Problem.Dispute.Check tendered in satisfaction

    Consider the following cases, adapted from Consolidated Edison Co. of New York, Inc. v. Arroll, 66 Misc.2d 816, 322 N.Y.S.2d 420 (N.Y.City Civil Ct. 1971). 

    Part A

    Homeowner has been billed $250 by her public utility for consumption of gas and electricity during December.  She does not dispute the bill but cannot afford to pay it.  She delayed paying any portion of the bill for several months but was able to pay and did pay much smaller bills for subsequent months.  The public utility eventually sent her a notice that it would discontinue providing utility service if she failed to pay the December bill by a specified date.  Still unable to pay the bill in full, homeowner tendered the utility a check for $150 with the following restrictive endorsement written on the back of the check:   "Accepted in full satisfaction of claim for gas/electricity for December."  Upon receipt of the check, an employee of the public utility credited the account of homeowner $150.00, crossed out the restriction, indorsed the check on behalf of the utility, and deposited the check for collection, and homeowner's bank paid the check.  Because this problem arises frequently with others of utility's millions of customers, the utility seeks your advice on how to proceed with homeowner and how to proceed generally with all of the utility's customers.  What is your advice?  See U.C.C 3-311 and its Official Comments, added to the Commercial Code in 1990, Comment d to R.2d Contracts 281,  U.C.C 1-207 (amended in 1990 to add subsection (2)), and its comments, Foakes v. Beer, Cal. Civ. Code 1521-24. 

    Part B

    Homeowner claims that she has been erroneously billed $250 by her public utility for consumption of gas and electricity during December.  Homeowner claims to owe only $150.00.  After unsuccessful efforts to resolve the dispute with a customer service representative, homeowner mailed public utility a check for $150.00 with the following restrictive endorsement written on the back of the check:   "Accepted in full satisfaction of claim for gas/electricity for December."  Upon receipt of the check, an employee of the public utility credited the account of homeowner $150.00, crossed out the restriction, indorsed the check on behalf of the utility, and deposited the check for collection, and homeowner's bank paid the check.  Because this problem arises frequently with others of utility's millions of customers, the utility seeks your advice on how to proceed with homeowner (e.g. add $100 to January bill for amount unpaid in December?) and how to proceed generally with all of the utility's customers.  What is your advice?  See U.C.C 3-311 and its Official Comments.  

     Note that California adopted U.C.C 3-311 in 1992 without repealing Cal. Civ. Code 1526(a), part of a statute that had been adopted in 1987.  With both statutes still on the books, how should the problem be resolved in California?