General Objection to Obligation to Pay Bill Sufficient to Defeat Account Stated Claim

On April 28, 2021, Justice Cohen of the New York County Commercial Division issued a decision in Dragonetti Bros. Landscaping Nursery & Florist, Inc. v. Verizon N.Y., Inc., 2021 NY Slip Op. 50375(U), holding that a general objection to the obligation to pay a bill was sufficient to defeat an account stated claim, explaining:

Dragonetti's account stated claim fails for several reasons. As an initial matter, there is no underlying contractual or business relationship between Dragonetti and Verizon with respect to the Parks Department Contracts (or any express agreement where Verizon obligated itself to pay Dragonetti for the work at issue). Nor were there any prior transactions between Dragonetti and Verizon with respect to any work relating to the Parks Department Contracts that would support the type of relationship warranting an account stated claim.

Further, there was no implied agreement between Dragonetti and Verizon to treat the invoices as a balance due. As noted above, the Complaint states that Verizon failed and refused to acknowledge its alleged obligation to pay Dragonetti for the purported utility impact/interference work performed. And Dragonetti admits that Verizon made a blanket claim that support/protection concerning its lines was not necessary. Verizon therefore made clear—prior to this litigation—that it was not going to pay Dragonetti for any work relating to Verizon's telephone lines. Because there was a dispute about the alleged account there can be no claim for an account stated.

Dragonetti recognizes that an account stated claim cannot be used to create liability where none otherwise exists but argues nevertheless that Verizon is liable for the costs of the work at issue by virtue of its common law obligation to move or protect interfering facilities. As discussed above, this argument is meritless because Verizon had no common law obligation to undertake that work.

Also unpersuasive is Dragonetti's assertion that Verizon acquiesced to the invoices because it only "generally" objected to paying Dragonetti but never objected to specific invoices. The cases cited by Dragonetti in support of this argument are inapposite and in no way indicate that Verizon's wholesale rejection of any and all work to be performed by Dragonetti on Verizon's equipment was somehow an ineffective way to dispute the invoices.

In short, Dragonetti cannot state a viable claim for an account stated simply by relying on unsolicited invoices it sent to Verizon for work already disapproved by Verizon.

(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 or payments.