Failure to Send Regular Invoices Defeats Account Stated Claim

On September 13, 2019, Justice Sherwood of the New York County Commercial Division issued a decision in Kasowitz, Benson, Torres LLP v. Cabrera, 2019 NY Slip Op. 32738(U), holding that the failure to send regular invoices defeated an account stated claim, explaining:

An account stated is an agreement between parties to an account based upon prior transactions between them with respect to the correctness of the account items and balance due. The agreement can be express, or may be implied where a defendant retains bills without objecting to them within a reasonable period of time, or makes partial payment on the account. Reciept and retention of plaintiff's accounts, without objection within a reasonable time, and agreement to pay a portion of the indebtedness, gives rise to an actionable account stated, thereby entitling plaintiff to summary judgment in its favor.

Here, Kasowitz makes a prima facie case for entitlement to judgement on account stated as there is no dispute that the defendants received and retained the bills for the outstanding amount, nor do defendants deny that they have made payments on their balance over the course of the representation.

Defendant's contention that plaintiff failed to provide regular invoices, however, is enough to raise a question of fact as to whether there was an account stated. During the course of Kasowitz's representation of defendants, only one invoice was provided. The second and final invoice, which represented charges for the bulk of the work, was presented to defendants after Kasowitz had withdrawn and a dispute had arisen between the parties. Defendants also state in a supporting affidavit that they raised objections to the charges both orally and by letter on March 15, 2017, which also shows that the $50,000 payment made was to obtain the case file and not an acceptance of the account.

Summary judgement shall be denied as to the claim for an account stated.

(Internal quotations and citations omitted).

People sometimes are surprised to learn that if they do not complain about a bill they receive, they can be found to have agreed to it. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client have questions about a claim based on un-objected-to invoices.