Legal Question in Credit and Debt Law in Colorado
Invoice marked Paid In Full but isn't
My company provided services for a staff member'w wedding here in San Diego. Her parents live in Colorado. Parents delayed 2 weeks in paying and then sent a check marked ''paid in full'' for less than the invoice amount along with a threatening letter I waive my rights to collect additional funds for the invoice if I cash the cashiers check. I really need the money to reimburse the expenses the company paid upfront in good faith and for salary to the florists especially. We had to close the office due to lack of payment and staff also had to take personal loans to pay their bills for January and now possibly February.
What happens if I cash the check? Can I cash the check and write above my endorsement ''under dispute - balance owed $___'' and still able to pursue further collection action?
Thank you.
''Stressed and now out of business''
3 Answers from Attorneys
Re: Invoice marked Paid In Full but isn't
No.
Civil Code 1526 provides that where a claim is disputed and a check is tendered in purported settlement thereof with the words "payment in full" notated on the check, the creditor (i.e. you) can negotiate the check under protest by striking out the notation on the check. However, there are a variety of exceptions to this statutory provision, and the most notable one is found at Commercial Code 3311.
Comm. Code 3311 provides, in sum, that where there is a bona fide dispute as to the underlying claim, and the debtor submits an instrument in full satisfaction of the claim, and the instrument or accompanying written communication contained a conspicuous statement to the effect that the instrument was tendered in full satisfaction of the claim, the claim is rendered discharged. This statute, in apparent conflict with Civil Code 1526, has been held to supersede Civil Code 1526 (by the Courts of Appeal in Woolridge v. JFL Electric 96 Cal.App.4th Supp. 52.)
Caveat: Your written agreement with the debtor may change the answer, depending upon its provisions. You should immediately seek out the advice of a competent local business litigator. Good luck.
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Re: Invoice marked Paid In Full but isn't
How much is the invoice and how much is the check? If it is not a small claims matter get an attorney. I can take the case with a minimal deposit. Call me directly at 16192223504.
Re: Invoice marked Paid In Full but isn't
You can not only cross out the "paid in full" and other limiting language, but write on it under your endorsement either "Without prejudice" or "with full reservation of rights," and then notify them by certified mail that you intend to pursue them for the balance and that you modified the check. Keep a copy of both sides of the check and the letter.
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