SingleDadJames

My Thoughts on Account Stated in MI and in General

Recommended Posts

I keep getting questions about account stated and this latest question motivated me to sit down and post what I can remember from my research. This is another of my trademark LONG threads but I want to share all of this info in a mental data dump before I forget it all. XtypeX

Hopefully it can also help someone else in their research and battles along the way! Any additional thoughts, reputation points, cups of coffee, or other gestures of gratitude are greatly appreciated.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Hey, first of all , Congrats on your victory against those scumbags.

A question , can you please tell us how you defeated the account stated claim, what were your pleadings or affirmative defenses you used in your case against account stated. Thanks for your help!

Thanks FLORIDA666. I really appreciate it! Since my trial was over pretty much as soon as it started, I can't definitively say I would have defeated an account stated. I guess the only way to truly know how I would make out would be to go to trial against a plaintiff with admissible, authenticated evidence and witnesses.

That being said, I'm fairly confident I had prepared a strong case to defeat their account stated claim. As for how to defeat an account stated, it depends on individual circumstances and your State to a large degree. I'm not an attorney so I can't and won't provide any legal advice. I CAN point out how I approached my situation and what I did/would do. So here we go!

Keep in mind that if the plaintiff is a junk debt buyer NONE of this really even matters all that much unless they can provide VALID proof of assignment. They need to prove they bought or were otherwise assigned the SPECIFIC alleged debt in your case. Focus on that, but still prepare yourself as if that junk b.s. bill of sale will be accepted into evidence, because it might. With a junk debt buyer I’d focus on standing, and authentication and admissibility of evidence just as much as worrying about picking apart their allegations in their complaint.

Much of this will be MI specific but there is plenty of info that applies to an account stated case in general. From what I can tell account stated claims are pretty popular here. In MI, we have MCL 600.2145 which is a nifty way for junk debt buyers to file a complaint and get a default judgment with nothing but an affidavit claiming the defendant owes such and such amount.

Under this rule in MI, if the plaintiff files and attaches a timely affidavit (An affidavit dated within the 10 days before the filing of the complaint) that affidavit can be used as prima facie evidence of the defendant's indebtedness UNLESS the defendant takes proper steps to avoid it.

Since most defendants don't even bother to respond or show up, in MI a junk debt buyer doesn't need to do much more than file the complaint with an affidavit. I view it as a sort of “default judgment” to “prove” an account stated. In other words the plaintiff doesn’t really need to PROVE an account stated. All they need to do is file an affidavit and let the defendant FAIL to properly respond to that affidavit.

Another handy fact for the Plaintiff is the fact that nothing in MCL 600.2145 specifies WHO the affidavit has to be from. It just has to be an affidavit. If you are a junk debt buyer the easiest way to do this is to print off hundreds of affidavits a day from one of your own employees in house. While it may be a little difficult to ensure the affidavit from your employee is dated within the Michigan required 10 days before the complaint was filed, who cares from their point of view?

After all, most defendants don't even bother to respond or show up. Even fewer are going to bother to do research and file a correctly formatted answer. On top of that, how many defendants are actually going to find MCL 600.2145 on their own and also figure out the affidavit has to be dated 10 days or less before the complaint was filed. Those squeaky wheels are a drop in the bucket. Out of the few trouble maker defendant's how many of them are going to be able to make EVERY court date over the next half a year or so? You get the idea.

In MI the first step to defeating an account stated is likely going to be filing a simple counter-affidavit that says you deny the debt and the allegations in the plaintiff's affidavit of debt. You file this WITH YOUR ANSWER. If you don't file the counter affidavit your case may be over at that point. A timely (or untimely and uncontested) and unopposed affidavit of debt in MI is considered prima facie evidence of an account stated. In other words it is proof you owe the amount the plaintiff claims is due in the eyes of the court and the plaintiff could move for summary disposition at that point. By then it may be too late to save yourself as a defendant.

The main point is here in MI if you don't properly file a counter affidavit to oppose the affidavit of indebtedness of the plaintiff, that may be all the proof or evidence a savvy plaintiff needs to win on account stated. If you DON’T submit a timely counter-affidavit pursuant to MCL 600.2145, you may still have options but things get a little more difficult.

I recall coming across MI cases in my research that showed since the plaintiff’s affidavit of debt wasn’t timely then there wasn’t a requirement for the defendant to timely file their affidavit in opposition. I also remember seeing some appeals opinions where the court ruled that since the complaint wasn’t properly filed or failed to follow proper format for a pleading then there technically isn’t a requirement for the defendant to submit the required affidavit in denial. (For example, is the plaintiff’s affidavit properly notarized and dated? Does their complaint follow proper format for a pleading? Does the complaint or affidavit make claims based on a written instrument? If so under the MI rules of civil procedure a copy of that written instrument must be attached to the pleading as an exhibit.) You get where I’m going with all of this.

If the plaintiff’s affidavit and complaint are legally insufficient then very likely there technically isn’t a legal requirement for a defendant to respond with a timely counter affidavit. You could certainly make a very compelling argument to that effect anyway!

I also remember MI appeals opinions or MI Supreme Court cases that showed even though an account stated was established under MCL 600.2145 that nothing precludes the defendant from questioning the rectitude, or accuracy of the account stated. Worst case scenario a defendant could probably focus on questioning the accuracy of the account. I don’t have the specific cases off hand but Google Scholar is a great place to start.

In my opinion MCL 600.2145 actually made things a little easier for self-educated defendants to fight back against an account stated. Since most plaintiffs are out for an easy default judgment they'll often just attach the affidavit to the complaint and file it, banking on the fact that you won't respond. Even if you do respond you need to do it properly with your own affidavit etc. In my case I managed to do my research and found out I had to submit a counter affidavit denying their affidavit of debt. I also discovered their affidavit of debt had to be dated within the period I've already mentioned. Once I properly filed my counter affidavit with my answer and started pointing out their affidavit was insufficient as a matter of law, I had already started to kill their account stated.

No longer was their b.s. affidavit from their own employee able to do their work for them. Now they had to continue on and actually PROVE an account stated existed in this case. That made things much more difficult for them.

Now FL and many other states may not have the affidavit rule similar to our MCL 600.2145. In that case the plaintiff has to PROVE an account stated exists from the get go. The requirements for that vary from state to state.

As a defendant you need to figure out exactly what constitutes an account stated in your according to the opinion of the Court in your State. The best way I learned was to search cases from the MI court of appeals and the MI supreme court. There I found TONS of cases that involved appealed motions for summary disposition/judgment that involved account stated cases. These were ideal for showing caselaw that outlines just how the Court determines an account stated. Once you know what the specific requirements are for an account stated then you can start outlining your arguments why an account stated doesn’t exist.

It’s important to note under an account stated the plaintiff generally does NOT need a signed credit card application or agreement. They also do NOT have to supply original credit card statements. Most courts accept a copy of the original. Also if the credit card company actually mailed the statements, the original would obviously no longer be in their possession, but would instead be in possession of the recipient.

In an attempt to prove an account stated in my case the Plaintiff basically claimed:

  1. 1. The Defendant used , or authorized use of, the credit card which is enough to establish the debt
  2. 2. The Defendant was mailed statements from the OC and failed to object or dispute charges
  3. 3. The Defendant received statements/demands for payment from the plaintiff and failed to object or dispute to them
  4. 4. The Defendant made a voluntary payment on the account and that shows they accept the debt

I’m sure those are 4 pretty common arguments in support of an account stated no matter where you live.

Here’s how I argued against their arguments in my opposition to their motion for summary disposition and how I was planning to argue at trial. . . (cont’d next post)

Share this post


Link to post
Share on other sites

Looking back on it, my arguments were pretty easy because of the Plaintiff’s proofs, or better stated, their lack thereof. They submitted alleged credit card statements. One was from allegedly early in the account and then all of the others were from the months leading up to the alleged date of default. There was somewhere between 2 and 3 years of statements missing in the middle. :confused:

1. The Plaintiff hasn’t proven the defendant used, or authorized use of the card. None of the statements showed any actual purchases or consumer transactions. (They consisted entirely of interest and financing charges, monthly member fees, overlimit fees etc.). None of this proved I used, or authorized use of, the alleged credit card.

Even with charges showing on the statements the Plaintiff would have to prove the statements were true and accurate copies of original credit records and that the defendant was the one who made the purchases or authorized them. Unless a defendant has admitted use or authorized use of the card, in my opinion they are more likely to focus on arguments 2-4.

2. The Defendant doesn’t recall receiving any statements. It’s also pretty hard to object to statements you never received! They cited case law in support of this argument that indicated a properly addressed and mailed statement MUST be presumed received by the addressee by the court.

Convincing at first glance, however if you dig up these cases you’ll likely see this “mailbox rule” in these cases involves a situation where there was obvious proof of mailing. Either there are actual proof of mailing receipts or testimony, deposition or affidavits outlining standard mailing procedures of the company that sent the letter/statements. Very often there is testimony from someone saying yes they did properly mail the statements. Usually these cases also involve an employee of the sender's company testifying to and describing common mailing practices within their company. The Plaintiff’s own self serving and unsubstantiated claim that the statements were mailed is not good enough.

I did a ton of research on this issue and was prepared with a bunch of info to argue. In my situation the plaintiff argued that a properly addressed and mailed document creates a presumption that the document was received by the intended recipient. In essence the court must presume the Postal Service is going to do their job correctly. It’s a little difficult to argue you didn’t receive years worth of properly addressed and mailed credit card statements.

In the case they cited in support of their argument there was deposition/testimony of common mailing practices and affidavits declaring the letter was actually mailed properly addressed with correct postage prepaid. None of that was true with this case.

In my eyes the key here is properly addressed AND MAILED statements. In my case the alleged statements did appear to be properly addressed, so what. Did they have proof of mailing? There was NOTHING from the OC that said the alleged statements were true and accurate let alone any description anywhere that said these statements were mailed.

An alleged document can be properly addressed all day, but if there is no testimony or evidence indicating the statements were mailed how do we know they were ever even mailed? Just because the plaintiff’s attorney says so? Is there anyone providing proof that the statements were placed in an envelope, with proper postage attached and then deposited in a mail box or left with a postal worker. In my case there was not.

This mailbox rule approach involves creating a presumption. Google what a "presumption" means in legal info. It is basically taking two or more facts and then those FACTS create a presumption that something else occurred. For example, we can prove “A” occurred and we know for a fact that “B” also occurred. Therefore we could presume after KNOWING A+B occurred that likely A+B=C. xhitwallx In our example if we know for a FACT that the statements were properly addressed and the court knew for a FACT (with proof) that the statements were mailed with proper postage, then the court should presume the statements were received.

The plaintiff in my case wasn’t asking the court to take two facts and create a reasonable presumption. They were asking the Court to take these unauthenticated statements showing a proper address and presume that they were mailed (with NOTHING to support it). They were then basically asking the Court to take that presumption and further presume that the statements were actually received. I’m no attorney but I don’t think that’s how a presumption works…at least that’s not what I learned in my self taught legal crash course.

On yet another side note I also remember reading that the entire mailbox rule presumption issue just allows the court to form a rebuttable presumption. It can be rebutted with an affidavit or evidence in many cases.

I denied receiving statements from the OC in my answer, in my counter-affidavit, and throughout the process. I think I had a very strong argument for the whole “presume the statements were received” issue. Since I had basically knocked out this argument I went on down the list figuring they’d focus on argument #4 and alleged payments. This would also make sense for them because if they could show a payment was made then they might also be to support their argument that credit card statements were received and not objected to.

3. The third argument was easy to defeat in my case. I had sent a validation request upon the first communication with the plaintiff, sent it certified mail, and had proof of delivery. I also faxed it and had copies of everything. The account with /\/\idland also showed as “disputed by consumer” on my credit report…so obviously they received, and were aware of, my disputes with them.

4. I believe the plaintiff was left with trying to prove a payment was made to establish an account stated in my case. Their alleged credit card statements showed one alleged payment. There was no proof that the payment was actually made, let alone that I was the one who made the payment. A copy of a canceled check etc. may work in this case, but an alleged payment on an unauthenticated and alleged statement is probably not enough.

Since I had no knowledge or recollection of the account I had no idea what that payment was. Absent a copy of a cancelled check with my signature or something similar there was no way I was going to let these weasels argue an alleged payment on an unauthenticated credit card statement served as proof of indebtedness!

5. Additional General arguments:

In addition to the arguments specifically opposing their arguments above I also had several further arguments. I found a bunch of case law in MI that defines what an account stated is. One central theme is an account stated requires “mutual assent” that the balance claimed due is correct and accurate. When you’ve disputed things the entire way it’s pretty hard to say “mutual assent” exists.

I also planned on arguing they couldn’t show how the balance was calculated or determined during their huge gap in statements etc.

Another point I was going to argue is that in my research I found that an account stated occurs when an open account is CONVERTED to an account stated. In my case the Plaintiff couldn't even really prove an open account ever existed, let alone one that could be converted to an account stated. No application, no proof the card was ever used, and no proof the defendant ever made a payment. On top of that I had proof I had disputed the debt with the plaintiff as well as my counter affidavit. That certainly doesn't sound like "mutual assent" to me.

Edited by SingleDadJames

Share this post


Link to post
Share on other sites

Well there you have it. There is a very basic idea of how common arguments might look in an account stated case and how I might argue against them. Unfortunately there is no quick and easy universal answer to defeating an account stated case. You need to spend DOZENS of hours reading, researching, looking up cases and cross referencing them and it all takes time.

I found my State’s court of appeals published and unpublished opinions to be amazing sources of info. They showed how an account stated (and also a motion for summary judgment) can be defeated and also won. Keep in mind you can’t just make the generic arguments in opposition I’ve outlined without supporting it with court rules or case law. I gave a general idea of what to look for and how you might approach an account stated, but I can’t do the work for you!

Some final food for thought:you’ll most likely get served with a Motion for Summary Judgment etc. before you ever have to argue at trial. This is actually a good thing because you have a little more time to research as opposed to thinking on your feet! If you do get hit with a motion for summary judgment in an account stated case the plaintiff will of course cite cases and court rules that they’ll use to support their arguments.

They’ll often attempt to “stretch” cases in an effort to make them relate to and support their arguments in your specific case. The Plaintiff knows that the odds that a lowly pro se or busy judge is going to critically go through each cited case with a critical eye are pretty slim. Use that to your advantage!

Make sure you look everything up and take nothing for granted. Just because the Plaintiff cited it doesn’t mean it’s applicable (or even true). In my case some of the cases cited in the Plaintiff’s Motion for Summary Disposition didn’t even really apply to the situation at hand. Some of the others contained information that actually helped my case against THEM once I read the case. They were also dead wrong on some of their cited court rules as well. So be sure to check ALL of their citations and be prepared to turn the tables and use the info against them!

I’ve said this a bunch of times but I want to point this out again:

I'm NOT an attorney so I can't and won't provide any legal advice. What I posted here is based on nothing more than my own experience and own my interpretation of about 2/3 of a year’s worth of research, etc. I wanted to share some of what I’ve discovered along the way and help possibly point pro-se litigants where to start some of their legal research. Always remember I have ZERO legal education and it’s entirely possible I’m dead wrong on many issues I discuss here. I do NOT want to mislead anyone who comes to this great site looking for help. Like many attorneys I’ve witnessed in Court, I only THINK I know what I’m talking about. Take it for what it’s worth! (::tp::)

  • Like 1

Share this post


Link to post
Share on other sites

James, this information is extremely helpful. In you other thread you pointed out the Google Scholar, which I had no idea about and I found it very useful for looking up the various cases. You also mentioned about a "strategy" that you picked up from the MustangGirl.. - were you referring to the way she pressed for Motion for Direct Verdict, or was there another tactic besides that?

Thank you for you input!

Share this post


Link to post
Share on other sites

Very helpful. Thank you.

I have a question about your 1,2,3,4. Did your complaint actually state these things or did you infer that they were claiming account stated and go from there (the four requirements of an account stated etc)? My actual complaint is really vague and I'm actually preparing arguments against both account stated and breach of contract because I can't figure out exactly what they are claiming. Your explanation here is GREAT as a basis for arguing against account stated. Again, thank you.

Share this post


Link to post
Share on other sites
James, this information is extremely helpful. In you other thread you pointed out the Google Scholar, which I had no idea about and I found it very useful for looking up the various cases. You also mentioned about a "strategy" that you picked up from the MustangGirl.. - were you referring to the way she pressed for Motion for Direct Verdict, or was there another tactic besides that?

Thank you for you input!

Thanks MrPunch! I truly hope my mental download here and my long rambling posts are helpful in some way. It's all nothing more than my approach and my opinions but I still think it's at least a starting point to give the panicked newbie a direction to head.

I too was unaware of Google Scholar until about a month or two ago. I need to go back and see who exactly pointed that out to me on here because I owe them a big thanks too! It's pretty much more of the same but another great site is:

http://courtweb.pamd.uscourts.gov/courtweb/FullText.aspx

Yes when I mentioned a strategy from my Mustang friend I was indeed referring to the motion for a directed verdict. It's a great way to end things quickly at trial if the plaintiff didn't do their job. Why bother presenting evidence or doing a bunch of oral arguments and talking that isn't necessary? I was worried it applied more to jury trials from the wording of our rules of civil procedure and the example cases I found, but it indeed applies in bench trials as well.

Share this post


Link to post
Share on other sites
Very helpful. Thank you.

I have a question about your 1,2,3,4. Did your complaint actually state these things or did you infer that they were claiming account stated and go from there (the four requirements of an account stated etc)? My actual complaint is really vague and I'm actually preparing arguments against both account stated and breach of contract because I can't figure out exactly what they are claiming. Your explanation here is GREAT as a basis for arguing against account stated. Again, thank you.

No. The complaint in my case never specifically stated a lot of these things. I sort of inferred that they were proceeding on an account stated because of the fact that their complaint had nothing but the affidavit attached and within the complaint it said something about "Plaintiff's assignor has completed performance and has rendered account stated; affidavit attached".

The complaint looked something like this:

1. This cause of action arose within the jurisdiction of such and such court in suchandsuch county..yadda yadda

2. Plaintiff is soandso and the predecessor in interest is the alleged OC

3. Plaintiff allowed defendant to charge goods/services on open account and upon defendant's promise to pay same.

4. Plaintiff's assignor sent statements on alleged account #suchandsuch to the Defendant who failed to dispute charges or object within reasonable frame of time.

5. Defendant has not paid balance owing despite plaintiff and plaintiff's assignor's demands for payment

6. Defendant failed to pay and has defaulted on account

7. Plaintiff's assignor has completed performance and has rendered account stated; affidavit attached.

8. Defendant is justly indebted to Plaintiff over and above all legal counterclaims in amount of $xxxxxx

That was basically the entire complaint. The plaintiff NEVER pointed out what was required for an account stated. They didn't even really mention an account stated or any of the until their Motion for Summary Disposition.

Then they mention only some of the requirements in general self serving arguments in their favor. Obviously they'll try and make it look like they've met the requirements of an account stated. That's why it's YOUR job to do all the dirty work and look up cases that show what ALL of the elements of an account stated are.

Even if you do the dirty work they'll most likely throw a motion for summary disposition/judgment at you before trial. That's yet another wonderful opportunity for a pro se defendant to drop the ball. You have to properly oppose that motion depending on the nature of the rule the motion was brought under. Some forms will allow only the pleadings to be considered. Other forms require a defendant to put forth affidavits and evidence in opposition. If you fail to file a properly formatted affidavit and/or evidence in these instances you can make the best arguments against the existence of an account stated and it still won't matter. The bottom line is you have to do your homework.

You are definitely doing the right thing by preparing to argue against both account stated and breach of contract. The plaintiff in my case threw in breach of contract argument in their motion for summary disposition. I think it's sort of a catch all approach. I think the requirements for breach of contract are even tougher for a jdb to prove.

I personally believe the complaints are intentionally vague for a couple of reasons:

1. It's easier. If they are shooting for a no-show default judgments why should they work any harder than they have to. If uncontested, their affidavit and generic complaint will work just fine!

2. It makes things harder for you and maybe a little easier for them. It's hard to know what cause of action they are actually claiming and how to defend when they make some vague statements. If they leave it general and you attack account stated they can always try to backtrack and say their complaint was also referring to breach of contract. :confused:

It certainly took me awhile to discover what the heck "plaintiff's assignor completed performance and rendered an account stated; affidavit attached" was really all about. It would have been much easier for me to decipher had the complaint just said they allege I owe them money based on Account Stated theory.

As you can see my complaint did allege they were proceeding under an account stated, but it didn't describe any details on what the requirements are. They won't go there until a motion for summary judgment, trial, or something similar. My complaint did NOT mention any of the arguments 1-4 I mentioned in my first post. Those are the 4 main arguments they tried to use in their motion for summary disposition to support their claim of account stated. They are undoubtedly the same arguments they would have used had things progressed at trial.

It's up to you to call their bluff and show the court, NO...this is actually what the Court considers an account stated and here is why no account stated exists. It's WORK but can be done once you start digging in past cases, court opinions, and look at why many cases are appealed.

Edited by SingleDadJames

Share this post


Link to post
Share on other sites
Brilliant!!! That's all I can say. Your posts really help clear the mud from the water.

Lol...check your PM's I probably just wasted 10 minutes of my day lol!

Keep in mind that this is nothing but general info I came across doing WAY too much research and preparation. It's not gospel and could contain wrong assumptions on my part. What i hope it does do is provide a look at my general train of thought and help others come up with their own answers. Hopefully somewhere along the line those more knowledgeable will come along and help clear up inaccuracies and add to the discussion.

Edited by SingleDadJames

Share this post


Link to post
Share on other sites

Back to affidavits, I found this case, good, bad, useful???

h tt p://scholar.google.com/scholar_case?case=6462789062261018339&q=untimely+filed+affidavits+michigan&hl=en&as_sdt=2,23

20 post limit on posting links??? Just remove spaces in link, copy and paste.

Share this post


Link to post
Share on other sites
Back to affidavits, I found this case, good, bad, useful???

h tt p://scholar.google.com/scholar_case?case=6462789062261018339&q=untimely+filed+affidavits+michigan&hl=en&as_sdt=2,23

20 post limit on posting links??? Just remove spaces in link, copy and paste.

That case is really not useful for anything regarding account stated. I skimmed it but to me it seems to be more about summary judgment/disposition. In a motion for summary disposition/judgment and in opposition to such a motion you often need to present affidavits to counter affidavits of the other party. Useful for those looking for info on summary judgment opposition, but not account stated.

I think I can see how you were searching google scholar and knowing a little about your case I can assume why. You'd be better off searching google scholar for MI court opinions and searching with "account stated' somewhere in there along with "affidavits" etc. Also try searching the applicable rule/law at hand "MCL 600.2145" etc.

  • Like 1

Share this post


Link to post
Share on other sites

VERY VERY HELPFUL THANKS!

It fits with the type of outline I'm trying to put together for each possible outcome, I'm trying to get it all set up in a 3 ring binder and I'm going to have my rules in another binder so I can reference things that might come up.

One of my goals though is to make and post a list with all the commonly used applicable Michigan case law by topic for and against, we are on such a steep learning curve that I think a more defined starting point would be helpful there is so much to take in and the roughly 45 days from the summons to pre trial is just not enough time.

Share this post


Link to post
Share on other sites

I do not want to highjack your post James, but can you Dave and all of the Michigan people on here look at my posts on GE Money Bank Suing my Wife. I copied the complaint, her answer and the affidavit.

In the second thread I copied the production of docs and Interrogatories I wrote out. Please give me some feedback and caselaw I can use when she gets in the mail the MSJ. I am pretty sure I will not get answers to my discovery, so I will have to file a motion to compel. If I can get past the MSJ, then the attorney already told is that they will not have a witness from the OC at trial. Thanks.

Share this post


Link to post
Share on other sites
Guest
This topic is now closed to further replies.