Tuesday, December 4, 2007
I Can't Get No Satisfaction: Hanukkah Case Reveals That Proving Accord And Satisfaction Is A Permitted Use Under Rule 408
Howard Budman was a tenant at Riverview Apartments, which were owned by Union River Associates in Ellsworth, Maine. In December 2002, the manager of Riverview Apartments served Budman with a notice to quit for failure to pay rent; the notice indicated that Budman could avoid the termination of his tenancy by paying the full amount of rent due within seven days. When Budman thereafter failed to pay the rent due, Union River filed a complaint for forcible entry and detainer.
In his answer, Budman admitted that he failed to pay his rent, but he claimed that he deposited the funds necessary to pay the rent due into an account and asserted that he was withholding his payment in response to Union River's violation of his civil rights. Specifically, the Jewish Budman argued that the apartment manager refused to take action after Budman complained to the manager that someone had taken down his Hanukkah decorations and that two swastikas were carved into the hood of his car. Budman further argued that the manager was responsible for an "ongong lack of action that has created an escalating anti-Semitic atmosphere."
At the Superior Court hearing, Budman argued, inter alia, that prior to the hearing there were settlement negotiations between the two sides. He claimed (1) that Union River agreed to dismiss the complaint if he paid his rent arrearages, (2) that he thereafter paid his rent arrearages to Union River, and (3) that despite his payment, Union River failed to dismiss the complaint. Budman sought to have his former attorney testify to these facts, but the Superior Court judge sustained Union RIver's objection that this testimony was inadmissible under Maine Rule of Evidence 408.
Maine Rule of Evidence 408 generally precludes the admission of evidence of compromises, offers to compromise, and related statements in order to prove the validity, invalidity, or amount of a claim. Maine Rule of Evidence 408, however, does not mention whether such compromise-related evidence is admissible for other purposes, and its federal counterpart explicitly states that Rule 408 does not require the exclusion of such compromise-related evidence if offered for other purposes.
When Budman's case reached the Supreme Court of Maine, the court properly found that the statements at issue were not covered by Maine Rule of Evidence 408 because they constituted an "accord and satisfaction" in that they showed that Union River agreed to discharge its existing claim against Budman for failure to pay his rent in exchange for his substituted performance. The statements were thus not offered to prove the validity, invalidity, or amount of a claim.
The court's decision makes sense to me, and it appears in line with every other case I have read dealing with statements constituting "accord and satisfaction" that are made during settlement negotiations. See, e.g., Morden v. Continental AG, 611 N.W.2d 659, 681 (Wis. 2000). In fact, some states' rules of evidence explicitly provide that evidence of compromises, offers to compromise, and related statements are admissible to prove accord and satisfaction. See, e.g., Wisconsin Rule of Evidence 904.08.