Johnathon Will v. Christopher Schlosser

COURT OF APPEALS
DECISION NOTICE
DATED AND FILED This opinion is subject to further editing. If
published, the official version will appear in
the bound volume of the Official Reports.
July 13, 2021
A party may file with the Supreme Court a
Sheila T. Reiff petition to review an adverse decision by the
Clerk of Court of Appeals Court of Appeals. See WIS. STAT. § 808.10
and RULE 809.62.

Appeal No. 2020AP407 Cir. Ct. No. 2018CV170

STATE OF WISCONSIN IN COURT OF APPEALS
DISTRICT III

JOHNATHON WILL,

PLAINTIFF-APPELLANT,

V.

CHRISTOPHER SCHLOSSER AND PROGRESSIVE UNIVERSAL INSURANCE
COMPANY,

DEFENDANTS-RESPONDENTS.

APPEAL from a judgment of the circuit court for Polk County:
DANIEL J. TOLAN, Judge. Reversed and cause remanded for further
proceedings.

Before Stark, P.J., Hruz and Seidl, JJ.

¶1 SEIDL, J. Johnathon Will appeals a summary judgment granted in
favor of Christopher Schlosser and his automobile liability insurer, Progressive
Universal Insurance Company (hereinafter “Progressive”), which dismissed Will’s
No. 2020AP407

personal injury claim. Will cashed a $950 settlement check from Progressive sent
with an attached document denominated “ADVICE FOR PAYMENT,” which
read, “Full and Final Settlement of all Bodily Injury Claims with Open Meds.”
The circuit court concluded that Will’s cashing of the check constituted an accord
and satisfaction between the parties, thereby limiting the defendants’ further
liability and warranting summary judgment in their favor.

¶2 On appeal, Will argues the circuit court erred in granting summary
judgment because there were genuine issues of material fact as to whether Will
had reasonable notice that the check he cashed was offered in full and final
satisfaction of his claim.1 We agree and conclude that there are material issues of
fact as to whether Will received such reasonable notice, thereby precluding
summary judgment. We therefore reverse the judgment and remand this matter
for further proceedings.

BACKGROUND

¶3 On November 3, 2016, Will was traveling on County Road F,
approaching the intersection with County Road C, when his vehicle struck a
vehicle driven by Schlosser. Schlosser failed to yield the right of way from a stop
sign at the intersection of the two roads, allegedly causing the collision.

¶4 Will commenced suit against Schlosser and Progressive, alleging
negligence and seeking damages for his injuries arising from the accident.

1
In addition, Will argues that “public policy should not allow insurers to forcefully settle
bodily injury claims without the signing of a clear and concise release of claims.” Will provides
no citation to legal authority for this proposition. Because we decide this case on other grounds,
we need not reach this argument. See State v. Castillo, 213 Wis. 2d 488, 492, 570 N.W.2d 44
(1997) (appellate courts not required to address every issue raised when one issue is dispositive).

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Progressive answered on behalf of both defendants, and it asserted that Will’s
claim was barred by the doctrine of accord and satisfaction. Progressive
ultimately moved for summary judgment, claiming Will’s action was barred by the
doctrine of accord and satisfaction.

¶5 On November 15, 2016, some twelve days after the accident, a
representative from Progressive named Rachel Thompson spoke by telephone with
Will in a recorded conversation.2 Thompson called Will to discuss the accident,
Will’s injuries sustained in the crash, potential future treatment, and his special
damages. The following facts are taken from a transcript of that telephone
conversation submitted by Progressive via affidavit, which Will acknowledged
was accurate.

¶6 In that conversation, Will informed Thompson that as a result of his
injuries, he had missed twenty hours of work, over two days, at $16.50 per hour.
Thompson calculated that Will had lost income in the amount of $330 as a result
of the accident. Will also informed Thompson that he had out-of-pocket expenses
of twenty dollars for prescriptions. Will’s mother had taken him to the emergency
room after the accident, and Progressive agreed to pay for the cost of that visit,
which included an ultrasound of Will’s heart and stomach. Will also stated that
his stomach and lower back were sore from the accident. At the time of the
accident, Will estimated his pain level to be a three out of ten, on a scale of one to
ten, with ten being the highest.

2
The computerized transcript of the telephone conversation incorrectly identified the
Progressive representative as “Ms. Fox.” Rachel Thompson provided an affidavit, however,
indicating that she was the representative who spoke to Will and that the transcript incorrectly
identified her as “Rachel Fox [sounds like].”

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¶7 At the time of his phone call with Thompson, Will stated he felt a bit
better and that his pain was getting better day by day. Will stated that he had quite
a bit of bruising, particularly on his stomach, that it hurt to bend over at work, and
that he was stiff when he would wake up in the morning. Will had been asked to
follow up with his primary care doctor, but he felt that he did not need to do so.
Will did, however, tell Thompson that he planned to see a chiropractor.

¶8 After discussing the accident, the nature of Will’s injuries, the past
damages, and potential future chiropractic treatment, and due to Will’s statement
that he was “almost 100 percent,” Thompson offered Will a settlement.
Thompson summarized the damages that Will discussed with her, and she
proposed an offer that Will agreed accurately reflected the damages:

[Thompson]: OK. OK. So, um, that’s all the questions I
have to ask in relation to the injuries. Um, of course here,
um, Johnathon, you would be entitled to, you know, the
bodily injury claim which does cover, um, you know, pain,
inconvenience, um, missed wages, um, and medical bills in
relation to the accident. Um, so right now, based off of
here, uh, what you’re telling me the injuries that you
sustained, um, I can offer you $600 for the pain and
inconvenience. In addition to that, um, you know, we
would cover your wages, uh, that you missed out on for the
days, um, of work, which would be $330. And then I
would reimburse you for, uh, your out-of-pocket, uh,
prescription costs of $20.

[Will]: OK.

[Thompson]: And then, of course, take care of, um, the
medical bill, uh, that you had for the ER visit. Um, your
medical bills incurred, I should say, that you’ve in-,
incurred thus far. Um, and then you said, um, you haven’t
scheduled a follow-up visit? Um ...

[Will]: Uh-uh.

[Thompson]: ... you know, so, if you’re anticipating that,
um, you said you also, uh, potentially may go see a
chiropractor, um, I can keep, um, the medical open for an
additional 30 days for up to $1,000. So, if you do go back

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in for that follow up, um, or go to see, you know, the
chiropractor, we’d be able to take care that for you, um, and
that would be, you know, open for 30 days from the date,
um, that the agreement is, is binded [sic].

¶9 After Thompson and Will discussed these valuations and
summarized the terms of the agreement, Will said to Thompson that the payment
amount would be fair and “should be all right.” Will then stated that the $1,000
for thirty days of future chiropractic would be all that he needs:

[Thompson]: OK. ‘Cuz total, what it would be, I know I
just threw a lot of numbers at you. I apologize [laughs].
Um, it would be total with, um, your pain, inconvenience,
plus your wages and the out-of-pocket prescription, that’d
be $950. And of course, again, we would take care of the,
your medical bills incurred thus far in relation to the
accident, and then ...

[Will]: So, then the emergency …

[Thompson]: … um …

[Will]: … room will be covered?

[Thompson]: Yes. Yep, that will be covered. Um, and
then your concern for, you know, future follow up or
treatment at the chiro, I can keep that open for 30 days up
to $1,000.

[Will]: OK. Yeah, that should …

[Thompson]: O-…

[Will]: …be all right.

[Thompson]: OK.

[Will]: I would like to see the chiropractor, and I don’t
think that’s …

[Thompson]: Sure.

[Will]: … gonna rack up bad [sounds like] …

[Thompson]: Yeah, and …

[Will]: … so.

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[Thompson]: … typically, um, you know, the visits do
range, if you do, um, go to, um, seek treatment, um, they’re
usually anywhere, depending on the area that you live in,
I’d say $45 to $75. So, you know, that would, um, get you
visits. You know, 30 days at …

[Will]: OK.

¶10 Thompson and Will then discussed the process for concluding the
agreement:

[Thompson]: OK. So, what I have to do then, Johnathon,
is, um, I have to send you out what’s called a release. It’s
an official document, um, that basically outlines the details
of our agreement. However, um, we would need that
signed and on file before we’re able to pay any medical
bills on your behalf.

[Will]: OK.

[Thompson]: Um, and I’ll send that out in the mail, um,
along with the check ….

[Thompson]: … But I will get this out in the mail right
away and I’ll look to follow up with you tomorrow
regarding the vehicle, um, you know, to go over that, which
is, you know, separate from, um, this injury claim. Um
other than that, um, I don’t have anything else for you right
now. Do you have any questions for me?

Will did not have any further questions, and Thompson thereafter provided her
contact information should Will need to reach her.

¶11 The next day, Thompson sent Will a letter stating, in part: “As we
discussed on November 15, 2016, you have agreed to settle your injury claim for
$950.00.” Thompson claims that enclosed with the letter was a check for $950, a
document entitled ADVICE FOR PAYMENT with language stating, “Full and
Final Settlement of all Bodily Injury Claims with Open Meds,” and two copies of
a release agreement. Will confirmed that he previously lived at the address where

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the check was sent, but he had his mail forwarded to a new address after he
moved.

¶12 Will also confirmed that the check “may have” had a letter attached
to it, but he did not recall what that letter said and he was not sure if he kept it.
Will stated, however, that no release was sent to him and that he did not sign or
return any release to Progressive. In addition, and significantly, the record does
not contain a copy of the purported release, either signed or unsigned.

¶13 Prior to the motor vehicle accident, Will had a surgery related to a
hernia. On December 4, 2016, Will saw his family physician and stated that he
was concerned that his hernia was coming back. The physician’s note from that
visit stated, in part: “[T]his is a time[-]sensitive issue[.] His insurance case will
be closuring [sic], so he … does need this acted on quickly[.]” Progressive
contends that this statement referenced Will’s agreement with Thompson. Will,
however, asserts that this statement was related to his health insurance coverage,
which was expiring at the end of the year.

¶14 Based upon the phone conversation between Will and Thompson,
Thompson’s letter accompanying the check payable to Will, and Will’s cashing
the check, the circuit court concluded Progressive had made a prima facie case for
summary judgment by showing that all the elements of accord and satisfaction
were met. The court determined that Will’s submissions did not establish a
genuine issue of material fact as to accord and satisfaction, and it therefore granted
Progressive’s motion for summary judgment. Will now appeals.

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DISCUSSION

¶15 We review a grant of summary judgment de novo. Duncan v. Asset
Recovery Specialists, Inc., 2020 WI App 54, ¶9, 393 Wis. 2d 814, 948 N.W.2d
419. Summary judgment is appropriate if there is no genuine issue as to any
material fact and the moving party is entitled to judgment as a matter of law.
WIS. STAT. § 802.08(2) (2019-20). “To make a prima facie case for summary
judgment, a moving defendant must show a defense which would defeat the
[opposing party’s] claim.” Preloznik v. City of Madison, 113 Wis. 2d 112, 116,
334 N.W.2d 580 (Ct. App. 1983). If such a showing has been made, we examine
the evidentiary materials submitted by the opposing party to determine whether a
genuine issue exists as to any material fact. Id. “In evaluating the evidence, we
draw all reasonable inferences from the evidence in the light most favorable to the
non-moving party.” Burbank Grease Servs., LLC v. Sokolowski, 2006 WI 103,
¶40, 294 Wis. 2d 274, 717 N.W.2d 781.

¶16 The issue for our review is whether the facts located in the summary
judgment record, viewed most favorably to Will, demonstrate that his claim is
barred by the common law doctrine of accord and satisfaction. “An ‘accord and
satisfaction’ is an agreement to discharge an existing disputed claim and
constitutes a defense to an action to enforce a claim,” “whether the claim be one
arising in contract, tort, or otherwise.” Hoffman v. Ralston Purina Co., 86
Wis. 2d 445, 453, 273 N.W.2d 214 (1979); see also Butler v. Kocisko, 166
Wis. 2d 212, 215, 479 N.W.2d 208 (Ct. App. 1991). “Ordinary contract principles
apply in determining whether an agreement of ‘accord and satisfaction’ is
reached.” Hoffman, 86 Wis. 2d at 453 (citation omitted). “Mere performance
does not operate as a satisfaction unless offered as such to the creditor or claimant.
There must be expressions sufficient to make the creditor understand or to make it

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unreasonable for [the creditor] not to understand that the performance is offered in
full satisfaction of the claim.” Id. Our supreme court has explained how this
doctrine applies when a debtor gives a settlement check to a creditor:

Under the common law rule of accord and satisfaction, if a
check offered by the debtor as full payment for a disputed
claim is cashed by the creditor, the creditor is deemed to
have accepted the debtor’s conditional offer of full payment
notwithstanding any reservations by the creditor. In other
words, the creditor’s cashing the full payment check
constitutes an accord and satisfaction which discharges the
entire debt.

Flambeau Prods. Corp. v. Honeywell Info. Sys., Inc., 116 Wis. 2d 95, 101, 341
N.W.2d 655 (1984).

¶17 There are two elements that must first be present for a valid accord
and satisfaction: (1) “there must be a good faith dispute about the debt”; and
(2) “the creditor must have reasonable notice that the check is intended to be in
full satisfaction of the debt.” Id. at 111. An accord and satisfaction requires a
“bona fide dispute as to the total amount owing, an offer, an acceptance and
consideration.” Butler, 166 Wis. 2d at 215.

I. Whether the circuit court relied upon the Uniform Commercial Code

¶18 The circuit court ordered that Will’s claims be dismissed on
summary judgment based upon the common law doctrine of accord and
satisfaction. Nonetheless, Will contends that the circuit court relied upon the
Uniform Commercial Code (UCC) in support of its conclusion that the doctrine of
accord and satisfaction applies in this case. He argues that the court erred in doing
so as the UCC is inapplicable to this tort action.

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¶19 Progressive, however, correctly argues that the circuit court did not
rely upon any UCC provisions in determining that Will’s claim was barred by
common law accord and satisfaction. The Hoffman and Flambeau Products
cases provide that the doctrine of accord and satisfaction is applicable under
common law, and it applies to tort claims. See Hoffman, 86 Wis. 2d at 453; see
also Flambeau Prods., 116 Wis. 2d at 101. While contract principles are applied
to an agreement to settle, this fact does not require the application of the UCC.
Will’s assertion that the court erred by applying the UCC therefore lacks merit.

II. Whether material questions of fact preclude summary judgment

¶20 Will next argues that there were material questions of fact
preventing summary judgment on the application of common law accord and
satisfaction.3 Resolution of this issue turns on whether there was a valid offer to
settle. Specifically, here, we must consider whether the second element of an
accord and satisfaction was met—i.e., did Will have “reasonable notice that the
check [was] intended to be in full satisfaction of the debt.” See Flambeau Prods.,
116 Wis. 2d at 111. Will contends that there are material questions of fact
whether he received any documents from Progressive with the check, and,
specifically, whether he received the release. He further asserts that based on
Thompson’s statements during her phone call with Will, in this particular case, the
parties understood that the execution of a release was a necessary condition to
resolving Will’s claim.

3
The Wisconsin Association for Justice filed an amicus brief in support of Will’s
position.

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¶21 We agree with Will that the circuit court erred in granting the
defendants summary judgment on this record. Both parties agree that part of the
agreement reached pursuant to Will’s phone conversation with Thompson was that
she would send a release outlining the parties’ agreement, and that this release
needed to be signed in order for further medical payments to be made. There is a
genuine issue of fact, however, as to whether Will ever received a release.
According to Will’s testimony, no release was ever provided to him, nor did he
sign or return any release, and no copy of the release is in the record. The signing
of the release was an express condition of the settlement. There is no question of
fact that this signing did not take place. As the release was apparently meant to
affirm the agreement between the parties, the absence of a sent or signed release
creates a material issue of fact as to what the parties intended Will’s acceptance
and deposit of the $950 check to settle all of Will’s claims.

¶22 Indeed, Will argues that there are material questions of fact as to
whether Will understood—or should have understood from his conversation with
Thompson—that the subsequent cashing of the $950 check acted as a termination
of his entire bodily injury claim. Will argues that based on his discussion with
Thompson, he reasonably understood that he was settling only his claim to the
date of the phone conference, and he did not understand that he was barred from
ever making any future claim related to his injuries. According to Will, that
reasonable understanding created a material question of fact as to whether he
understood that the check was offered in full satisfaction of his claim, and that it
manifested a clear intent in that regard.

¶23 In response, Progressive correctly notes that an offer and acceptance
can occur even if there is no “meeting of the minds.” See Hoffman, 86 Wis. 2d at
454 (citation omitted). Manifestation of intent to accept an offer can occur

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through the offeree’s words, or by the offeree’s actions. See id. “[W]hen a party
accepts, without objection, a check which he [or she] knows to be offered in full
settlement of a disputed account, he [or she] is estopped from claiming in the
future that the account has not been settled. The acceptance of the check
constitutes a good accord and satisfaction.” Chicago & N.W. Transp. Co. v.
Thoreson Food Prods., Inc., 71 Wis. 2d 143, 146, 238 N.W.2d 69 (1976). The
problem with Progressive’s argument here, however, is that material questions of
fact remain as to whether the deposit of the check clearly expressed an intent to
settle in full satisfaction of the entirety of Will’s claim, including his damages for
future pain and suffering from bodily injury, and whether Will’s cashing of the
check constituted an acceptance of that offer.

¶24 Nothing in the conversation between Will and Thompson
conclusively established that the amount agreed upon was intended to fully and
finally settle all aspects of Will’s claim for relief regarding his bodily injury,
whether already existing or in the future. In fact, Thompson never used the word
“settle” during her conversation with Will. Additionally, Thompson’s discussion
with Will regarding the release indicated that the release would outline the details
of the agreement and that it was to be signed in order for Will to have Progressive
pay any medical bills, not to settle his bodily injury claim. Furthermore, there is
little evidence a release was ever received, much less signed. We do not know
what the release said, and without it, there remains a genuine dispute as to whether
the offer as made can be considered as accepted under the doctrine of accord and
satisfaction. Without the release, we do not agree with Progressive and the circuit
court that there is no material question of fact that Will’s cashing the check
establishes that there was reasonable notice to Will that he was accepting the $950
in full and final settlement of his negligence claim.

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¶25 Will also argues that there was a material question of fact as to the
basis for his statement to his doctor in December that he needed his hernia injury
“acted on quickly.” Will claims the circuit court could not rely upon that
statement as evidence that he understood his agreement with Progressive was final
and that he only had thirty days to obtain medical treatment. Instead, Will argues
that there was a question of fact as to whether he was instead referencing a time
limit due to his expiring health insurance. The court did not, however, state that it
relied on Will’s statement to his physician in support of its summary judgment
decision. And, in any event, our summary judgment review is de novo, and we
agree with Will that this issue further supports our ruling in his favor.

¶26 In summary, we agree with Will that there are genuine issues of
material facts on the current record that preclude summary judgment in the
defendants’ favor. There are questions as to whether the agreement between Will
and Progressive required a signed release, and whether Will understood that by
cashing Progressive’s check, he was fully and finally settling the full value of his
bodily injury claim. On this record, these material factual questions must be
resolve by a fact finder. The circuit court therefore erred in granting Progressive’s
motion for summary judgment. For these reasons, we reverse and remand for
further proceedings.

By the Court.—Judgment reversed and cause remanded for further
proceedings.

Not recommended for publication in the official reports.

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