Account Stated Archives - New York Appellate Digest

Account Stated, Banking Law, Contract Law, Evidence

THE BANK DID NOT PRESENT EVIDENCE THE CREDIT CARD BILLING STATEMENTS AND THE AMENDMENTS TO THE CREDIT CARD AGREEMENT WERE MAILED TO THE DEFENDANT; THE BANK’S MOTION FOR SUMMARY JUDGMENT ON THE BREACH OF CONTRACT AND ACCOUNT STATED CAUSES OF ACTION SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined plaintiff bank’s motion for summary judgment on the breach of contract and account stated causes of action should not have been granted. The bank alleged plaintiff had not paid sums due on her credit card account. But the bank failed to demonstrate the billings statements and the amendments to the credit care agreement were mailed to the defendant:

… [T]he Stephenson affidavit laid a proper foundation for admission as business records of the amendments to the credit card agreement and the monthly billing statements (see CPLR 4518[a] …). However, no evidence that those documents were mailed to the defendant was provided. Stephenson did not attest to [*2]personal knowledge of the mailings or of a standard office practice and procedure designed to ensure that items were properly addressed and mailed, and the business records did not evince the mailing of the account documents … .

Absent evidence that the billing statements were mailed to the defendant, the plaintiff failed to establish its prima facie entitlement to judgment as a matter of law on the cause of action to recover on an account stated … . Similarly, absent evidence that the amendments to the credit card agreement were mailed to the defendant, the plaintiff failed to establish its prima facie entitlement to judgment as a matter of law on the breach of contract cause of action … . Bank of Am., N.A. v Ball, 2020 NY Slip Op 06740, Second Dept 11-18-20

November 18, 2020/by Bruce Freeman

Account Stated, Civil Procedure, Contract Law, Debtor-Creditor, Evidence

MOTION FOR SUMMARY JUDGMENT IN LIEU OF COMPLAINT SHOULD NOT HAVE BEEN GRANTED BECAUSE REFERENCE TO EXTRINSIC EVIDENCE WAS REQUIRED; STATUTE OF FRAUDS DID NOT REQUIRE DISMISSAL BECAUSE IT WAS ALLEGED THERE WAS NEW CONSIDERATION FOR THE PROMISE TO PAY THE DEBT OF ANOTHER (FIRST DEPT).

The First Department, reversing (modifying) Supreme Court, determined the invoices submitted by plaintiff do not qualify for CPLR 3213 relief on the account stated cause of action because reference to extrinsic evidence was required, and defendants were not were not entitled to dismissal based upon the statute of frauds because there was an allegation of new consideration flowing from plaintiff to defendants:

Plaintiff’s motion for summary judgment in lieu of complaint should have been denied. The invoices do not qualify for CPLR 3213 relief because it is necessary to consult extrinsic evidence aside from the invoices and proof of nonpayment in order for plaintiff to establish its entitlement to summary judgment on its account stated claim … . Plaintiff has failed to establish, based on the invoices themselves, that defendants, as opposed to nonparty Impact Sports, are liable based on an account stated claim.

Defendants are not entitled to dismissal of the action based on the statute of frauds (GOL § 5-701[a][2]) as plaintiff has sufficiently alleged that there was new consideration flowing from plaintiff to defendants, which is an exception to the requirement that a promise to pay the debt for another be in writing … . Peter R. Ginsberg Law, LLC v J&J Sports Agency, LLC, 2020 NY Slip Op 01468, First Dept 3-3-20

March 3, 2020/by Bruce Freeman

Account Stated

PLAINTIFF ENTITLED TO RECOVER THE FULL AMOUNT OF THE INVOICE UNDER AN ACCOUNT STATED THEORY (SECOND DEPT).

The Second Department, reversing (modifying) Supreme Court, determined that plaintiff was entitled to full payment for beer delivered to defendants under an account stated theory:

At trial, the plaintiff established that the defendants received the first invoice and made partial payment on it. While the defendants claim that the number of cases of beer and manner of shipping did not conform with their order, there is no evidence in the record that they raised that objection prior to the commencement of this lawsuit, or that they ever disputed the invoice. Accordingly, the evidence presented at trial warranted a determination in the plaintiff’s favor in the principal sum of $12,345 on the cause of action to recover on an account stated based on the invoice … . Stardom Brands, LLC v S.K.I. Wholesale Beer Corp., 2019 NY Slip Op 04018, Second Dept 5-22-19

May 22, 2019/by Bruce Freeman

Account Stated, Attorneys

THE ABSENCE OF A RETAINER AGREEMENT DOES NOT PRECLUDE RECOVERY OF ATTORNEY’S FEES UNDER THE ACCOUNT STATED THEORY (FIRST DEPT).

The First Department determined the absence of a retainer agreement did not preclude recovery of attorney’s fees under the account stated theory:

… “[F]ailure to comply with the letter of engagement rule (22 NYCRR 1215.1) does not preclude . . . recovery of legal fees under a theory of account stated” … . The record before us shows that, after receiving the benefit of Carling’s services, Peters invoked the absence of a retainer agreement in an effort to evade her payment obligations, and the court was right to award him the amounts reflected in his bills. Carling v Peters, 2019 NY Slip Op 01713, First Dept 3-12-19

March 12, 2019/by Bruce Freeman

Account Stated, Contract Law

ALTHOUGH THERE WAS NO ENFORCEABLE CONTRACT TO INSTALL SOLAR PANELS, PLAINTIFF WAS ENTITLED TO SUMMARY JUDGMENT ON ITS ACCOUNT STATED CAUSE OF ACTION BASED ON INVOICES SENT TO DEFENDANT FOR THE SOLAR PANELS (THIRD DEPT).

The Third Department, reversing (modifying) Supreme Court, determined plaintiff’s breach of contract action was properly dismissed but plaintiff should have been granted summary judgment on its account stated cause of action based upon the submission of invoices for $1.9 million. There was no executed agreement between plaintiff and defendant for the installation of solar panels. However, defendant did not object to the invoices for the solar panels:

Plaintiff attempted to raise “material questions of fact” with proof that it had already entered into an agreement to install one solar system at the complex, that defendants expressed interest in having plaintiff install the two additional systems, and that plaintiff purchased solar cells and performed other work in the expectation that it would do so … . These submissions did not, however, raise any question on the dispositive issue of whether the parties reached agreement on the material terms of a contract to install the additional systems … . …

We reach a different result with regard to plaintiff’s claim for an account stated, which is “an agreement between parties to an account based upon prior transactions between them with respect to the correctness of the account items and balance due, and may be implied from the retention of an account rendered for an unreasonable period of time without objection and from the surrounding circumstances” … . In the course of the unsuccessful negotiations over an agreement to install the two proposed systems, plaintiff purchased approximately $1.9 million worth of solar cells for one of the projects and, beginning in December 2011, periodically invoiced defendants for the purchase price and storage costs of the cells. The initial invoice stated that the solar cells were “purchased and held pursuant to agreement with” defendants, and noted that defendants’ representative had “acknowledge[d] receipt of [defendants’] inventory.” Plaintiff’s chairperson averred that defendants’ chief executive officer and a consultant had acknowledged receipt of the solar cells on behalf of defendants, and attached purchase documents for the solar cells bearing what plaintiff’s chairperson stated were the initials of those two individuals.

In response, defendants admitted that they had never objected to the invoices, which “is deemed acquiescence and warrants enforcement of the implied agreement to pay” … . Solartech Renewables, LLC v Techcity Props., Inc., 2018 NY Slip Op 08739, Third Dept 12-20-18

December 20, 2018/by Bruce Freeman

Account Stated

ATTORNEY ENTITLED TO THE REMAINDER OF HER FEE UNDER AN ACCOUNT STATED THEORY (SECOND DEPT).

The Second Department determined plaintiff attorney was entitled to her fees from the defendant client under an account stated theory and the defendant’s counterclaim for legal malpractice was properly dismissed:

The plaintiff represented the defendant from January 2009 through June 2011, and periodically sent invoices to the defendant for legal services rendered in accordance with a retainer agreement executed by the defendant. The defendant received the invoices and made payments with respect thereto through October 22, 2010. Thereafter, he made no further payments to the plaintiff. …

” An account stated is an agreement between parties, based upon their prior transactions, with respect to the correctness of the account items and the specific balance due'” … . “Although an account stated may be based on an express agreement between the parties as to the amount due, an agreement may be implied where a defendant retains bills without objecting to them within a reasonable period of time, or makes partial payment on the account” … . The “agreement” at the core of an account stated is independent of the underlying obligation between the parties … . Holtzman v Griffith, 2018 NY Slip Op 04540, Second Dept 6-20-18

ACCOUNT STATED (ATTORNEY ENTITLED TO THE REMAINDER OF HER FEE UNDER AN ACCOUNT STATED THEORY (SECOND DEPT))/ATTORNEYS (FEES, ACCOUNT STATED, ATTORNEY ENTITLED TO THE REMAINDER OF HER FEE UNDER AN ACCOUNT STATED THEORY (SECOND DEPT))

June 20, 2018/by Bruce Freeman

Account Stated, Debtor-Creditor

CITIBANK NOT ENTITLED TO SUMMARY JUDGMENT UNDER AN ACCOUNT STATED THEORY TO COLLECT A CREDIT CARD DEBT.

The Second Department determined plaintiff bank (Citibank) was not entitled to summary judgment on its account stated cause of action. Defendant's credit card balance increased substantially every month when he failed to pay, The bank increased the interest rate from 3.99 and 6.99% to 29.99%. Between May and November, the credit card balance increased from under $24,000 to over $27,000. Defendant made a $75 payment at some point:

Citibank … failed to establish its prima facie entitlement to judgment as a matter of law on its cause of action for recovery on an account stated. An account stated is an agreement between parties, based upon their prior transactions, with respect to the correctness of the account items and the specific balance due … . Although an account stated may be based on an express agreement between the parties as to the amount due, an agreement may be implied where a defendant retains bills without objecting to them within a reasonable period of time, or makes partial payment on the account … . The “agreement” at the core of an account stated is independent of the underlying obligation between the parties … . Here … Citibank alleged an account stated of $26,985.85. In support of its motion, Citibank submitted proof that it mailed regular monthly statements to the defendant through October 7, 2009.

Citibank failed, however, to establish that the defendant retained this final monthly statement without objecting to the “total new balance” contained on the statement within a reasonable time. In her affidavit, the Citibank employee averred that the “attached Account Statement does not reflect any outstanding disputes on the account.” However, the fact that the final statement did not reflect a protest does not prove that the defendant did not dispute the statement, since any protest would necessarily come after the statement was received by the defendant. Moreover, the record does not establish when the defendant sent a partial payment of $75, and, in any event, that payment was so small in relation to the alleged amount due that it does not give rise, prima facie, to an inference of assent to the total amount alleged to be due … . Citibank (South Dakota), N.A. v Abraham, 2016 NY Slip Op 03133, 2nd Dept 4-27-16

April 27, 2016/by CurlyHost

Account Stated, Debtor-Creditor

PLAINTIFF ENTITLED TO SUMMARY JUDGMENT UNDER AN ACCOUNT STATED THEORY IN AN ACTION TO COLLECT A CREDIT CARD DEBT.

The Second Department determined plaintiff, who had purchased defendant's credit card debt of over $16,000, was entitled to summary judgment under an account stated theory. The court explained the elements:

” An account stated is an agreement between [the] parties to an account based upon prior transactions between them with respect to the correctness of the account items and balance due'” … . To establish its prima facie entitlement to judgment as a matter of law to recover on an account stated, a plaintiff must show that the defendant received the plaintiff's account statements for payment and retained these statements for a reasonable period of time without objection … .

In the case of existing indebtedness, the agreement may be implied as well as express … . “An agreement may be implied where a defendant retains bills without objecting to them within a reasonable period of time, or makes partial payment on the account” … . Cach, LLC v Aspir, 2016 NY Slip Op 02046, 2nd Dept 3-23-16

ACCOUNT STATED (PLAINTIFF ENTITLED TO SUMMARY JUDGMENT IN ACTION TO COLLECT A CREDIT CARD DEBT)/DEBTOR-CREDITOR (PLAINTIFF ENTITLED TO SUMMARY JUDGMENT UNDER AN ACCOUNT STATED THEORY IN AN ACTION TO COLLECT A CREDIT CARD DEBT)/CREDIT CARDS (PLAINTIFF ENTITLED TO SUMMARY JUDGMENT UNDER AN ACCOUNT STATED THEORY IN AN ACTION TO COLLECT A CREDIT CARD DEBT)

March 23, 2016/by CurlyHost

Account Stated, Civil Procedure, Debtor-Creditor

Equitable Relief Sought for the Purpose of Determining a Money Judgment—Plaintiffs Entitled to Jury Trial

In an action involving former partners, plaintiffs sought an accounting, a declaration of defendant’s share in the business, and money judgments for breach of contract and unjust enrichment. The Third Department determined Supreme Court properly held plaintiffs are entitled to a jury trial. The inquiry is whether the primary character of the case is legal or equitable. Here the primary character was the seeking of a monetary judgment:

… [W]e agree with Supreme Court that plaintiffs are entitled to a jury trial. In determining whether a party is entitled to a jury trial, “the relevant inquiry ‘is not whether an equitable counterclaim exists but whether, when viewed in its entirety, the primary character of the case is legal or equitable'” … . Here, plaintiffs seek equitable relief — an accounting of defendant’s share of Medical Arts and an account stated between the parties — only for the purpose of determining the money judgment against defendant. Staunton v Brooks, 2015 NY Slip Op 05248, 3rd Dept 6-18-15

June 18, 2015/by CurlyHost

Account Stated, Contract Law

Quantum Meruit and Account Stated Causes of Action Should Have Been Dismissed—Quantum Meruit is Not Available Where a Valid, Enforceable Written Contract Covers the Subject Matter—Account Stated Can Not Be Used to Collect Under a Disputed Contract

The Second Department determined, in a breach of contract action, the quantum meruit and account stated causes of action should have been dismissed. No action for quantum meruit lies when a contract covers the subject matter of the dispute. An “account stated’ cause of action can not be used as another means to collect under a disputed contract:

A party cannot recover under a theory of quantum meruit where a valid and enforceable written contract governs the subject matter involved in the dispute … . Moreover, “a claim for an account stated may not be utilized simply as another means to attempt to collect under a disputed contract” … .

Here, the defendant expressly agreed, in the written contract, to pay “as reasonable” for required “extra material and/or labor.” Therefore, the plaintiff’s remedy with respect to the additional labor and materials is not in quantum meruit or account stated, but to seek recovery in breach of contract pursuant to that provision … . Aquatic Pool & Spa Servs., Inc. v WN Weaver St., LLC, 2015 NY Slip Op 05137, 2nd Dept 6-17-15

June 17, 2015/by CurlyHost