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Scotland v. PREPA, 94-1364 (1994)

Court: Court of Appeals for the First Circuit Number: 94-1364 Visitors: 10
Filed: Nov. 08, 1994
Latest Update: Mar. 02, 2020
Summary: November 8, 1994 [NOT FOR PUBLICATION] UNITED STATES COURT OF APPEALS FOR THE FIRST CIRCUIT ____________________ No. 94-1364 SCOTLAND GUARD SERVICES, INC., Plaintiff, Appellant, v. PUERTO RICO ELECTRIC POWER AUTHORITY, Defendant, Appellee. Sugar Co., 62 P.R.R.and cashing the checks.
USCA1 Opinion









November 8, 1994 [NOT FOR PUBLICATION]

UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT

____________________

No. 94-1364

SCOTLAND GUARD SERVICES, INC.,

Plaintiff, Appellant,

v.

PUERTO RICO ELECTRIC POWER AUTHORITY,

Defendant, Appellee.


____________________

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF PUERTO RICO


[Hon. Carmen C. Cerezo, U.S. District Judge] ___________________

____________________

Before

Boudin, Circuit Judge, _____________

Aldrich, Senior Circuit Judge, ____________________

and Young,* District Judge. ______________

____________________


Miriam Deborah Salwen Acosta with whom Woods & Woods was on brief _____________________________ _____________
for appellant.
Lilliam Elisa Mendoza Toro on brief for appellee. __________________________

____________________


____________________

____________________

*Of the District of Massachusetts, sitting by designation.













Per Curiam. This action is before us on appeal __________

from a decision of the United States District Court for the

District of Puerto Rico affirming the bankruptcy court's

finding that although PREPA owes Scotland Guard $42,859.77

representing (1) amounts it admits are owed, (2) amounts for

which it provides no evidence of payment, and (3) unexplained

deductions from payments for services rendered, it does not

owe an additional $645,893.38 claimed by Scotland for

deductions from the contract price that Scotland effectively

accepted via cashing PREPA's checks or for expenditures

incurred by Scotland due to an intervening enactment of a

federal minimum wage. We affirm.

Scotland's first contention is that the district

court incorrectly applied the doctrine of accord and

satisfaction to its cashing of PREPA's checks in payment for

services rendered. Scotland maintains that it accepted these

checks as partial payment only, and continued to invoice

PREPA for the unpaid amounts. PREPA points first to its

contract with Scotland, which explicitly allowed deductions

from the contract price where Scotland failed to comply with

certain contract terms, then to the endorsements carried on

its checks to Scotland which state that they are "in full

payment of the account stated" on the accompanying voucher

and "payee by this endorsement accepts it as such payment,"

in arguing that accord and satisfaction applies.



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In H.R. Electroplating, Inc. v. Rodriguez, 114 __________________________ _________

D.P.R. 236 (1983), the court makes clear that a claim

unliquidated, or involving a bona fide controversy, is __________

satisfied upon acceptance by the creditor of a sum less than

that it claims. If it is not agreeable to this resolution,

it "has the duty of returning to the debtor the sum ________________________________________________________

offered, . . . [and] cannot take advantage of the offer . . . _______

in order, after receiving the same, to claim the balance."

Id., at 244, quoting Lopez v. South P.R. Sugar Co., 62 P.R.R. ___ _____ ____________________

227, (1943) (emphasis in original).

The district court applied Puerto Rican law in

determining that the requisites of the doctrine of accord and

satisfaction had been met, absolving PREPA of the duty to pay

the bulk of the sum Scotland claims is due.2 Not only did

Scotland cash PREPA's checks, but there is no evidence to

suggest that it registered any objection to the amounts

offered at the time. The checks and accompanying vouchers

explicitly drew Scotland's attention to the fact that the

payments included deductions from the contract price and why,

that PREPA intended them to be in full payment, and that

Scotland would signal their acceptance as such by endorsing


____________________

2. The bankruptcy court determined that $42,859.77
representing (1) amounts PREPA admits are owed, (2) amounts
for which PREPA provided no evidence of payment, and (3)
unexplained deductions by PREPA from payments for services
rendered by Scotland were not covered by accord and
satisfaction, and thus remained due and payable.

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and cashing the checks. It is not enough for Scotland to

say, "Appellant obviously did not perceive PREPA's checks to

be in total payments of debts when it continues issuing

invoices to PREPA."

Scotland contends next that the doctrine of rebus _____

sic sanctibus, or impossibility, should have been applied to ___ _________

its contract with PREPA to find that PREPA should absorb the

cost increase that resulted from the enactment of a new

federal minimum wage law. Puerto Rican law requires the

modification of the terms of a contract when unforeseen

circumstances render it "impossible for a party to comply

with its duties." Medina & Medina v. Country Pride Foods, ________________ _____________________

Ltd., 631 F. Supp. 293, 298 (D.P.R. 1986). This is an ____

"extraordinary remedy to be applied only in extreme

circumstances." Id. The new minimum wage law, which made ___

the federal minimum wage mandatory for the first time in

Puerto Rico, went into effect when approximately 10 months of

Scotland's contract with PREPA remained. Not only did

Scotland continue to perform, no evidence was presented to

suggest that it made any objection or assertion of

onerousness or impracticability at any time prior to the

termination of the contract period. This falls far short of

impossibility.

Affirmed. ________





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Source:  CourtListener

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