ficofightr

Account Stated by a CA - can you really attack it?

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I've read the various theories that account stated by a CA can fail if attacked properly because the account stated is between the OC and debtor.

Has anyone actually won or heard of a case won with this argument? If so, where, do you make it this argument after you prove at trial that you have had no prior relationship with the CA and that the balance owed is in dispute?

The CA's attorneys seem very confident that their account stated claim will hold up even though Plaintiff is an assignee.

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Has anyone actually won or heard of a case won with this argument? If so, where, do you make it this argument after you prove at trial that you have had no prior relationship with the CA and that the balance owed is in dispute?

So a search for the topic on this forum. I have posted several links to caselaw and other reference material that explains specifically how to defeat a CAs claim of account stated.

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So a search for the topic on this forum. I have posted several links to caselaw and other reference material that explains specifically how to defeat a CAs claim of account stated.

Thanks, I've seen your post regarding 1A CJS Account Stated s.62 and much appreciated.

My concern is that the standard varies by state and perhaps in CA the Plaintiff can shift the burden of proof onto the Defendant by alleging that assignment from OC entitles CA to sue, and that the issue is prior relationship with OC not with CA.

If they force the debtor Defendant to validate the account statements, most will lose.

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State laws and case law vary widely. I would research as many cases you can find dealing with account stated in your jurisdiction.

I attacked account stated, and won, but due to their not being able to verify the address they sent the alleged "statement of account" to, not the actual theory. I was prepared to the attack it in theory with the caselaw I had, but since it was unnecessary I don't know how well I would have done.

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I'm still struggling with how to attack it based on theory. I've read every Nolo book and some online courses and of course these forums. All are very good at pre-trial stuff but once you get to trial there's less material there for your typical pro se.

I can't expect the judge to just know what the legal conclusions should be. I can discuss it in my Trial Brief (due two days before trial) but of course don't want to tip off the other side (but I suppose that's the purpose of exchanging Trial briefs).

I can work it into my closing statement by stating facts NOT in evidence, which would be required to support 'account stated', but I'm struggling with the line between discussing FACTS in my closing argument and making legal conclusions. I'm afraid my country bumpkin judge won't make the right legal conclusions, and appeal is way too painful.

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That's where case law came in handy for me. I was prepared to cite "In XXX vs. YYY it was determined that account stated required factors XYZ and those criteria are not met here"

I am not sure the best way to write that up, but definitely find some decisions in your jurisdiction that define "account stated", that way you can at least know how it's been interpreted in the past and attack it from there.

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I was prepared to cite "In XXX vs. YYY it was determined that account stated required factors XYZ and those criteria are not met here"

Yes, I think you're right on target. There are certain required elements to a claim of account stated, and even though they vary slightly between jurisdictions, the elements are generally the same. Included are things like (a) there must have been an actual exchange of goods or services between the parties, (B) there must have been statements of account provided to the debtor, to which he did not dispute, etc. etc.

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I've been reading through every search hit in AccessLaw for California and haven't found a single case yet where there is a claim of Account Stated by third-party collector can be defeated by the "no prior relationship" test.

In all cases I've seen so far of an assignee, there's no mentino of the relationship test with the assignee. Maybe the defense never raised that, but I see a hundreds of cases of an assignee winning and that was never brought up.

I need caselaw here or the judge will think I'm a nut!

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Here's something from my files that might help. Unfortunately, I'm not sure where I found it.

Under California law "[a]n account stated is an agreement, based on the prior transactions between the parties, that the items of the account are true and that the balance struck is due and owing from one party to another." Gleason v. Klamer, 103 Cal. App. 3d 782, 786-87 (1980); see generally 1 B.E. Witkin, Summary of California Law, Contracts, §917 (9th ed.). An essential element of an account stated is that both parties have assented to its terms. Restatement (Second) of Contracts §282. If there is no evidence that both parties agreed to a stated sum, the document is not an account stated. See Zinn v. Fred R. Bright Co. Inc., 271 Cal. App. 2d 597, 600 (1969) (noting a requisite element of an account stated is "an agreement between the parties, express or implied, on the amount due from the debtor to the creditor"). This is particularly true where statements are routinely sent as part of a continuing business relationship between the parties. See American Fruit Growers, Inc. v. Jackson, 203 Cal. 748, 751 (1928).

Generally, an account stated is viewed as a new contract and forecloses further dispute as to the items which comprise the account stated. See Gleason v. Klamer, 103 Cal. App. 3d at 787. Since an account stated constitutes a new contract that supersedes and extinguishes the original obligation, mutual assent is an essential element. Id. at 786-787. However, the parties to an account stated are not bound as to matters that were not contemplated, even though those matters existed when the account was stated. See California Milling Corp. v. White, 229 Cal. App. 2d 469, 478-79 (1964). To further complicate the issue, there may be a partial settlement and account stated as to only some transactions between the parties. Id. at 477.

Here's some other stuff. It's from Florida, but I think the basic principles apply:

“Mere failure to object to an account sent by mail to one who has had no dealings with sender does not give rise to presumption of acquiescence of debt.”

C. & H. Contractors, Inc. v. McKee, 177 So.2d 851 (Fla. App. 2 Dist. 1965)

“Complaint failed to state cause of action for “Account Stated” where allegations therein did not show existence of a mutual agreement.”

Dionne v. Columbus Mills, Inc., 311 So.2d 681 (Fla. App. 2 Dist. 1975)

“Account stated claim involves agreement between persons who have had previous transactions, fixing amount due in respect to such transactions and promising payment.” South Motor Co. of Dade County v. Accountable Const. Co., 707 So.2d 909 (Fla. App. 3 Dist. 1998)

“”Account stated” is agreement between persons who have had previous transactions, fixing amount due in respect to such transactions and promising payment.”

Nants v. F.D.I.C., 864 F.Supp. 1211 (S.D.Fla. 1994)

“There can be no liability on an account stated if there has been no mutual agreement, and mere presentation of a claim and its retention without objection does not of itself create a liability.”

Recreation Corp. of America v. Jack Drury & Associates, Inc. 235 So.2d 49 (Fla. App. 4 Dist. 1970)

“An account stated must be based on prior dealings resulting in a subsisting debt. It may not rest upon a liquidated demand.”

Nicolaysen v. Flato, 204 So.2d 547, certiorari denied 212 So.2d 867 (Fla. App. 4 Dist. 1967)

“Basic premise of an account stated action, which presupposes some indebtedness, is that the statement fixing the various sums that constitute the debt is correct and not the existence of the debt itself.”

Nicolaysen v. Flato, 204 So.2d 547, certiorari denied 212 So.2d 867 (Fla. App. 4 Dist. 1967)

Good luck.

DH

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