Is there anything written on the back of the check?
Did the defendant write anything like "In ful and final settlement?"
Was there a letter or note which accompanied the check?
If so, what did it say?
Was there a letter sent a couple of days before the check that said the check was coming?
If so, what did it say?
Technically, legally, in order to create a binding settlement by cashing the check, the defendant was required to send you a letter in advance that he would be sending a check and that if you cashed the check, that it would constitute a full and final settlement and waiver of all your claims.
That ought to be the law in small claims court, but sometimes it is ignored. One risk of small claims court is that the plaintiff has no right to appeal, even if the judge gets the law completely wrong.
In theory, if the defendant did not do any of the things listed above, you can take his money and continue your lawsuit the for the 2/3 balance he still owes you. At the same time that you cash the check, send the defendant a signed letter, not an email, saying that you are accepting his partial payment in partial satisfaction of what he owes you, state how much is still owed, and that you will continue your lawsuit to collect that amount still owed.
If you appreciate this free advice, please remember to refer me to anyone you know who needs a lawyer. Referrals are still our best source of business. My firm and I are described at www.sackrosendin.com.
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Dana Sack
Sack Rosendin, LLP
One Kaiser Plaza, Suite 340
Oakland CA 94612
510-286-2200...
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