In McCormick v. Auto Club Insurance Association (2018AP753), the Court of Appeals District I held that the doctrine of accord and satisfaction applied when the plaintiff cashed a check that the defendant insurer intended to settle the claim.

After David McCormick was injured in an automobile accident with an uninsured driver, McCormick sought his full uninsured motorist coverage policy limit of $300,000 from his insurer Auto Club Insurance Association (AAA). AAA disputed McCormick’s $300,000 claim, and instead offered a settlement of $20,000. In a letter, AAA included a check for $20,000 and a release form. McCormick cashed the check but did not sign the release form.

McCormick filed the instant lawsuit seeking the full policy limit plus damages for loss of companionship on behalf of his son. AAA pled the affirmative defense that the doctrine of accord and satisfaction barred McCormick’s claim because he cashed the $20,000 check.

The court agreed that the doctrine of accord and satisfaction barred McCormick’s claim. The accord and satisfaction doctrine requires a dispute, offer, acceptance, and consideration in order to bar future claims. In this case, the plaintiff and defendant disagreed over whether AAA had presented an offer to McCormick. The court found the $20,000 check that McCormick cashed constituted an offer because the language of the attached letter and notes on the check and check stub provided “reasonable notice” that the check was an offer to settle McCormick’s claims.

The court also found that McCormick’s failure to sign the release did not prevent the application of the defense of accord and satisfaction. McCormick’s cashing the check was enough to constitute accord and satisfaction, a separate defense than the defense of release.