Account Stated – Page 2 – New York Appellate Digest

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

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

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

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

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

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

Account Stated

Failure to Make Timely Objections to Invoices Justified Summary Judgment

The First Department determined defendant’s statement in an affidavit that defendant advised plaintiff the invoices were not correct was not sufficient to defeat summary judgment:

…[D]efendant did not object to the invoices in a timely manner. The parties’ agreement provided that “[f]ailure to object to any bill within thirty days from the mailing shall be deemed an acknowledgment of the amount owed ….” Plaintiff sent defendant regular invoices, with the most recent invoice having been sent on July 13, 2010. Defendant did not make any objections until plaintiff’s commencement of a prior action filed on August 27, 2010. Such belated protest is insufficient to ward off summary judgment … . Notably, the only evidence in the record of a protest is defendant’s affidavit, sworn to on May 6, 2011, asserting, without any details, that he advised plaintiff that its invoices were incorrect. This is insufficient to raise a triable issue of fact … . Mintz & Gold LLP v Daibes, 2015 NY Slip Op 01388, 1st Dept 2-17-15

February 17, 2015

Account Stated, Contract Law

Account Stated Criteria Met

The Second Department determined plaintiff was entitled to recover under the doctrine of “account stated:”

In support of its motion for summary judgment, the plaintiff submitted monthly billing statements from 1993 to 2011, together with an affidavit from its vice-president and credit manager explaining that the billing statements were sent to the defendants in the ordinary course of business and that the defendants accepted and retained those statements without objection. The billing statements also demonstrated that the defendants had made partial payments on the account until on or about May 2010. This was sufficient to establish the plaintiff’s prima facie entitlement to judgment as a matter of law on the cause of action to recover on an account stated … . In opposition, the defendants failed to submit any evidence that would raise a triable issue of fact as to whether they received the billing statements or ever disputed the bills. National Commerce Exch of Long Is Inc v Cosmopolitan Coach Ltd, 2014 NY Slip Op 06068, 2nd Dept 9-10-14

September 10, 2014

Account Stated

Partial Payment of Monthly Bills Supported Account Stated Cause of Action

The First Department determined the acceptance of monthly bills and partial payment entitled plaintiff to summary judgment on the cause of action for an account stated:

An account stated is an agreement, express or implied, between the parties to an account based upon prior transactions between them with respect to the correctness of account items and a specific balance due on them … . “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” … . Here, in support of its motion for summary judgment the plaintiff submitted monthly billing statements from January 2007 through March 2008, and an affidavit from a document control officer who averred that the billing statements were sent to the defendant at his home address, that the defendant accepted and retained those statements without objection, and that he made partial payments on the account until on or about December 2007 when payments ceased. This evidence was sufficient to establish the plaintiff’s entitlement to judgment as a matter of law on the cause of action for an account stated … . Citibank (South Dakota) NA v Cutler, 2013 NY Slip Op 08042, 2nd Dept 12-4-13

December 4, 2013

Account Stated, Civil Procedure

Procedure Re: “Improper Service” Affirmative Defense and Criteria for “Account Stated” Pleadings

The Fourth Department explained the law with respect to dismissal based on the “improper service” affirmative defense, and the pleading requirements for an “account stated:”

Because defendants failed to move to dismiss the complaint against them on that ground within 60 days after serving their respective answers, which set forth objections to service (see CPLR 3211 [e]), they thereby waived those objections…. As plaintiff further contends, defendants did not demonstrate the requisite “undue hardship” to justify an extension of defendants’ time for moving to dismiss the action on the ground of improper service (CPLR 3211 [e…).* * *

…[W]e reject plaintiff’s related contention that it is entitled to judgment on the account stated cause of action pursuant to CPLR 3016 (f). That statute provides in relevant part that, where the plaintiff in an action involving the “performing of labor or services” sets forth “the items of his [or her] claim and the reasonable value or agreed price of each,” the defendant, in his or her answer, must “indicate specifically those items he [or she] disputes.” Plaintiff contends that it is entitled to judgment because defendants’ answers set forth only general denials…. Here, however, plaintiff’s itemization of the charges fails to meet the specification standards of CPLR 3016 (f). Although plaintiff contends that defendants made a partial payment … toward the amount due, plaintiff failed to specify to which of the invoice items defendants’ payment was applied …. As a result, “the [complaint] ‘did not trigger a duty on the part of [defendants] to specifically dispute each item’ ” …. Anderson & Anderson, LLP…v Incredible Investments…425, 4th Dept, 6-14-13

June 14, 2013

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).

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

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

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

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

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

Failure to Make Timely Objections to Invoices Justified Summary Judgment

Account Stated Criteria Met

Partial Payment of Monthly Bills Supported Account Stated Cause of Action

Procedure Re: “Improper Service” Affirmative Defense and Criteria for “Account Stated” Pleadings

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