will exist where the amount due is unliquidated. 6 Corbin on Contracts § 1288 at 160. The settlement of the dispute constitutes consideration, and accord and satisfaction occur only where the dispute is honest and not fraudulent. Horn Waterproofing Corp., 497 N.Y.S.2d at 312. Furthermore, an accord will be created only where both parties intended to enter into it. Cerulean Land Developers Corp. v. Colon Dev. Corp., 144 A.D.2d 615, 535 N.Y.S.2d 35 (App. Div. 1988).
At the time that PGFE cashed the checks, the amount, if any, owed by Northwest was unliquidated -- PGFE had merely submitted claims, the parties had not settled on an amount due, and Northwest had not been adjudged liable. Therefore, there was a genuine dispute sufficient to form the basis for an accord. 6 Corbin on Contracts § 1288 at 160.
AIU claims, however, that PGFE never had the requisite intent to enter into an accord because at the time that PGFE's agent cashed the check for $ 971.44 the agent believed that the dispute had been settled. AIU asserts further that even if PGFE did enter into an accord, that accord cannot cover the cargo that was shipped by sea because both Northwest and PGFE only intended to settle the claims regarding the cargo shipped by air. As support for these assertions, AIU points to a variety of extrinsic evidence, including a letter written by Jerome Goenner, Northwest's cargo claims manager; copies of the air waybills; and an affidavit submitted by Carroll Forehand, the general manager of PGFE's freight forwarder. AIU also asserts that the question of intent cannot be settled until it has had an opportunity to depose Goenner. "Under New York law, we first look to the written agreement to discern the parties' intent and limit our inquiry to the words of the agreement itself so long as the agreement sets forth the parties' intent clearly and unambiguously." Nicholas Labs. Ltd. v. Almay, Inc., 900 F.2d 19, 20-21 (2d Cir. 1990). Where intent is clear from the agreement itself the court may determine it as a matter of law, but where the court must turn to extrinsic evidence to determine the parties' intent then it becomes an issue of fact, National Am. Corp. v. Federal Republic of Nig., 448 F. Supp. 622, 643 (S.D.N.Y. 1978) (Goettel, J.), aff'd, 597 F.2d 314 (2d Cir. 1979), which may preclude summary judgment.
Here, Connor endorsed the check for $ 971.44, on the back of which was written, "By endorsement of this check, the payee acknowledges full settlement and satisfaction of all claims against and/or liability of Northwest Airlines, Inc. . . . arising in connection with air cargo shipment covered by Airbill Number 7139-8401 dated 1-27-93." (Goenner Aff. 1/3/ 95 Ex. 12.) PGFE's agents also endorsed the check for $ 1,670.66, the back of which bore identical language regarding Airbill Number 7139-8412 dated 1-25-93. (Goenner Aff. 1/3/ 95 Ex. 9.) Although this language evinces an intent by both parties to settle some claims, the phrase "air cargo shipment covered by Airbill Number . . ." is too vague to permit the court to determine from the face of the contracts alone which claims the parties intended to settle. In light of the fact that the claims involve damage that allegedly occurred to the cargo during the time that it was stored by Northwest, an air carrier, although some of the cargo was eventually carried by ocean, the phrase could refer either to all of the cargo or solely to the cargo that was carried by air. Since the phrase is ambiguous, the court will turn to extrinsic evidence to ascertain its meaning. Christiania Gen. Ins. Corp. of N.Y. v. Great Am. Ins. Co., 979 F.2d 268, 274 (2d Cir. 1992).
AIU argues that the air waybills were altered to reflect the fact that only 5 of the pal lets listed in air waybill 8401 and only 36 of the pal lets listed in air waybill 8412 were carried by air, and that the language on the checks referring to "air cargo shipment covered by Airbill Number 7139-8401 dated 1-27-93" and "air cargo shipment covered by Airbill Number 7139-8412 dated 1-25-93 " therefore refers only to the pal lets carried by air. (Forehand Aff. PP 9, 15 & Ex. 1.) AIU tells only part of the story, however. As Goenner explains, a copy of the air waybill always accompanies any cargo carried by air, and when cargo is shipped in partial lots, as this was, the copy of the air waybill accompanying the cargo is altered to reflect the partial nature of the shipment. (Goenner Aff. 3/9/95 PP 6-7.) Therefore, the copies of the air waybills to which PGFE points are those that accompanied the cargo that was carried by air (Forehand Aff. Ex. 1), but there were other copies that accompanied the cargo that was carried by ocean, and those copies were altered to reflect only the cargo carried by ocean. (Goenner Aff. 3/9/ 95 Ex. 13.) Therefore, all the cargo, whether carried by air or by ocean, was covered by air waybills 8401 and 8412, and AIU's argument is not conclusive.
AIU argues that the court cannot determine Northwest's intent in reaching the accord until AIU has had a chance to depose Goenner. It points to a memorandum from Goenner to a fellow Northwest employee, dated February 11, 1994, six days before Northwest issued the check for $ 1,670.66 which purported to settle all claims regarding air waybill 8412. The memo states,
HAVE REVIEWED THIS WITH OUR INSURERS. THE INCIDENT CLAIMED AT OSA INVOLVES A SHIPMENT BY AIR AND NOT THE BULK OF THE GOODS WHICH WERE MOVED BY SEA UNDER A DIFFERENT AIRWAYBILL. THEREFORE, WE WILL RESOLVE THIS MATTER WITH PROCTOR AND GAMBLE/JAPAN C/O MR. IZUMIKAWA FOR JPY 186,458 OR $ 1,670.00 USD . . . .
(Schorr Aff. Ex. 2.) This memo contradicts the following statement in Goenner's affidavit:
It was clear to me that the claims by John S. Connor, Inc. and Proctor & Gamble Far East, Inc. against Northwest were to include not only the rolls actually carried by air under the air waybills, but for damage that may have occurred to the 530 rolls shipped on the M/V CAPE HENRY, while they were in Northwest's possession.