On Appeal from the United States District Court For the Eastern District of Pennsylvania, D.C. Civil No. 86-1367.
BEFORE: SLOVITER and STAPLETON, Circuit Judges and ROTH, District Judge*fn*
T. J. Trauner Associates, Inc. (Trauner Inc.) appeals a decision by the United States District Court for the Eastern District of Pennsylvania, granting the motion for summary judgment of appellees, Cooper-Benton, Inc. (Cooper) and Demetree Industries, Inc. (Demetree). The district court found that the Pennsylvania law of accord and satisfaction barred plaintiff from recovering the monies claimed in its suit. Our review of the grant of a motion for summary judgment is plenary, to determine "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). Maldonado v. Ramirez, 757 F.2d 48, 49 (3d Cir. 1985); Kahn v. United States, 753 F.2d 1208, 1210 (3d Cir. 1985). For the reasons we set out below, we find that there are genuine issues of material fact and we reverse the decision of the district court.
Appellant Trauner Inc. is a professional construction consulting firm. Appellees Cooper and Demetree are construction companies that hired Trauner Inc. to provide expert services in preparing a claim for uncompensated costs, arising from a construction project in which appellees were involved in Florida. Cooper and Demetree engaged Trauner Inc. pursuant to a letter-agreement written by Theodore J. Trauner, Jr. (Mr. Trauner), president of Trauner Inc., on April 23, 1982, in which Trauner Inc. agreed to perform a detailed analysis and investigation of the Florida project and prepare a report on its findings. The letter contained a fee schedule with an outline of hourly charges and an estimated cost of the designated services of $25,100. The letter also stated that, as to certain "support services" which might become necessary, including assistance in settlement negotiations and trial preparation, no accurate estimate could be given and, in fact, none was provided. Fees for all services, whether designated or "support," were to be computed on an hourly basis in accordance with the fee schedule provided. Trauner Inc. further agreed in the letter not to exceed the total estimate without defendants' approval.
On August 1, 1985, after appellees had already paid $47,245.57 to Trauner Inc. on the account, a "final invoice" was submitted in the amount of $32,566.68. There is no record that appellees made any response to this invoice until October 4, 1985, when Jack C. Demetree, vice-president of Demetree Industries, sent a letter to Mr. Trauner, stating that appellant's charges were considered to be unjustified and unreasonable. The letter further informed Mr. Trauner that appellees had no intention of paying the full amount of the invoice and enclosed a check for $10,000 made out to T. J. Trauner Associates. The letter explained that the enclosed $10,000 check was for "full and final payment" and that "negotiation of the check will constitute total satisfaction of your bill." The check itself made no reference to the conditions stated in the letter.
The October 4, 1985 letter and enclosed $10,000 check were received at the offices of Trauner Inc. at a time when Mr. Trauner was away on business. Since the letter was addressed to Mr. Trauner, it was sent to his office where it waited until his return. The check was transmitted to the accounting department where it was negotiated and deposited. Upon his return, Mr. Trauner wrote a letter to Mr. Demetree, dated October 21, 1985, in which he acknowledged receipt of the October 4 letter and check but asserted that the $10,000 constituted only partial payment. Mr. Trauner further stated in this letter that Trauner inc. had continually informed appellees' counsel of its activities and that Trauner Inc. had not performed any work that was not authorized or directed by appellees' representatives.
Trauner Inc. retained the $10,000 and Demetree made no further payments. Trauner Inc. then filed this suit to recover the balance due of $22,566.68.
Cooper and Demetree contend that the Pennsylvania law of accord and satisfaction entitled them to summary judgment in this action. The elements of an accord and satisfaction are (1) a disputed debt, (2) a clear and unequivocal offer of payment in full satisfaction of the debt, and (3) acceptance and retention of payment by the offeree. Goodway Marketing, Inc. v. Faulkner Advertising Associates, Inc., 545 F. Supp. 263, 266 (E.D. Pa. 1982). Appellant argues that there was no dispute at the time Jack Demetree's October 4 letter was received by Trauner Inc. or that at the very least, a genuine factual dispute exists concerning this issue.
A trial court may grant summary judgment only if there is no genuine issue of material fact. Goodman v. Mead Johnson & Co., 534 F.2d 566, 573 (3d Cir. 1976), cert. denied, 429 U.S. 1038, 97 S. Ct. 732, 50 L. Ed. 2d 748 (1977). The appellate court in reviewing a grant of summary judgment must apply the same test:
Inferences to be drawn from the underlying facts contained in the evidential sources submitted to the trial court must be viewed in the light most favorable to the party opposing the motion. The non-movant's allegations must be taken as true and, when these assertions conflict ...