Cal.App.4th at pp. 1058-1059.) “Intent of the parties to make a final settlement generally is a question of fact. [Citations.]” (Id. at p. 1059; see also Potter v. Pacific Coast Lumber Co. (1951) 37 Cal.2d 592, 601 (Potter) [“. . . [I]n case of conflicting evidence or where contrary inferences can be drawn from uncontradicted proof, whether ‘a dispute concerning the amount due and whether the tender was on condition that acceptance would be in full satisfaction are primarily questions of fact for the trial court’ [citation]. . . .”].)

C. Triable Issues of Material Fact Precluded Granting Defendants’ Summary Judgment Motion
D.
Shellogg argues that due to the Firm’s confusing conduct, Shellogg had no clear idea what the Firm intended by its resumed monthly checks to Shellogg between October 2010 and December 2011. The record demonstrates disputed issues of fact concerning whether Shellogg knew the Firm intended its resumed checks to constitute full and final satisfaction of Seal’s separation payment.

1. Accord and Satisfaction’s Clearly Made and Understood Elements
2.
The second element of accord and satisfaction required Defendants to clearly communicate to Shellogg that the Firm’s checks “. . . must be accepted ‘in full discharge of [her] claim’ or not at all. . . .” (Potter, supra, 37 Cal.2d at p. 597.) The third element of accord and satisfaction required that Shellogg “clearly understood” when cashing Defendants’ checks that they “intended such remittance to constitute payment in full. . . .” (Thompson, supra, 211 Cal.App.3d at p. 571.)

These two elements work in tandem: “. . . it must unequivocally appear that the check is offered only upon condition that it be accepted, if accepted at all, as full satisfaction of the disputed claim” and “. . . acceptance [must] be upon the understanding or knowledge that the lesser amount would constitute full payment; that the creditor take such amount with the awareness of the consequences.” (Dietl v. Heisler (1961) 188 Cal.App.2d 358, 365-366 (Dietl); see also Berger v. Lane (1923) 190 Cal. 443, 451 (Berger) [“The rule is that where the amount due is in dispute . . . and a check for a less amount is sent to the creditor with a statement that it is sent in full satisfaction of the claim, or language equivalent thereto is employed, and the tender is accompanied with such acts or declarations that it amounts to a condition that if the check is accepted at all it is accepted in full satisfaction of the disputed claim, and the creditor so understands it, its acceptance, even though the creditor states at the time that the amount tendered is not accepted in full satisfaction, constitutes an accord and satisfaction.”].)

3. Whether Shellogg Deposited the Firm’s Resumed Checks Pursuant to a Clearly Made and Understood Condition of Full Satisfaction Presents Triable Issues of Material Fact
4.
Shellogg presented evidence raising triable issues of fact as to whether the Firm clearly communicated to Shellogg, and whether Shellogg understood, that the Firm’s 2010 and 2011 checks could only be deposited on the condition they constituted full satisfaction of Seal’s separation payment.

a. Checks Sent During Ongoing Negotiations
b.
Defendants argue Robinson’s explanation of the Firm’s offset position during the parties’ October 12, 2010 meeting, and his later provision to Shellogg of a draft settlement agreement, made clear to Shellogg that her acceptance of the Firm’s resumed payments would fully satisfy any claims over Seal’s separation payment. However, Shellogg introduced evidence disputing Defendants’ suggestion that its resumed checks were conditioned on Shellogg’s adoption of the Firm’s October 12, 2010 position.

During their October 12, 2010 meeting, Robinson told Shellogg the Firm would soon send her the first check towards the balance of Seal’s separation payment, but if the parties later reached agreement regarding an offset amount, the Firm would adjust future payments. Robinson did not tell Shellogg, and did not himself believe, that Shellogg’s cashing the Firm’s check would constitute settlement of any dispute over Seal’s separation payment amount. In fact, Robinson expected the parties to continue negotiating Seal’s separation payment after the Firm resumed sending Shellogg installment payments; Robinson testified that he thought Shellogg would send a “counter offer” following their meeting. Accordingly, in November 2010 Curtiss and Robinson negotiated an increase in Seal’s separation payment balance above Robinson’s October proposal.

Rather than presenting its resumed checks to Shellogg on a “take it or leave it” basis (Thompson, supra, 211 Cal.App.3d at p. 570), the Firm anticipated increasing its future check amounts in response to Shellogg’s potential counter offer. An accord and satisfaction does not arise as a matter of law where the debtor “did not specify that the check could be accepted only upon condition that it be deemed satisfaction in full [and] the record does not show that [the creditor] accepted the check with knowledge of any such condition. . . .” (Dietl, supra, 188 Cal.App.2d at pp. 363-364.)

c. Shellogg’s Request for a Written Settlement Agreement
d.
Defendants argue the absence of a signed written agreement is irrelevant to its accord and satisfaction defense. While accord and satisfaction does not require written documentation, where, as here, the parties have contemplated a written settlement agreement, its absence is relevant to the parties’ mutual understanding of, and agreement to, any accord.

At the end of the October 12, 2010 meeting, Shellogg and Robinson had not agreed on Seal’s separation payment balance. The two discussed what the Firm had to do to put Shellogg in a position to counter the Firm’s proposed offset, if she wanted to. Shellogg requested that the Firm provide her with a proposed written settlement agreement containing all relevant terms and conditions, as well as a detailed explanation for the Firm’s proposed additional offset and why it went unmentioned for two years.

Robinson prepared and subsequently revised a written settlement agreement, which he circulated to Curtiss. Curtiss then mailed the revised proposed agreement to Shellogg in early 2011. When sending its proposed written agreement, the Firm did not provide Shellogg with further explanation for why the Memorandum did not control, why Seal’s separation payment should be reduced by almost $200,000, or why the Firm’s proposed offset went unmentioned for two years.

Upon reading the proposal and absent any additional explanation for the proposed set off, Shellogg rejected and never executed the Firm’s written settlement agreement. Shellogg then retained litigation attorney Edmund Schaffer to represent her in the ongoing dispute. Schaffer told Robinson on multiple occasions between May 2011 and June 2014 that Shellogg had rejected the Firm’s proposed written settlement.

In response, Robinson initially asserted to Schaffer that he and Shellogg had entered into a binding oral contract during their October 12, 2010 meeting (despite later acknowledging that the Firm expected Shellogg to make a counter offer following the meeting) and later claimed his November 18, 2010 email exchange with Curtiss constituted an enforceable contract. Robinson’s vacillating position regarding the terms and timing of the parties’ alleged contract evinces the Firm’s own confusion over any accord between the parties in 2010 or 2011.

The absence of written documentation of an accord is unremarkable where other evidence unequivocally demonstrates the parties’ mutual understanding and agreement. Defendants’ alternative evidence—namely, its continued insistence that the parties entered a binding oral agreement in 2010—does not satisfy Defendants’ summary judgment burden where Shellogg introduced conflicting evidence that any settlement between the parties was to be in writing. “Since ‘accord’ signifies an agreement between the parties, the primary principles which govern the law of contracts are necessarily applicable. [Citation.] One of such principles is the fundamental rule that there must be a consent or meeting of the minds of the contracting parties [citation]. . . .” (Zuckerman v. Pac. Sav. Bank (1986) 187 Cal.App.3d 1394, 1405.) The parties’ conflicting positions and evidence raises a triable dispute whether any meeting of the minds occurred between the parties, as is necessary for accord and satisfaction.

e. Lack of Notation or Explanation Accompanying the Firm’s Checks
f.
None of the Firm’s resumed checks to Shellogg included an accompanying letter or notation explaining what the check represented or indicating its relation to the parties’ dispute, let alone a settlement of that dispute. “In all the cases that have been called to our attention in which a satisfaction has been held to have been conclusively expressed in writing the writing in some form shows without question that the acceptance of the inclosure was clearly intended to be a satisfaction in full of the claim. This sometimes is shown by the express words used in the body of the check or by an accompanying receipt stating that the amount sent is in full of all demands. . . . Neither the language of the receipt nor the check here involved can be said to be conclusive on the case at bar.” (Berger, supra, 190 Cal. at pp. 451-452.)

Defendants cite Thompson, supra, 211 Cal.App.3d at p. 571 for the proposition that an accord and satisfaction does not require any writing and may be entirely oral. However, Thompson contained alternative, explicit evidence of the debtor’s intent and the creditor’s understanding, mooting any need for a writing demonstrating either. (Id. at p. 574.) In Thompson, plaintiff’s own testimony confirmed his understanding of the debtor’s intentions: “[w]hen [plaintiff] inquired of [defendant] as to whether or not that was his ‘final say’ he advised that it was. [Plaintiff] responded with ‘Fine, I’d like to pick up the money now’ and he did.” (Ibid.) Likewise, in Potter, supra, 37 Cal.2d 601, plaintiff-creditor’s testimony conclusively showed that he knowingly accepted debtor’s tender intended “as ‘full settlement,’ for he ‘figured that a bird in the hand was better than nothing.’”

In contrast, the facts as set forth by Defendants in this case do not demonstrate Shellogg’s unequivocal understanding that her acceptance of the Firm’s checks, following her rejection of the Firm’s proposed written settlement agreement, would constitute full satisfaction of Seal’s separation payment. Defendants have failed to make a prima facie showing sufficient to shift the burden to Shellogg on their theory that Shellogg understood depositing the Firm’s bare checks would extinguish her claim.

g. The Firm’s Inquiry into Shellogg’s Uncashed Checks Without Mention of Settlement or Accord and Satisfaction
h.
Allegedly operating on his November 18, 2010 agreement with Curtiss, Robinson did not make any inquiry with respect to the unsigned proposed agreement with Shellogg regarding Seal’s separation payment balance for a year. When Robinson learned from a Firm employee in December 2011 that Shellogg had not yet cashed any of the Firm’s resumed checks, Robinson requested the employee call Shellogg to inquire about the outstanding checks. Following this directive, Shellogg deposited the accumulated checks in 2012.

The record does not evidence any communication to Shellogg in December 2011 that her deposit of the Firm’s checks, which she had held previously held, but not cashed, would extinguish the parties’ dispute. Indeed, the Firm’s summary judgment motion relied solely on the parties’ fall 2010 negotiations, the rejected January 2011 draft written agreement, and Robinson’s assertions to Schaffer that the parties entered a binding oral contract in either October or November 2010 as evidence that its resumed checks could only be accepted as full satisfaction of Seal’s separation payment.

Based on this record, Defendants failed to demonstrate that there were no triable issues of fact concerning Shellogg’s understanding.

5. On This Record, Defendants Fail to Establish Accord and Satisfaction as a Matter of Law
6.
As set forth above, Defendants did not make a showing that the undisputed facts demonstrate they unequivocally conveyed, and Shellogg unequivocally understood, the Firm’s resumed checks could only be accepted as full satisfaction of the parties’ dispute.

The crux of Defendants’ argument is that the parties’ 2010 aborted settlement negotiations irrefutably establish Shellogg’s understanding that the Firm intended its resumed checks to constitute full satisfaction of Seal’s separation payment. Thus, Shellogg’s 2012 deposit of those checks constitutes an accord and satisfaction as a matter of law. However, the Firm resumed sending Shellogg checks towards Seal’s separation payment while the parties negotiated the proper amount of that separation payment, and without expectation that these resumed checks would immediately extinguish the parties’ dispute. Moreover, these checks were sent without notation or an accompanying letter tying them to any dispute or settlement. After Shellogg clearly rejected Defendants’ proposed settlement, Robinson did not follow up on the status of any deal, even when he learned that Shellogg had not cashed the Firm’s resumed checks; instead, he instructed a Firm employee to simply follow up on those outstanding checks.

Defendants contend that even if Shellogg did not independently understand the Firm’s resumed checks could only be accepted on condition they constituted full satisfaction, Robinson clearly communicated that condition to Shellogg’s attorneys who themselves clearly understood the condition, and Shellogg’s attorneys’ knowledge is imputed to Shellogg. (Civ. Code, § 2332; Herman v. Los Angeles County Metropolitan Transportation Authority (1999) 71 Cal.App.4th 819, 828.) Defendants cite Curtiss’s declaration that he believed the parties had agreed on certain terms of a settlement in November 2010, and all that remained was to reduce the agreement to writing, and Schaffer’s admitted knowledge of the Firm’s position in May 2011 that the parties had entered into an oral agreement on October 12, 2010, which Shellogg and Schaffer disputed. These declarations do not evidence any clear communication to, or understanding by, Shellogg’s attorneys that Shellogg’s deposit of the Firm’s 2010 and 2011 checks (checks which Robinson had promised would be sent when the Firm’s cash flow improved) would bind her to the Firm’s previously proposed settlement terms, which Shellogg had unequivocally and repeatedly rejected.

Viewing the evidence in the light most favorable to the nonmoving party, the record demonstrates that Defendants failed to meet their ultimate burden to establish that there were no triable issues of material fact concerning whether they unequivocally communicated to Shellogg, and Shellogg understood, that the Firm’s 2010 and 2011 checks could only be accepted as full satisfaction of Seal’s separation payment. (Moore v. Regents of University of California (2016) 248 Cal.App.4th 216, 241.) The court erred by granting summary judgment based on Defendants’ accord and satisfaction defense.

DISPOSITION

The judgment is reversed. The matter is remanded to the trial court with instructions to enter an order denying Defendants’ motion for summary judgment. Shellogg shall recover her costs on appeal.

ZELON, Acting P. J.

We concur:

SEGAL, J.

FEUER, J.