Account Stated question.

[Adviceplease]

Hi, I have a question about Account stated in California. Here are my facts:

Complaint was filed by a known JDB suing me for an old credit card that was charged off. It is not past SOL yet and it is not the OC suing me. I have already done the answer and we have already exchanged discovery questions and now a case management conference is coming up. My question is: Can anyone please help me out on a defense for Account Stated?

Relevant facts to Plaintiffs Acount stated is:

1) I never received anything or talked to or never even knew they existed untill I received the summons.

2) During Discovery they sent me 2 copies of letters that they allegedly sent me (That I never received). Which stated that I owed the plaintiff money and on the 2nd letter it stated they were going to bring suit against me.

3) I did put in my original answer that I never had contact with the Plaintiff either through writting or phone conversation. I also requested strict proof if there was any contact between the plaintiff and myself.

I hope this is enough info to get me started on defending myself from this JDB case and any help would be greatly appreciated.

[admin]

We need to know what you said in your answer. Is the SOL up? Did they produce a contract/proof of how the debt was calculated? That's where I'd go.

[calawyer]

You need some discovery. You should ask for all correspondence between you and OC, all alleged contracts between you and OC and all documents that plaintiff contends constitute an account stated between you and OC. Finally, you want all contracts and correspondence between plaintiff and OC relating to the alleged debt and any assignment of that debt to the plaintiff.

[debtorshusband]

Here's something I downloaded off web and saved. Unfortunately, I didn't make a note of where I got it.

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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.

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Basically, a JDB shouldn't prevail on the basis of an "account stated" because there were no "prior transactions between the parties." As for reaching an agreement, they're going to claim that your failure to dispute letters sent by them constitutes agreement. If that held water, I could create an account stated by sending you a demand letter, and claiming agreement when you throw it out as the rantings of a crackpot.

Here is some other stuff I found. It's based on Florida law, but I think the same basic principles apply.

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“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)

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Good luck.

DH

[Adviceplease]

We need to know what you said in your answer.

Affirmative defences:

1) Defendant request debt verification from plaintiff.

2) That this action is time-barred under ccc 337 and asks for a signed contract between the defendant and plaintiff.

3) That if there is no signed contract between Plaintiff and defendant then this would be covered under ccc 339 law which states the SOL is 2 years or less.

4) Defendant demands strict proof that their was some written contact between the Defendant and plaintiff that states the amount stated is owed between the plaintiff and defendant.

5) Plaintiff admits to purchasing the defaulted debt allegedly owned by the defendant causing plaintiffs injury to its own self, therefore Plaintiff is barred seeking relief for damages.

6) Defendant claims Lack Of Privity as Defendant has never entered into any contractual or debtor/credit arrangements with the plaintiff.

7) Defendant reserves the right to amend and/or add additional answers,defenses and/or counterclaims

8) Asked for strict proof of debt and interest.

Is the SOL up? No

Did they produce a signed contract/proof of how the debt was calculated?

No only produced some of the statements not all. Also produce a barely legible copy of a credit card agreement copy right in 2003. No Signiture on anything! Alleged account was opened in 2004.

Thank You so much.

[Adviceplease]

Here are my discovery requests:

Date: xx-xx-xxx

To: JDB

From: Defendant: XXXX

Case Number:

Please respond within 30 days after service of this document.

RE: Defendants acting pro se asks for Discovery demands: Request for Production of Documents.

1. Provide the alleged credit application or photocopy from Account Number (xxxxxxxxxxxx) bearing the defendant’s signature.

2. Provide the alleged credit agreement from Account Number (xxxxxxxxxxxx) that states interest rate, grace period, terms of repayment, et cetera.

3.Provide All Itemized statement documents or credit card statements from Account (xxxxxxxxxxxxxxxx) that demonstrate how the alleged amount of $XXXX.XX was calculated.

4. Provide all contracts, agreements, assignments, or other means demonstrating that the Plaintiff had the authority and capacity, and was legally entitled to collect on the alleged debt from Account Number (xxxxxxxxxxxxxxxx).

5. Provide the amount of consideration that you paid to acquire the account which is the subject of this action, Account Number (xxxx-xxxx-xxxx-xxxx).

6.Provide A notarized statement, if presently existing or otherwise, by a person with original knowledge of the alleged debt, as it was constituted, and who can testify, or be so interrogated in a deposition, that the alleged debt was incurred legally.

7. Provide all further documents that you believe establish that the defendant had an outstanding account or debt related to Account Number (xxxxxxxxxxxxxxxx).

8.Provide all further documentation, beyond what has been previously requested, that clearly establishes defendant’s liability and/or responsibility to the alleged debt;

9.Provide all notes, memoranda, or likewise, be they handwritten, computerized, or typed, regularly kept in the normal transaction and business of collecting debts, that relate to the defendant and/or Account Number (xxxxxxxxxxxxxxxx).

10. Provide all documents the Plaintiff intends to use, in any way, at trial of this matter.

11. Provide copies of any further documentation beyond what has been previously requested, including charge slips of purchases associated with the alleged account number (xxxxxxxxxxxxxxxx) with Defendant's signature on them, that clearly establishes Defendant’s liability and/or responsibility to the alleged debt.

12. Provide all documents, letter(s) relating to any communications between the Plaintiff and Defendant with respect to the alleged account(xxxxxxxxxxxxxxxx) or alleged debt prior to this lawsuit.

13. Provide all documents, letter(s) that Plaintiff claims were sent to the Defendant demanding payment on the alleged debt, account number (xxxxxxxxxxxxxxx).

14. Provide all documents that the Plaintiff claims the Defendant made a payment on this alleged account on xx-xx-xxxx. Provide the amount of payment and how payment was allegedly made by the Defendant on the account number(xxxxxxxxxxxxxxxx).

Thank You all for providing a rookie with so much advice. It helped me to answer discovery.

Plaintiffs lawyer sent back a lot of legal mumbo jumbo to each answer. Like "Plaintiff hereby incorporates the general objections set forth above. Plaintiff objects to this request to the extent it seeks information and or documents protected by attorney/client work product privilege. subject to and without waivering the forgoing preliminary response and objections.

If needed I can type each response to each question.

What they provided was:

Exhibit 1:

A barely legible credit card agreement form OC. Copy righted in 2003 account was opened in 2004.

Exhibit 2:

7 Photo copies of billing statements. I believe not verified.

Exhibit 3:

Bill of sale from OC to JDB dated 7/2006. Notarized but with no debtors name or account #.

Bill of sale and assignment of accounts from 1st JBD to 2nd JDB dated 5/2007. No reference to defendant's name or account #.

THIS GETS A LITTLE WEIRD.

Affidavit of Assignment from JDB2 to JDB3, dated 6/2003.

The name of JDB #2 has been changed to another company with similar name.

Affidavit of Assignment from JDB3 Dated 11/2003.

The name of JDB#3 has been changed to another company with similar name.

Sorry for the long post, hope it doesn't put you to sleep.

My question is can this be just a name change and that's why they included it? Or did they mess up and send me the wrong documents during discovery that proves a bad chain of title?

I have a case management conference scheduled coming up and I really need some advice and help on my defenses if anyone can offer any advice I would greatly appreciate it! Thank you

[debtorshusband]

My question is can this be just a name change and that's why they included it? Or did they mess up and send me the wrong documents during discovery that proves a bad chain of title?

In my wife's case the plaintiff sent similarly defective documents to support their "ownership." We waited with anticipation to point this out during trial, confident this would result in victory for us. Plaintiff dismissed the case the day before trial. In other words, they gave up.

If your case managment is like ours, this will not be the time for you to challenge their documents. The judge will basically ask if Discovery is completed, if you're ready for trial, and will set a trial date.

Good luck.

DH

[unusualsuspect]

Since you are in CA, try these three items in your answer:

1. The Plaintiff, lacks standing to sue under CCP §430.10(. The Defendant has never had any sort of relationship, business or otherwise, with the Plaintiff. At no time did the Defendant become indebted to the Plaintiff. As such, the Defendant has no obligation to the Plaintiff, monetary or otherwise.

2. The Plaintiff alleges in their complaint that the Defendant owes them $$$ plus interest, court costs and attorney fees. However, the Plaintiff has failed to show that a debt exists (CCP §430.10(e) and CCP §430.10(f)).

3. There has been no contract created between the Plaintiff and the Defendant (Civil Code §1549). There has been no consideration exchanged between the Plaintiff and the Defendant (Civil Code §1605). Because of the lack of existing contract or consideration exchanged, the Defendant owes the Plaintiff nothing.

Hope this helps, it got me out of a jam with a JDB.

[Adviceplease]

Hi, Thank you so much for your help so far. I wanted to know how to research and find these California case citings that are relevant to my case for my defense on Account Stated that I can use when I go to trial.

When I google them nothing comes up. Do I need to go to the court library to research them or is there something on the internet that I can do from home? Thank you...

[Adviceplease]

Hi ,Thank you so much everyone for your help so far.

Does anyone know if I can file a motion once a trial date has been set? Or should the motion be filed prior to the case management conference? Can anyone recommend what motion I should file by the info I provided about my case. Thank you

[Adviceplease]

In my wife's case the plaintiff sent similarly defective documents to support their "ownership." We waited with anticipation to point this out during trial, confident this would result in victory for us. Plaintiff dismissed the case the day before trial. In other words, they gave up.

If your case managment is like ours, this will not be the time for you to challenge their documents. The judge will basically ask if Discovery is completed, if you're ready for trial, and will set a trial date.

Good luck.

DH

Hi Debtorshusband, Thank you so much for your help so far.

I wanted to know when is a good time to challenge their documents and if you have any good defense advice on the chain of title? Would it be best AFTER the case management conference or at trial? Should I file a motion of some sort once the trial date has been set? My case management conference is soon and by law I had the meet and confer conversation with the plaintiffs lawyer. I told him I want to go to trial and he said ok but kept saying feel free to call anytime to settle. I told him no thanks!! I filled out my case statement and filed it with the courts and served the lawyer plus a letter to confirm our meet and confer by California law. The weird thing is that the Plaintiffs Lawyer has not filed a case statement to the courts yet and it was suppost to be in within 15 days of the case conference and its past that time already. Did you experience something similar like this. I am hoping they dont show up or call in to the case conference so it will be dismissed. Sorry so long I just wanted you to see at what point I am at with the case and get some advice since you have been through it and maybe I am missing something. Thank you so much

[debtorshusband]

I've only been through this process once. The plaintiff's lawyer submitted their Case Management Statements on time, and sent local "rent-a-lawyers" to represent them.

The first meeting, a "Collection Case Review" was automatically cancelled because I had filed an answer. (We weren't required to do a "meet and confer", and so didn't.)

The second meeting, a CMC, was continued as plaintiff requested in their CMS, in order for Discovery to be completed.

The next CMC was held, with their "rent-a-lawyer", and all that happed was the trial date was set, as Discovery had been completed.

At the trial, another "rent-a-lawyer" asked for a continuance, because "their witness from New York had fallen ill and couldn't fly." It was granted over our attorney's objection.

The day before the second trial date, they dismissed.

I think you wait for the trial to challenge their chain of title. That's what our lawyer was going to do -- then never got the chance. To us laymen it seems silly to set things for another date in the future when it could be done now, but that's the way the legal system works -- at glacier speed.

If your case actually comes to trial, you just point out the problems with their chain of assignments: wrong company names, dates out of sequence, specific account number not identified, and so on.

If I was to make a prediction, I'll bet they dismiss. A lawyer would, and should, be embarrassed to show up in court with documents like that. But only time will tell.

Good luck.

DH

[calawyer]

This demonstrates something that several people have mentioned on this board but is worth repeating. Many JDB's file the lawsuit hoping to obtain a default judgment. If you respond, they will try to intimidate you. They will send discovery and hope you do not answer. They will file a summary judgment motion and hope you screw up the opposition. If you stay in the game, however, they will frequently dismiss the case (without prejudice) and try to sell the debt to another.

What can you do besides staying alive until trial? First, be aware of the game that is being played here. It should relieve a lot of stress to know of the probable outcome. Second, see if your state's rules allow recovery of costs if the complaint is dismissed without prejudice. If so, follow the rules and seek your costs as the prevailing party. YOU will get a judgment against the plaintiff for a couple of hundred dollars (it is usually only the filing fee that can be recovered although this varies from staste-to-state). Once you get a judgment you can either collect on it or trade it for a dismissal with prejudice. Then you will have won the game.

[Adviceplease]

I have less than 36 hours before my case management conference(Pre-Trial) and by looking at my defences I posted for my Answer should I Amend my original answer with the courts and add more affirmative defenses?

Here is my original Answer

Affirmative defences:

1) Defendant request debt verification from plaintiff.

2) That this action is time-barred under ccc 337 and asks for a signed contract between the defendant and plaintiff.

3) That if there is no signed contract between Plaintiff and defendant then this would be covered under ccc 339 law which states the SOL is 2 years or less.

4) Defendant demands strict proof that their was some written contact between the Defendant and plaintiff that states the amount stated is owed between the plaintiff and defendant.

5) Plaintiff admits to purchasing the defaulted debt allegedly owned by the defendant causing plaintiffs injury to its own self, therefore Plaintiff is barred seeking relief for damages.

6) Defendant claims Lack Of Privity as Defendant has never entered into any contractual or debtor/credit arrangements with the plaintiff.

7) Defendant reserves the right to amend and/or add additional answers,defenses and/or counterclaims

8) Asked for strict proof of debt and interest.

****My question is: Should I amend my original answer to add any affirmative defences? If so what is the best way to phrase it below?

I wanted to add affirmative defences to include:

1) Challenge "Account Stated".

2) Challenge Chain of Title that was sent to me during discovery.

Also do I need to add any Case citings or civil codes to my affirmative defenses?

[calawyer]

In California, a defendant only needs to plead "new matter" as an affirmative defense. Thus, if plaintiff alleges that he received an assignment from X and therefore has standing to sue, and you deny all of the allegations of the complaint, you do not need an affirmative defense saying that there was no valid assignment.

On the other hand, the statute of limitations, for example, is "new matter" that must be raised as an affirmative defense. This is because the complaint does not allege "I am filing this action in a timely fashion".

I'm not really sure what you want to challenge as far as account stated is concerned. If you just want to show there was no account stated and you denied the complaint's allegation that there was, you don't need another affirmative defense. Moreover, if the Court permits you to amend the complaint it will also allow the defendant to do discovery on the affirmative defenses and this may delay the trial.

[Adviceplease]

Thank you calawyer that helps me alot. Once my trial has been set at the case managment conference should I file a motion to dismiss or strike the credit card statments and chain of title they sent me in discovery? And state my defenses for account stated with the case law citations? Or should I wait till the trial to state my defenses with the citations and civil code laws?

[Adviceplease]

I went to my case management conference(pre-trial) and unfortunatly the lawyer showed up. It was a rent a lawyer that knew nothing of the case of course. I denied all and the judge set trial 2 months from now. What boggeled me is that the judge said that this was a HIGHlY SETTELABLE CASE? Why would he say that? Now I am not sure if I should hire a lawyer, file any motions or try to work out a settlement? I will not do good in court. I get extremly stressed and nervous like a deer caught in headlights at court.

Please any advice

[calawyer]

I don't know why the judge said that. If she was trying to send a signal to the plaintiff, it fell on deaf ears since they sent a rent-a-lawyer.

I don't know what to tell you about hiring a lawyer. I can't remember how much is at issue so I don't know whether it would be worth spending money out of pocket. Tell me what county you are in and I will see if there is a lawyer that might take the case on contingency. Is there an attorney fee provision in the contract?

You should also know that most of these cases get dismissed if the plaintiff appears at all hearings and shows a willingness to go forward to trial. I think filing some sort of pretrial brief setting forth the fact that plaintiff has failed to produce any documents supporting its claim might very well produce that result (if the plaintiff's lawyer even bothers to read it).

Good luck.

[Adviceplease]

x

[Adviceplease]

Hi Calawyer, I was wondering where I should look for a lawyer that would possibly take my case on contingency and that deals with these kind of cases? Thank you for your help....

[calawyer]

Sorry, I dropped the ball. I will look at my list of fellow NACA members and send you a pm with any suggestions.

[calawyer]

Done.

[Adviceplease]

Thank you so much Calawyer I really appreciate it!

[Adviceplease]

Hi Calawyer, I will send you a message...Thank you