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California Account Stated - What number of statements required of JDB?

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Hey all!

I am asking this question for a friend who is up against TD Bank for Target. They have given this friend a copy of a one page signed application, several years of statements (but by no means all), and two pages of the card agreement which is CLEARLY incomplete. The purchase agreement they sent my friend mentions two other documents but these were not sent for reference.

The only COA is Account Stated...and at this point, we're wondering how bad its looking. I know TNB used CCP98's in the past which has given us that amazing case law calawyer found, and I'm honestly hoping they try that again and no witness arrives for the OC.

What's your thinking on chances of winning this now and what my friend might do to help their chances?

Thanks everybody.

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I would have to say that there is no set number and the issue is dependent on state law and court rulings. Some states require an accounting from the last time the account was at 0. Others simply require that you show enough statements to show activity and acceptance of the balance and charges. If the statements show charge and payment activity, then it is likely enough to prove account stated.

As for the purchase agreement, it sounds like TD Bank bought or administered Target Credit Cards. If so, then odds are, the are almost like an OC to the point where the agreement will be accepted. Look in the news as this would have been a major story (a Google search should help there).

Your only way out may be a CCP 98 and force them to produce a witness to authenticate the statements. If they do produce said witness though, you are probably sunk. Starting to come up with a reasonable settlement may not be a bad idea either. Simply put, some creditors are ready for court.

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The following is from an article published in Sargent Shriver National Center on Poverty Law Clearinghouse Review, in March/April 2010. Note the suggestion that the account at issue must be a closed account at the time the deal is struck. That makes sense, for lots of reasons.


In California, under Mercantile Trust Company v. Doe, 146 P. 692, 695 (Cal. 1914), "to turn an account into  an account stated, it must have been rendered with a view of ascertaining the balance and making a final adjudication of the matter involved in the account ...." Under Mike Nelson Company v. Weston Hathaway, 2005 U.S.  Dist. LEXIS 27377, at 8, a claim of account stated has three elements: an underlying debt from one party to  another, a balance struck, and a promise to pay. 43 Clearinghouse Rev. 542 (2010)
The elements of an account stated in writing are a preexisting debt, a closed account with the parties agreeing on the  balance due, and a written agreement to pay. Unlike the other common counts, an account stated is not an account at all but a new contract, formed by a promise to pay, with consideration being the exchange of an old debt for a new promise to pay. Id.
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Yes, I am aware of the new requirements, which actually has me more worried. Particularly troubling is the part that says the last statement is sufficient. I do hope I am reading that incorrectly, but don't think I am.


The account was prior to the 2000's, if that helps. The suit started with Target as the plaintiff and changed to TD bank. I'm fairly certain the way it happened makes TD a buyer and not an OC.

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I assume you know about Calif's new Fair Debt Buying  Practices Act, which imposes new requirements on jdbs about authenticating a debt





This is interesting:




1788.52. (a) A debt buyer shall not make any written statement to a debtor in an attempt to collect a consumer debt unless the debt buyer possesses the following information:





So, does this mean a debt buyer with no proof can make all the "non written" statements to a debtor it wants to? (i.e., "we don't have the paperwork, so we're just going to blow up your phone . . .")


How does that reconcile with the 5-day requirement of 15 U.S.C. 1692g(a)? 


I can see it now. Debt buyers in California are going to waste no time testing the argument that they couldn't comply with the FDCPA without violating California law, and vice versa. Why can't anyone get this right?

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Because to get this right would cost actual money that no one wants to pay, especially when it is easier to just assume.

The OP also mentions that the debt was from before 2000. Is that the DOFD or simply when the account was opened? If the DOFD was within the past 4 years, they are still fine to sue. If not, then the debtor needs to add SOL to their list of defenses.

In any case, I still stand by my statement that all then need are a sufficient number of statements to prove that an account existed and that the debtor agreed to the terms by using the account. Whatever that number is would be dependent upon many factors in which each case is different.

As for the CA law thing, I think that is for purposes of collection, not court. Remember that what is used for validation under the FDCPA would not hold up as proof in court so I think this is the same thing, only just a tad bit tighter.

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Based upon the following, I'm wondering if more than one statement is needed to prove an account stated.  Or, at least, the case law might cast doubt that all the statements are needed.



The key element in every context is agreement on the final balance due. (See 1 Witkin, Summary of Cal. Law (9th ed. 1987), Contracts, § 917, p. 820.)

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. (Zinn v. Fred R. Bright Co. (1969) 271 Cal. App.2d 597, 600 [76 Cal. Rptr. 663, 46 A.L.R.3d 1317]; California B.G. Assn. v. Williams (1927) 82 Cal. App. 434, 442 [255 P. 751].)

"The agreement necessary to establish an account stated need not be express and is frequently implied from the circumstances." Maggio, Inc. v. Neal, 196 Cal.App.3d 745, 753, 241 Cal.Rptr. 883 (Cal.Ct.App.1987); see Hansen v. Fresno Jersey Farm Dairy Co., 220 Cal. 402, 31 P.2d 359, 362 (1934) ("[T]he assent of the party sought to be charged may be implied from his conduct.").

Acquiescence to the debt arises from a failure to object within "a reasonable time," such that the law "implies an agreement that the account is correct as rendered." Maggio, Inc. v. Neal, 196 Cal.App.3d 745, 753, 241 Cal.Rptr. 883 (Cal.Ct.App.1987).

The question of what length of time is "reasonable" "is one of law for the court." Crane v. Stansbury, 173 Cal. 631, 636-37, 161 P. 7 (Cal.1916).

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First off, my opinion is dependent on state law so one answer does not fit everyone. In Minnesota, most consumer lawyers agree that the law states that in order to prove account stated, one must prove the balance of the account from $0. Other states however are not that tough.

If I were a creditor and wanted to sue, to make sure I have an ironclad case, I would probably come up with statements that show the account was used and that the balance at the time the account was used and the terms of account were agreed to. Then I would come up with subsequent statements if I was charging interest to prove how I came up with the lawsuit figure.

Now, could one statement prove account stated? That might be possible if the statement proves that the account, its terms, and the balance were agreed upon. However, it would not be as ironclad as multiple statement would be.

Now if all the creditor had was a statement with a balance, that might prove account stated and it might not prove it. One would have to prove that said statement was mailed to the last known address of the debtor or the debtor was otherwise made known of that balance and agreed to it. Otherwise, all you have is a statement that says someone owes someone else money. Just because it is written does not make it fact.

The issue is that most creditors wait 2 - 3 years to sue. Since they are adding on interest and fees, they would almost have to have statements going back to prior to the DOFD to the current day to prove the account existed, the debtor agreed to the terms, and that the balance was the true balance. I assume that one day, banks will keep or make available to CA/JDBs such paperwork. That will not happen though until enough people actually take the issue to trial.

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