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Original Creditor and account stated


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What are the items the OC has to prove to prevail in an account stated claim?

Do the items differ by state?

California

"The essential elements of an account stated are: (1) previous transactions between the parties establishing the relationship of debtor and creditor; (2) an agreement between the parties, express or implied, on the amount due from the debtor to the creditor; (3) a promise by the debtor, express or implied, to pay the amount due." Zinn v. Fred R. Bright Co., 271 Cal. App. 2d 597 - Cal: Court of Appeal 1969

Texas

"The elements of an account stated claim are (1) transactions between the parties give rise to indebtedness of one to the other; (2) an agreement, express or implied, between the parties fixes an amount due; and (3) the one to be charged makes a promise, express or implied, to pay the indebtedness.

I believe they're pretty much the same from state to state." Budzyn v. Citibank (South Dakota), NA, Tex: Court of Appeals, 1st Dist. 2010

Utah

"Consequently, the essential elements of an account stated include "previous transactions between the parties giving rise to an indebtedness from one to the other, an agreement between the parties as to the amount due and the correctness of that amount, and an express or implied promise by the debtor to pay the creditor the amount owing." Dementas v. Estate of Tallas, 764 P. 2d 628 - Utah: Court of Appeals 1988

I think it's pretty much the same across the country.

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The biggest reason they use account stated is they have no signed contract to enter as evidence.

The doctrine of account stated is an alternative means of establishing liability for a debt other than a showing of an express contract. , It can be an easier claim for debt collectors to make. see Am. Druggists Ins. v. Thompson Lumber Co.

In stating an account, two things are necessary:

1) Both parties must have seen and acknowledged that there was an agreement for money owed to the creditor. Usually, there are prior or ongoing transactions between the creditor and debtor.

2) Both parties must also agree that the amount owed is the correct amount.

In proving an account stated, it is not necessary to show that both parties actually did examine the claimed debt. There does not need to be an express agreement to the total of the claimed debt. Both of the above requirements can be implied from the circumstances. If, for example, there is no objection to a statement of account of invoice for an unreasonable period of time, it can be inferred that the debtor agrees to the amount owed. see this case Meagher v. Kavli.

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Is there case law or any authority that states account stated is not a "written contract"? In other words, is there any authority that account stated claims are subject to a shorter SOL ?

I'm thinking that would be based upon state law. If this is a credit card debt, some states differentiate between a written contract and a credit card. Others, like Arizona, don't. In Arizona, a credit card is considered a contract. I could be wrong, but I don't think an account stated claim would change that.

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Account stated is a shortcut theory of litigation that precludes any real evidence. It is based upon "take our word for it." You try it and see what happens. The elements must be specifically pleaded and proven. If even one fails, you can win. The "defendant retained the billing statements for an unreasonabe time" can be challenged. I posted rogs for this. There is no specific definition of "unreasonable time." I counterclaimed a bank for not taking any action in a reasonable amount of time (failue to mitigate) and they stated that one year was not unreasonable. Then they claim that 30 days for the dispute is reasonable. They should have proof of mailing, which they never have, proof of a non-dispute, (Gee, I called you 20 times, got any evidence to the contrary?) and ultimately proof that you agreed to the terms of the contract they can't prove they sent you or that they can justify by exportation of their state statutes.

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Anyone in Cali know much about Bill of Particulars?

I recently sent a BOP but did not send POS with it. I just had my debt mediaton conference and brought up my request for BOP that had not been answered. The Plaintiffs lawyer, who was 20 min late, told me I did not send a POS with it -only certified mail, so it did not count. I then received a copy of some statements (atleast 4 months worth) with only the balance amount and along with this LVNV sent, I am assuming, is a copy of the letter stating that Citbank has sold the account and all rights to LVNV.

Is this sufficient? I plan to resend BOP w/ POS and requesting more specific details on the account. Any advice? Would appreciate any help and advice.

Edited by LukaCA
mis wording
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"The essential elements of an account stated are: (1) previous transactions between the parties establishing the relationship of debtor and creditor; (2) an agreement between the parties, express or implied, on the amount due from the debtor to the creditor; (3) a promise by the debtor, express or implied, to pay the amount due." (Zinn v. Fred R. Bright Co. (1969) 271 Cal.App.2d 597, 600 [76 Cal.Rptr. 663], internal citations omitted.)

"The agreement of the parties necessary to establish an account stated need not be express and frequently is implied from the circumstances. In the usual situation, it comes about by the creditor rendering a statement of the account to the debtor. If the debtor fails to object to the statement within a reasonable time, the law implies his agreement that the account is correct as rendered." (Zinn, supra, 271 Cal.App.2d at p. 600, internal citations omitted.)

"An 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. When the account is assented to, ' "it becomes a new contract. An action on it is ot founded upon the original items, but upon the balance agreed to by the parties. . . ." Inquiry may not be had into those matters at all. It is upon the new contract by and under which the parties have adjusted their differences and reached an agreement.' " (Gleason v. Klamer (1980) 103 Cal.App.3d 782, 786-787 [163 Cal.Rptr. 483], internal citations omitted.)

"To be an account stated, 'it must appear that at the time of the statement an indebtedness from one party to the other existed, that a balance was then struck and agreed to be the correct sum owing from the debtor to the creditor, and that the debtor expressly or impliedly promised to pay to the creditor the amount thus determined to be owing.' The agreement necessary to establish an account stated need not be express and is frequently implied from the circumstances. When a statement is rendered to a debtor and no reply is made in a reasonable time, the law implies an agreement that the account is correct as rendered. Actions on accounts stated frequently arise from a series of transactions which also constitute an open book account. However, an account stated may be found in a variety of commercial situations. The acknowledgement of a debt consisting of a single item may form the basis of a stated account. The key element in every context is agreement on the final balance due." (Maggio, Inc. v. Neal (1987) 196 Cal.App.3d 745, 752-753 [241 Cal.Rptr. 883], internal citations omitted.)

"An account stated need not be submitted by the creditor to the debtor. A statement expressing the debtor's assent and acknowledging the agreed amount of the debt to the creditor equally establishes an account stated." (Truestone, Inc. v. Simi West Industrial Park II (1984) 163 Cal.App.3d 715, 726 [209 Cal.Rptr. 757], internal citations omitted.)

" 'The common count is a general pleading which seeks recovery of money without specifying the nature of the claim . . . . Because of the uninformative character of the complaint, it has been held that the typical answer, a general denial, is sufficient to raise almost any kind of defense, including some which ordinarily require special pleading.' However, even where the plaintiff has pleaded in the form of a common count, the defendant must raise in the answer any new matter, that is, anything he or she relies on that is not put in issue by the plaintiff." (Title Ins. Co. v. State Bd. of Equalization (1992) 4 Cal.4th 715, 731 [14 Cal.Rptr.2d 822, 842 P.2d 121], internal citations and footnote omitted.)

"The account stated may be attacked only by proof of 'fraud, duress, mistake, or other grounds cognizable in equity for the avoidance of an instrument.' The defendant 'will not be heard to answer when action is brought upon the account stated that the claim or demand was unjust, or invalid.' " (Gleason, supra, 103 Cal.App.3d at p. 787, internal citations omitted.)

"An account stated need not cover all the dealings or claims between the parties. There may be a partial settlement and account stated as to some of the transactions." (Gleason, supra, 103 Cal.App.3d at p. 790, internal citation omitted.)

"In the common law action of general assumpsit, it is customary to plead an indebtedness using 'common counts.' In California, it has long been settled the allegation of claims using common counts is good against special or general demurrers. The only essential allegations of a common count are '(1) the statement of indebtedness in a certain sum, (2) the consideration, i.e., goods sold, work done, etc., and (3) nonpayment.' " (Farmers Ins. Exchange v. Zerin (1997) 53 Cal.App.4th 445, 460 [61 Cal.Rptr.2d 707], internal citations omitted.)

"A common count is not a specific cause of action, . . . rather, it is a simplified form of pleading normally used to aver the existence of various forms of monetary indebtedness, including that arising from an alleged duty to make restitution under an assumpsit theory. When a common count is used as an alternative way of seeking the same recovery demanded in a specific cause of action, and is based on the same facts, the common count is demurrable if the cause of action is demurrable." (McBride v. Boughton (2004) 123 Cal.App.4th 379, 394 [20 Cal.Rptr.3d 115], internal citations omitted.)

Secondary Sources

4 Witkin, California Procedure (4th ed. 1997) Pleading, � 515

1 Witkin, Summary of California Law (9th ed. 1987) Contracts, �� 917, 918

1 California Forms of Pleading and Practice, Ch. 8, Accounts Stated and Open Accounts, �� 8.10, 8.40-8.46 (Matthew Bender)

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37 N.Y.2d 151 (1975)

Interman Industrial Products, Ltd., Appellant,

v.

R. S. M. Electron Power, Inc., Respondent.

Court of Appeals of the State of New York.

Argued April 28, 1975.

Decided June 11, 1975.

Jessel Rothman for appellant.

Irwin Littman for respondent.

Chief Judge BREITEL and Judges JASEN, JONES, WACHTLER, FUCHSBERG and COOKE concur.

152*152GABRIELLI, J.

The issue presented may be phrased as follows: Does an account stated, unsupported by any written document subscribed by the party to be charged thereunder, constitute "an instrument for the payment of money only" entitling the moving party to accelerated summary judgment pursuant to the procedure provided by CPLR 3213? Both Special Term and the Appellate Division held that an account stated does not constitute an instrument for the payment of money only, and have ruled that the appellant may not avail itself of the procedure provided in CPLR 3213. We affirm.

The defendant (R. S. M.) is engaged in the business of producing silicon transistors and rectifiers for power equipment manufacturers, and plaintiff Interman is a supplier of silicon material. During the period from April 12, 1973 to August 7, 1973, R. S. M. issued purchase orders for the supply of silicon slices, and Interman contends that it delivered the requested materials pursuant to these purchase orders without 153*153 objection or protest. It is further alleged that the agreed value of this merchandise was in the amount of $40,839.94. Defendant, disputing this contention, asserts that Interman did not supply the goods in the quantities ordered, or at the prices specified, and that the appellant unilaterally raised its prices without respondent's consent or approval.

During May, 1973 through August, 1973 Interman furnished the purchaser with a written statement of account for each month which purportedly represented the merchandise shipped and delivered during the prior month. Under these accounts, payment was due net 30 days, and each statement of account set forth the following request: "Please notify us promptly if this statement does not agree with your records." R. S. M. does not deny that it received these accounts stated totaling $40,839.94, nor does it assert that it filed any objection thereto, but in response to plaintiff's motion for summary judgment pursuant to CPLR 3213 both the accuracy and the correctness of these statements of account are disputed.

The parties are also in disagreement as to the effect of a check for $8,693.15 delivered by R. S. M. on August 6, 1973. According to R. S. M. payment on this check was stopped as a result of alleged violations of the contracts. Interman, on the other hand, avers that payment on this check was stopped because there were insufficient funds in the bank account.

Claiming that the sum of $40,839.94 was owed to it upon these accounts stated, Interman served a summons, affidavit and notice of motion by which it sought an accelerated summary judgment upon the ground that the action was based on instruments for the payment of money only, pursuant to the procedure set forth in CPLR 3213 which states: "When an action is based upon an instrument for the payment of money only * * * the plaintiff may serve with the summons a notice of motion for summary judgment and the supporting papers in lieu of a complaint."

As was stated nearly one hundred years ago by Chief Judge FOLGER, "[a]n account stated is an account balanced and rendered, with an assent to the balance express or implied; so that the demand is essentially the same as if a promissory note had been given for the balance" (Volkening v DeGraaf, 81 N.Y. 268, 270); and in Newburger-Morris Co. v Talcott (219 N.Y. 505, 512) Judge CARDOZO wrote as follows: "the very meaning of an account stated is that the parties have come together and agreed upon the balance of indebtedness, insimul 154*154 computassent, so that an action to recover the balance as upon an implied promise of payment may thenceforth be maintained". Thus, while the mere silence and failure to object to an account stated cannot be construed as an agreement to the correctness of the account, the factual situation attending the particular transactions may be such that, in the absence of an objection made within a reasonable time, an implied account stated may be found (Corr v Hoffman, 256 N.Y. 254, 266).

Interman, cognizant of the fact that R. S. M. never expressly ratified the propriety of the accounts stated, argues that it may be found to have impliedly acquiesced in the correctness of the accounts by its failure to have interposed an objection thereto prior to the institution of this proceeding for summary judgment. However, even if we accept such an assertion that an implied account stated may be found to have existed, this, in and of itself, is not sufficient to entitle the appellant to avail itself of the procedural device provided by CPLR 3213.

CPLR 3213 is intended to provide a speedy and effective means of securing a judgment on claims presumptively meritorious. In the actions to which it applies, "a formal complaint is superfluous, and even the delay incident upon waiting for an answer and then moving for summary judgment is needless." (First Preliminary Report of Advisory Committee on Practice and Procudure, p 91; NY Legis Doc, 1957, No. 6 , p 91.) However, in order to qualify for CPLR 3213 treatment, it is incumbent upon the appellant to show that the accounts stated, on which its action is based, "are instruments for the payment of money only." The question of what constitutes an "instrument for the payment of money only" may appear to be a vexing problem (4 Weinstein-Korn-Miller, NY Civ Prac, par 3213.02a), and, according to one commentator, there is already a plethora of irreconcilable case law on this subject (Siegel, Practice Commentaries, McKinney's Cons Laws of NY, Book 7B, CPLR 3213:3, p 829). The Advisory Committee's reports do not define what is meant by "an instrument for the payment of money only" nor is case law prior to the enactment of the CPLR informative, since CPLR 3213 had no earlier counterpart (4 Weinstein-Korn-Miller, NY Civ Prac, par 3213.02a).

For the most part, the cases permitting use of the CPLR 3213 procedural device have dealt primarily with some variety 155*155 of commercial paper in which the party to be charged has formally and explicitly acknowledged an indebtedness (Banco Portugues Do Atlantico v Fonda Mfg. Corp., 31 AD2d 122, affd 26 N.Y.2d 642 [an accepted sight draft]; Seaman-Andwall Corp. v Wright Mach. Corp., 31 AD2d 136, affd 29 N.Y.2d 617 [promissory note not in dispute]; Rhodia, Inc. v Steel, 32 AD2d 753 [unconditional guarantee of a promissory note]; see, also, the following cases all of which had to do with promissory notes Horne v Law Research Serv., 35 AD2d 931; Artistic Greetings v Shalom Greeting Card Co., 36 AD2d 68; Badische Bank v Ronel Systems, 36 AD2d 763; Ballantine & Sons v Boston Celtic Basketball Club, 36 AD2d 914; Mills v Ryan, 41 AD2d 689).

In those cases in which use of the CPLR 3213 procedural device has been denied, it has been held that the actions were not based on instruments for the payment of money only. Thus, the motion for summary judgment was denied in an action by a depositor for paying out on a forged instrument (Signal Plan v Chase Manhattan Bank, 23 AD2d 636); in an action on a contract to supply snow removal equipment (Nasti Sand Co. v Almar Landscaping Corp., 34 AD2d 554); in an action on an employment contract (Rickert v Packet Facilities, 35 AD2d 711); in an action on a separation agreement to recover payments due thereunder (Wagner v Cornblum, 36 AD2d 427), and in an action on a bond and mortgage (New York Conference Assn. of 7th Day Adventists of Syracuse v 915 James St. Assoc., 63 Misc 2d 38). In each of these cases the document sued upon required something in addition to the defendant's explicit promise to pay a sum of money.

The present case is distinguishable from and anomalous to the cited authorities where CPLR 3213 relief was granted since the instruments upon which plaintiff bases its action have not been subscribed by the defendant. The most cogent analysis of the standard to be applied in ascertaining whether an instrument qualifies for CPLR 3213 treatment was enunciated in Seaman-Andwall Corp. v Wright Mach. Corp. (31 AD2d 136, affd 29 N.Y.2d 617, supra) wherein it was stated that if a prima facie case would be made out by the instrument and a failure to make the payments called for by its terms, the moving party would be entitled to summary judgment unless the other party came forward with evidentiary proof sufficient to raise an issue as to the defenses to the instrument. In the case before us, the plaintiff's assertions do 156*156 not provide a basis for concluding that it has made out a prima facie case since there is no written instrument by which the defendant has expressly obligated itself to make the payments required by the accounts stated. Thus, the fact that the appellant relies upon an implied account stated rather than upon an account stated evidenced by a promissory note becomes critical because in the former there is no instrument to establish a prima facie case. That is not to say, however, that an account stated evidenced by a promissory note would suffice for CPLR 3213 purposes. In such an instance, as Mr. Justice SHAPIRO indicated in his concurring opinion, although the account stated does not serve as a predicate for summary judgment, the promissory note evidencing the indebtedness might (45 AD2d 34, 37).

Accordingly, the order of the Appellate Division should be affirmed, and the certified question answered in the affirmative.

Order affirmed, with costs. Question certified answered in the affirmative.

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Is there case law or any authority that states account stated is not a "written contract"? In other words, is there any authority that account stated claims are subject to a shorter SOL ?

Account stated is a theory of litigation accepted by most courts, although I have never been able to find any statute establishing it, or even jury instructions. SOl has no bearing on this theory. Neither does contract law, apparently. It's a shortcut method used to avoid proving their case. I cannot understand why courts accept this garbage. They do have to prove the elements though, and if you can defeat one you can be that much closer to a win. Most times, they don't even plead them in the complaint. I guess we're supposed to be mind readers. Lately, they don't even plead a cause of action.

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