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GERMANN v. PEKOW

January 22, 1982

GEORGE R. GERMANN, ETC., PLAINTIFF,
v.
PHILIP PEKOW, ET AL., DEFENDANTS.



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

MEMORANDUM OPINION AND ORDER

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.

Facts*fn1

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.

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] ...

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