In Re Segall – Case Brief
Summary of In Re Morton Allan Segall, Attorney, 117 Ill.2d 1, 509 N.E.2d 988, 109 Ill. Dec. 149 (1987).
Segall (D) amassed $12,800 in credit card debt owed to Carte Blanche. A default judgment was entered for that amount plus costs and Segall moved to vacate the judgment. While that motion was pending Segall sent a check to Carte Blanche for $95.60. The back of the check included a limitation that the check was payment in full for the $12,837.62. The check referenced his account number only and did not state the amount owed. Defendant also sent a release letter along with the check indicating that cashing the check released him from all claims by Carte Blanche.
Segall filed a motion to vacate with a copy of the letter and the check and the trial court dismissed the motion on the grounds that there was no accord and satisfaction. Defendant appealed and the judgment was affirmed. Segall attempted to satisfy a debt with Amoco in a similar manner and the State Bar Disciplinary Commission filed a complaint against him.
May a party settle a debt, reduced for judgment, with a large company via payment by check and a letter of accord and satisfaction which does not explain the entire situation?
Holding and Rule
No. A party may not settle a debt, reduced for judgment, with a large company via payment by check and a letter of accord and satisfaction which does not explain the entire situation.
The court held that for an accord and satisfaction to be valid there must be a knowing agreement to relinquish the debt due. Segall did not tell the creditors that in fact they had been represented by attorneys and that the amounts owed had been reduced to judgment. The court held that the fact that Segall was an attorney made these acts attempted fraud because they were done to circumvent counsel, and the defendant knowingly mislead the creditors into cashing the checks without informing them of all the circumstances in good faith.
Segall was suspended for two years.