Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Official citation and/or docket number and footnotes (if any) for this case available with purchase.

Learn more about what you receive with purchase of this case.


United States District Court, Northern District of Illinois, E. D

January 22, 1982


The opinion of the court was delivered by: Shadur, District Judge.


George R. Germann ("Germann"), as Executor of the Estate of Godfrey J. Carlson ("Carlson"), has sued various defendants (collectively "Midland") for violation of the Age Discrimination in Employment Act of 1967 ("ADEA," 29 U.S.C. § 621-34). Midland has moved for summary judgment, asserting that Germann and Midland had executed an accord and satisfaction as to the claim on which Germann now sues. For the reasons stated in this memorandum opinion and order, Midland's motion is denied.


Germann claims that Midland violated ADEA by providing group life insurance to its employees under which an employee's beneficiary would receive $20,000 if the employee died before age 60, but only $1,000 if the employee had passed that birthday. Carlson was a Midland employee who was 60 when he died February 3, 1979. Germann (as Executor) was his beneficiary.

Shortly after Carlson's death Midland wrote Germann enclosing a letter and $1,000 check from the insurer (Guardian Life Insurance Company of America, "Guardian"). Guardian's letter, addressed to Midland, read in part:

  We are enclosing our check for $1,000.00 drawn to the order of
  George H. Germann a/k/a Jack H. Germann in payment of this
  group life insurance claim. This amount is $1,000.00 subject to
  the group's policy cutback provision which provides for a
  reduction in life insurance amounts to $1,000.00 at age 60.

Germann deposited the check in the Estate's bank account. Some nine months later Germann filed this action, charging that the group policy that had been the source of the payment was illegal under ADEA.

Accord and Satisfaction

Midland's motion — predicated solely on accord and satisfaction notions — faces an insuperable difficulty. At common law*fn2 an accord and satisfaction, 1 I.L.P. Accord and Satisfaction § 2 at 156, is:

  an agreement, an adjustment, a settlement of a former
  difficulty or dispute, and presupposes a difference, a
  disagreement as to what is right.

Germann states by affidavit that no "dispute" existed at the time of his reception and negotiation of the check, because he had not even consulted with his attorneys (let alone filed suit) as to the "discriminatory nature" of the insurance policy.

Midland quite properly answers that argument by pointing out that ignorance of some factors relating to a settlement is not necessarily fatal to its operation as an accord and satisfaction. Roman v. Delta Air Lines, Inc., 441 F. Supp. 1160, 1166 (N.D.Ill. 1977). But Midland chooses to ignore the fact that Roman — like all accord and satisfaction cases — speaks of the settlement of disputes. Germann is correct in saying no "dispute" existed as to which his acceptance of the Guardian check could operate as an accord and satisfaction as to Midland. There was never any difference — nor could there have been — as to his right to receive $1,000 from Guardian. Neither Midland nor Guardian has ever argued Germann was not due $1,000 under the policy. Instead the only "dispute" that has existed and still exists between the parties is whether Midland owes Germann another $19,000 for having failed to provide Carlson the same coverage a younger employee would have received.

Even if the obvious difference between Germann's undisputed (and fully paid) $1,000 claim against Guardian and his present $19,000 claim against Midland were ignored,*fn3 the law has long been that there would be no occasion for finding an accord and satisfaction here. Thus in Farmers and Mechanics Life Ass'n v. Caine, 224 Ill. 599, 606-07, 79 N.E. 956, 959 (1906), plaintiff claimed an insurer owed her $2,000 on account of her dead husband's life insurance policy. It responded that her voluntary surrender of the policy upon payment of $200 was an accord and satisfaction, discharging the larger claim. Plaintiff prevailed, 224 Ill. at 606-07, 79 N.E. at 959:

  It is true, where there has been a compromise, in good faith,
  of unliquidated or disputed demands, where there is an honest
  difference between the parties as to the amount due, such an
  accord with satisfaction is binding [citations omitted]. The
  pleadings now under consideration show no such honest
  difference between the parties. [Nothing] . . . alleged facts
  from which it appears that [defendant] in good faith set up a
  claim that it owed [plaintiff] nothing or that it owed her less
  than $2,000.

Accord, Obermeyer v. Wisconsin Dairy Farms Co., 199 Ill. App. 568
 (1st Dist. 1916); and to same effect Fichter v. Milk Wagon
Drivers Union, Local 753, 382 Ill. 91, 99, 46 N.E.2d 921, 924
(1943). More recent cases reconfirm the necessity of an honest
dispute as to an unliquidated claim as a prerequisite to an
accord and satisfaction. See, e.g., Koretz v. All American
Life & Cas. Co., 102 Ill. App.2d 197, 201, 243 N.E.2d 586, 588
(1st Dist. 1968).

Extended discussion is unnecessary. Midland could not prevail on its argument in any case. But when heed is given to Guardian, as to whom Germann had an undisputed and liquidated claim that was simply paid in full, the concept of an accord and satisfaction as between Germann and Midland is bizarre indeed.


Because Guardian's payment to Germann, involving payment in full of an undisputed liquidated amount, could not have been an accord and satisfaction of a then-unasserted Germann claim against Midland, the latter's summary judgment motion is denied.

Buy This Entire Record For $7.95

Official citation and/or docket number and footnotes (if any) for this case available with purchase.

Learn more about what you receive with purchase of this case.