USCA1 Opinion
November 8, 1994 [NOT FOR PUBLICATION]
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
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No. 94-1364
SCOTLAND GUARD SERVICES, INC.,
Plaintiff, Appellant,
v.
PUERTO RICO ELECTRIC POWER AUTHORITY,
Defendant, Appellee.
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APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Carmen C. Cerezo, U.S. District Judge]
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Before
Boudin, Circuit Judge,
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Aldrich, Senior Circuit Judge,
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and Young,* District Judge.
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Miriam Deborah Salwen Acosta with whom Woods & Woods was on brief
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for appellant.
Lilliam Elisa Mendoza Toro on brief for appellee.
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*Of the District of Massachusetts, sitting by designation.
Per Curiam. This action is before us on appeal
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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
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D.P.R. 236 (1983), the court makes clear that a claim
unliquidated, or involving a bona fide controversy, is
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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
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offered, . . . [and] cannot take advantage of the offer . . .
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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.
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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
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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
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sic sanctibus, or impossibility, should have been applied to
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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,
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Ltd., 631 F. Supp. 293, 298 (D.P.R. 1986). This is an
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"extraordinary remedy to be applied only in extreme
circumstances." Id. The new minimum wage law, which made
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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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