Summary
holding that a payee who cashed a check but who also provided a letter to the payor stating that she was reserving her right to commence an action, prevented an accord and satisfaction
Summary of this case from Weyant v. The Phia Grp.Opinion
December 16, 1991
Appeal from the Supreme Court, Suffolk County (Hand, J.).
Ordered that the order is affirmed, with costs.
In the latter part of 1988, the defendant Equitable Variable Life Insurance Company (hereinafter Equitable) issued a policy insuring the life of Andrew Masi. After he died in January 1989, Equitable elected to rescind the policy on the ground that a material misrepresentation had been made on his insurance application. Equitable issued a check to Masi's widow, the plaintiff Antonina Masi, which represented the premium paid on the policy, plus interest.
By letter dated July 14, 1989, the plaintiff's attorney acknowledged the receipt of Equitable's letter and check and informed Equitable that the plaintiff reserved the right to commence an action against it despite the fact that she would negotiate the check. The plaintiff deposited the check on that same day. The plaintiff did not indicate that she was reserving her rights on the check itself.
The plaintiff commenced the instant action against Equitable. Equitable moved for summary judgment, raising the affirmative defense of accord and satisfaction. The Supreme Court denied Equitable's motion, stating that the plaintiff effectively reserved her rights in the July 14, 1989, letter.
We reject Equitable's argument that the plaintiff's reservation was inadequate because she did not write it on the check itself. An explicit reservation of one's rights by letter satisfies the requirement of UCC 1-207 and prevents an accord and satisfaction (see, Ayer v Sky Club, 70 A.D.2d 863; see generally, Horn Waterproofing Corp. v Bushwick Iron Steel Co., 66 N.Y.2d 321). Thompson, J.P., Bracken, Harwood and Copertino, JJ., concur.