“Payment in Full” Memo Insufficient

The often misunderstood impact of writing “Payment in Full” on a check was before the North Carolina Court of Appeals in In the Matter of the Foreclosure of a Lien by Five Oaks Recreational Association, Inc., decided on March 6, 2012.  In this case, a member of a planned community failed to pay his assessments on time.  The association sued and moved for summary judgment in its favor.  The member argued that by writing “Payment in Full” in the memo section of a check, he had reached a settlement with the association for less than the full amount.  The Court of Appeals affirmed the entry of summary judgment by the trial court against the member, holding that there was no evidence that the amount was in dispute so that an accord and satisfaction may have existed.