Account Stated Defense Defeats Claim Based on Alleged Miscalculation of Payments

On April 13, 2021, the First Department issued a decision in Atsco Footwear Holdings, LLC v. KBG, LLC, 2021 NY Slip Op. 02235, holding that an account stated defense defeated a claim based on the alleged miscalculation of payments, explaining:

Defendant could properly invoke the account stated doctrine as a defense to plaintiff's breach of contract claim, in view of plaintiff's express waiver of its audit rights and acquiescence to defendants' calculations, and acceptance of payments. The parties' agreements as to the correctness of the amounts due were independent of the underlying Management Agreement. Plaintiff's contention that defendant's reliance on the account stated doctrine is barred if fraud, mistake, or other equitable considerations are shown is unavailing, as plaintiff could have discovered any fraud or mistake had it not waived its audit rights.

(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. And, as this decision shows, the reverse also is true. If you bill someone and they pay, that could be found to be an agreement on the amount owed. 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 or payments.